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UTENOS TRIKOTAŽAS AB
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
CONSOLIDATED ANNUAL REPORT
AND INDEPENDENT AUDITOR’S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
CONTENT
Financial Statements:
Statements of Financial Position
2–3
Statements of Comprehensive
Income
4-5
Statements of Changes in Equity
6-7
Statements of Cash Flows
8-9
Notes to the Financial Statements
10–69
Confirmation responsible of person
70
Annual Report:
Consolidated Annual Report (incl.
Remuneration Report)
71–95
Appendix: Disclosure of Compliance with the Governance Code for the year ended 31 December 2021. 96–110
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
2
Statements of Financial Position
Notes
Group
Company
31 December
31 December
2021
2020
2021
2020
ASSETS
Non-current assets
Intangible assets
6
486
517
84
115
Property, plant and equipment
7
9,443
9,448
6,405
6,463
Right-of-use assets
17
578
629
238
304
Investment property
8
163
125
163
125
Investments in subsidiaries
9
-
-
1,490
1,490
Receivables from subsidiaries
26
-
-
1,104
1,039
Prepayments to subsidiaries
26
-
-
771
883
Deferred tax asset
24
-
77
-
-
10,670
10,796
10,255
10,419
Current assets
Inventories
10
6,914
5,428
6,831
5,384
Trade receivables
11
1,182
1,433
1,065
1,255
Contract assets
11
2,748
1,382
2,673
1,356
Other current assets
12
534
397
463
351
Cash and cash equivalents
13
625
3,792
72
3,167
12,003
12,432
11,104
11,513
Total assets
22,673
23,228
21,359
21,932
Continued on the next page
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
3
Statements of financial position (continued)
Group
Company
31 December
31 December
2021
2020
2021
2020
EQUITY AND
LIABILITIES
Equity attributable to the equity holders of the Company
Share capital
14
2,756
2,756
2,756
2,756
Legal reserve
15
574
574
574
574
Revaluation reserve
15
3,946
4,085
2,129
2,187
Reserve for acquisition of own shares
15
1,090
1,090
1,000
1,000
Foreign exchange translation reserve
15
1,053
922
-
-
Retained earnings
(2,142)
739
480
3,424
7,277
10,166
6,939
9,941
Non-controlling interest
26
109
244
-
-
Total equity
7,386
10,410
6,939
9,941
LIABILITIES
Non-current liabilities
Borrowings
16
2,999
2,314
2,999
2,314
Borrowings from related entities
16
532
-
532
-
Non-current lease liabilities
17
488
527
177
227
Borrowings from subsidiaries
16, 26
-
-
600
600
Deferred tax liability
24
825
614
425
233
Provisions for employee benefits
18
358
275
251
193
5,202
3,730
4,984
3,567
Current liabilities
Current portion of non-current borrowings
16
637
567
637
567
Other current liabilities
16
1,801
-
1,801
-
Borrowings from parent company
26, 16
-
532
-
532
Current lease liabilities
17
116
128
81
96
Trade payables
2,989
2,180
2,886
2,106
Payables to other related parties and
subsidiaries
26
106
97
320
157
Contract liabilities
11
861
372
860
366
Income tax payable
-
73
-
73
Accrued expenses and other current liabilities
19
3,575
5,139
2,851
4,527
10,085
9,088
9,436
8,424
Total liabilities
15,287
12,818
14,420
11,991
Total equity and liabilities
22,673
23,228
21,359
21,932
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
4
Statements of Comprehensive Income
Notes
Group
Company
Year ended 31 December
Year ended 31 December
2021
2020
2021
2020
Revenue from contracts with customers
5
30,443
27,902
28,121
24,778
Cost of sales
20
(26,321)
(22,239)
(24,364)
(19,945)
Gross profit
4,122
5,663
3,757
4,833
Selling expenses
21
(2,806)
(2,026)
(2,503)
(1,960)
General and administrative expenses
21
(4,264)
(3,646)
(3,313)
(2,916)
Other income
22
137
155
106
53
Other expenses
22
(17)
(15)
(13)
(12)
Operating profit (loss)
(2,828)
131
(1,966)
(2)
Interest income
23
-
-
66
60
Finance income
23
227
177
68
102
Finance costs
23
(260)
(644)
(924)
(384)
Profit/(loss) before tax
(2,861)
(336)
(2,756)
(224)
Income tax
24
(250)
(86)
(192)
(49)
Net profit (loss) for the year
(3,111)
(422)
(2,948)
(273)
Net profit (loss) attributable to:
Equity holders of the Company
(2,966)
(453)
(2,948)
(273)
Non-controlling interests
26
(145)
31
-
-
(3,111)
(422)
(2,948)
(273)
Other comprehensive income/(loss)
that may be reclassified to profit or
loss in subsequent periods, net of tax
Exchange differences on translation of
foreign operations
131
(161)
-
-
Total other comprehensive
income/(loss) to be reclassified to
profit or loss in subsequent periods,
net of tax
131
(161)
-
-
Continued on the next page
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
5
Statements of Comprehensive Income (continued)
Notes
Group
Company
Year ended 31 December
Year ended 31 December
2021
2020
2021
2020
Other comprehensive income/(loss)
that will not be reclassified to profit or
loss in subsequent periods
Actuarial gain/(loss) from the pensions
reserve
18
(54)
23
(54)
23
Total other comprehensive
income/(loss) that will not be
reclassified to profit or loss in
subsequent periods
(54)
23
(54)
23
Total other comprehensive income/(loss), net of tax
77
(138)
(54)
23
Total comprehensive income/(loss), net of tax
(3,034)
(560)
(3,002)
(250)
Total comprehensive income/(loss) attributable to:
Equity holders of the Company
(2,889)
(593)
(3,002)
(250)
Non-controlling interests
(145)
33
-
-
(3,034)
(560)
(3,002)
(250)
Basic/diluted earnings (loss) per share
(EUR)
25
(0.32)
(0.06)
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
6
Statements of Changes in Equity
Equity attributable to the Company’s shareholders
Group
Share
capital
Legal
reserve
Revalua
tion
reserve
Reserve for
acquisition
of own
shares
Foreign
currency
translatio
n reserve
Retained
earnings/
(deficit)
In total
Non-
controlling
interests
Total
equity
Balance at 31 December 2019
2,756
574
4,215
1,090
1,085
1,039
10,759
211
10,970
Net profit for the year
-
-
-
-
-
(453)
(453)
31
(422)
Other comprehensive income
-
-
-
-
(163)
23
(140)
2
(138)
Total comprehensive income
-
-
-
-
(163)
(430)
(593)
33
(560)
Transfer of revaluation reserve to
retained earnings
-
-
(130)
-
-
130
-
-
-
Balance at 31 December 2020
2,756
574
4,085
1,090
922
739
10,166
244
10,410
Net profit (loss) for the year
-
-
-
-
-
(2, 966)
(2,966)
(145)
(3,111)
Other comprehensive income
-
-
-
-
131
(54)
77
-
77
Total comprehensive income
-
-
-
-
131
(3,020)
(2,889)
(145)
(3,034)
Other movements
-
-
-
-
-
-
-
10
10
Transfer of revaluation reserve
to retained earnings
-
-
(139)
-
-
139
-
-
-
Balance at 31 December 2021
2,756
574
3,946
1,090
1,053
(2,142)
7,277
109
7,386
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
7
Statements of Changes in Equity (continued)
Company
Share
capital
Legal
reserve
Revaluation
reserve
Reserve for
acquisition of
own shares
Retained
earnings/(deficit)
In total
Balance as at 31 December 2019
2,756
574
2,245
1,000
3,616
10,191
Net profit for the year
-
-
-
-
(273)
(273)
Other comprehensive income
-
-
-
-
23
23
Total comprehensive
income/(loss)
-
-
-
-
(250)
(250)
Transfer of revaluation reserve to
retained earnings
-
-
(58)
-
58
-
Balance at 31 December 2020
2,756
574
2,187
1,000
3,424
9,941
Net profit (loss) for the year
-
-
-
-
(2,948)
(2,948)
Other comprehensive income
-
-
-
-
(54)
(54)
Total comprehensive
income/(loss)
-
-
-
-
(3,002)
(3,002)
Transfer of revaluation reserve to
retained earnings
-
-
(58)
-
58
-
Balance at 31 December 2021
2,756
574
2,129
1,000
480
6,939
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
8
Statements of Cash Flows
Group
Company
Year ended 31
December
Year ended 31
December
Notes
2021
2020
2021
2020
Cash flows from (to) operating activities
Profit (loss) before tax
(2,861)
(336)
(2,756)
(224)
Adjustments for non-cash items:
Depreciation and amortisation
7
909
1,053
655
780
(Gain) from disposal of property, plant and equipment
and investment property
22
(1)
(7)
(3)
-
Impairment (reversal of impairment) and write-off of
accounts receivable, loans granted and interests
(25)
95
675
245
Impairment of investments in subsidiaries
-
-
40
60
Impairment and write-off of non-current assets
7
158
27
158
26
Impairment and write-off of inventories
21
507
730
507
712
Lease discounts received
17
-
(10)
-
(10)
Elimination of finance (income)/costs
23
(248)
481
(11)
35
Income tax expense/(benefit)
24
250
86
192
49
Changes in working capital:
(Increase)/decrease in inventories
(1,993)
507
(1,954)
422
(Increase)/decrease in trade receivables
277
(294)
215
(384)
(Increase)/decrease in contract asset
(1,364)
625
(1,317)
614
(Increase)/decrease in non-current receivables from subsidiaries
-
-
47
(72)
Decrease/(increase) in other receivables and other current assets
58
(173)
74
(174)
Increase/(decrease) in contract liabilities
490
239
500
232
Increase (decrease) in trade payables and other accounts payable
817
(1,367)
937
(1,373)
Increase/(decrease) in taxes payable and other current
liabilities
19
(1,566)
1,952
(1,877)
2,238
Income tax (paid)
(198)
(51)
(186)
(11)
Net cash flows from operating activities
(4,790)
3,557
(4,104)
3,165
Cash flows used in investing activities
Purchase of property, plant and equipment
7
(620)
(624)
(604)
(585)
(Purchase) of intangible assets and prepayments
6
(20)
(35)
(20)
(35)
Proceeds from sale of property, plant and equipment
1
7
4
-
(Acquisition) disposal of investments in subsidiaries
-
-
(40)
3
Interest received
23
-
-
66
60
Dividends received
-
-
-
33
Net cash flows used in investing activities
(639)
(652)
(594)
(524)
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
9
Statements of Cash Flows (continued)
Group
Company
Year ended 31
December
Year ended 31
December
Notes
2021
2020
2021
2020
Cash flows from/(used in) financing activities
Loans received
3,351
532
3,351
532
Loans granted
-
-
(700)
-
Loans repaid
(795)
(283)
(795)
(433)
Interest paid
23
(100)
(88)
(105)
(98)
Dividends paid
1
-
-
-
-
Reduction and pay-out of non-controlling interest
26
-
-
-
-
Lease payments
17
(194)
(169)
(148)
(127)
Net cash flows from (used in) financing activities
2,262
(8)
1,603
(126)
Net increase/(decrease) in cash and cash equivalents
(3,167)
2,897
(3,095)
2,515
Cash and cash equivalents at the beginning of the
year
3,792
895
3,167
652
Cash and cash equivalents at the end of the year
625
3,792
72
3,167
Supplementary cash flow information:
Non-cash activities:
Non-cash investing and financing activities:
Acquisition of the right-of-use asset under lease, excl. VAT
-
122
-
122
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
10
Notes to the Financial Statements
1. General
Utenos Trikotažas AB (hereinafter “the Company”) is a joint-stock company registered in the Republic of Lithuania on 6 December
1994. The address of its registered office is as follows:
Basanavičiaus st. 122,
Utena,
Lithuania
The Company is engaged in production of knit-wear and textile articles.
The shares of Utenos Trikotažas AB are listed on the Official List of the NASDAQ OMX Vilnius Stock Exchange.
As at 31 December 2021 and 2020, the shareholders of the Company were:
2021
2020
Number of shares
held
% of share capital
Number of shares
held
% of share capital
SBA Grupė UAB
8,771
92,31
8,771
92,31
Other shareholders
732
7,69
732
7,69
9,503
100
9,503
100
92.31% of the Company’s shares are owned by the parent company SBA Grupė UAB with 90% of shares owned by
Mr. A. Martinkevičius.
As at 31 December 2021, the number of employees of the Company was 797 (as at 31 December 2020 – 761).
The Group consists of the Company and the following subsidiaries (hereinafter “the Group”) :
Group’s share (%) as at 31
December
Registered office
2021
2020
Activity
Šatrija AB
Šatrijos st. 3, Raseiniai
89.78
89.78
Manufacture of wearing
apparel
Gotija UAB
Laisvės ave. 33,
Kaunas
100
100
Retail
PAT MTF Mrija
Tomas Masarik 13,
Mukachevo, Ukraine
98.95
98.95
Production of knitted
articles
Aboutwear UAB
Laisvės per.3, Vilnius
80.00
-
Production of knitted
articles
As at 31 December 2021, the number of employees of the Group was 1,094 (31 December 2020 – 1,081).
The Company’s management authorised these financial statements on 08 of April 2022. The shareholders of the Company
have a statutory right to either approve or refuse to approve these financial statements and require the management to
prepare a new set of financial statements.
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
11
2 Summary of Significant Accounting Policies
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.
2.1 Basis of preparation
These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS)
as adopted by the EU.
These financial statements have been prepared on a historical cost basis, except for buildings measured at revalued
amounts and derivative financial instruments measured at fair value.
Adoption of new and/or amended IFRS and International Financial Reporting Interpretations Committee (IFRIC)
interpretations
Compared to the previous financial year, the accounting policies adopted are consistent with those of the previous
financial year, except for the following new/amended IFRSs which have been adopted by the Group/Company as of 1
January 2021:
In 2021, the Group and the Company consistently applied the accounting policy to all the periods presented in these
financial statements.
The following are the guidelines effective as of 1 January 2021. The implemented guidelines did not affect preparation
of the Company’s and the Group’s financial statements for 2021:
− Amendments to IFRS 16 Leases-related to CΟVID-19;
− Interest Rate Benchmark Reform (amendment to IFRS 9, IAS 39 and IFRS 7, IAS 16).
New standards and interpretations of IFRS that have not been applied yet
Certain new standards, amendments to standards and interpretations that will be approved for subsequent periods of
the financial statements have been issued or are not yet applicable in the European Union. Such standards were not
applied in preparing these financial statements. Early application of these standards is not intended by the Company and
the Group.
It is believed that the following revised standards will not have material impact on the Company’s and the Group’s financial
statements:
− Onerous Contracts — Cost of Fulfilling a Contract (Amendments to IAS 37)
The amendments specify which costs an entity includes in determining the cost of fulfilling a contract for the purpose of
assessing whether the contract is onerous. The amendments are effective for annual periods beginning on or after 1
January 2022. The amendments apply for contracts which are effective as at the initial application date of these
amendments. As at the date of initial application, the overall impact of the amendments is recognised as an adjustment
of retained earnings (losses) or other appropriate equity components at the beginning of the period. Comparative
information is not recalculated. The Group has identified that all contracts valid as at 31 December 2021 will be
implemented before the effective date of the amendments.
− Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12)
The amendments narrow the scope of the initial recognition exemption (IRE) so that it does not apply to transactions that
give rise to equal and offsetting temporary differences, e. g. lease and decommissioning liabilities. The amendments are
effective for annual periods beginning on or after 1 January 2023. Deferred tax asset and liabilities of lease and
decommissioning liabilities will need to be recognised from the beginning of the earliest comparative period presented,
with any cumulative effect recognised as an adjustment to retained earnings or other components of equity at that date.
For all other transactions, the adjustments apply to transactions that occur after the beginning of the earliest period
presented.
The amendments will not affect the retained earnings.
Annual Improvements to IFRS Standards 2018-2020;
− Property, Plant and Equipment – Proceeds before Intended Use (Amendments to IAS 16);
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
12
− Amendments to IAS 1 Presentation of Financial Statements related to classification of liabilities as current or
non-current;
− IFRS 17 Insurance Contracts and amendments to IFRS 17 Insurance Contracts (not yet endorsed by EU);
− Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2);
− Reference to the Conceptual Framework (Amendments to IFRS 3);
− Definition of Accounting Estimates (Amendments to IAS 8).
Conceptual Framework in IFRS standards
The IASB issued the revised Conceptual Framework for Financial Reporting on 29 March 2018. The Conceptual
Framework sets out a comprehensive set of concepts for financial reporting, standard setting, guidance for preparers in
developing consistent accounting policies and assistance to others in their efforts to understand and interpret the
standards. IASB also issued a separate accompanying document, Amendments to References to the Conceptual
Framework in IFRS Standards, which sets out the amendments to affected standards in order to update references to
the revised Conceptual Framework. Its objective is to support transition to the revised Conceptual Framework for
companies that develop accounting policies using the Conceptual Framework when no IFRS Standard applies to a
particular transaction. For preparers who develop accounting policies based on the Conceptual Framework, it is effective
for annual periods beginning on or after 1 January 2020.
IFRS 3: Business Combinations (Amendments)
IASB issued amendments in Definition of a Business (Amendments to IFRS 3) aimed at resolving the difficulties that
arise when an entity determines whether it has acquired a business or a group of assets. The Amendments are effective
for business combinations for which the acquisition date is in the first annual reporting period beginning on or after 1
January 2020, and to asset acquisitions that occur on or after the beginning of that period. The implementation of these
Amendments did not have significant impact on the financial statements of Group/Company.
IAS 1 Presentation of Financial Statements and IAS 8 Accounting Policies, Changes in Accounting Estimates
and Errors: Definition of ‘Material’ (Amendments)
The Amendments are effective for annual periods beginning on or after 1 January 2020 with earlier application permitted.
The Amendments clarify the definition of material and how it should be applied. The new definition states that, ’Information
is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary
users of general purpose financial statements make on the basis of those financial statements, which provide financial
information about a specific reporting entity’. In addition, the explanations accompanying the definition have been
improved. The Amendments also ensure that the definition of material is consistent across all IFRS Standards. The
implementation of these Amendments did not have significant impact on the financial statements of Group/Company.
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
13
2. Summary of Significant Accounting Policies (continued)
2.1 Basis of preparation (continued)
Interest Rate Benchmark Reform - IFRS 9, IAS 39 and IFRS 7 (Amendments)
In September 2019, IASB issued amendments to IFRS 9, IAS 39 and IFRS 7, which concludes phase one of its work to
respond to the effects of Interbank Offered Rates (IBOR) reform on financial reporting. The amendments published, deal
with issues affecting financial reporting in the period before the replacement of an existing interest rate benchmark with
an alternative interest rate and address the implications for specific hedge accounting requirements in IFRS 9 Financial
Instruments and IAS 39 Financial Instruments: Recognition and Measurement, which require forward-looking analysis.
The amendments provided temporary relief, applicable to all hedging relationships that are directly affected by the interest
rate benchmark reform, which enable hedge accounting to continue during the period of uncertainty before the
replacement of an existing interest rate benchmark with an alternative nearly risk-free interest rate. There are also
amendments to IFRS 7 Financial Instruments: Disclosures regarding additional disclosures around uncertainty arising
from the interest rate benchmark reform. The amendments are effective for annual periods beginning on or after 1
January 2020 and must be applied retrospectively. Phase two will focus on issues that could affect financial reporting
when an existing interest rate benchmark is replaced with a risk-free interest rate (an RFR). The implementation of this
interpretation did not have significant impact on the financial statements of Group/Company.
IFRS 16 Leases-CΟVID-19 Related Rent Concessions (Amendment)
The amendment applies, retrospectively, to annual reporting periods beginning on or after 1 June 2020. Earlier
application is permitted, including in financial statements not yet authorised for issue at 28 May 2020. IASB amended the
standard to provide relief to lessees from applying IFRS 16 guidance on lease modification accounting for rent
concessions arising as a direct consequence of the COVID-19 pandemic. The amendment provides a practical expedient
for the lessee to account for any change in lease payments resulting from the COVID-19 related rent concession the
same way it would account for the change under IFRS 16, if the change was not a lease modification, only if all of the
following conditions are met:
• The change in lease payments results in revised consideration for the lease that is substantially the same as,
or less than, the consideration for the lease immediately preceding the change.
• Any reduction in lease payments affects only payments originally due on or before 30 June 2021.
• There is no substantive change to other terms and conditions of the lease.
The management applied this amendment and the practical expedient provided for therein earlier, i.e. from 1 January
2020, since the Company received COVID-19 related rent concessions and accounted these as negative variable lease
payments through profit or loss.
Standards issued but not yet effective and not early adopted
Amendment to IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint
Ventures: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments)
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 recognised when a transaction involves a business (whether
it is housed in a subsidiary or not). A partial gain or loss is recognised when a transaction involves assets that do not
constitute a business, even if these assets are housed in a subsidiary. In December 2015, IASB postponed the effective
date of this amendment indefinitely pending the outcome of its research project on the equity method of accounting. The
amendments have not yet been endorsed by the EU. The Group and the Company do not have any associates or joint
ventures.
IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current (Amendments)
The Amendments are effective for annual periods beginning on or after 01 January 2022 with earlier application
permitted. However, in response to the COVID-19 pandemic, the IASB has deferred the effective date by one year, i.e.
1 January 2023, to provide companies with more time to implement any classification changes resulting from the
amendments. The amendments aim to promote consistency in applying the requirements by helping companies
determine whether, in the statement of financial position, debt and other liabilities with an uncertain settlement date
should be classified as current or non-current. The amendments affect the presentation of liabilities in the statement of
financial position and do not change existing requirements around measurement or timing of recognition of any asset,
liability, income or expenses, nor the information that entities disclose about those items. Also, the amendments clarify
the classification requirements for debt which may be settled by the company issuing own equity instruments. These
Amendments have not yet been endorsed by the EU. The management has not yet evaluated the impact of the
implementation of these amendments.
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
14
2. Summary of Significant Accounting Policies (continued)
2.1 Basis of preparation (continued)
IFRS 3 Business Combinations; IAS 16 Property, Plant and Equipment; IAS 37 Provisions, Contingent Liabilities
and Contingent Assets as well as Annual Improvements 2018-2020 (Amendments)
The amendments are effective for annual periods beginning on or after 1 January 2022 with earlier application permitted.
The IASB has issued narrow-scope amendments to the IFRS Standards as follows:
• IFRS 3 Business Combinations (Amendments) update a reference in IFRS 3 to the Conceptual Framework for
Financial Reporting without changing the accounting requirements for business combinations.
• IAS 16 Property, Plant and Equipment (Amendments) prohibit a company from deducting from the cost of
property, plant and equipment amounts received from selling items produced while the company is preparing
the asset for its intended use. Instead, a company will recognise such sales proceeds and related cost in profit
or loss.
• IAS 37 Provisions, Contingent Liabilities and Contingent Assets (Amendments) specify which costs a company
includes in determining the cost of fulfilling a contract for the purpose of assessing whether a contract is onerous.
• Annual Improvements 2018-2020 make minor amendments to IFRS 1 First-time Adoption of International
Financial Reporting Standards, IFRS 9 Financial Instruments, IAS 41 Agriculture and the Illustrative Examples
accompanying IFRS 16 Leases
The amendments have not yet been endorsed by the EU. The management has not yet evaluated the impact of the
implementation of these amendments.
Interest Rate Benchmark Reform – Phase 2 – IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 (Amendments)
On 27 August 2020, the IASB published Interest Rate Benchmark Reform – Phase 2, Amendments to IFRS 9, IAS 39,
IFRS 7, IFRS 4 and IFRS 16, completing its work in response to IBOR reform. The amendments provide temporary
reliefs which address the financial reporting effects when an interbank offered rate (IBOR) is replaced with an alternative
nearly risk-free interest rate (RFR). In particular, the amendments provide for a practical expedient when accounting for
changes in the basis for determining the contractual cash flows of financial assets and liabilities, to require the effective
interest rate to be adjusted, equivalent to a movement in a market rate of interest. Also, the amendments introduce reliefs
from discontinuing hedge relationships including a temporary relief from having to meet the separately identifiable
requirement when an RFR instrument is designated as a hedge of a risk component. Furthermore, the amendments to
IFRS 4 are designed to allow insurers who are still applying IAS 39 to obtain the same reliefs as those provided by the
amendments made to IFRS 9. There are also amendments to IFRS 7 Financial Instruments: Disclosures to enable users
of financial statements to understand the effect of interest rate benchmark reform on an entity’s financial instruments and
risk management strategy. The amendments are effective for annual periods beginning on or after 1 January 2021 with
earlier application permitted. While application is retrospective, an entity is not required to restate prior periods. The
management has not yet evaluated the impact of the implementation of these amendments.
IFRS 16 Leases-CΟVID-19 Related Rent Concessions (Amendment)
In February 2021 the IASB issued a proposal to extend the relief period by another year, i.e. to apply the practical
expedient on rent concessions to a change in lease payments originally due on or before 30 June 2022 from 30 June
2021. The amendment is effective for annual periods beginning on or after 1 April 2021 with earlier application permitted.
The amendment has not yet been endorsed by the EU. The management has not yet evaluated the impact of the
implementation of these amendments.
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 January 1, 2023 with earlier application permitted.
The amendments provide guidance on the application of materiality judgements to accounting policy disclosures. In
particular, the amendments to IAS 1 replace the requirement to disclose ‘significant’ accounting policies with a
requirement to disclose ‘material’ accounting policies. Also, guidance and illustrative examples are added in the Practice
Statement to assist in the application of the materiality concept when making judgements about accounting policy
disclosures. The Amendments have not yet been endorsed by the EU. The management has not yet evaluated the impact
of the implementation of these amendments.
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
15
2. Summary of Significant Accounting Policies (continued)
2.1 Basis of preparation (continued)
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 January 1, 2023 with earlier application
permitted and apply to changes in accounting policies and changes in accounting estimates that occur on or after the start of that
period. The amendments introduce a new definition of accounting estimates, defined as monetary amounts in financial statements
that are subject to measurement uncertainty. Also, the amendments clarify what changes in accounting estimates are and how
these differ from changes in accounting policies and corrections of errors. The Amendments have not yet been endorsed by the
EU. The management has not yet evaluated the impact of the implementation of these amendments.
2.2 Consolidation and Business Combinations
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate
of the consideration transferred, measured at fair value at the acquisition date and the amount of any non-controlling interest in
the acquire, if any. For each business combination, the acquirer measures the non-controlling interest in the acquiree either at fair
value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition costs incurred are expensed and included
in administrative expenses.
If the business combination is achieved in stages, at the acquisition date, the fair value of the acquirer’s previously held equity
interest in the acquiree is remeasured to fair value at the acquisition date in the statement of comprehensive income. Any
contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Subsequent
changes to the fair value of the contingent consideration which is deemed to be an asset or liability will be recognised in
accordance with IFRS 9 in profit or loss. If the contingent consideration is classified as equity, it should not be remeasured until
it is finally settled within equity.
Goodwill is initially measured at cost being the excess of the aggregate of the consideration transferred and the amount recognised
for non-controlling interest over the net identifiable assets acquired and liabilities assumed. If this consideration is lower than the
fair value of the net assets of the subsidiary acquired, the difference is recognised in the statement of comprehensive income.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses and is assessed for impairment at
each reporting date
2.3 Segment Reporting
Operating segments are reported in a manner consistent with the Group’s internal reporting provided to the chief operating
decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of
the operating segments, has been identified as the Board that makes strategic decisions.
2.4 Foreign currencies
(a) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic
environment in which each entity operates (hereinafter “the functional currency”). These financial statements are presented in
euro (EUR), which is the Company’s functional and the Group’s and the Company’s presentational currency.
(b) Transactions and balances
Transactions in foreign currencies are converted based on their respective functional currency spot rates at the date the
transaction.
Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange
at the reporting date.
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
16
2. Summary of Significant Accounting Policies (continued)
2.4 Foreign currencies (continued)
Differences arising on settlement or translation of monetary items are recognised in profit or loss with the exception of monetary
items that are designated as the Group’s net investment in a foreign subsidiary. These are recognised in other comprehensive
income. On disposal of a foreign subsidiary, the cumulative amount of the translation differences recognised in other
comprehensive income is reclassified to profit or loss. Tax charges attributable to exchange differences on those monetary items
are also recognised in other comprehensive income.
(c) Group companies
The functional currency of the Group Companies is EUR, except for subsidiary PAT MTF Mrija, which operates in Ukraine and its
functional currency is UAH (Ukrainian hryvnia).
The results and financial position of all the Group entities that have a functional currency different from the presentational currency
are translated into the presentational currency as follows:
(i) assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that
statement of financial position;
(ii) income and expenses for each statement of comprehensive income are translated at average exchange rates (unless this
average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case
income and expenses are translated at the rate on the dates of transactions);
(iii) all resulting exchange differences are recognised as a separate component of equity.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign
operation and translated at the closing rate.
When a foreign operation is partially disposed of or sold, exchange differences that were recorded in other comprehensive income
are reclassified to profit and loss as part of the gain or loss on sale.
2.5 Derivatives
The Group and the Company engage in swap contracts for interest rate risk management purposes. Derivatives are initially
recognised at cost. Subsequent to initial recognition and measurement, outstanding swaps are carried in the statement of financial
position at the fair value. Fair value is derived from using the discounted cash flow method which is based on directly observable
inputs (level 2 in fair value hierarchy). The estimated fair values of these contracts are reported on a gross basis as financial
assets for instruments having a positive fair value, and financial liabilities for instruments with a negative fair value.
Gain or loss from changes in the fair value of outstanding forward contracts, swaps and other financial instruments, which are not
classified as hedging instruments, are recognised in the statement of comprehensive income as they arise.
2.6 Hedge Accounting
For the purposes of hedge accounting, hedges are classified into two categories:
(a) fair value hedges which hedge the exposure to changes in the fair value of a recognised asset or liability; and
(b) cash flow hedges which hedge exposure to variability in cash flows that is either attributable to a particular risk associated with
a recognised asset or liability or a forecasted transaction.
The Group and the Company use cash flow hedge.
In relation to cash flow hedges, which meet the conditions for hedge accounting, the portion of the gain or loss on the hedging
instrument that is determined to be an effective hedge is recognised initially in other comprehensive income and the ineffective
portion is recognised in the statement of comprehensive income as profit or loss.
The gains or losses on effective cash flow hedges recognised initially in equity are either transferred to profit or loss in the period
in which the hedged transaction impacts the statement of comprehensive income or included in the initial measurement of the
cost of the related asset or liability.
For hedges, which do not qualify for hedge accounting, any gains or losses arising from changes in the fair value of the hedging
instrument are taken directly to the statement of comprehensive income (profit or loss) for the period.
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
17
2. Summary of Significant Accounting Policies (continued)
2.6 Hedge Accounting (continued)
Hedge accounting is discontinued when the hedging instrument expires, is sold, terminated, exercised, or no longer qualifies for
hedge accounting. At that point in time, any cumulative gain or loss on the hedging instrument recognised in equity remains in
equity until the forecasted transaction occurs. Where the hedged transaction is no longer expected to occur, the net cumulative
gain or loss recognised in equity is transferred to profit or loss.
The Group and the Company have entered into interest swap agreement with a purpose to hedge itself against a possible
fluctuation (increase) of EURIBOR on the loan taken from a bank and with this action fixed the payable interest rate (Note 16).
These hedged items are subject to a single risk component, thus the Company hedged an item in its entirety, not splitting into
different components.
There is an economic relationship between the hedged item and the hedging instrument as the terms of the interest rate swap
match the terms of the fixed rate loan (i.e., notional amount, maturity, payment and reset dates). The Company and Group has
established a hedge ratio of 1:1 for the hedging relationships as the underlying risks are identical to the hedged risk component.
To test the hedge effectiveness, the Company and Group uses the hypothetical derivative method and compares the changes in
the fair value of the hedging instrument against the changes in fair value of the hedged item attributable to the hedged risk.
The hedge ineffectiveness can arise from:
• Differences in timing of cash flows of the hedged item and hedging instrument;
• The counterparties’ credit risk differently impacting the fair value movements of the hedging instrument and hedged item;
• Changes to the forecasted amount of cash flows of hedged items and hedging instruments.
2.7 Intangible assets
(a) Goodwill
After initial recognition (Note 2.2), goodwill is measured at cost less any accumulated impairment losses. Goodwill is included in
intangible assets in the statement of financial position. Goodwill is tested annually for impairment (Note 2.10). Gains and losses
arising from the disposal of a business include the carrying amount of goodwill relating to the business sold.
(b) Computer software
Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring to use a specific
software and are further carried at acquisition cost, less subsequent accumulated amortisation and impairment losses. Computer
software is amortised using the straight-line method over their estimated useful lives (3 to 5 years).
2.8 Property, Plant and Equipment
Buildings are stated at revalued amounts less accumulated depreciation and impairment losses.
A building revaluation surplus is recorded in OCI and credited to the asset revaluation surplus in equity. However, to the extent
that it reverses a revaluation deficit of the same asset previously recognised in profit or loss, the increase is recognised in profit
and loss. A revaluation deficit is recognised in the statement of comprehensive income, except to the extent that it offsets an
existing surplus on the same asset recognised in the asset revaluation surplus. An annual transfer from the asset revaluation
surplus to retained earnings is made for the difference between depreciation based on the revalued carrying amount of the asset
and depreciation based on the asset’s original cost. Valuations are performed on a regular basis to ensure that the fair value of a
revalued asset does not differ materially from its carrying amount. Accumulated depreciation as at the revaluation date is
eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset.
Upon disposal, any revaluation surplus relating to the particular asset being sold is transferred to retained earnings.
Other property, plant and equipment are carried at acquisition cost, less subsequent accumulated depreciation and impairment
losses. The initial cost of property, plant and equipment comprises its purchase price, including non-refundable purchase taxes
and any directly attributable costs of bringing the asset to its working condition and location for its intended use.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the Company and the Group and the cost of the item
can be measured reliably. All other repairs and maintenance are charged to general and administrative expenses during the
financial period in which they are incurred.
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
18
2. Summary of Significant Accounting Policies (continued)
2.8 Property, plant and equipment (continued)
Depreciation on property, plant and equipment is calculated on a straight-line method to allocate their cost to their residual values
over their estimated useful lives, as follows:
Buildings 10 to 80 years
Structures 15 to 25 years
Vehicles 4 to 7 years
Machinery 5 to 15 years
Other property, plant and equipment 2 to 20 years
Land is not depreciated.
The assets’ residual values, depreciation method and useful lives are reviewed, and adjusted if appropriate, at each
reporting date, ensuring that they are consistent with the expected pattern of economic benefits from items in property,
plant and equipment.
Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately to its
recoverable amount (Note 2.10). Impairment of property, plant and equipment as well as reversals of impairment during the year
are included into operating expenses in the profit and loss.
Borrowing costs incurred in relation to acquisition of qualifying property, plant and equipment are capitalised. Other borrowing
costs are recognised as finance costs as incurred.
Construction in progress is transferred to appropriate groups of property, plant and equipment when it is completed and available
for its intended use.
When property is written-off or otherwise disposed, the cost and related depreciation are removed from the financial statements
and any related gains or losses are determined by comparing proceeds with carrying amount and are included in operating profit.
2.9 Investment property
Property held for long-term rental yields and (or) capital appreciation and which is not occupied by the Company and the Group
is classified as investment property. Investment property comprises freehold land and buildings.
Investment property is stated at historical cost, less accumulated depreciation and impairment losses. Subsequent costs are
included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to the Company and the Group and the cost of the item can be measured
reliably. All other repairs and maintenance are charged to general and administrative expenses during the financial period in which
they are incurred.
Land is not depreciated. Buildings are depreciated over their expected useful life (40 to 70 years) using the straight-line method
by writing-off the cost of each asset to its residual value. Depreciation of investment property is recognised in other operating
expenses.
When the carrying amount of an asset is higher than its estimated recoverable amount, it is written down immediately to its
recoverable amount (Note 2.10). Impairment of investment property as well as reversals for the year are included in operating
expenses.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount and are included into operating
profit.
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
19
2. Summary of Significant Accounting Policies (continued)
2.10 Impairment of non-financial asset
Assets that have an indefinite useful life, for example goodwill, are tested annually for impairment. Assets that are subject to
amortisation and depreciation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying
amount may not be recoverable.
An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of the asset’s fair value less costs to sell and value in use.
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash
flows (cash-generating units). Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation
is made to those cash-generating units or groups of cash-generating units that are expected to benefit from the business
combination in which the goodwill arose.
Non-financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at each
financial statement date. Impairment losses on goodwill are not reversed.
2.11 Financial assets and financial liabilities
IFRS 9 Financial instruments
Financial instrument: a contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of
another entity.
i) Financial assets
Initial recognition and measurement:
Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through other
comprehensive income (OCI), and fair value through profit or loss.
The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics
and the Group’s/Company’s business model for managing them. With the exception of trade receivables that do not contain a
significant financing component, the Group/Company initially measures a financial asset at its fair value plus, in the case of a
financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing
component are measured at the transaction price determined under IFRS 15.
In order for a financial asset to be classified and measured at amortised cost or fair value through other comprehensive income
OCI, it needs to give rise to cash flows that are “solely payments of principal and interest (SPPI)” on the principal amount
outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level.
The Group’s/Company’s business model for managing financial assets refers to how the Group/Company manages its financial
assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual
cash flows, selling the financial assets, or both.
A regular way purchases or sales of financial assets are recognised on the trade date, i.e., the date that the Group/Company
commits to purchase or sell the asset.
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
20
2. Summary of Significant Accounting Policies (continued)
2.11. Financial assets and financial liabilities (continued)
Subsequent measurement
After initial recognition, the Group/Company measures a financial asset at:
(a) Amortised cost (debt instruments)
(b) Fair value through other comprehensive income with recycling of cumulative gains and losses upon derecognition (debt
instruments). The Group/Company did not have such items as at 31 December 2021 and 2020.
(c) Fair value through other comprehensive income with no recycling of cumulative gains and losses upon derecognition
(equity instruments). The Group/Company did not have such items as at 31 December 2021 and 2020.
(d) Fair value through profit or loss (Note 2.5).
Financial assets at amortised cost (debt instruments)
The Group/Company measures financial assets at amortised cost if both of the following conditions are met:
(i) The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual
cash flows and
(ii) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding
Financial assets at amortised cost are subsequently measured using the effective interest (EIR) method and are subject to
impairment. Gains and losses are recognised in the statement of comprehensive income when the asset is derecognised,
modified or impaired.
The Group’s/Company’s financial assets at amortised cost includes trade, other current and non-current receivables, loans
granted.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for trading, financial assets designated upon initial
recognition at fair value through profit or loss, or financial assets mandatorily required to be measured at fair value. Financial
assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Derivatives,
including separated embedded derivatives, are also classified as held for trading unless they are designated as effective hedging
instruments (under IFRS 9). Financial assets with cash flows that are not solely payments of principal and interest are classified
and measured at fair value through profit or loss, irrespective of the business model. Notwithstanding the criteria for debt
instruments to be classified at amortised cost or at fair value through other comprehensive income (OCI), as described above,
debt instruments may be designated at fair value through profit or loss on initial recognition if doing so eliminates, or significantly
reduces, an accounting mismatch. Financial assets at fair value through profit or loss are carried in the statement of financial
position at fair value with net changes in fair value recognised in profit or loss (Note 2.5).
Impairment of financial asset
Under IFRS 9, the Group/Company recognises an allowance for expected credit losses (ECLs) for all debt instruments not held
at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with
the contract and all the cash flows that the Group/Company expects to receive, discounted at an approximation of the original
effective interest rate.
(a) Impairment of trade receivables
For trade receivables and contract assets, the Group/Company applies a simplified approach in calculating ECLs. Therefore, the
Group/Company does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each
reporting date. The Group/Company has established a provision matrix that is based on its historical credit loss experience,
adjusted for forward-looking factors specific to the debtors and the economic environment. The Group/Company considers a
financial asset in default when contractual payments are past due or when indications exist that the debtors or a group of debtors
are experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will
enter bankruptcy or other financial reorganisation, and where observable data indicate that there is a measurable decrease in the
estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults. A financial asset is
written off when there is no reasonable expectation of recovering the contractual cash flows.
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
21
2. Summary of Significant Accounting Policies (continued)
2.11 Financial assets and financial liabilities (continued)
(a) Impairment of trade receivables (continued)
The Company/Group is also making allowances on individual assessment basis for certain debtors.
(b) Assessment of impairment of loans granted
The Company grants loans to the entities of the Group with a fixed maturity as it is disclosed in Note 4. Upon issuing a loan,
expected credit losses for 12 months are generally assessed and accounted. In subsequent reporting periods, when there is no
significant increase in credit loss risk related to the lessee, the Company modifies the balance of expected credit losses for 12
months with regard to the remaining debt amount that is not yet repaid at the assessment date. If a lessee’s financial position
significantly deteriorates in comparison to the position upon issuing of the loan, the Company accounts all expected credit losses
that fall within maturity term. Loans with estimated credit losses within maturity term are considered as credit-impaired financial
assets.
ii) Financial liabilities
Initial recognition and measurement:
Financial liabilities are classified as measured at amortised cost or fair value through profit or loss. The Group’s/Company’s
financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, lease liabilities and
derivatives.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated
upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred
for the purpose of repurchasing in the near term. This category also includes derivatives entered into by the Company that are
not designated as hedging instruments in hedge relationships as defined by IFRS 9. Separated embedded derivatives are also
classified as held for trading unless they are designated as effective hedging instruments. Gains and losses arising from financial
liabilities held for trading are recognised in profit or loss.
Loans and other payables
After initial recognition, loans, borrowings and other payables are subsequently measured at amortised cost using the EIR method.
Gains and losses are recognised in the statement of comprehensive income, when the liabilities are derecognised as well as
through the amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and
fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of
comprehensive income.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial position if there is a
currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, i.e. to realise
the assets and settle the liabilities simultaneously.
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
22
2. Summary of Significant Accounting Policies (continued)
2.11 Financial assets and financial liabilities (continued)
Derecognition of financial assets and liabilities
Financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily
derecognised (i.e., removed from the Group’s/Company’s statement of financial position) when:
i) the rights to receive cash flows from the asset have expired; or
ii) the Group/Company has transferred its rights to receive cash flows from financial asset; or has undertaken a liability to
pay all received cash flows to a third party based on contract of disposal without significant overdue and (a) the
Group/Company has transferred substantially all the risks and rewards of the asset, or (b) the Group/Company has
neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the
asset.
Financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing
financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability
are substantially modified, such an replacement or modification is treated as the derecognition of the original liability and the
recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss.
2.12 Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined using the first-in, first-out (FIFO) method.
The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and related indirect
production overheads (based on normal operating capacity), but excludes borrowing costs. Net realisable value is the estimated
selling price in the ordinary course of business, less the costs of completion and selling expenses. Unrealised inventory is fully
written-off. Impairment of obsolete inventories is assessed in accordance with the rates approved by management for individual
inventory groups, calculated on the basis of historical information.
2.13 Cash and cash equivalents
Cash and cash equivalents are carried at nominal value.
For the purposes of the cash flow statement, cash and cash equivalents comprise cash on hand and cash at banks, deposits on
demand with banks and other short-term highly liquid investments with original maturities of 3 months or less.
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
23
2. Summary of Significant Accounting Policies (continued)
2.14 Share capital
(a) Ordinary shares
Ordinary shares are stated at their par value.
(b) Treasury shares
Where the Company or its subsidiaries purchase the Company’s equity share capital, the consideration paid, including any
attributed incremental external costs, is deducted from shareholders’ equity as treasury shares until they are sold, reissued, or
cancelled. No gain or loss is recognised in profit or loss on the sale, issuance, or cancellation of treasury shares. Where such
shares are subsequently sold or reissued, any consideration received is presented in the consolidated financial statements as a
change in shareholders’ equity.
2.15 Reserves
(a) Legal reserve
A legal reserve is a compulsory reserve under the Lithuanian legislation. Annual transfers of 5% of net result are required until
the reserve reaches 10 per cent of issued capital. The legal reserve cannot be used for payment of dividends and it is
established to cover future losses only.
(b) Revaluation reserve
A revaluation reserve is recorded in other comprehensive income and credited to the asset revaluation reserve in equity. However,
when new revalued amount is higher than net book value previously recognised impairment for the asset accounted in statement
of comprehensive income as loss, the increase in value of revalued amount which not exceed recognised impairment is recognised
in statement of comprehensive income as profit. If a revaluation surplus still exists after the reversal of an impairment loss, it is
recognised in comprehensive income as other comprehensive income (and, accordingly, in equity in the statement of financial
position).
A revaluation deficit is recognised in the statement of profit comprehensive income, except to the extent that it offsets an existing
surplus on the same asset recognised in the consolidated financial statement as a change in equity. Upon disposal or write-off of
an asset carried at revalued amount, the related revaluation surplus is transferred to retained earnings in the statement of changes
in equity.
Revaluation reserve in foreign currency in the consolidated financial statements is converted based on their respective functional
currency spot rates at the date of revaluation. Revaluation reserve in foreign currency is not translated at the closing rate at the
date of that statement of financial position.
(c) Reserve for acquisition of own shares
This reserve is created based on the decision of the shareholders for the acquisition of own shares.
(d) Foreign currency translation reserve
The foreign currency translation reserve is used for exchange differences arising on consolidation of financial statements of foreign
subsidiaries. Exchange differences are classified as equity in the consolidated financial statements until disposal of the investment.
Upon disposal of the corresponding assets, the accumulated amount of foreign currency translation reserve is recognised as
income or expenses in the same period when the gain or loss of disposal is recognised.
(e) Cash flow hedge reserve
This reserve represents the effective part of the change in fair value of derivatives (interest rate swaps), used by the Group and
the Company to secure the cash flows from interest rate risk, at the reporting date. The reserve is accounted for based on the
requirements of IFRS 9 (Note 3.1).
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
24
2. Summary of Significant Accounting Policies (continued)
2.16 Trade and Other Payables
Trade payables are non-derivative financial liabilities with fixed or determinable payments that are not quoted in an active market.
Such liabilities are carried at amortised cost using the effective interest rate method. Gains and losses are recognised in the
statement of comprehensive income when trade liabilities are written-off or amortised.
2.17 Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial
period of time to get ready for its intended use, construction production or sale are capitalised as part of the cost of the respective
assets. Other borrowing costs are expensed as incurred.
2.18 Income tax
(a) Current income tax
The Group companies are taxed individually irrespective of the overall results of the Group.
Income tax expenses reported in these financial statements is based on the calculation made by the management in accordance
with tax legislation of the Republic of Lithuania and the Republic of Ukraine.
Profit for the year 2021 of the Group companies that operate in Lithuania is taxable at a rate of 15% (2020: 15%), corporate
income tax rate in Ukraine is 18% (2020: 18%).
In accordance with tax legislation of the Republic of Lithuania, taxable losses, except for losses related to transfer of securities
and (or) financial instruments may be carried forward for an unlimited period. As from 1 January 2014, tax loss carry forward that
is deducted cannot exceed 70% of the taxable profit of the current financial year.
The losses from disposal of securities and (or) derivative financial instruments can be carried forward for 5 consecutive years and
only be used to reduce taxable income earned from the transactions of the same nature.
Investment incentive can be carried forward for 5 years.
In accordance with tax legislation of the Republic of Ukraine, as from 1 January 2012, tax loss carry forward that is deducted
cannot exceed 25% of the taxable profit of the current financial year.
(b) Deferred Tax
Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the consolidated financial statements. However, the deferred tax is not accounted for if it
arises from initial recognition of an asset or liability in a transaction, other than a business combination, that at the time of the
transaction affects neither accounting nor taxable profit nor loss. Deferred tax is determined using tax rates (and laws) that have
been enacted or substantially enacted by the statement of financial position date and are expected to apply when the related
deferred tax asset is realised or the deferred tax liability is settled.
Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the
temporary differences can be utilised.
Deferred tax is provided on temporary differences arising on investments in subsidiaries except where the timing of the reversal
of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the
foreseeable future.
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
25
2. Summary of Significant Accounting Policies (continued)
2.19 Lease
A. THE COMPANY/GROUP IS A LESSEE
The Company/Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys
the right to control the use of an identified asset for a period of time in exchange for consideration.
The Company/Group applies a single recognition and measurement approach for all leases, except for short-term leases and
leases of low-value assets. The Company/Group recognises lease liabilities to make lease payments and right-of-use assets
representing the right to use the underlying assets.
Right-of-use assets
The Company/Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset
is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and
adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities
recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives
received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful
lives of the assets, as follows:
Premises
5–6 years
Land
25–99 years
Vehicles
4–7 years
Other property, plant and equipment
4–6 years
If ownership of the leased asset transfers to the Company and the Group or the price of the right-of-use assets at the end of the
lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the
asset.
The right-of-use assets are also subject to impairment. Refer to the accounting policies in Note 2.10 “Impairment of non-financial
assets”.
Lease liabilities
At the commencement date of the lease, the Company/Group recognises lease liabilities measured at the present value of lease
payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments)
less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be
paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain
to be exercised by the Company/Group and payments of penalties for terminating the lease, if the lease term reflects the
Company/Group exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are
recognised as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that triggers
the payment occurs.
In calculating the present value of lease payments, the Company/Group uses its incremental borrowing rate at the lease
commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the
amount of lease liabilities is increased to reflect the estimates of interest and reduced for the lease payments made. In addition,
the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease
payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments)
or a change in the assessment of an option to purchase the underlying asset.
Short-term leases and leases of low-value assets
The Company and the Group apply the short-term lease recognition exemption to its non-current-asset (i.e., those leases that
have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the
lease of low-value assets recognition exemption to leases of office equipment. Lease payments on short-term leases and leases
of low-value assets are recognised as expense on a straight-line basis over the lease term.
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
26
2. Summary of Significant Accounting Policies (continued)
2.19 Lease (continued)
B. THE COMPANY/GROUP IS A LESSOR
At inception of a contract, the Company and the Group, as a lessor, determine whether the lease is a finance lease or an operating
lease. If the Company and the Group determine that the lease transfers substantially all of the risks and rewards of ownership of
the underlying asset, the lease is a finance lease. Leases in which the Company and the Group do not transfer substantially all
the risks and rewards incidental to ownership of an asset are classified as operating leases. The Company and the Group have
not entered into any finance leases as a lessor. Operating lease payments are accounted for on a straight-line basis over the
lease term and recognised as revenue in the statement of comprehensive income based on its lease nature. Initial direct costs
incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised
over the lease term on the same basis as rental income. Contingent payments are recognised as revenue in the period in which
they are earned.
The accounting policies applied by the Group as a lessor in the comparative period were not different from IFRS 16.
2.20 Revenue Recognition
Revenue from contracts with customers
The main activity of the Company and the Group is production of knitted articles and working clothes upon particular customers’
order. The service includes the full process of production from making yarns to preparation of fully finished production. Revenue
from contracts with customers is only recognised when the control of goods or services is transferred to the customer to the extent
that reflects the remuneration which the Group and the Company expects to receive in return for these goods or services.
As it is disclosed in the Note 5, the Company and the Group in their activities generate revenue from sales of goods with their
brand and from other commercial activities. This type of revenue, in comparison with knitted article production under particular
customers’ order, is relatively insignificant. This type of revenue is recognised when the control over goods is transferred to the
customer (conditions of goods collection are agreed differently with separate customers) and the goods are transferred at a
particular time. Payment terms vary from 2 to 45 days.
Knitted article and working clothes production under particular customers’ order
The main performance obligation arising from contracts with customers is to provide knitted article production defined in technical
specifications (knitting, dying, decorating, sewing, and cutting) service with a fixed price set for each produced (finished) knitted
article separately.
Revenue from contracts with customers is recognised over the period in which the services are rendered. The company provides
its products to customers only fully finished. The Company and the Group allocate the transaction price over the product production
period based on the relative selling prices of the individual production levels.
The Company has performed an analysis and evaluated that the Company and the Group fulfils their performance obligation
described in contracts with customers over a period of time (not at point in time) due to the following reasons:
- The Company and the Group do not create an alternatively usable asset while providing article production services;
- The Company and the Group have an enforceable right to payment for work in progress.
Management calculates its share of revenue based on the expected costs plus margin. Based on management and production
accounting data, the production fulfilment status of a particular order is deducted at each stage of production (calculating what
proportion of the expected product cost at which stage of production is reached accordingly). The calculations shall be completed
by adding the applicable margin to the estimated relative levels of work-in-progress at different stages of production. Thus, the
calculated revenue is recognised in the statement of comprehensive income under the caption “Revenue from contracts with
customers” and contract assets are accounted in the current assets in the statement of financial position under the caption
“Contract asset”. Costs related to this revenue amount are reflected in the statement of comprehensive income under the caption
“Cost of sale”.
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
27
2. Summary of Significant Accounting Policies (continued)
2.20 Revenue recognition (continued)
In preparation of financial statements according to IFRS and applying IFRS 15, the Company’s and the Group’s management has
to apply particular assumptions and estimates that have significant impact on amounts presented in financial statements.
According to the management, the most significant estimates and associated uncertainties arising while calculating and
recognising revenue from contracts with costumers relate to:
- The estimated product margin (percentage);
- Application of historical management and production accounting data in calculating value ratios, related to each stage of
production.
Aside from aforementioned, the management considered the impact of other matters on revenue recognition, such as the
existence of significant financing components, non-cash considerations, discounts applied, etc. None of these terms appear in
the Company’s and the Group’s contracts with customers or, in the judgement of management, they are not significant in
application of IFRS 15.
Revenue from sales of goods to a group of customers for which supply contracts contain clauses allowing alternative uses are
recognised when the control over goods is transferred to the customer and the revenue is recognised in the same way as from
the sale of their branded goods.
Contract assets: Accrued income
Contract assets are conditional rights to consideration. The right is conditional, for example, when the Company / Group must first
satisfy another performance obligation in the contract before it is entitled to payment from the customer. If the Company / Group
has an unconditional right to receive consideration from the customer, the contract asset is accounted for as a receivable and
presented separately from other contract assets.
If the Company and the Group transfer goods or services to a customer before the customer pays consideration or before payment
is due, a contract asset is recognised for the earned consideration that is conditional as the order is not completed. Contract
assets – accrued revenue – at the end of production cycle (usually within 60 days) after fulfilling contractual obligations and issuing
an invoice, is accounted as trade receivable.
Contract liabilities: Prepayments received
Contract liabilities consist of prepayments received from customers for services to be rendered or goods to be sold in the future.
Trade receivables
A trade receivable represents the Company’s and the Group’s right to an amount of consideration that is unconditional (i.e., only
the passage of time is required before payment of the consideration is due). Trade receivables usually have a set payment delay
term of 10–60 days.
Interest income
Interest income is recognised on a time-proportion basis using the effective interest method. When a receivable is impaired, the
Company or the Group reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted
at the original effective interest rate of the instrument, and continues unwinding the discount as interest income. Interest income
on impaired loans is recognised using the original effective interest rate.
Dividend income
Dividend income is recognised when the right to receive payment is established.
Rental income
Payments received under operating leases (net of any incentives given to the lessee) are credited to profit and loss on a straight-
line basis over the period of the lease (Note 2.19).
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
28
2. Summary of Significant Accounting Policies (continued)
2.21 Dividend Distribution
Dividend distribution to the Company’s shareholders is recognised as a liability in the Company’s and the Group’s financial
statements in the period in which the dividends are approved by the Company’s shareholders.
2.22 Earnings (Losses) per Share
The Group presents basic (EPS) and diluted earnings per share (DEPS) data for its ordinary shares. Basic EPS is calculated by
dividing the profit or loss attributable to ordinary shareholders of the Group by the weighted average number of ordinary shares
outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and
the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, such as
convertible notes and share options granted to employees.
2.23 Non-Current Assets Held for Sale
Non-current assets classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell.
Assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than
through its continuing use. This condition is regarded as met only when the sale is highly probable and the asset is available for
immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for
recognition as a completed sale within one year from the date of classification.
Property, plant and equipment and intangible assets once classified as held for sale are not depreciated or amortised.
2.24 Subsequent Events
Subsequent events that provide additional information about the Group’s and the Company’s position at the reporting date
(adjusting events) are reflected in the financial statements. Subsequent events that are not adjusting events are disclosed in the
notes when material.
2.25 Current versus Non-Current Classification
The Group and the Company present assets and liabilities in the statement of financial position based on current/non-current
classification. An asset is current when it is:
• Expected to be realised or intended to be sold or consumed in the normal operating cycle
• Held primarily for the purpose of trading
• Expected to be realised within 12 months after the reporting period
Or
• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the
reporting period.
All other assets are classified as non-current.
A liability is current when:
• It is expected to be settled in the normal operating cycle
• Held primarily for the purpose of trading
• It is due to be settled within 12 months after the reporting period
• There is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period.
The Group and the Company classifies all other liabilities as non-current. Deferred tax assets and liabilities are classified as non-
current assets and liabilities.
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
29
2. Summary of Significant Accounting Policies (continued)
2.26 Employee Benefits
(a) Social security contributions
The Company and the Group pay social security contributions to the state Social Security Fund (hereinafter the “Fund”) on behalf
of its employees based on the defined contribution plan in accordance with the local legal requirements. A defined contribution
plan is a plan under which the Company and the Group pays fixed contributions and will have no legal or constructive obligations
to pay further contributions if the Fund does not hold sufficient assets to pay benefits to all employees related to employee service
in the current and prior period. Social security contributions are recognised as expenses on an accrual basis and are included in
staff costs.
(b) Bonus plans
The Company and the Group recognises a liability and expenses for bonuses where contractually obliged or where there was a
practice applied in the past that has created a constructive obligation.
(c) Non-current employee benefits
According to the requirements of the Labour Code of the Republic of Lithuania, each employee leaving the Company at the age
of retirement is entitled to a one-off payment amounting to two-month salary.
Current year cost of employee benefits is recognised as incurred in the statement of comprehensive income. Previously incurred
service costs are recognised as expenses on a straight-line basis over the average period until the benefits become vested.
Any gains or losses appearing as a result of changes in terms of benefits (curtailment or settlement) are recognised in the
statement of comprehensive income as incurred.
The above mentioned employee benefit obligation is calculated based on actuarial assumptions, using the projected unit credit
method. Remeasurements, consisting of actuarial gains and losses, are recognised immediately in the statement of financial
position with a corresponding debit or credit to retained earnings through other comprehensive income in the period in which they
occur. Remeasurements are not reclassified to profit or loss in subsequent periods.
Obligation is recognised in the statement of financial position and reflects the present value of these benefits on the date of the
statement of financial position. Present value of the non-current obligation to employees is determined by discounting estimated
future cash flows using the discount rate which reflects the interest rate of the Government bonds of the same currency and similar
maturity as the employment benefits.
2.27 Government grants
Government grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions
will be complied with. When the grant relates to an expense item, it is recognised as income (as a reduction of related costs) on
a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. When the grant
relates to an asset, it is recognised as income in equal amounts over the expected useful life of the related asset.
The balance of grant not yet received is shown in the statements of financial position caption “Other current assets”.
2.28 Offsetting and comparative figures
When preparing the financial statements, assets and liabilities, as well as revenue and expenses are not set off, except for the
cases when certain International Financial Reporting Standard specifically requires such set-off.
Where necessary, comparative figures have been adjusted to agree with the current year's presentation of information.
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
30
3. Financial risk management
3.1 Financial risk factors
The Group’s and the Company’s activities expose them to a variety of financial risks: market risk (including currency risk and cash
flow interest rate risk), credit risk and liquidity risk. The Group’s and the Company’s overall risk management programme focuses
on the unpredictability of financial markets and seeks to minimise potential adverse effects of the financial performance of the
Group and the Company. Risk management is carried out by the Group‘s management.
Group
Company
31 December
31 December
Financial assets reported in the statement of financial
position
2021
2020
2021
2020
Financial assets at amortised cost
Non-current amounts receivable from subsidiaries except for
prepayments
-
-
1,085
1,039
Trade receivables and contract assets (Note 11)
3,930
2,815
3,738
2,611
Cash and cash equivalents
625
3,792
72
3,167
Other current assets (excluding prepayments made and
deferred expenses)
145
214
99
175
4,700
6,821
4,994
6,992
Group
Company
31 December
31 December
Financial liabilities reported in the statement of financial
position
2021
2020
2021
2020
Financial liabilities measured at amortised cost
Borrowings and other current liabilities
5,437
2,881
5,437
2,881
Borrowings from subsidiaries
-
-
600
600
Borrowings from parent company
532
532
532
532
Trade payables
2,989
2,180
2,886
2,106
Payables to subsidiaries
-
-
225
62
Payables to other related parties
106
97
95
95
Accrued expenses and other current liabilities, other payables
(Note 19)
792
554
593
364
9,856
6,244
10,368
6,640
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
31
3 Financial Risk Management (continued)
3.1 Financial risk factors (continued)
(a) Market risk
(i) Monetary assets and monetary liabilities foreign exchange risk
The Group and the Company operate internationally and carry out significant part of their transactions in euros. Therefore, the
management believes that entities operating in Lithuania are not exposed to significant currency exchange risk.
The Ukrainian subsidiary had a foreign exchange profit on the loans received and long-term payables to the Company amounting
to EUR 201 thousand in 2021 (in 2020, the subsidiary had a foreign exchange loss amounting to EUR 1,167 thousand) due to
fluctuations in the official exchange rate of Ukrainian gryvnia (UAH) to EUR set by the National Bank of Ukraine. As from 2014,
due to the geopolitical situation in Ukraine and significant drop in the value of UAH against EUR, the management of the Group
and the Company re designated of loans granted and long term receivables from the subsidiary Mrija PAT MTF to net investment,
considering that the repayment of these amounts is not expected in the foreseeable future.
Accordingly, gains (losses) arising from foreign exchange related to the monetary items considered to be part of net investment
into foreign operation are accounted in Group’s consolidated financial statements through other comprehensive income (loss) in
2021 and 2020. Amount of monetary items attributed to net investment amounts to EUR 1,385 million and foreign currency
exchange difference related to this amount for the year 2021 comprises EUR 208 thousand (EUR 951 thousand in 2020), is
accounted in the Group’s consolidated financial statements through other comprehensive income.
Comprehensive income (loss) from foreign currency translation included in the consolidated statement of changes in
equity in other comprehensive income attributable to the equity holders of the Company:
2021
2020
Foreign currency exchange difference on monetary items attributed to net
investments
(208)
951
Foreign currency translation effect on other items
339
(1,114)
Total comprehensive income (loss)
131
(163)
Other comprehensive income (loss) from foreign currency translation included in other comprehensive income attributable to non-
controlling interests was not material.
Company’s business transactions mainly are denominated in euro, therefore, the Company is not exposed to significant foreign
exchange risk. In the Group the UAH exchange risk is related to intercompany balances in different currencies. The following table
demonstrates the sensitivity to a reasonably possible change in UAH exchange rate related to EUR, with all other variables held
constant.
Change in UAH rate with
regard to EUR
Effect on profit before tax
Effect on equity
2021
5%
4
134
(5)%
(4)
(130)
2020
5%
66
69
(5)%
(66)
(69)
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
32
3 Financial Risk Management (continued)
3.1 Financial risk factors (continued)
(ii) Cash flow interest rate risk
Borrowings with variable interest rates expose the Company and the Group to cash flow interest rate risk. In 2021 and 2020, the
Company’s and the Group’s borrowings with variable interest rates were denominated in EUR.
The Group and the Company analyse their interest rate exposure on an annual basis. The Group and the Company calculates
the impact on profit or loss by multiplying year-end balances of interest-bearing loans granted and borrowings by the estimated
interest rate change. Except for the current year’s profit (loss), there is no impact on the equity of the Group and the Company.
Based on the sensitivity analysis performed, the impact of a 0.5% increase/decrease in interest rates on the Company’s and the
Group’s net result would be an increase/decrease at maximum of EUR 13 thousand and EUR 19 thousand respectively (in 2020:
EUR 12 thousand and EUR 14 thousand, respectively), mainly as a result of higher/lower interest expenses/income on borrowings
and loans granted.
(b) Credit risk
None of the Group’s and the Company’s customers comprise more than 10% of the Group’s and Company’s trade receivables.
The Group and the Company evaluates the concentration of risk with respect to trade receivables as low because its customers
are located in several industries and operate in largely independent markets.
(i) Maximum exposure to credit risk
Credit risk arises from cash balances at bank, loans granted, trade receivables and contract assets.
The table below summarises all credit risk exposures related to the items of the Group’s and the Company’s statements of financial
position. Maximum exposure to credit risk before collateral held or other credit risk reduction:
Group
Company
31 December
31 December
2021
2020
2021
2020
Cash and cash equivalents at banks (Note 13)
625
3,792
72
3,167
Trade receivables and contract assets (Note 11)
3,930
2,815
3,738
2,611
Non-current loans granted and amounts receivable
except for prepayments (Note 26)
-
-
1,085
1,039
In total
4,555
6,607
4,895
6,817
(ii) Credit quality of financial assets
Trade customer quality is assessed with respect to their financial position, work experience and other facts.
The credit quality of financial assets that are neither past due nor impaired can be assessed considering historical data of their
performance as independent credit ratings are not available.
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
33
3 Financial Risk Management (continued)
3.1 Financial risk factors (continued)
(a) Trade receivables and contract assets – trade customers with no independent rating
Group
Company
31 December
31 December
2021
2020
2021
2020
New trade customers (up to 12 months)
800
154
753
154
Current trade customers (more than 12 months) that
fully fulfilled their obligations in the past
3,130
2,661
2,985
2,457
In total
3,930
2,815
3,738
2,611
Impairment analysis is performed at each balance sheet date based on provision matrix and individual assessment in order to
evaluate expected credit losses. Provision rates are assessed based on the number of days past due payment, grouping
customers based on similar previous credit loss risk experience. Calculations reflect the possibility to calculate the amount, time
value of money, reasonable and predicable information on past events, current conditions and forecasts of expected economic
conditions, which can be obtained at the reporting date. Based on the performed analysis, the Company/Group assessed that
historical loss rates are very low even including any reasonable adjustments based on forward looking indicators.
(b) Cash and cash equivalents, excluding cash on hand.
Group
Company
31 December
31 December
2021
2020
2021
2020
Rating “A”
506
2,764
28
2,207
Rating “BBB+”
43
959
31
959
No rating
76
69
13
1
In total
625
3,792
72
3,167
*Independent ratings established by Fitch agency.
As at 31 December 2021, the Company’s non-current receivables and loans granted comprises of receivables only from PAT
MTF Mrija (Note 26). Please refer to Note 4 for the evaluation of expected credit losses for these receivables.
Trade receivables that are past due are not treated as impaired when the Group’s and the Company’s management expects to
recover these receivables.
Group
Company
31 December
31 December
2021
2020
2021
2020
Not past due receivables
3,833
2,725
3,672
2,570
Past due not impaired
Less than 30 days
82
88
51
40
Past due from 31 to 60 days
-
-
-
-
Past due from 61 to 180 days
15
-
15
-
More than 181 days
-
2
-
1
Total past due not impaired
97
90
66
41
Overdue and impaired
Up to 180 days
-
-
-
-
More than 181 days
85
107
59
81
Impairment allowance for trade receivables
(85)
(107)
(59)
(81)
Total accounts receivable and contract assets
after impairment
3,930
2,815
3,738
2,611
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
34
3 Financial Risk Management (continued)
3.1 Financial risk factors (continued)
Impairment of loans granted and trade receivables evaluated based on the accounting policy as disclosed in Note 2.11, is
recognised in the statement of comprehensive income.
(c) Liquidity risk
The Group’s and the Company’s policy is to maintain sufficient cash and cash equivalents or have available funding through an
adequate amount of committed credit lines to meet its commitments at a given date in accordance with its strategic plans.
As at 31 December 2021, the Group’s current assets exceeded its current liabilities by EUR 1,917 thousand (as at 31 December
2020, current assets exceeded current liabilities by EUR 3,344 thousand). As at 31 December 2021, the Group’s liquidity (current
assets/current liabilities) and quick ratios ((current assets - inventory)/current liabilities) were 1.19 and 0.50, respectively (as at 31
December 2020, 1.37 and 0.77, respectively). As at 31 December 2021, the Company’s (Utenos Trikotažas AB) current assets
exceeded its current liabilities by EUR 1,670 thousand (as at 31 December 2020: by EUR 3,089 thousand). As at 31 December
2021, the Company’s liquidity (current assets/current liabilities) and quick ratios ((current assets - inventory)/current liabilities)
were 1.18 and 0.45, respectively (as at 31 December 2020: 1.37 and 0.73, respectively).
The table below summarises the Group’s and the Company’s undiscounted financial liabilities. The financial liabilities are classified
into relevant maturity groupings based on the remaining period to the contractual maturity date.
Fair value of accounts payable and other financial liabilities due within 3 months or less are equal to their carrying balances as
the impact of discounting is insignificant.
The tables below summarise the maturity profile of the Group’s financial liabilities as at 31 December 2021 and 2020, based on
contractual undiscounted payments:
Group
Less
than 3
months
From 3 to 12
months
From 1 to 5
years
After 5
years
In total
31 December 2021
Borrowings from the banks with future interest
174
513
2,122
-
2,809
State Aid Fund for Business
29
147
3,739
-
3,915
Lease liabilities
35
111
564
-
710
Borrowings from parent company
-
-
602
-
602
Trade payables and other financial liabilities
3,095
-
-
-
3,095
3,333
771
7,027
-
11,131
Less
than 3
months
From 3 to 12
months
From 1 to 5
years
After 5
years
In total
31 December 2021
Borrowings from the banks with future interest
174
513
2,122
-
2,809
State Aid Fund for Business
29
147
3,739
-
3,915
Borrowings from subsidiaries
-
-
679
-
679
Borrowings from parent company
-
-
602
-
602
Lease liabilities
23
71
175
-
269
Trade payables and other financial liabilities
3,200
-
-
-
3,200
3,426
731
7,317
-
11,474
Less than 3
months
From 3 to
12 months
From 1 to
5 years
After 5
years
In total
31 December 2020
Borrowings from the banks with future interest
157
467
2,460
-
3,084
Lease liabilities
39
123
363
271
796
Borrowings from parent company
544
544
Trade payables and other financial liabilities
2,277
-
-
-
2,277
2,473
1,134
2,823
271
6,701
Company
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
35
3 Financial Risk Management (continued)
3.1 Financial risk factors (continued)
Less
than 3
months
From 3 to 12
months
From 1 to 5
years
After
5
years
In total
31 December 2020
Borrowings from the banks with future interest
157
467
2,460
-
3,084
Borrowings from subsidiaries
-
-
613
-
613
Borrowings from parent company
-
544
-
-
544
Lease liabilities
29
89
215
-
333
Trade payables and other financial liabilities
2,263
-
-,
-
2,263
2,449
1,100
3,288
-
6,837
The tables below summarise the changes in the Group’s and the Company’s liabilities arising from financing activities:
Group
01/01/2021
Cash flows
New
leases
Write-offs
and
disposals
Reclassifi
cation
Discounts
received
Interest
charges
Effect of
exchange
rate
31/12/2021
Current portion of
non-current
borrowings
1,099
1,871
,-
-
(532)
-
-,
-,
2,438
Non-current
portion of
borrowings
2,314
685
-,
-
532
-
-,
-,
3,531
Lease liabilities
655
(194)
594
(496)
-
-
17
28
604
4,068
2,362
594
(496)
-
-
17
28
6,573
Company
01/01/2021
Cash flows
New leases
Write-offs
and
disposals
Reclassifi
cation
Discounts
received
Interest
charges
Effect of
exchange
rate
31/12/2021
Current portion of
non-current
borrowings
1,099
1,871
-
-
(532)
-
-
-
2,438
Non-current
portion of
borrowings
2,914
686
-
-
532
-
-
-
4,132
Lease liabilities
323
(147)
570
(496)
-
-
8
-
258
4,336
2,410
570
(496)
-
-
8
-
6,828
Group
01/01/2020
Cash flows
New leases
Write-offs
and
disposals
Reclassifi
cation
Discount
s
received
Interest
charges
Effect of
exchange
rate
31/12/2020
Current portion
of non-current
borrowings
567
532
-
-
-
-
-
-
1,099
Non-current
portion of
borrowings
2,597
(283)
-
-
-
-
-
-
2,314
Lease liabilities
833
(169)
122
(50)
-
(10)
15
(86)
655
3,997
80
122
(50)
-
(10)
15
(86)
4,068
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
36
3 Financial Risk Management (continued)
3.1 Financial risk factors (continued)
Company
01/01/2020
Cash
flows
New
leases
Write-offs
and
disposals
Reclass
ification
Discounts
received
Interests for
the year and
net-offs*
Effect of
exchange
rate
31/12/2020
Current portion
of non-current
borrowings
1,317
532
-
-
(750)
-
-
-
1,099
Non-current
portion of
borrowings
2,597
(433)
-
-
750
-
-
-
2,914
Lease liabilities
392
(127)
122
(61)
-
(10)
7
-
323
4,306
(28)
122
(61)
-
(10)
7
-
4,336
* Other non-cash offset of dividends received against repayment of borrowings and interest payable.
3.2 Capital management
The Group’s and the Company’s objectives when managing capital are to ensure the Group’s and the Company’s ability to
continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain
an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group and
Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell
assets to reduce debt.
The Group and the Company defines its capital as equity and borrowings, including lease, less cash and cash equivalents. As
at 31 December, the Group’s and the Company’s capital structure was as follows:
Group
Company
31 December
31 December
2021
2020
2021
2020
Total borrowings
5,437
2,881
5,437
2,881
Lease liabilities
604
655
258
323
Less: cash and cash equivalents
(625)
(3,792)
(72)
(3,167)
Net debt
5,416
(256)
5,623
37
Total equity
7,276
10,166
6,939
9,941
Total capital
12,692
9,910
12,562
9,978
Utenos Trikotažas AB
Under the Lithuanian Republic Law on Companies, the authorised share capital of a public company must be not less than
EUR 40 thousand (EUR 2.5 thousand for a private limited liability company) and the shareholders’ equity should not be lower
than 50% of the company’s registered share capital. As at 31 December 2021 and 2020, the Company and its subsidiaries
registered in Lithuania complied with these requirements.
Mrija PAT MTF
As at 31 December 2021 and 31 December 2020, the shareholders’ equity of the subsidiary registered in Ukraine was negative.
Pursuant to the Ukrainian laws, a company may be put into liquidation when its shareholders’ equity becomes less than the
minimal amount of authorised share capital as defined in the Law on Companies at the moment of the company’s registration. On
the date of these financial statements, there were no decisions made or actions taken concerning PAT MTF Mrija negative
shareholders’ equity. Taking into the account appropriate financial support to PAT MTF Mrija, the management of the Group
assesses the liquidation risk as low.
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
37
3 Financial Risk Management (continued)
3.3 Fair value of financial assets and liabilities
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the
asset or transfer the liability takes place either:
• In the principal market for the asset or liability, or
• In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible to the Group and the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the
asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits
by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest
and best use.
The Group and the Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data
are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable
inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair
value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or
indirectly observable;
Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group and the Company
determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest
level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
Valuations are performed by the Group’s and the Company’s management at each reporting date. For the purpose of fair value
disclosures, the Group and the Company have determined classes of assets and liabilities on the basis of the nature,
characteristics and risks of asset or liability and the level of the fair value hierarchy as explained above.
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
38
3.3 Fair value of financial assets and liabilities (continued)
Valuation of assets according to the fair value hierarchy levels:
31 December 2021
Group
Company
Level 1
Level 2
Level 3
Level 1
Level 2
Level 3
Assets for which fair values are disclosed:
Loans receivable and other receivables from
subsidiaries
-
-
-
-
-
1,085
Trade receivables
-
-
1,182
-
-
1,065
Cash and cash equivalents (Note 13)
-
-
625
-
-
72
Other current assets (excluding prepayments
made and deferred expenses)
-
-
145
-
-
99
Liabilities for which fair values
are disclosed
Borrowings and other current liabilities
-
-
5,437
5,437
Borrowings to subsidiaries
-
-
-
-
-
600
Borrowings to parent company
-
-
532
-
-
532
Trade payables
-
-
2,989
-
-
2,886
Payables to subsidiaries
-
-
-
-
-
225
Payables to other related parties
-
-
106
-
-
95
Accrued expenses and other current liabilities
(Note 19)
-
-
494
-
-
496
31 December 2020
Group
Company
Level 1
Level 2
Level 3
Level 1
Level 2
Level 3
Assets for which fair values are disclosed:
Loans receivable and other receivables from
subsidiaries
-
-
-
-
-
1,039
Trade receivables
-
-
1,433
-
-
1,255
Cash and cash equivalents (Note 13)
-
-
3,792
-
-
3,167
Other current assets (excluding prepayments
made and deferred expenses)
-
-
214
-
-
175
Liabilities for which fair values
are disclosed
Borrowings and other current liabilities
-
-
2,881
-
-
2,881
Borrowings to subsidiaries
-
-
,-
-
-
600
Current financial liabilities
-
-
532
-
-
532
Trade payables
-
-
2,180
-
-
2,106
Payables to subsidiaries
-
-
-
-
-
62
Payables to other related parties
-
-
97
-
-
95
Accrued expenses and other current liabilities
(Note 19)
-
-
328
-
-
353
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
39
3.3 Fair value of financial assets and liabilities (continued)
The fair value of receivables from subsidiaries and loans granted to the subsidiary by the Company is estimated as described in
Note 4, therefore, the management estimates that their fair value approximates carrying amounts as at 31 December 2021 and
2020 (level 3 in fair value hierarchy). Interest rate on the loans received by the Group and the Company is subject to repricing at
least every six months, therefore, the fair value of loans received equals their carrying amount.
4. Critical accounting estimates and judgements
The Company and the Group make estimates and assumptions that affect the reported amounts of assets and liabilities within.
The estimates and judgements are continually evaluated and are based on the management’s experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances. The management also makes
certain judgements, apart from those involving estimations, in the process of applying the accounting policies. Estimates and
judgements that can cause a significant adjustment to the carrying amount of assets and liabilities within the next financial year
include:
Estimates of recoverable amounts of goodwill, investments in subsidiaries, as well as loans to and receivables from
subsidiaries
The Group annually tests goodwill for impairment in accordance with the accounting policy described in Note 2.7. The recoverable
amount of cash-generating units has been determined based on the greater of their value in use and its fair value less costs to
sell. Loans granted and accounts receivable are tested for impairment in accordance with the accounting principles described in
Note 2.11. These calculations require the use of significant estimates as outlined below.
Valuation of investment in the subsidiary PAT MTF Mrija, including loan granted and amounts receivable, in the
Company’s separate financial statements, as well as valuation of non-current assets in the Company’s consolidated
financial statements
As at 31 December 2021, the Company’s investment in PAT MTF Mrija, including loan granted and amounts receivable, amounted
to EUR 4,850 thousand before impairment allowance and to EUR 1,875 thousand after impairment allowance, and, respectively,
EUR 4,897 thousand and EUR 1,922 thousand as at 31 December 2020. In 2021, additional impairment of EUR 150 thousand
was recognised. The impairment is accounted for in the Company’s statement of comprehensive income under financial expenses
(Note 22).
As at 31 December 2021 and 2020, goodwill which is related to PAT MTF Mrija and accounted in consolidated financial statements
amounted to EUR 0 thousand.
At the Group’s consolidated financial statement and Utenos Trikotažas separate financial statement level, cash generating unit,
related to the subsidiary PAT MTF Mrija is comprised of the entity’s property, plant and equipment, goodwill and working capital.
As at 31 December 2021, the recoverable amount of the cash generating unit was determined based on the fair value, less costs
of disposal, which is considered by the management to be the higher of the value in use and fair value less the costs of disposal.
The following significant assumptions were used for the assessment of the value:
Value in use
In 2021, the management did not carry out an estimate of the value in use of the cash generating unit in accordance with IAS 36,
Impairment of Assets, whereas based on the experience of previous years and taking into account the current year’s results of
PAT MTF Mrija management reasonably believes that this value is less than fair value less cost of disposal.
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
40
4. Critical Accounting Estimates and Judgements (continued)
Fair value less cost of disposal
The fair value of the cash generating unit was estimated based on the net asset value of PAT MTF Mrija less the estimated costs
of disposal.
The major part (95%) of the assets of PAT MTF Mrija (other than right-of-use assets and unrecognised deferred tax assets arising
from tax loss) consists of real estate (buildings) located in the Transcarpathian region of Ukraine. As disclosed in Note 7, the fair
value of these assets was determined as part of revaluation of buildings of the Company and the Group in October and November
2018 and is based on valuations performed by certified appraiser Aleksandr Tidir. In order to assess possible changes in the fair
value of buildings until 31 December 2020, the management of the Group commissioned the reassessment of the fair value of
these assets carried out by an independent property appraiser, who identified the fair values of these assets on 6 November 2020.
Considering that by the end of 2020 no significant changes have occurred in the real estate market in the Transcarpathian region
of Ukraine, the fair value of the property approximates its carrying amount, therefore, the values of the buildings of PAT MTF Mrija
identified in 2018 less depreciation for the year approximates to the market values as at 31 December 2020 (no revaluation surplus
was recorded). The fair values of the other components of net assets of PAT MTF Mrija, in the Group’s management opinion,
approximate their carrying amount. Liabilities of PAT MTF Mrija mostly (98%) comprise loans granted by and payables to the
Company (excluding lease liabilities and deferred tax liability).
Based on the above estimate of the recoverable amount of the assets, the management of the Company and the Group did not
identify and recognise in the consolidated financial statements the impairment of the Group’s property, plant and equipment related
to MTF Mrija PAT, nor did it identify and account for in the separate financial statements the reversal of impairment related to
investment in MTF Mrija PAT, which was impaired to zero. Significantly negative net asset position of MTF Mrija PAT (i.e. liabilities
to the Company) would not lead to a reversal of an impairment loss related to the investment, if key assumptions used in the
measurement of fair value change within reasonably possible limits.
The bookkeeping company Grossbuh of asset valuators carried out the market price analysis of property in the area of
Transcarpathia on 20 December 2021. There were no significant changes in the property market in 2021.
The expected credit loss (ECL) model was applied to assess impairment of loans granted and accounts receivables from the
subsidiary PAT MTF Mrija in the separate financial statements of the Company, as provided for in IFRS 9 Financial Instruments.
Because the credit exposure of the subsidiary PAT MTF Mrija has increased significantly since initial recognition (negative balance
in equity), the impairment loss is required for credit losses expected over the remaining life of the exposure, irrespective of the
timing of the default. The probability of default without the Company’s financial support in the near future is considered to be close
to 100%, and the loss given default is close to net assets of PAT MTF Mrija (Including its liabilities to the Company) less costs of
disposal, as this value is negative. Based on this estimate, additional impairment of loans granted and interest receivable from
PAT MTF Mrija (EUR 150 thousand) was recognised in 2020.
Determination of the carrying value of the buildings
Revaluation of buildings is performed periodically (every 5 years, unless there are indications that there are significant differences
in the market of buildings) to ensure that the carrying value of buildings does not significantly differ from fair value at the reporting
date. In 2018, the Group’s and the Company’s management identified indications of impairment of buildings and due to that,
based on the data of October 2018, professional appraisers performed an independent valuation in 2018. In 2021, the Company
and the Group employed independent appraisers to carry out property valuations or an overview of the real estate market, and
did not identify any indications that the carrying values of the property may differ significantly from their fair values.
Revenue recognition
Management’s judgement related to revenue recognition over time is disclosed in Note 2.20.
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
41
4. Critical Accounting Estimates and Judgements (continued)
Determining the lease term of contracts with renewal and termination options – the Company/Group as lessee
The Company/Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by
an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease,
if it is reasonably certain not to be exercised.
The Company/Group has few land lease contracts that include extension or/and termination options. The Company/Group applies
judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease.
That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination. After
the commencement date, the Company/Group reassesses the lease term if there is a significant event or change in circumstances
that is within its control and affects its ability to exercise or not to exercise the option to renew or to terminate (e.g., construction
of significant leasehold improvements or significant customisation to the leased asset). For more details please see Note 17.
5. Segment information
The Group has two main business segments which are identified based on products type and the entities within the Group
producing them: production of knitted articles (that includes the Company and its subsidiaries PAT MTF Mrija and Aboutwear
UAB) and production of working clothes (that includes subsidiary Šatrija AB).
In assessing operational performance of segments, the Board of the Group takes into account the sales revenue, gross profit,
EBITDA (earnings before financial activity result, tax, depreciation and amortisation), profit (loss) ratios, therefore the report on
the Group’s segments discloses these items in respect of each segment. Inter-segment transactions are eliminated on
consolidation.
2021
Production
of knitted
articles
Production of
working clothes
Eliminations
In total
External sales
28,194
2,249
-
30,443
Internal sales
870
-
(870)
-
Total sales
29,064
2,249
(870)
30,443
Gross profit
4,022
100
-
4,122
EBITDA
(1,693)
(226)
-
(1,919)
Profit (loss)
(2,704)
(407)
-
(3,111)
Depreciation and amortisation
793
116
-
909
Interest expense
113
-
(13)
100
Income tax
176
74
-
250
Total segment assets
21,241
1,43,2
-
22,673
Total segment liabilities
14,355
932
-
15,287
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
42
5. Segment information (continued)
2020
Production
of knitted
articles
Production of
working
clothes
Eliminations
In total
External sales
24,858
3,044
-
27,902
Internal sales
638
-
(638)
-
Total sales
25,496
3,044
(638)
27,902
Gross profit
4,942
721
-
5,663
EBITDA
846
338
-
1,184
Profit
(605)
183
-
(422)
Depreciation and amortisation
933
120
-
1,053
Interest expense
101
-
(13)
88
Income tax
50
36
-
86
Total segment assets
21,479
1,749
-
23,228
Total segment liabilities
12,019
799
-
12,818
2021
2020
EBITDA
(1,919)
1,184
Depreciation and amortisation
(909)
(1,053)
Operating profit
(2,828)
131
Interest expense
(100)
(88)
Other finance costs, net
67
(379)
Profit for the year before income tax
(2,861)
(336)
The measurement and recognition policies used for preparation of management’s reports are the same as those used in these
financial statements.
Breakdown of the Company’s revenue by type of activity:
2021
2020
Sales of goods ordered (recognised over time)
19,902
16,910
Sales of goods ordered (recognised at the point in time)*
2,424
1,585
Company brands (About, Utenos) (recognised at the point in time)
4,482
5,142
Sales of services (recognised over time)
427
365
Other sales (recognised at the point in time)
886
776
28,121
24,778
* As described in Note 2.20, revenue from sales of goods to a group of customers for which supply contracts contain clauses
allowing alternative uses are recognised at the point in time.
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
43
5. Segment information (continued)
The table below summarises the Group’s and the Company’s revenues geographically:
2021
DACH
(Germany,
Austria,
Switzerland)
Scandinavia
(Sweden,
Norway,
Denmark,
Finland)
Lithuania
Other
markets
In total
Group’s sales
16,661
4,690
5,500
3,592
30,443
Company’s sales
15,651
4,475
4,946
3,049
28,121
2020
DACH
(Germany,
Austria,
Switzerland)
Scandinavia
(Sweden,
Norway,
Denmark,
Finland)
Lithuania
Other
markets
In total
Group’s sales
15,797
2,894
6,155
3,056
27,902
Company’s sales
14,018
2,894
5,458
2,408
24,778
The majority of the Group’s sales (54.7%) in 2021 were made to DACH customers (in 2020: 56.6%). In 2021, 15.4% of total
production was sold to Scandinavian customers (in 2020: 10.4%). 18% of the production was sold in the Lithuanian market (in
2020: 22%).
Assets are divided by separate geographical segments and described in Notes 6, 7 and 24.
Impact of COVID-19
The coronavirus (COVID-19) pandemic and the announcement of quarantine in Lithuania and other markets affected the
performance of the Company and the Group in 2021 and 2020. Due to quarantine restrictions on economic activities in the territory
of the Republic of Lithuania, shops were temporarily closed from 16 March to 20 April and from 16 to 31 December 2020 and from
1 January 2021 to 14 February (until 19 April if there is no separate entrance). There was a decrease in sales of Company’s brand
in physical outlets and sales to wholesale partners; according to the management, the loss of sales amounts to about EUR 560
thousand due to the shutdown of the stores in 2020 and EUR 506 thousand in 2021. The effect was compensated by sales growth
in the e-store and sales of specific products (protective face masks).
Sales of goods ordered decreased by 15% in 2020; however, in 2021 they increased by 20.8%. The management cannot fully
distinguish the impact of COVID-19 for the ordered knitwear segment due to lack of data on different quarantine restrictions in
end-user markets, customers' financial condition before and change in the COVID-19 pandemic, possible influence of other factors
on customer decisions.
The development of sales of ordered products was also hindered by exhibitions which were cancelled or held through e-channels,
restricted possibility to travel for both the Company's sales specialists and the Company's customers in 2020-2021.
Potential risks caused by the COVID 19 on the Company’s performance and going concern identified by the management, which
are still relevant for 2022:
- Disruptions and delays due to morbidity in group companies
- Supply risks, disruptions in movement of goods
- Settlement risk
- Liquidity risk
- Funding risk
- Temporary business suspension in the framework of an epidemic
Operational risk is managed through preventive testing of employees, the principles of organisational organisation have been
changed to minimise the number of employee contacts also. The premises are regularly disinfected and ventilated according to
the recommendations of specialists. The work of administrative staff, with the necessary tools, is organised from home.
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
44
6. Intangible assets
The Group’s intangible assets (except for the assets of subsidiary PAT MTF Mrija located in the Republic of Ukraine) are located
in the Republic of Lithuania. As at 31 December 2020, intangible assets located in Ukraine are fully depreciated (EUR 90 as at
31 December 2020).
Group
Company
Goodwill
related to
Šatrija AB
Other
intangible
assets
In total
Other
intangible
assets
Cost:
Balance at 31 December 2019
441
1,191
1,632
1,040
Additions
-
35
35
35
Disposals and write-offs
-
(341)
(341)
(341)
Balance at 31 December 2020
441
885
1,326
734
Additions
-
20
20
20
Disposals and write-offs
-
(29)
(29)
(29)
Balance at 31 December 2021
441
876
1,317
725
Amortisation and impairment:
Balance at 31 December 2019
37
1,047
1,084
895
Amortisation for the reporting period
-
65
65
65
Disposals and write-offs
-
(340)
(340)
(340)
Balance at 31 December 2020
37
772
809
619
Amortisation for the reporting period
-
36
36
36
Disposals and write-offs
-
(14)
(14)
(14)
Balance at 31 December 2021
37
794
831
641
Net book value at 31 December 2019
404
144
548
145
Net book value at 31 December 2020
404
113
517
115
Net book value at 31 December 2021
404
82
486
84
The Company and the Group do not have internally generated intangible assets. Amortisation expenses of intangible assets are
recognised in general and administrative expenses in the statement of comprehensive income (Note 21).
As at 31 December 2021, acquisition cost of fully amortised but still in use intangible assets of the Group and the Company
amounted to EUR 719 thousand and EUR 587 thousand, respectively (as at 31 December 2020, EUR 703 thousand and EUR
571 thousand, respectively).
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
45
7. Property, plant and equipment
Group
Land
Buildings
Structures
Vehicles and other
property, plant and
equipment
Construction-
in-progress
In total
Cost or revalued amount:
Balance at 31 December 2019
4
7,333
401
21,168
519
29,425
Additions
-
5
-
287
332
624
Reclassification between asset groups
-
431
-
-
(431)
-
Reclassified to investment property
-
-
-
-
(13)
(13)
Disposals and write-offs
-
-
-
(235)
(25)
(260)
Foreign currency translation
differences
-
(890)
(12)
(117)
-
(1,019)
Balance at 31 December 2020
4
6,879
389
21,103
382
28,757
Additions
-
43
-
565
9
617
Reclassification between asset groups
-
95
-
268
(380)
(17)
Disposals and write-offs
-
-
-
(39)
-
(39)
Foreign currency translation
differences
-
460
5
109
-
574
Balance as at 1 January 2021
4
7,477
394
22,006
11
29,892
Accumulated depreciation:
Balance at 31 December 2019
-
265
180
18,617
-
19,062
Depreciation charge for the year
-
77
18
567
-
662
Depreciation of revalued asset
-
166
-
-
-
166
Disposals and write-offs
-
-
-
(233)
-
(233)
Foreign currency translation
differences
-
(239)
(10)
(112)
-
(361)
Balance at 31 December 2020
-
269
188
18,839
-
19,296
Depreciation charge for the year
-
96
17
421
-
535
Depreciation of revalued asset
-
156
-
-
-
156
Reclassification between groups
23
-
-
-
23
Disposals and write-offs
-
-
-
(38)
-
(38)
Foreign currency translation
differences
-
215
4
103
-
322
Balance as at 1 January 2021
-
759
209
19,325
-
20,293
Impairment:
Balance at 31 December 2019
-
13
-
-
-
13
Balance at 31 December 2020
-
13
-
-
-
13
Balance at 31 December 2021
-
13
-
143
-
156
Net book value at 31 December 2019
4
7,055
221
2,551
519
10,350
Net book value at 31 December 2020
4
6,597
201
2,264
382
9,448
Net book value at 31 December 2021
4
6,705
185
2,538
11
9,443
The Group’s assets (except for the assets of subsidiary PAT MTF Mrija located in the Republic of Ukraine) are located in the Republic
of Lithuania. As at 31 December 2021, the carrying amount of property, plant and equipment located in Ukraine was EUR 2,219
thousand (as at 31 December 2020 – EUR 2,064 thousand).
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
46
7. Property, plant and equipment (continued)
Company
Land
Buildings
Structures
Vehicles,
equipment and
other property,
plant and
equipment
Construction-
in-progress
In total
Cost or revalued amount:
Balance at 31 December 2019
4
3,793
356
18,593
519
23,265
Additions
-
5
-
248
332
585
Disposals and write-offs
-
-
-
(127)
(25)
(152)
Reclassification between asset groups
-
431
-
-
(431)
-
Reclassified to investment property
-
-
-
-
(13)
(13)
Balance at 31 December 2020
4
4,229
356
18,714
382
23,685
Additions
-
43
-
549
9
601
Disposals and write-offs
-
-
-
(33)
-
(33)
Reclassified to investment property
-
-
-
-
(17)
(17)
Reclassification between groups
-
95
-
268
(363)
-
Balance at 31 December 2021
4
4,367
356
19,498
11
24,236
Accumulated depreciation:
Balance at 31 December 2019
-
109
145
16,495
-
16,749
Depreciation for the reporting period
-
46
16
461
-
523
Depreciation of revalued asset
-
67
-
-
-
67
Disposals and write-offs
-
-
-
(126)
-
(126)
Balance at 31 December 2020
,
222
161
16,830
-
17,213
Depreciation for the reporting period
-
66
16
326
-
408
Depreciation of revalued asset
-
67
-
-
-
67
Reclassified to investment property
-
23
-
-
-
23
Disposals and write-offs
-
-
-
(32)
-
(32)
Balance at 31 December 2021
-
378
177
17,124
-
17,679
Impairment:
Balance at 31 December 2019
-
9
-
-
-
9
Balance at 31 December 2020
-
9
-
-
-
9
Balance at 31 December 2021
-
9
-
143
-
152
Net book value at 31 December 2019
4
3,675
211
2,098
519
6,507
Net book value at 31 December 2020
4
3,998
195
1,884
382
6,463
Net book value at 31 December 2021
4
3,980
179
2,231
11
6,405
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
47
7. Property, plant and equipment (continued)
Allocation of depreciation and amortisation of property, plant and equipment, intangible assets, investment property and the right-
of-use asset is disclosed in the table below.
Group
Company
2021
2020
2021
2020
Cost of sales (Note 20)
586
704
381
483
General and administrative expenses (Note
21)
315
342
266
289
Other operating expenses
8
7
8
7
Total
909
1,053
655
779
As at 31 December 2021, property, plant and equipment of the Group and the Company with the cost of EUR 17,861 thousand
and EUR 14,873 thousand, respectively, were fully depreciated (as at 31 December 2020 – EUR 16,103 thousand and EUR
13,353 thousand, respectively).
As at 31 December 2021, the Company had its non-current assets pledged to OP Bank and manages the Business Assistance
Fund. The carrying amount of the pledged assets was EUR 2,100 thousand (Note 16). Non-current asset of Šatrija AB the amount
of which is EUR 203 thousand was pledged to the Fund as a collateral. As at 31 December 2020, the Company’s carrying amount
of property, plant and equipment pledged to the bank was EUR 3,903 thousand.
If buildings were measured using the cost method, the carrying amounts of buildings would be as follows:
Group
Company
As at 31 December 2021
As at 31 December 2020
Acquisition cost
4,567
2,677
Accumulated depreciation and impairment losses
(2,634)
(1,185)
Net book value
1,933
1,492
Group
Company
As at 31 December 2021
As at 31 December 2020
Acquisition cost
4,380
2,539
Accumulated depreciation and impairment losses
(2,494)
(1,096)
Net book value
1,886
1,443
The revalued buildings consist of warehouses, factories, shop, administration buildings, etc. The management determined that
these constitute one class of asset under IFRS 13, based on the nature, characteristics and risks of the property.
Fair value of the properties was determined by using the market prices method. This means that valuations performed by the
appraiser are based on active market prices for comparable properties adjusted for difference in the nature, location or condition
of the specific property. As at the date of the last revaluation (October and November 2018) the properties’ fair values were based
on valuations performed by accredited independent appraisers Centro Kubas UAB (Lithuania) and certified appraiser Aleksandr
Tidir (Ukraine). The value of the Group’s and the Company’s assets is based on third level of fair value hierarchy.
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
48
7. Property, plant and equipment (continued)
Significant directly or indirectly observable valuation inputs:
Group
Company
Price per sq. m (EUR)
Average price
Average price
Administration buildings
96-125
96-125
Manufacturing and warehouse buildings
96-125
96-125
Shop premises
178-475
178-475
Significant increases (decreases) in estimated price per square metre alone would result in a significantly higher (lower) fair
value.
Impact of non-current asset revaluation:
Group
Company
Net book value of the building as at 31 December 2019
7,055
3,675
Net book value of buildings at revalued amount as at 31 December 2019:
5,455
2,622
Net book value of buildings at acquisition cost as at 31 December 2019:
1,600
1,053
Acquisition, reclassification, write-off of buildings
436
436
Effect of exchange rate to revalued amount
(579)
-
Effect of exchange rate to buildings acquisition cost
(73)
-
Depreciation of acquisition cost of buildings
(77)
(46)
Depreciation of the revalued part of buildings
(165)
(67)
Net book value of buildings at revalued amount as at 31 December 2020:
4,711
2,555
Net book value of buildings at acquisition cost as at 31 December 2020:
1,886
1,443
Net book value of the buildings as at 31 December 2020:
6,597
3,998
Acquisition, reclassification, write-off of buildings
138
138
Effect of exchange rate to revalued amount
217
-
Effect of exchange rate to buildings acquisition cost
28
-
Depreciation of acquisition cost of buildings
(119)
(89)
Depreciation of the revalued part of buildings
(156)
(67)
Net book value of buildings revalued amount as at 31 December 2021:
4,772
2,488
Net book value of buildings acquisition cost as at 31 December 2021:
1,933
1,492
Net book value of the building as at 31 December 2021:
6,705
3,980
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
49
8. Investment property
Group
Company
Cost:
Balance at 31 December 2019
194
194
Reclassified from property, plant and equipment
13
13
Balance at 31 December 2020
207
207
Acquisition
3
3
Reclassified from property, plant and equipment
17
17
Balance at 31 December 2021
227
227
Accumulated depreciation:
Balance at 31 December 2019
80
80
Depreciation for the reporting period
2
2
Balance at 31 December 2020
82
82
Depreciation for the reporting period
5
5
Reclassified from property, plant and equipment
(23)
(23)
Balance at 31 December 2021
64
64
Net book value at 31 December 2019
114
114
Net book value at 31 December 2020
125
125
Net book value at 31 December 2021
163
163
Rental income and related costs have been disclosed in Note 22.
Investment property of the Company and the Group is comprised of buildings rented to a third party.
Fair value of the properties was determined by using the market prices method. This means that valuations performed by the
appraiser are based on active market prices for comparable properties adjusted for difference in the nature, location or condition
of the specific property. As at the date of the last revaluation (October and November 2018), the asset’s fair value was based on
valuations performed by accredited independent appraisers Centro Kubas UAB (Lithuania).
The Group’s and the Company’s investment property fair value was estimated based on the level 3 of fair value hierarchy (Note
3.3).
Group
Company
2021
2020
2021
2020
31 December
31 December
31 December
31 December
Net book value of investment
property
163
125
163
125
Fair value of investment property
227
207
227
207
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
50
8. Investment property (continued)
Future rental income of investment property
Group
Company
2021
2020
2021
2020
Within 1 year
14
12
14
12
After 1 year but not later than 5 years
10
4
10
4
24
64
24
16
No material contractual commitments to purchase, construct, develop, repair or increase the investment property existed at the
year-end.
9. Investments in subsidiaries
The Company’s investments in subsidiaries were as follows as at 31 December:
2021
2020
Cost of investments:
Balance as at 1 January
3,745
3,748
Additions
40
-
Disposals
-
(3)
Balance as at 31 December
3,785
3,745
Impairment:
Balance as at 1 January
2,255
2,195
Impairment
40
60
Balance as at 31 December
2,295
2,255
Carrying amount of investments in subsidiaries as at 31 December
1,490
1,490
On 29 April 2021, Utenos trikotažas AB and G. Vilkė established a subsidiary company Aboutwear UAB. The capital of the
subsidiary amounts to EUR 50,000. Utenos trikotažas AB holds 80% shares of this subsidiary. On 28 November 2019, Utenos
Trikotažas AB established a subsidiary SIA Utenas Trikotaža in Latvia with the capital in the amount EUR 2,800. In July 2020,
SIA Utenas Trikotaža was sold for EUR 100.
As at 31 December 2021, there was impairment of EUR 40 thousand identified for investments in the subsidiary Aboutwear UAB,
which was accounted for in the Company’s statement of comprehensive income under finance expenses. In 2020, EUR 60
thousand impairment of investment in subsidiary Gotija UAB was recognised and accounted for in the Company’s statement of
comprehensive income under finance expenses.
As described in Note 4, the investment into the subsidiary PAT MTF Mrija is impaired to zero.
10. Inventories
Group
Company
2021
2020
2021
2020
31 December
31 December
31 December
31 December
Raw materials
3,310
3,017
2,971
2,684
Production-in-progress
2,418
1,485
2,411
1,481
Finished goods
2,985
2,340
2,930
2,314
Goods for re-sale
94
4
89
-
8,807
6,846
8,401
6,479
Write-down to net realisable value:
Opening balance
(1,418)
(890)
(1 095)
(567)
Change
(475)
(528)
(475)
(528)
Closing balance
(1,893)
(1,418)
(1,570)
(1,095)
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
51
6,914
5,428
6,831
5,384
10. Inventories (continued)
Taking into account the changed circumstances of the realisation of inventories in 2021, the principles of write-down of inventories
to net realisable value were revised and an additional allowance was formed - the total amount of allowance formed during 2021
amounted to EUR 475 thousand in the Company and the Group.
The cost of the Group’s and the Company’s inventories accounted for at net realisable value as at 31 December 2021 amounted
to EUR 2,184 thousand and EUR 1,849 thousand, respectively (as at 31 December 2020 – EUR 2,018 thousand and EUR 1,694
thousand, respectively). Changes in impairment allowance for inventories during 2021 and 2020 were recorded within the Group’s
and the Company’s general and administrative expenses (Note 21).
The Group and the Company do not account for third-party inventories received for processing and which are stored in the Group’s
and the Company’s warehouse premises in the statement of financial position. As at 31 December 2021, the unaudited value of
such inventories owned by third parties was EUR 1,798 thousand and EUR 501 thousand, respectively (as at 31 December 2020
– EUR 2,342 thousand and EUR 524 thousand, respectively).
As at 31 December 2021, the Company’s and the Group’s carrying amount of inventories pledged to the bank was EUR 2,100
thousand and EUR 2,132 thousand (Note 16). As at 31 December 2020, the Company’s carrying amount of inventories pledged
to the bank was EUR 5,384 thousand.
11. Trade receivables, contract assets
Group
Company
2021
2020
2021
2020
31 December
31 December
31 December
31 December
Trade receivables, gross
1,267
1,540
1,124
1,336
Impairment:
Opening balance
(107)
(274)
(81)
(248)
Accrued over the year
-
(81)
-
(81)
Written-off
22
248
22
248
Closing balance
(85)
(107)
(59)
(81)
1,182
1,433
1,065
1,255
Changes in allowance for doubtful trade receivables during 2021 and 2020 were recorded within the Group’s and the Company’s
general and administrative expenses (Note 21).
For trade receivables ageing see Note 3.1
As at 31 December 2021, contract assets of the Company and the Group comprised of accrued revenue of, respectively, EUR
2,673 thousand and EUR 2,748 thousand, it mainly reflects the earned income from ordered article sewing service that had no
invoices issued at the year-end and certain performance obligations (such as completion of the order/bunch according to the
order) still to be completed. The amount was assessed for impairment but no impairment was identified.
As at 31 December 2020, contract assets of the Company and the Group comprised of accrued revenue of, respectively, EUR
1,356 thousand and EUR 1,382 thousand, it mainly reflects the earned income from ordered article sewing service that had no
invoices issued at the year-end and certain performance obligations (such as completion of the order/bunch according to the
order) still to be completed. The amount was assessed for impairment but no impairment was identified.
As at 31 December 2021 and 2020, the Group and the Company did not have amounts past due.
As at 31 December 2021, the Group and the Company had received advances from customers in the amount of EUR 861 thousand
and EUR 866 thousand, respectively (as at 31 December 2020 – EUR 372 thousand and EUR 366 thousand, respectively). The
advances received are reflected as contractual liabilities in the statement of financial position.
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
52
12. Other current assets
Group
Company
2021
2020
2021
2020
31 December
31 December
31 December
31 December
Other current assets
Taxes receivable and other receivables,
except for prepaid income tax
145
39
99
-
Subsidies receivable*
-
175
-
175
Prepayments
212
133
200
128
Deferred expenses
51
50
50
48
Total other current assets
408
397
349
351
*The amount represents subsidies receivable. In 2020, the company (Utenos Trikotažas AB) was included in the list of taxpayers
who may be subject to fiscal aid measures due to the COVID-19, established by the State Tax Inspectorate. Additionally, under
the Law on Employment, the Company received subsidies to employers during and after the downtime, and subsidies to employers
affected by the COVID-19, which are accounted for by reducing wage costs (the total amount of subsidies received in 2020
amounted to EUR 1,687 thousand). The impact of the subsidies is reflected in the cost of production sold in the period from
January to December, as well as in selling, general and administrative expenses.
13. Cash and cash equivalents
Group
Company
2021
2020
2021
2020
31 December
31 December
31 December
31 December
Cash on hand
5
1
5
1
Cash at bank
620
3,791
67
3,166
Cash equivalents
-
-
-
-
625
3,792
72
3,167
14. Share capital
As at 31 December 2021 and 2020, the share capital comprised of 9,503,000 ordinary registered shares with nominal value of
EUR 0.29 each.
As at 31 December 2021 and 2020, all shares were fully paid.
The subsidiaries did not hold any shares of the Company as at 31 December 2021 and 2020. The Company did not hold its own
shares as at 31 December 2021 and 2020.
15. Other reserves
Legal reserve
A legal reserve is a compulsory reserve under the Lithuanian legislation. Annual transfers of not less than 5% of distributable profit
of the Company calculated under the Lithuanian Republic Law on Companies, are compulsory until the reserve reaches 10% of
the share capital. As at 31 December 2021 and 2020, the legal reserve was fully formed by the Company. The legal reserve
cannot be distributed as dividends but can be used to cover accumulated losses.
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
53
15. Other Reserves (continued)
Revaluation reserve
Revaluation reserve reflects the result of the revaluation (net of deferred tax) of the property, plant and equipment.
Group
Company
Net book value of buildings revaluation reserve as at 31 December 2019:
4,215
2,245
Building revaluation depreciation charges
(130)
(58)
Net book value of buildings revaluation reserve as at 31 December 2020:
4,085
2,187
Building revaluation depreciation charges
(139)
(58)
Net book value of buildings revaluation reserve as at 31 December 2021:
3,946
2,129
Reserve for acquisition of own shares
According to the decision of the shareholders of Šatrija AB in 2019, the reserve for acquisition of own shares amounted to
EUR 100 thousand (including that attributable non-controlling interest).
In 2019, a decision of the shareholders of AB Utenos Trikotažas was passed to build up a reserve of EUR 1,000 thousand
for acquisition of own shares.
Foreign currency translation reserve
The foreign currency translation reserve represents exchange differences arising on consolidation of financial statements of
foreign subsidiaries (Note 2.15).
As at 31 December 2021, foreign currency translation impact on consolidated financial statements amounted to EUR 130
thousand (including non-controlling interest), respectively as at 31 December 2020 – EUR (158) thousand.
16. Borrowings
Group
Company
2021
2020
2021
2020
31 December
31 December
31 December
31 December
Current
Current portion of non-current bank
borrowings
637
567
637
567
Other current borrowings
1,801
1,801
-
Borrowings from related parties
-
532
-
532
Non-current
Borrowings from subsidiaries
-
-
600
600
Borrowings from related entities
532
532
-
Non-current borrowings
2,999
2,314
2,999
2,314
Total borrowings
5,969
3,413
6,569
4,013
The Company’s borrowings from subsidiaries consist of the loan granted by subsidiary Šatrija AB, amounting to EUR 600
thousand with maturity as at 31 December 2027 and variable interest rate 12-month EURIBOR+2.2%.
On 18 December 2020, the Company entered into the loan agreement with SBA Grupė UAB for EUR 532 thousand.
The annual interest rate on the loan will be 6-month EURIBOR+2.2%. The loan matures on 31 December 2027.
On 28 June 2021, a loan agreement was concluded between Utenos trikotažas UAB and the subsidiary Aboutwear UAB, the
maximum amount of which does not exceed EUR 700 thousand. The loan has to be repaid before 27 June 2024. The loan
bears interest, and a variable interest rate is applied calculated according to 6-month EURIBOR + 2.2%. as at 31 December
2021, the amount of the repaid loan was EUR 700 thousand.
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
54
16. Borrowings (continued)
On 27 December 2021, bond subscription agreement and a loan agreement were concluded with manages the Business
Assistance Fund, which provide that the Fund signs and acquires whereas the Company issues ordinary registered bonds of
nominal value of up to EUR 2,300 thousand, and the Fund grants the Company a loan of up to EUR 500 thousand. The
redemption date of the bonds and the repayment deadline of the loan – 15 December 2027. The liabilities are subject to an
annual interest rate which is calculated at intervals of 12 (twelve) months - 7%. For each other 12 (twelve) months the interest
rate is increased by 0.1 (one tenth) percentage point annually. Under the agreements, liabilities are guaranteed by pledges of
current and non-current assets and by sureties of the subsidiaries Šatrija AB and Aboutwear UAB. As at 31 December 2021,
the balance of issued and paid bonds amounted to EUR 1,000 thousand.
As of 31 December 2021 and 2020, the bank borrowings were secured by property, plant and equipment and inventory (Note
7 and 10).
Borrowings were received in the following currencies:
Group
Company
2021
2020
2021
2020
31 December
31 December
31 December
31 December
EUR
5,969
3,413
6,569
4,013
The weighted average interest rates (%) were as follows:
Group
Company
2021
2020
2021
2020
31 December
31 December
31 December
31 December
Non-current borrowings from
subsidiaries
-
-
2.2
2.2
Business support Fund (Viva)
7
-
7
-
Non-current loan from related
entities
2.2
-
2.2
-
Current loan from related entities
-
2.2
-
2.2
Current bank borrowings
2.45
-
2.45
-
Non-current bank borrowings
2.2
2.2
2.2
2.2
The Group’s and the Company’s borrowings fair value was estimated based on the level 3 of fair value hierarchy, contractual
cash-flows were discounted using the prevailing market interest rates. Borrowings fair value is approximate to carrying value, as
disclosed in Note 3.
The exposure of the borrowings to interest rate changes and the contractual re-pricing dates at the statements of financial position
dates are as follows:
Interest changes
Group
Company
2021
2020
2021
2020
31 December
31 December
31 December
31 December
Every 3 months
4,437
2,881
4,437
2,881
Every 6 months
532
532
532
532
Every 12 months
1,000
-
1,600
600
5,969
3,413
6,569
4,013
On 28 March 2019, the Company has signed a long-term credit agreement and an overdraft agreement with OP Corporate Bank
plc Lithuania. The main purpose of this loan of EUR 5,000 thousand is to refinance the Company’s liabilities to Luminor bank AB.
As at 31 December 2021, the amount of the long-term credit was EUR 2,314 thousand with maturity term effective until 31 August
2024.
As at 31 December 2021, under the overdraft agreement Utenos trikotažas UAB has an outstanding amount of EUR 1,801
thousand. The renewal of the overdraft agreement was signed on 28 December 2021 extending it to 30 April 2024 with a limit of
EUR 2,000 thousand.
As at 31 December 2020, the Company had no obligations under the overdraft agreement and as at 31 December 2020 the
amount of unused overdraft amounted to EUR 1,900 thousand.
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
55
Interest rate was set based on market interest rate, therefore, according to the management, their carrying amount approximated
their fair value.
17. Leases
Set out below are the carrying amounts of right-of-use assets recognised and the movements during the period:
Company
Premises
Land
Vehicles
Other property,
plant and
equipment
In total
31 December 2019
148
30
176
12
366
Additions
93
-
28
1
122
Disposals and write offs
-
-
(60)
(1)
(61)
Depreciation expense
(73)
(3)
(43)
(4)
(123)
31 December 2020
168
27
101
8
304
Additions
521
-
48
1
570
Disposals and write offs
(496)
-
-
-
(496)
Depreciation expense
(96)
(3)
(38)
(3)
(140)
31 December 2021
97
24
111
6
238
Group
Premises
Land
Vehicles
Other property,
plant and
equipment
In total
31 December 2019
148
456
188
12
804
Additions
93
-
28
1
122
Disposals and write offs
-
-
(52)
(1)
(53)
Depreciation expense
(73)
(31)
(50)
(4)
(158)
Effect of exchange rate
-
(86)
-
-
(86)
31 December 2020
168
339
114
8
629
Additions
521
-
72
1
594
Disposals and write offs
(496)
-
-
-
(496)
Depreciation expense
(96)
(34)
(44)
(3)
(177)
Effect of exchange rate
-
28
-
-
28
31 December 2021
97
333
142
6
578
Set out below are the carrying amounts of lease liabilities and their dynamics during the period:
Company
Group
1 January 2021
323
655
Additions
570
594
Accretion of interest
8
17
Payments
(147)
(194)
Write-offs and disposals
(496)
(496)
Effect of exchange rate
-
28
31 December 2021
258
604
Current
81
116
Non-current
177
488
The Company and the Group had received discounts on lease payments related to COVID-19 for several premise lease
agreements. The maturity analysis of lease liabilities is disclosed in Note 3.1.
The following are the amounts recognised in profit or loss:
Company
Group
Depreciation expense of right-of-use assets
125
162
Interest expense on lease liabilities
8
17
Commitments relating to short-term leases
-
-
Commitments relating to leases of low-value assets
-
-
Discounts received
-
-
Variable lease payments (included in cost of sales)
6
6
Total amount recognised in profit or loss
139
185
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
56
In 2021, the Company and the Group had total cash outflows for leases of EUR 147 thousand and EUR 194 thousand,
respectively.
The Group has lease contracts for premises that contains variable payments based on sales turnover. The following provides
information on the Company’s variable lease payments in 2020, including the magnitude in relation to fixed payments:
17. Lease (continued)
2021
Fixed
payments
Variable
payments
In total
EUR
thousand
EUR
thousand
EUR
thousand
Variable rent with minimum payment
96
6
102
96
6
102
The Company and the Group do not have any contracts that include extension and termination options for which the extension
options are expected not to be exercised or termination options are expected to be exercised.
The Company and the Group are lessors
The Company and the Group have entered into operating leases on its investment property portfolio consisting of certain office
and manufacturing buildings (refer to Note 8). These leases have terms of between 1 to 5 years. All leases include a clause to
enable upward revision of the rental charge on an annual basis according to prevailing market conditions. The lessee is also
required to provide a residual value guarantee on the properties.
Rental income recognised by the Group during the year is EUR 24 thousand (in 2020 – EUR 16 thousand).
Future minimum rentals receivable under non-cancellable operating leases as at 31 December were as follows:
2021
2020
EUR thousand
EUR thousand
Within one year
14
12
After one year but not more than five years
10
4
After five years
-
-
24
16
18. Provisions for employee benefits
Group
Company
Balance at 31 December 2019
363
290
Benefits earned
59
39
Interest expense
1
1
Actuarial (gain) loss
(23)
(23)
Reduction of costs due to cancelled job contracts
(46)
(45)
Balance at 31 December 2020
354
262
Benefits earned
71
39
Interest expense
-
-
Actuarial (gain) loss
54
54
Reduction of costs due to cancelled job contracts
(28)
(28)
Balance at 31 December 2021
451
327
Group
Company
Non-current provisions for employee benefits as at 31 December 2021
358
251
Current provisions for employee benefits as at 31 December 2021
93
76
Non-current provisions for employee benefits as at 31 December 2020
275
193
Current provisions for employee benefits as at 31 December 2020
79
69
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
57
Provisions for pension and jubilee benefits represent amounts calculated according to the collective agreements, which are in
force in the Group and the Company. In the Company and its subsidiary Šatrija AB, each employee is entitled to a jubilee benefit
and a 2-month salary payment when leaving the job at or after the beginning of pension period.
In 2021, provisions were calculated with the discount rate of 0.16% and employee turnover rate of 13.06% (in 2020, 0.22% and
14.62%, respectively).
18. Provisions for Employee Benefits (continued)
The table below discloses the sensitivity of the Group’s and the Company’s provisions to possible changes in key
assumptions, with all other variables held constant.
19. Accrued expenses and other current liabilities
Group
Company
As at 31
December 2021
As at 31
December 2020
As at 31
December 2021
As at 31
December 2020
Accrual for vacation reserve
1,360
1,059
1,061
840
Salaries and social security*
792
1,557
635
1,462
Accounts payables for services and
non-current assets
494
328
496
353
Taxes payable, other than income
tax*
466
1,466
414
1,442
Provisions for accrued bonuses
72
423
72
351
Provisions for employee benefits
93
79
76
69
Other liabilities
298
226
97
11
3,575
5,138
2,851
4,528
*In 2020, Utenos Trikotažas AB entered into an interest-free tax loan agreement with the State Tax Inspectorate and the State
Social Insurance Fund Board for the amount of EUR 1,347 thousand and EUR 888.7 thousand, respectively. Under these
agreements, debts are to be settled by December 2021.
In December 2021, it has been requested to defer the last instalment of the loan – EUR 103 thousand – to 2022. The deferral of
payment to 25 March 2022 has been received from the Tax Authorities.
31 December 2021
Group
Company
Change in
assumption
Positive changes
in assumption
Negative
changes in
assumption
Positive
changes in
assumption
Negative
changes in
assumption
Discount rate
0.50%
Decreased by
3.36%
Increased by
3.43%
Decreased by
3.15%
Increased by
3.21%
Salary growth rate
0.50%
Increased by
3.56 %
Decreased by
3.27 %
Increased by
3.35%
Decreased by
3.05%
31 December 2020
Group
Company
Change in
assumption
Positive
changes in
assumption
Negative
changes in
assumption
Positive
changes in
assumption
Negative
changes in
assumption
Discount rate
0.50%
Decreased by
2.97%
Increased by
3.11%
Decreased by
2.61%
Increased by
2.76%
Salary growth rate
0.50%
Increased by
3.60%
Decreased by
2.92 %
Increased by
2.70%
Decreased by
2.58%
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
58
20. Cost of sales
Group
Company
2021
2020
2021
2020
Materials used in production
10,467
8,131
10,353
7,921
Salaries and social security
9,954
9,112
7,647
6,805
Other additional expenses
4,454
3,569
5,181
4,054
Depreciation and amortisation (Notes
6, 7, 8 and 17)
586
704
381
483
Cost of materials sold
860
723
802
682
26,321
22,239
24,364
19,945
21. Selling, General and Administrative Expenses
Group
Company
2021
2020
2021
2020
Selling expenses
Salaries and social
security
1,053
718
927
666
Advertising and marketing costs
737
445
576
444
Agency costs
287
209
286
209
Transportation expenses
395
389
389
387
Maintenance costs of retail outlets
39
20
39
14
Depreciation and amortisation (Notes 6, 7, 8
and 17)
158
157
158
156
Other selling expenses
137
88
128
84
Total selling expenses
2,806
2,026
2,503
1,960
General and administrative
expenses
Salaries and social
security
1,477
1,173
1067
837
Communication and consulting services*
719
443
476
379
Taxes (other than income tax)
138
114
124
108
Depreciation and amortisation
157
185
108
133
Security services
139
136
71
67
Car operating expenses
54
34
46
28
Fees to financial institutions
95
97
89
94
Premises operating expenses
45
42
43
39
Travel expenses
3
5
2
4
Representation expenses
29
31
27
29
Allowance (reversal) and write-off of trade
receivables
(25)
95
(25)
95
Allowance (reversal) and write-off of
inventories
507
730
507
712
Other
926
561
778
391
4,264
3,646
3,313
2,916
7,070
5,672
5,816
4,876
* For year 2021, fee for other non-audit related services provided by independent auditors amounted to EUR 8.6 thousand
(SA8000 surveillance audit). For year 2020, fee for other non-audit related services provided by independent auditors amounted
to EUR 5.7 thousand (EUR 1.2 thousand translation services and EUR 4.5 thousand tax services).
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
59
22. Other income and expenses
Group
Company
2021
2020
2021
2020
Gain on disposal of non-current assets
1
7
3
-
Rental income
26
23
24
18
Other income
110
125
79
35
Other income
137
155
106
53
Loss from disposal of non-current assets
(1)
-
(1)
-
Expenses related to leasehold assets
(8)
(8)
(4)
(5)
Depreciation of rentals
(8)
(7)
(8)
(7)
Other expenses
(17)
(15)
(13)
(12)
23. Finance expenses, net
Group
Company
2021
2020
2021
2020
Dividend income
-
-
-
33
Gain on foreign exchange
224
163
66
55
Interest income
-
-
65
60
Other finance income
3
14
3
14
Income from financing activities
227
177
134
162
Interest expense*
(100)
(88)
(105)
(98)
Loss on foreign exchange
(145)
(538)
(64)
(57)
Impairment of loans and interest of loans
-
-
(700)
(150)
Impairment of investments in subsidiary
-
-
(40)
(60)
Other finance costs
(15)
(18)
(15)
(19)
Finance costs
(260)
(644)
(924)
(384)
*Interest is calculated on those loans which are measured at amortised cost.
24. Income tax
Income tax expenses comprised as follows:
Group
Company
2021
2020
2021
2020
Current income tax
-
(166)
-
(149)
Change of deferred income tax
(250)
80
(192)
100
Income tax (expenses) recognised in the
statement of comprehensive income
(250)
(86)
(192)
(49)
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
60
24. Income tax (continued)
Reconciliation of the reported amount of income tax expenses for the year to the amount of income tax that would be calculated
applying the statutory income tax rate to profit before tax:
Group
Company
2021
2020
2021
2020
Profit (loss) before tax
(,2,861)
(336)
(2,754)
(224)
Income tax (expense) at a rate of 15%
429
50
413
34
Change in investment incentive
-
12
-
12
Effect of different tax rates applicable to
subsidiary in Ukraine
(3)
(27)
-
-
Change in valuation allowances for deferred tax
asset
-
-
-
-
Used tax losses carried forward for which
deferred tax assets was not recognised
194
234
-
-
Impact of permanent differences
(870)
(355)
(605)
(95)
Income tax (expenses) recognised in the
statement of comprehensive income
(250)
(86)
(192)
(49)
In 2021, deferred income tax asset and liability related to the entities operating in Lithuania were estimated using a tax rate of
15% (in 2020: 15%). Deferred income tax asset and liability relating to entity operating in Ukraine were estimated using a tax rate
of 18% (in 2020: 18%).
The movement in the Group’s and the Company’s deferred tax assets and deferred tax liabilities accounts (prior to and after
offsetting the balances) during the period was as follows:
Group
31 December
2020
Recognised
in profit or
loss
Recognised
in other
comprehensi
ve income
31 December
2021
Deferred tax asset
Tax loss carry forward
-
-
-
Inventories
172
(172)
-
-
Amounts receivable
17
(17)
-
-
Impairment of property, plant and equipment
1
(1)
-
-
Provisions for employee benefits
51
(51)
-
-
Accrued expenses
29
(29)
-
-
Deferred tax asset before valuation allowance
270
(270)
-
-
Less: valuation allowance
(8)
8
-
-
Less: deferred tax asset netted with deferred tax
liability
(185)
185
-
-
Deferred tax asset, net
77
(77)
-
-
Deferred tax liabilities
Depreciation of property, plant and equipment
(68)
2
(38)
(104)
Revaluation of property, plant and equipment
(731)
10
-
(721)
Deferred tax liabilities
(799)
12
(38)
(825)
Less: deferred tax liability netted with deferred tax
asset
185
(185)
-
-
Deferred tax liabilities, net
(614)
(173)
(38)
(825)
Deferred income tax, net
(537)
(250)
(38)
(826)
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
61
24. Income tax (continued)
Group
31 December
2019
Recognised
in profit or
loss
Recognised
in other
comprehensi
ve income
31 December
2020
Deferred tax asset
Tax loss carry forward
-
-
-
-
Inventories
93
79
-
172
Amounts receivable
16
1
-
17
Impairment of property, plant and equipment
1
-
-
1
Provisions for employee benefits
53
(2)
-
51
Accrued expenses
53
(24)
-
29
Deferred tax asset before valuation allowance
216
54
-
270
Less: valuation allowance
(8)
-
-
(8)
Less: deferred tax asset netted with deferred tax
liability
(112)
(73)
-
(185)
Deferred tax asset, net
96
(19)
-
77
Deferred tax liabilities
Depreciation of property, plant and equipment
(84)
16
-
(68)
Revaluation of property, plant and equipment
(858)
11
116
(731)
Deferred tax liabilities
(942)
27
116
(799)
Less: deferred tax liability netted with deferred tax
asset
112
73
-
185
Deferred tax liabilities, net
(830)
100
116
(614)
Deferred income tax, net
(734)
81
116
(537)
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
62
24. Income Tax (continued)
Company
31 December
2020
Recognised in
profit or loss
Recognised in
other
comprehensive
income
31 December
2021
Deferred tax asset
Tax loss carry forward
-
-
-
-
Inventories
164
(164)
-
-
Allowance for amounts receivable
13
(13)
-
-
Impairment of property, plant and equipment
and investment property
1
(1)
-
-
Provisions for employee benefits
39
(39)
-
-
Accrued expenses
2
(2)
-
-
Deferred tax assets before valuation
allowance
219
(219)
-
-
Less: valuation allowance
-
-
-
-
Less: deferred tax assets netted with deferred
tax liability*
(219)
219
-
-
Deferred tax asset, net
-
-
-
-
Deferred tax liabilities
Depreciation of property, plant and equipment
(69)
17
-
(52)
Revaluation of property, plant and equipment
(383)
10
-
(373)
Deferred tax liability
(452)
27
-
(425)
Less: deferred tax liability netted with deferred
tax asset*
219
(219)
-
-
Deferred tax liabilities, net
(233)
(192)
-
(425)
Deferred income tax, net
(233)
(192)
-
(425)
Company
31 December
2019
Recognised in
profit or loss
Recognised in
other
comprehensive
income
31 December
2020
Deferred tax asset
Tax loss carry forward
-
-
-
-
Inventories
85
79
-
164
Allowance for amounts receivable
12
1
-
13
Impairment of property, plant and equipment
and investment property
1
-
-
1
Provisions for employee benefits
43
(4)
-
39
Accrued expenses
2
-
-
2
Deferred tax assets before valuation
allowance
143
76
-
219
Less: valuation allowance
-
-
-
-
Less: deferred tax assets netted with deferred
tax liability*
(143)
(76)
-
(219)
Deferred tax asset, net
-
-
-
-
Deferred tax liabilities
Depreciation of property, plant and equipment
(83)
14
-
(69)
Revaluation of property, plant and equipment
(393)
10
-
(383)
Deferred tax liability
(476)
24
-
(452)
Less: deferred tax liability netted with deferred
tax asset*
143
76
-
219
Deferred tax liabilities, net
(333)
100
-
(233)
Deferred income tax, net
(333)
100
-
(233)
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
63
24. Income tax (continued)
*Deferred income tax asset and liabilities are netted as much as they are related to the tax institution and with the condition that
tax institution does not perform such coverings.
As at 31 December 2021, the subsidiary PAT MTF Mrija had tax losses carried forward amounting to EUR 1,295 thousand (as at
31 December 2020 – EUR 1,556 thousand) for which it did not recognise deferred tax assets due to uncertainties related to their
realisation. These tax losses may be carried forward for an unlimited term.
25. Earnings per share
Profit per share reflect the Group’s net profit, divided by the number of shares. The Company has no dilutive instruments,
therefore basic and dilutive earnings per share are equal. Calculation of the profit per share is presented below:
Group
2021
2020
Profit (loss) attributable to the equity holders of the Group
(2,966)
(453)
Weighted average number of shares in issue (thousand)
9,503
9,503
Earnings per share/notional profit (in EUR)
(0.31)
(0.05)
26. Related party transactions
The parties are considered related when one party has the possibility to control the other one or have significant influence over
the other party in making financial and operating decisions. The related parties of the Group are as follows:
Related party
Description of relation
A. Martinkevičius
Ultimate controlling individual
SBA Grupė UAB
Ultimate parent company, exercising control through majority of Board
members
SBA Group companies
Koncernas SBA UAB subsidiaries
Company’s management
Directors, Board members and their family members
Besides related parties of the Group, subsidiaries of the Company are treated as related parties of the Company.
In the normal course of business, the Company and the Group enter into transactions with their related parties. These transactions
are priced predominantly at market rates. Judgement is applied in determining if transactions are priced at market or non-market
rates, where there is no active market for such transactions. The basis for judgement is pricing for similar types of transactions
with unrelated parties, when such information is known to the Company or the Group.
As at 31 December 2021 and 2020, the management of the Group and the Company had 0.002 per cent of shares of PAT MTF
Mrija.
Information on less than 100% owned subsidiaries
Financial information of subsidiaries that have non-controlling interests is provided below.
Equity interest attributable to non-controlling interests:
Country of incorporation
and operation
2021
2020
Gotija UAB
Lithuania
0.00%,
0.00%
Šatrija AB
Lithuania
10.22%
10.22%
PAT MTF Mrija
Ukraine
1.05%
1.05%
Aboutwear UAB
Lithuania
20.00%
-
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
64
26. Related party transactions (continued)
Accumulated balances of non-controlling interest:
31/12/2021
31/12/2020
Gotija UAB
-
-
Šatrija AB
166
204
PAT MTF Mrija
37
40
Aboutwear UAB
(94)
-
Summarised statement of comprehensive income for 2021:
Gotija UAB
Aboutwear
UAB
Šatrija AB
PAT MTF Mrija
Revenue
-
102
2,249
842
Cost of sales
-
(39)
(2,149)
(712)
Administrative expenses
-
(576)
(536)
(184)
Other operating income (expenses)
-
-
91
1
Finance income (expenses)
-
(6)
10
135
Profit before tax
-
(519)
(335)
82
Income tax
-
-,
2
16
Profit from continued operations for the year
-
(519)
(333)
98
Total comprehensive income
-
(519)
(333)
98
Attributable to non-controlling interests
-
(104)
(42)
1
Dividends paid to non-controlling interests
-
-
-
-
Summarised statement of comprehensive income for 2020:
Gotija UAB
Utenos
trikotaza SIA
Šatrija AB
PAT MTF Mrija
Revenue
26
-
3,044
692
Cost of sales
(16)
-
(2,323)
(616)
Administrative expenses
(9)
(8)
(584)
(177)
Other operating income (expenses)
-,
-
91
2,322
Finance income (expenses)
-,
-
10
(1,235)
Profit before tax
1
(8)
238
986
Income tax
-
-
(36)
(1)
Profit from continued operations for the year
1
-
202
985
Total comprehensive income
1
(8)
202
985
Attributable to non-controlling interests
-
-
21
10
Dividends paid to non-controlling interests
-
-
-
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
65
26. Related party transactions (continued)
Summarised statement of financial position as at 31 December 2021:
Gotija UAB
Aboutwear
UAB
Šatrija AB
PAT MTF Mrija
Inventories, cash at hand and cash at bank
(current assets)
61
425
640
127
Property, plant and equipment and other non-
current financial assets (non-current assets)
-
49
1,830
2,491
Trade and other payables (current)
-
(243)
(676)
(1,757)
Interest-bearing loans and borrowings and
deferred tax liabilities (non-current)
-
(700)
(166)
(1,338)
Total equity
61
(469)
1,628
(477)
Attributable to:
Parent company
61
(375)
1,462
(514)
Non-controlling interests
-
(94)
166
37
Summarised statement of financial position as at 31 December 2020:
Gotija UAB
Šatrija AB
PAT MTF Mrija
Inventories, cash at hand and cash at bank (current assets)
61
794
121
Property, plant and equipment and other non-current financial
assets (non-current assets)
-
1,973
2,338
Trade and other payables (current)
-
(627)
(1,632)
Interest-bearing loans and borrowings and deferred tax liabilities
(non-current)
-
(144)
(1,334)
Total equity
61
1,996
(507)
Attributable to:
Parent company
61
1,792
(547)
Non-controlling interests
-
204
40*
* Upon application of changes in IAS 27 Consolidated and Separate Financial Statements on 1 January 2010, the Group
retrospectively started to attribute losses to a non-controlling interest even if this resulted in non-controlling interest having a deficit
balance.
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
66
26. Related party transactions (continued)
Related party transactions are disclosed below:
Group
Company
2021
2020
2021
2020
Sales of goods and services
and other sales
Subsidiaries of the Company
-
-
98
26
SBA Group companies
2
23
2
23
Ultimate parent company
-
10
-
10
2
33
100
59
Group
Company
2021
2020
2021
2020
Interest income
Subsidiaries of the Company
-
-
66
60
-
-
66
60
Group
Company
2021
2020
2021
2020
Interest expense
Subsidiaries of the Company
-
-
13
13
-
-
13
13
Group
Company
2021
2020
2021
2020
Purchases of goods and
services
Subsidiaries of the Company
-
-
900
656
Ultimate parent company
158
189
158
160
Other related parties
177
203
170
162
336
392
1,228
978
Group
Company
2021
2020
2021
2020
Dividend payments and
reduction of issued capital
-
-
-
33
Dividends declared by the
subsidiaries of the Company to
shareholders
-
-
-
33
Group
Company
2021
2020
2021
2020
Dividends paid
Subsidiaries of the Company
-
-
-
-
Ultimate parent company
-
782
-
782
-
782
-
782
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
67
26. Related party transactions (continued)
Group
Company
31 December
2021
31 December
2020
31 December
2021
31 December
2020
Amounts receivable,
prepayments and loans
Accounts receivable from subsidiaries of
the Company, gross*
-
-
19
14
Impairment:
-
-
-
-
Accounts receivable from subsidiaries
of the Company, net
-
-
19
14
Prepayments to subsidiaries
-
-
771
883
Loans granted including interest
receivables from subsidiaries, gross**
-
-
2,565
1,805
Impairment
-
-
(1,480)
(780)
Prepayments, loans granted and
interest receivables from the
Company’s subsidiaries, net
-
-
1,856
1,908
-
-
1,875
1,922
* As at 31 December 2021 and 2020, accounts receivable consisted only of accounts receivable from PAT MTF Mrija.
**As at 31 December 2021 and 2020, the amount stands for loan granted to (including interest receivables) PAT MTF Mrija
with fixed annual interest rate of 6%.
As at 31 December 2021, receivables not past due and loans granted amounted to EUR 1,146 thousand, a portion of
receivable payments from subsidiaries of EUR 5 thousand was more than 30 days past due, another portion of receivable
payments from subsidiaries of EUR 15 thousand was 31–120 days past due. The rest of the payments EUR 709 thousand
were more than 121 days past due. As at 31 December 2020, receivables not past due and loans granted amounted to EUR
1,258 thousand, a portion of accounts receivable from subsidiaries of EUR 5 thousand is more than 30 days past due, another
portion of receivable payments from subsidiaries of EUR 15 thousand is 31–120 days past due. The rest of the payments of
EUR 645 thousand are more than 121 days past due.
2021 June 28 a loan agreement was signed between AB Utenos Trikotažas and its subsidiary UAB Aboutwear, the maximum
amount of which is not more than EUR 700 thousand. The loan maturity date is June 27, 2024. The loan bears interest at a
variable interest rate calculated on the basis of 6 month EURIBOR plus 2.2%. On December 31, 2021 the loan amounted to 700
thousand EUR. The loan was fully impaired at 31 Decemer 2021.
Interest rates set for loans granted to related parties by the Company are based on the market interest rates set for similar
borrowings, therefore, the carrying amount of loans granted to related parties is approximately equal to their fair value.
Group
Company
31/12/2021
31/12/2020
31/12/2021
31/12/2020
Current and non-current payables
Subsidiaries of the Company:
Borrowings
-
-
600
600
Other payables
-
-
225
62
SBA Group companies:
Other related parties
57
27
52
21
Ultimate parent company
582
622
574
607
639
649
1,451
1,290
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
68
26. Related party transactions (continued)
Except for loans and borrowings, payables to or receivables from related parties have no interest. Except for dividends and loans
which are respectively paid out or settled based on the legal or contractual requirements, other balances are settled within 15–30
days.
Balances at the year-end have no collaterals and all transactions are carried out in cash unless otherwise agreed.
As at 31 December 2021, the amount of loan from subsidiary Šatrija AB amounted to EUR 600 thousand and accounted for in
non-current liabilities. As at 31 December 2020, the amount of loan from subsidiary Šatrija AB amounted to EUR 600 thousand.
Group
Company
2021
2020
2021
2020
Key management remuneration including
social security costs
Remuneration of the management
1,053
742
745
507
Defined benefit and jubilee payments to
management
13
10
4
2
1,066
752
749
509
Management includes general director, functional directors and chief accountant.
In 2021 and 2020, the management of the Group and the Company did not receive any loans, guarantees, any other payments
or property transfers were not made or accrued. Remuneration to management comprise base salary and related social security
costs.
In December 2021, guarantee agreements were signed with OP Corporate Bank and the subsidiaries Šatrija AB and Aboutwear
UAB. Under these agreements, guarantors guarantee to the OP Corporate Bank that Utenos trikotažas AB will fulfil all of its
obligations pursuant to financing contracts.
No guarantees were issued on behalf of related parties as at 31 December 2020.
27. Contingent Liabilities and Commitments
As at 31 December 2021 and 2020, the Group and the Company had no material commitments for acquisition of property, plant
and equipment or intangible assets.
From 2003 to 2021, the State Tax Inspectorate did not perform a full tax assessment of the Company and the Group (a partial
Company’s tax assessment was performed in 2017). In accordance with applicable laws, the State Tax Inspectorate can at any
time assess the Company’s accounting archive and registers within 3-5 years before the reporting taxable period and can calculate
additional taxes and sanctions. Analogically, similar risk exists due to the existence of entity PAT MTF Mrija registered in Ukraine
as the local state tax authority has not yet performed a full tax inspection.
The Company’s management is not aware of any circumstances that would cause the company any additional material tax
liabilities.
28. Subsequent events
An amendment to the loan agreement between Utenos trikotažas AB and the subsidiary Aboutwear UAB was signed on 1
February 2022, according to which the maximum amount of the loan was increased from EUR 700 thousand to up to EUR 1,000
thousand.
In 2022, a decision has been adopted to suspend investments into the subsidiary Aboutwear UAB and to search for an alternative
investor therein and, in case an investor is not found, to terminate commercial activity of the company.
In February 2022, there has been a notification received about resignation of the Company’s Board member Vytautas Vaškys
from the position of a Board member of the Company; also, it has been decided to appoint Vytautas Vaškys to hold the position
of the Company’s General Manager instead of Petras Jašinskas since March.
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
69
28.Subsequent events (continued)
The Group’s conducts operations in the Ukrainian market through its subsidiary, Mrija PAT MTF, which is providing services to
the Company Utenos trikotažas AB as its main activity and has little external sales. Consequently, the Group is exposed to the
economic and financial markets of Ukraine. In February 2022, following the recognition of self-proclaimed republics of Donetsk
and Lugansk by the Russian Federation and its subsequent invasion of Ukraine, the military conflict escalated and spread to other
regions of that country. The current escalation of the military conflict is likely to have a detrimental impact on the political and
business environment in Ukraine, including on the ability of many entities to continue business as usual. In view of the above, as
at the date these consolidated financial statements were authorised for issue, the situation in Ukraine is extremely volatile and
inherently uncertain. In the wake of the ongoing and dynamic nature of the military operations management concluded that a
reliable estimate of the financial impact cannot be presently made.
However, presented below is the Group’s summarized exposure as at 31 December 2021:
Mrija PAT MTF (exposure in Ukraine to 3rd parties only)
Thousand EUR
PPE
2 219
Inventory
49
Trade and other receivables
1
Other Assets
14
Trade and other liabilities
80
Sales revenues of Mrija PAT MTF for the year ended 31 December 2021 amounted to EUR 842 thousand, of which direct sales
to Ukrainian customers amounted to EUR 10 thousand for the year ended 31 December 2021. Mrija PAT MTF produced 25.4%
of units produced by the Group in 2021.
Going concern
Taking into account significance of operations in the Ukrainian market before it has been affected by the events as described in
the previous paragraphs, the management of the Company is assessing possibilities to either expand its sub-contraction
operations in local market / to other markets or temporarily decrease the volume of the Company operations.
In management’s view, the Company will have sufficient resources to continue its operations for a period of at least 12 months
from the reporting date. Management concluded that the range of possible outcomes considered at arriving at this judgment does
not give rise to material uncertainties related to events or conditions that may cast significant doubt on the Company’s ability to
continue as a going concern.
Management cannot however preclude the possibility of an escalation of the general market uncertainty to other markets, or a
consequential adverse impact on the economic environment the Company operates, that might have an adverse effect on the
Company, and its financial position and operating results, in the medium and longer term.
UTENOS TRIKOTAŽAS AB, company code 183709468, J. Basanavičiaus St. 122, Utena, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS,
FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts are in EUR thousand, unless otherwise stated)
70
CONFIRMATION OF RESPONSIBLE PERSONS
Following Article 21 of the Law on Securities of the Republic of Lithuania, Periodic and Additional
Information of Preparation and Submission rules of Lithuanian Bank Board, we, Vytautas Vaškys,
Managing Director of Utenos trikotazas, AB, Chief Financial Officer Živilė Jonaitytė, and Chief
Accountant Reda Kučinskienė hereby confirm that, to the best of our knowledge, the consolidated and
Company’s Financial Statements and annual for the year ended 31 December of 2021 of Utenos trikotazas
AB, prepared in accordance with the International Financial Reporting Standards as adopted by the
European Union, give a true and fair view of the assets, liabilities, financial position and profit of Utenos
trikotazas, AB and the Group of undertakings.
Managing Director Vytautas Vaškys
Chief Financial Officer Živilė Jonaitytė
Chief Accountant Reda Kučinskienė
Utena, 08 April 2022
UTENOS TRIKOTAŽAS AB
CONSOLIDATED ANNUAL REPORT
For the year ended 31 December 2021
Consolidated Annual Report for 2021
71
1 Reporting Period Covered by the Annual Report
The Annual Report covers the period from 1 January 2021 to 31 December 2021. All amounts in the Annual Report
presented as at 31 December 2021 or for the year than ended, unless otherwise stated. Further in this report Utenos
Trikotažas AB can be referred to as the Company or the Issuer.
2 Issuer and its contact data
Company name
Legal and organisation
form
Date and place of
incorporation
Registration code
Code of the Register of
Legal Entities
Authorised share capital
Address
Name of Register of Legal
Entities
Telephone
Fax
E-mail
Website
Main activities
Auditor
Utenos Trikotažas AB
Legal entity, public company
Registered with the Register of Legal Entities of Utena District on 6 December 1994;
Reregistered with the Ministry of Economy of the Republic of Lithuania on 18 September
1998.
BĮ 98-257
183709468
EUR 2,755,870
J. Basanavičiaus g.122, LT-28214, Utena, Lithuania
Registrų centras VĮ
+370 389 51445
+370 389 69358
utenos.trikotazas@ut.lt
www.ut.lt
Production of knit-wear and textile articles
KPMG Baltics UAB
3 Nature of the Issuer’s Operations
Utenos Trikotažas AB operates in the field of textile industry. The Company’s principal activity is production of knit-wear
and textile articles.
Utenos Trikotažas AB types of activities:
-production of knit-wear and textile articles;
-production of mass-consumption goods which is closely related to principal activities;
-retail and wholesale trade in own production and production of other companies in local and foreign
markets;
-rendering of services to natural and legal persons.
Šatrija AB type of activity:
- sewing of clothes;
MTF Mrija PAT type of activity:
- production of knitwear;
- sewing of knitwear;
Gotija UAB type of activity:
- retail trade;
UAB Aboutwear types of activities:
- retail and wholesale trade;
Consolidated Annual Report for 2021
72
4 Company and Group Companies
The Company and the Group companies do not have branches or representative offices.
5 Agreements with Intermediaries of Securities’ Public Turnover
On 25 September 2005, the Issuer concluded a service agreement with the Department of Safe Custody Services of SEB
Vilniaus Bankas AB, address Gedimino pr. 12, LT-01103 Vilnius. Under this agreement, the accounting and servicing of
the Issuer’s securities is handled in Šiaulių bankas AB in 2018.
On 25 April 2007, the Issuer concluded an agreement with OMX Exchanges Ltd. on the system of service provision,
disclosure and communication of information.
6 Overview of the Company's Activities
During 12 months of 2021, the group of companies Utenos Trikotažas AB (hereinafter – the Group) realised orders of its
productions and provided services for the amount of EUR 30.4 million, i. e. an increase by 9.1 per cent compared to the
previous year when the Company’s sales amounted to EUR 27.9 million. The Group exported 81.9% of its production.
During 12 months of 2021, the Company Utenos Trikotažas earned EUR 28.1 million of income. Sales income increased
by EUR 3.3 million, or 13.5 per cent, compared to the same period in 2020. The Company‘s sales income related to export
accounted for 82.4 per cent.
Compared to the corresponding period of the previous year, sales of on-demand production – the largest segment of the
Group‘s sales – increased by 20.8 per cent to EUR 23.7 million. Sales of the Company‘s brands decreased by 14.2 per
cent to EUR 4.5 million, and sales of specialised clothing manufacture by the subsidiary Šatrija decreased by 26.1 per
cent.
Quarantine-related restrictions have highly affected the sales of the Company‘s brands due to closure of stores in
Lithuania because of the COVID-19 pandemic.
During 12 months of 2021, the Group incurred EUR 2,861 thousand of loss before tax; whereas, there was EUR 336
thousand of loss before tax during the same period in 2020. During 12 months of 2021, the Company Utenos Trikotažas
incurred EUR 2,756 thousand of loss before tax; whereas, there was EUR 224 thousand of loss before tax during the
same period of the previous year.
The Group‘s EBITDA is negative (– EUR 1,919 thousand), i. e. a decrease of EUR 3,103 thousand compared to the
same period in 2020. The Company‘s EBITDA is negative (– EUR 1,310 thousand); i. e. a decrease of EUR 2,088
compared to the same period in 2020 when the Company’s EBITDA was positive (EUR 778 thousand).
In 2021, the results of the Group were adversely affected by the decrease in production capacities and additional expenses
for their compensation caused by the COVID-19 pandemic.
Consolidated Annual Report for 2021
73
7 Key performance indicators of the Group
UT group sales, profit, price per share for the last 5 years:
2021
2020
2019
2018
2017
Revenue (EUR’000)
30,443
27,902
30,771
30,457
25,843
Profit for the year (loss) (EUR’000)
(3,111)
(422)
763
1,141
301
Price per share
0,760
0,900
0,940
0,820
0,950
Trade
Group
Company
Revenue (EUR’000) EUR
Change,
Change,
2021
2020
per cent
2021
2020
per cent
Products manufactured on
demand of other clients
23,714
19,637
20.8
23,639
19,636
20.4
Company brands (ABOUT,
UTENOS)
4,480
5,222
(14.2)
4,482
,5,142
(12.8)
Services of specialized clothing
manufacture
2,249
3,043
(26.1)
-
-
-
30,443
27,902
9.1
28,121
24,778
13.5
Revenue (EUR’000) EUR
2021
2020
Change,
per cent
2019
Utenos Trikotažas AB
28,120
24,778
13.5
26,979
Šatrija AB
2,249
3,044
(26.1)
3,687
PAT MTF Mrija
842
692
21.7
865
Gotija UAB
-
26
(100)
300
Aboutwear UAB
102
-
-
-
Elimination of intercompany transactions
(870)
(638)
36.4
(1,060)
30,443
27,902
9.11
30,771
Sales by regions
In 2021, the Company has sold goods and services of total amount of EUR 28.1 million. Trade volume increased by EUR
3.3 million as compared to 2020. The Company exported to Western Europe and other countries 82.4 per cent, whereas
sold in Lithuania 17,6 per cent of total production.
In 2021, the total sales of goods and services of Utenos Trikotažas AB group (hereinafter “the Group”) amounted to EUR
30.4 million. The Group exported 81.9 per cent, whereas sold in Lithuania 18.1 per cent of total production.
Lithuania
In 2021, the Company sold in Lithuania total amount of EUR 4.9 million of knitwear production. The sales in Lithuania
decreased by EUR 0.5 million or 9.4 per cent.
In 2021, the Group sales in Lithuania amounted to EUR 5.5 million of production, the export sales decreased by EUR 655
thousand compared to 2020.
Export
In 2021, the Company exported knitwear in the amount of EUR 23.2 million. Export volumes increased by EUR 3.8 million
or 20 per cent compared to 2020. Western European retail chains remained the Company’s major buyers.
In 2021, the Group‘s exports to Western Europe and other regions amounted to EUR 24.9 million, which is more by EUR
3.2 million compared to 2020.
Trade by regions is disclosed in Note 5 of the financial statements.
Consolidated Annual Report for 2021
74
Operating figures
Group
Company*
2021
2020
2019
2021
2020
2019
Manufactured items, units’000
2,578
3,149
2,853
2,492
3,062
2,735
Average number of employees (FTE)
1,022
936
1,080
715
662
720
* The production of Utenos Trikotažas UAB is shown in conjunction with the subsidiary’s production according to the
Company’s orders.
Production
In 2021, the Company produced 1.2 million knit-wear items. The Company‘s subcontractors (including subcontractors in
Ukraine) produced 1.3 million knit-wear items or 52 per cent of total production volumes. In 2021, Šatrija AB produced 80
thousand sewn items. In 2021, MTF Mrija PAT produced 656 million items.
Production (units’000)
2021
2020
Change, per
cent
Utenos,Trikotažas,AB
1,842
2,472
(25.5)
Šatrija,AB
80
87
(8.0)
PAT,MTF,Mrija
656
590
11.2
Gotija,UAB
-
-
-
Aboutwear, UAB
-
-
-
2,578
3,149
(18.1)
Financial ratios
Group
Company
2021
2020
2019
2021
2020
2019
Revenue (EUR’000)
30,443
27,902
30,771
28,121
24,778
26,979
Operating profit (loss) (EUR’000)
(2,828)
131
659
(1,966)
(2)
597
Operating profit (loss) margin (per cent)
(9.3)
0.5
2.1
(7.0)
(0.01)
2.2
EBITDA *
(1,919)
1,184
1,710
(1,310)
778
1,337
EBITDA margin (per cent)
(6.3)
4.2
5.6
(4.7)
3.1
5.0
Profit (loss) before tax (EUR’000)
(2,861)
(336)
759
(2,756)
(224)
1,801
Profit (loss) before tax, margin (per cent)
(9.4)
(1.2)
2.5
(9.8)
(0.9)
6.7
Net profit (loss) for the year (loss) (EUR’000)
(3,111)
(422)
763
(2,948)
(273)
1,798
Net profit (loss) for the year margin (per cent)
(10.2)
(1.5)
2.5
(10.5)
(1.1)
6.7
Number of shares (thousand)
9,503
9,503
9,503
9,503
9,503
9,503
* EBITDA is calculated taking profit (loss) before tax from the statement of comprehensive income, plus financial costs
and minus financial income and plus depreciation and amortization.
Consolidated Annual Report for 2021
75
Relative ratios
Group
Company
2021
2020
2019
2021
2020
2019
Return on capital employed (per cent)
(net profit divided by share capital)
(95.0)
(15.3)
27.7
(91.8)
(9.9)
65.2
Return on assets (per cent)
(net profit divided by total assets)
(11.5)
(1.8)
3.3
(11.8)
(1.2)
8.6
Return on shareholders’ equity (per cent)
(net profit divided by shareholder’s equity)
(33.2)
(4.1)
7.0
(34.4)
(2.7)
17.6
Debt ratio (per cent )
(total liabilities divided by total assets)
65.3
55.2
52.2
65.6
54.7
51.4
Debt-to-equity ratio (per cent)
(total liabilities divided by shareholder’s equity)
188.5
123.1
109.2
190.4
120.6
105.7
Liquidity ratio (per cent)
(current assets divided by current liabilities)
119.0
136.8
145.5
117.7
136.7
139.9
Equity-to-asset ratio (per cent)
34.7
44.8
47.8
34.4
45.3
48.6
Ratios related with the share price
2021
2020
2019
P/E (price-to-earnings ratio)
(2.89)
(18.88)
12.17
EPS (earnings per share)
(0.26)
(0.05)
0.08
EV/EBITDA (enterprise value to EBITDA
ratio)
(6.50)
6.90
6.55
EV/EBIT (enterprise value to EBIT ratio)
(4.43)
(32.68)
12.66
Investments
In 2021, the Group’s investments in new equipment and new technologies amounted to EUR 640 thousand.
In 2021, the Company‘s investments in new equipment and technologies amounted to EUR 624 thousand,
including transactions between Group companies.
In 2021, Šatrija AB did not make any investments.
In 2021, MTF Mrija PAT invested EUR 14 thousand.
In 2021, Utenos Trikotažas AB has sold its trademark rights of ABOUT for the amount of EUR 43 thousand to its
subsidiary Aboutwear UAB for further development.
Consolidated Annual Report for 2021
76
8 Information About Trade in the Issuer’s Securities in Regulated Markets
The Company’s shares are listed on the Official List of the National Stock Exchange, as well on the Baltic List of the
Lithuanian, Latvian and Estonian stock market. 9,503,000 of ordinary registered shares have been registered for public
turnover of securities. ISIN code ISIN LT0000109324. Vilnius is place of registration of shares. A nominal value of one
share is EUR 0.29.
9 Information Regarding the Price of Shares and Their Dynamics
Utenos Trikotažas AB share price dynamics, 2019–2021 (EUR):
Price ratios
2021
2020
2019
Open price, EUR
0.92
0.94
0.82
High price, EUR
0.98
1.04
1.20
Low price, EUR
0.75
0.80
0.81
Last price, EUR
0.76
0.90
0.94
Turnover, units
140,306
56,369
79,171
Turnover, million EUR
0.12
0.05
0.08
Capitalisation, million EUR
7.17
8.55
8.93
Consolidated Annual Report for 2021
77
Utenos Trikotažas AB, OMX Baltic Benchmark GI and OMX Vilnius Index dynamics from 2019 to 2021
Index/Equity
31/12/2021
31/12/2020
31/12/2019
2021/2020
change, per cent
OMX Baltic Benchmark GI
1,568.82
1,104.74
992.83
42.01
OMX Vilnius
966.13
816.64
712.14
18.31
UTR1L
0.76,EUR
0.90,EUR
0.94,EUR
(15.56)
10 Dividend Policy
The decision on dividends payment for 2021 will be made by the General Meeting of Shareholders, based on the
proposal of the Board.
2021
2020
2019
Dividends (EUR’000)
-
-
-
Dividends per share
-
-
-
Consolidated Annual Report for 2021
78
11 Description of Key Risks and Contingencies of the Company
In 2021, the results of sales of Utenos Trikotažas AB (hereinafter referred to as “the Group”), the largest group of textile
companies in Central and Eastern Europe, were influenced by the COVID-19 pandemic and its outcomes on economic
situation in the main export markets and Lithuania. In 2021, the Group’s largest export regions remain the German-speaking
countries of Germany, Austria and Switzerland, and Scandinavia.
Key risk factors related to operations of Utenos Trikotažas AB include:
• Overall economic situation in principal export markets;
• Overall economic situation of Lithuania;
• Foreign currency fluctuations;
• Amendments to laws and legal acts of the Republic of Lithuania;
• Changes in accounting and tax regulations;
• Geopolitical situation in Europe and world-wide.
Economic factors.
The coronavirus (COVID-19) pandemic and the announcement of quarantine in Lithuania and other markets affected the
performance of the Company and the Group in 2021 and 2020. Due to quarantine restrictions on economic activity, the
stores were temporarily closed in the territory of the Republic of Lithuania from 16 March 2020 to 20 April 2020, from 16
December 2020 to 31 December 2020, and from 1 January 2021 to 14 February (to 19 April if there is no separate entrance).
Sales of the own brand segment in physical outlets and to wholesale partners declined. According to the management, the
loss of sales due to closure of stores amounts to approx. EUR 560 thousand in 2020 and EUR 506 thousand in 2021. This
effect was offset by the growth of e-shop sales and sales of specific products (face masks).
Sales of on-demand production dropped by 15 per cent in 2020; yet, they increased by 18% in 2021. The management
cannot fully distinguish the impact of the COVID-19 on the segment of knitwear products manufactured on demand due to
lack of data on different quarantine restrictions in end-user markets, customers’ financial position prior to the COVID-19
pandemic and subsequent changes, possible impact of other factors on customer decisions.
In 2020-2021, the development of sales of on-demand production was also hampered by the exhibitions which were
cancelled or held through electronic channels, restricted travel for both the Company’s sales professionals and the
Company’s customers.
The management identifies potential risks caused by COVID-19 to the company‘s results and the going concern which
remain relevant in 2022 as well. It is probable that structural market changes resulting from the COVID-19 when importance
of e-channels in retail trade, compared to physical channels, increased due to restrictions and changed purchasing
behaviours, will remain.
− Operating disruptions and delays due to illness throughout the Group companies;
− Supply-related risk, disruptions of movement of goods;
− Settlement risk;
− Liquidity risk;
− Financing risk;
− The risk of temporary suspension of operations due to epidemic.
Social risk factors.
The Company focuses on improvement of working conditions, employees training, qualification development.
Technical and technological risk factors.
The condition of the Company’s major facilities is good and does not pose any risk to operations. Utenos Trikotažas AB
regularly invests in renovation of facilities and introduction of the latest technologies.
Ecological risk factors.
The Company has implemented environment management system, which complies with requirements of ISO 14001. Key
environmental strategic objectives include:
• Reduction of environmental pollution through efficient and economical use of raw materials and energy resources;
• Reduction in waste volume, improvement of management of waste and chemical materials, reduction of use of
dangerous chemical substances in the production process.
The impact of the COVID-19 pandemic has not influenced any specific sustainability-related targets.
Climate-related policy.
There are sustainable measures applied to mitigate climate change:
• Waste sorting and recycling – waste is sorted and recycled. The Company‘s priority is to continue and promote
waste sorting for recycling.
• Efficient energy consumption and saving – proposals / investments related to energy efficiency are analysed. The
ai mis to save >10% of energy for the year 2022. Only green electricity is used – electricity generated only from
renewable resources is purchased and consumed. Audit of energy consumption was carried out in the Company
in 2021.
There is no information that the Company should disclose in accordance with the Regulation (EU) 2020/852 or theTaxonomy
Regulation.
Consolidated Annual Report for 2021
79
12 References to and Additional Explanations of Data Presented in The Financial Statements
All financial data of 2021 and 2020 presented in this Annual Report is calculated based on the financial information
presented in the Group and the Company’s financial statements for the year 2021, prepared in accordance with the
International Financial Reporting Standards as adopted by the EU. These financial statements were audited by the auditor
assigned under established procedure.
13 Main Features of the Group Company’s Internal Control and Risk Management Systems Related to the
Preparation of the Consolidated Financial Statements
The consolidated financial statements of Utenos Trikotažas Group are prepared in accordance of International Financial
Reporting Standards (IFRS) as adopted by the EU. To all Utenos Trikotažas AB group companies the same principles of
internal control organisation and accounting are applied. Per consolidated financial statements, all intercompany
transactions and balances are eliminated.
Internal controls in Utenos Trikotažas AB includes control procedures over processes related to sales and manufacturing
of production, supply, financial reports preparation.
14 Corporate Social Responsibility
Utenos Trikotažas AB is the largest Lithuanian knitwear producer, whose production cycle covers the whole process: from
the yarn to the finished product and expanding the sales of innovative materials. The goal of the Company is to become an
innovative leader in the production of knitwear in Europe and an example of a responsible attitude towards the environment
and public welfare. Implement innovations for high value-added and new products and increase process flexibility and
speed. Maintain a good relationship with existing partners and clients and constantly search for new ones, working flexibly
and adapting to the needs of the client.
Utenos Trikotažas AB in 2017 officially joined the Greenpeace project “Detox”. The Company is committed to eliminate raw
materials that could have a negative impact to people or the environment in all stages of the product life, from the start of
production and packaging to wearing, washing, sorting and recycling of the product, thus producing products that are safe
for the consumer without harming the environment and workers. This is guaranteed by the available certificates and
independents auditor audits, after which independent certification bodies issue certificates proving that the production meets
the requirements of international ecological standards.
The Company does not tolerate any forms of corruption and is in favour of honest business and transparent cooperation.
The risk is reduced by internal controls aimed at identifying potential risk factors for corruption. Information about risk is
disclosed in Note 3.1 per financial statements.
In accordance with the requirements of SA8000: 2014, the Company has instituted the Social Performance Team that
periodically evaluates all aspects of social responsibility (including corruption) pursuant to the written Corporate Social
Accountability Risk Assessment Procedure and submits suggestions for improvement to the management.
Employees of the Company are educated about the importance of social claims, and there is a system of complaints and/or
offers in the Company that ensures confidentiality and anonymity.
The Company complies with the requirements of the legislation in force in the field of environmental protection, labour safety
and other fields. Inspections by the controlling authorities are carried out to ensure compliance with the legislation in force.
The Company is actively involved in the worker trade union, which works closely with the management and simultaneously
solves the issues raised by employees.
The Company seeks to continuously improve the conditions of its employees. The employees have the opportunity to
exercise free of charge on the sports club located on the premises of the Company, subsidized food at the Company’s
canteen.
The Company’s employees participate in external Lean training, aimed not only at managing and optimizing production
processes but also in improving workplaces, encouraging employees to contribute to the improvement of the company's
operations, optimization and facilitation of work.
The Company and the Group companies take care of environmental protection by controlling the waste generated by the
Company and the use of electricity.
The Company has replaced all light bulbs used in industrial premises in energy saving bulbs, thus saving energy
consumption.
In order to implement the development of corporate social responsibility in partnership with business, social and international
partners, Utenos Trikotažas AB certified for international social responsibility standard SA 8000 in 23 May 2006 (the re-
Consolidated Annual Report for 2021
80
certification audit was carried out on 22-24 November 2021). A new certificate has been obtained which will be valid till 27
February 2025.
In order to meet the customer’s expectations in a timely and qualitative manner, within the Group, the Company registers
and examines the company’s internal problems, ascertaining the reasons for the discrepancies and anticipating the actions
to prevent the problem from happening again. In case a claim is received from the client, the claim is registered in the
register, the causes of the discrepancies are identified and the preventive actions are envisaged so that the problem does
not recur and the customer receives feedback.
SA 8000 standard objectives:
• Ensure social welfare of workers and employees;
• Improve social responsibility not only inside the Company, but also encourage subcontractors;
• Demonstrate to the Western partners that Utenos Trikotažas AB managers of all levels treat their workers civilized
and the Company had implemented core human rights conventions and directives.
Utenos Trikotažas AB management ensure wages which would satisfied the basic needs of personnel and provide some
discretionary income.
Social responsibility (SA 8000) standard demands:
• The work for children under 16 years must not be practised;
• Forced labour, verbal abuse or physical punishment must be avoided; working conditions must be healthy and
safe;
• Discrimination based on nationality, race, religion, sex, sexual orientation, membership in organizations or political
affiliation, sex, age or disability must be prevented; employing, dismissing or retiring must not become a cause to
work successfully, feel happy and needed.
• Equal pay for equal work and same opportunities for learning and promotions for men and women;
• People should work under well-defined working time schedules (work start, work end, lunch break and rest breaks);
overtime work or work on rest days or holidays must be provided in the collective agreement or negotiated with
the worker representatives – the Council of Trade Unions.
• Payment and additions for work done must be clear to employees and all this must be negotiated in the collective
agreement or with the worker representatives – the Council of Trade Unions.
The Company and the Group companies comply with the requirements of SA 8000: do not use child labour, provide
adequate conditions for the protection of occupational safety and health of workers, guarantee the freedom of workers’
organizations, prohibit any discrimination against employees, do not apply and does not encourage physical disciplinary
measures, forced labour, adhere to working time regulations, correctly remunerates for work.
To manage the COVID-19 situation, Utenos Trikotažas AB took steps to ensure the health and safety of employees prior
announcement of the first quarantine in the country. In accordance with the decision of the Crisis Management Group, all
employee business trips, events have been cancelled, excursions to the Company’s premises have no longer been
organised and the reception of the guest delegations has been cancelled, and working from home has been introduced
since 2020. Due to the specifics of the work, employees who could not work from home were provided with protective
equipment and a maximum safe working environment. The Crisis Management Group worked continuously by selecting
solutions for the organization of the work at the Company and the achievement of strategic goals, and taking into account
the dynamics of the pandemic, as the safety and health of employees is of paramount importance to the Company.
The Company seeks to enable training and development of employees, expand knowledge and broaden horizons, as well
as to engage in the implementation of the strategic goals of Utenos Trikotažas AB as effectively as possible. All employees
are given the opportunity to gain or refresh the knowledge and skills required to perform their direct functions. Both individual
employee and the organization takes the responsibility for the development of competencies necessary for the functions of
the employee and activities of the organization. Moreover, the education system includes not only formal education activity,
but also other forms of development and learning. Due to the pandemic, 85% of training programs were transferred to the
distance learning model. Employees were able to participate in conferences, workshops, lectures, and obtain further training
in compulsory, qualification and key competence trainings. Given that the pandemic caused many workers to work remotely,
it was an unusual and emotionally difficult time for everyone.
Utenos Trikotažas AB attaches great importance to the professional recruitment processes and a smooth induction. Both
the experienced professionals in their field and starting professionals with ambition to develop and grow are constantly
invited to join the Company. The most important thing is that the candidates have the right value base, not only what but
also how things are done plays a key role, i.e. with a professional, collaborative and progressive focus. Despite the
challenges posed by the pandemic, the remote recruitment process was successfully carried out in the second half of the
year. In 2021, 224 employees joined Utenos Trikotažas AB (in 2020: 115).
Consolidated Annual Report for 2021
81
The World Environmental Organization “Greenpeace” has recognised the SBA group company Utenos Trikotažas
as the first and so far the only company in the world to comply with the Textile Procurement Standard of
“Greenpeace”. The Lithuanian company also became the only production partner of the organization on a global
scale – production of the new “Greenpeace” collection was started in Utena.
The new “Greenpeace” standard embodies all existing best practices in terms of zero use of toxic chemicals, fairness and
transparency.
“It is the standard for any fashion brand really looking to achieve credibility in terms of sustainability. Utenos Trikotažas has
become the first manufacturer to prove it is compliant with these requirements. Under the standard, organically farmed
natural fibres, production tested free of harmful substances, fair pay and transparency are uniquely combined. And all this
with the most stringent testing”, says Viola Wohlgemuth, Consumer and Harm Coordinator at Greenpeace.
“Greenpeace” collection after a long break
When in 2011 the “Greenpeace” has launched Detox My Fashion campaign by announcing that it will suspend all textile
sales “until suppliers and manufacturers can ensure that no hazardous chemicals are used and released at all stages of
production.” A few years later, in 2018, Utenos Trikotažas successfully implemented a pilot phase of production of
“Greenpeace” collection. It became the foundation of the organization’s new standard for textile production, and a year later,
the first large-scale collection was launched.
“This is a historic achievement. Becoming the first producer worldwide to meet “Greenpeace” requirements is phenomenal.
At the same time, it is an appreciation of the long-term efforts of Utenos Trikotažas. We hope that our example will
encourage other textile companies to achieve ambitious environmental goals as well”, says Petras Jašinskas, General
Manager of Utenos Trikotažas AB.
Environmentally friendly production: across the cycle
Utenos Trikotažas has already finished production of the first batch of “Greenpeace” new t-shirt collection and will continue
the production later this year.
According to Viola Wohlgemuth, Utenos Trikotažas and its partners
1
have shown that for the first time ever, steps to avoid
hazardous chemical use and contamination have been taken across the entire production chain, from fibres in the
processing of raw materials, to dyeing and printing according to Detox principles, and finally to the sewing and packaging
of high quality, ready-to-wear garments, made to last.
“The new “Greenpeace” textiles procurement standard requires Utenos Trikotažas to control the chemicals used via
complete testing of the wastewaters released when it bleaches, dyes, washes and prints the cotton. This collection proves
that truly clean, fair and completely transparent production is in fact possible. And not in some boutique sewing shop, but
at an industrial level”, Mrs Wohlgemuth says.
EU Commissioner: sustainability is a competitive advantage
Last December, the European Union introduced its strategy of tackling pollution – the Green Deal. It will include the Circular
Economy Action Plan, which will focus in particular on resource-intensive sectors such as textiles, construction, electronics
and plastics.
European Union Commissioner for Environment, Oceans and Fisheries Virginijus Sinkevičius congratulated non-
governmental and private sector initiatives and achievements to make the textile industry greener and emphasized the
importance of sustainability in global competition.
“Textile is one of the main industries, where solutions for the circular economy, reusable materials, and recycling will aim to
improve sustainability. The Circular Economy Action Plan, an important part of the EU’s industrial strategy, is already guiding
the planned transformation, therefore, changes in this area are inevitable. It is true that the first ones to follow this path will
naturally have a competitive advantage in the market”, said Virginijus Sinkevičius, EU Commissioner for Environment,
Oceans and Fisheries.
Years of preparation: Detox My Fashion
“Greenpeace” Detox My Fashion campaign, launched almost a decade ago, put a lot of pressure on the global textile
industry, one of the largest polluter, to eliminate the use and discharge of hazardous chemicals. Environmentalists identified
11 groups of hazardous chemicals widely used in the textile industry that are of particular concern due to their effects on
people and the environment and insisted that the major manufacturers and their suppliers commit themselves to stopping
their use in production.
Utenos Trikotažas, part of the SBA Group, is the only Lithuanian company participating in this campaign and one of the few
Detox-committed companies with a vertically integrated production cycle, i.e. when all production processes, from raw
material production through to the final ready-to-wear product, are being made under one roof.
Since the beginning of the Detox my Fashion campaign, over 80 different textile companies (H&M, Nike, Adidas, Puma and
many more) have joined the initiative, representing about 10–15 per cent of the global apparel market.
Consolidated Annual Report for 2021
82
15 Information About the Company’s Own Share Acquisitions
No own shares were acquired by the Company during the current accounting period.
16 Significant Events Subsequent to the End of the Previous Financial Year
28/02/2022 – the Group of Utenos Trikotažas AB earned EUR 30.4 million last year;
23/02/2022 – announcement about the change of the head of Utenos Trikotažas AB was made;
2022-02-23 – it was reported about resignation of a Board member;
28/01/2022 - Utenos Trikotažas AB will focus its investments on the most profitable activities;
03/01/2022 - preliminary publishing dates of performance results of Utenos Trikotažas AB in 2022 were announced;
28/12/2021 – announcement about funding of Utenos Trikotažas AB received from the state management agency was made.
30/11/2021 – resolutions of the General Meeting of Shareholders of Utenos Trikotažas AB.
04/11/2021 – notification of the convening of the Extraordinary General Meeting of Shareholders of Utenos Trikotažas AB;
29/10/2021 – changes in the market of export of Utenos Trikotažas AB were published: sales of products manufactured on
demand of clients are starting to increase;
22/10/2021 – it was reported about resignation of a Board member;
28/09/2021 – it was published that Utenos Trikotažas AB will manufacture knitwear items to the Lithuanian military for the
amount of EUR 3 million;
30/07/2021 - changes in the market of export of Utenos Trikotažas AB were published: sales of products manufactured on
demand of clients are increasing;
03/05/2021 - D. Tamoševičienė will be head of the Board of Utenos Trikotažas AB, independent members are joining;
30/04/2021 - unaudited financial information for the Q1 of 2021 of Utenos Trikotažas AB;
29/04/2021 - Utenos Trikotažas AB will found a subsidiary for development of the brand ABOUT;
28/04/2021 - annual information of Utenos Trikotažas AB for the year 2020;
28/04/2021 – resolutions of the General Meeting of Shareholders;
16/04/2021 – draft resolutions of the General Meeting of Shareholders to be convened on 28 April 2021;
05/04/2021 - notification of the convening of the General Meeting of Shareholders of Utenos Trikotažas AB;
26/02/2021 - unaudited financial information for 12 months of 2020 of Utenos Trikotažas AB;
08/01/2021 – resolution of the Extraordinary General Meeting of Shareholders of Utenos Trikotažas AB;
05/01/2021 - preliminary publishing dates of performance results of Utenos Trikotažas AB in 2021 were announced;
17 The Company’s Operating Plans and Objectives
Sales in 2022 are planned to be maintained at the same level as in 2021. As the demand for exclusive and sustainable
knitwear is increasing, high value-added production to worldwide brands remains the Group’s strategic direction. As a result
of this tendency, the Group’s investments and resources will be directed towards further development of eco-friendly
innovations, strengthening of positions on global markets and long-term profitable growth of the company.
Tendencies and effects of COVID-19 in 2022 are expected to be similar to those in 2021. It is probable that structural market
changes caused by COVID-19 when importance of e-channels in retail trade, compared to physical channels, increased due
to restrictions and changed purchasing behaviours, will remain. Potential
The management identifies potential risks caused by COVID-19 to the company‘s results and the going concern which remain
relevant in 2022 as well. It is probable that structural market changes resulting from the COVID-19 when importance of e-
channels in retail trade, compared to physical channels, increased due to restrictions and changed purchasing behaviours,
will remain. Potential impact of military actions in Ukraine on the Group‘s results is unknown.
The Group’s growth potential is based on two Organically Innovative pillars of the business strategy: firstly, the focus is on
meeting customer needs for the highest quality production and product innovation, and, secondly, the environmental and
consumer friendliness of the production processes is of utmost importance. This is widely appreciated by the customers in
Lithuania and abroad. Due to these reasons, the Company will focus its investments on the main activity – sale of products
manufactured on demand of clients and development of innovative textiles. The Company‘s Board approved this strategic
direction that is generating the largest income and profitability. Investments in the Company‘s brands which are generating
lower portion of income will be reduced when clarifying the activities.
As products manufactured on demand of clients are increasing, contribution of the brand UTENOS to the general sales
structure will change. A separate division of the Company which is currently dedicated to development of the brand UTENOS
will become an integral part of the organisation, and, implementing the ‘Zero Waste’ ideology, the brand will be intended for
production of collections made of quality and sustainable materials that have not been used in manufacture. According to the
statistics, up to 30% of textile inevitably remain unused in various stages of manufacturing. These amounts are not enough
for mass production; however, they are suitable for smaller individualised batches which will be an axis of the restructured
brand UTENOS. When production volumes of the brand UTENOS decrease as a result of the restructuring, their selling
channels will be revised. Activities of the e-shop will be continued; yet, the number of physical stores will be reduced during
2022.
In implementing restructuring of the Company‘s brands, the subsidiary Aboutwear that is developing the innovative and
sustainable brand ABOUT has suspended its commercial activities. The decision regarding commercial activities has been
Consolidated Annual Report for 2021
83
There are no restrictions.
adopted after the active search for investors, the circumstances therefor are currently particularly unfavourable, was
completed.
Priority directions for 2022:
• Increase sales to customers by focusing on high quality and added-value, eco-friendly products made of innovative
materials.
• Restructuring of the Company brand – UTENOS and further development according to the purified Zero Waste strategy.
• Sale promotion of materials created and manufactured based on the customer demand.
• Improvement of operational efficiency.
18 Research and Development Activities
The Company and the Group did not carry out research.
19 Structure of the Issuer's Authorised Share Capital
As at 31 December 20221, the Company’s authorised share capital was comprised of 9,503,000 ordinary registered
shares with a nominal value of EUR 0.29 each.
Utenos Trikotažas AB authorised share capital according to types of shares:
Class of shares
Number of
shares, units
Nominal
value (EUR)
Total nominal
value (EUR)
Percentage in the
authorised share
capital (per cent)
Ordinary registered shares
9,503,000
0,29
2,755,870
100.00
All shares of Utenos Trikotažas AB are fully paid. All shares of the Company are ordinary registered shares of one class
granting equal rights to their holders (shareholders).
An ordinary registered share grants the following property rights to its holder (shareholder):
1. to receive a part of the Company’s profit (dividend);
2. to receive a part of assets of the Company in liquidation;
3. to receive shares without payment if the authorised capital is increased out of the Company’s funds, except
in cases specified in the Law on Companies of the Republic of Lithuania;
4. to have the pre-emption right in acquiring shares or convertible debentures issued by the Company, except in
cases when the General Meeting of Shareholders decides to withdraw the pre-emption right in the manner
prescribed by the Lithuanian Law on Companies in acquiring the Company’s newly issued shares or
convertible debentures for all the shareholders;
5. to lend to the Company in the manner prescribed by law; however, when borrowing from its shareholders, the
Company may not pledge its assets to the shareholders. When the Company borrows from a shareholder, the
interest may not be higher than the average interest rate offered by commercial banks of the locality where
the lender has his place of residence or business, which was in effect on the day of conclusion of the loan
agreement. In such a case, the Company and the shareholders shall be prohibited from negotiating a higher
interest rate;
6. to transfer all or part of the shares into the ownership of other persons;
7. to force other shareholders to sell their shares to them or to force other shareholders to buy their shares from
them in cases and manner prescribed by the Law on the Law on Securities Market;
8. other property rights established by laws.
An ordinary registered share grants the following non-property rights to its holder (shareholder):
1. to attend the General Meetings of Shareholders;
2. to vote at General Meetings of Shareholders according to voting rights carried by their shares. One ordinary
registered share carries one vote;
3. to receive information on the Company specified by laws;
4. to file a claim with the court for reparation of damage resulting from nonfeasance or malfeasance by the
Company’s manager and the Board members of their obligations prescribed by laws or these Articles of
Association as well as in other cases laid down by laws;
5. other non-property rights established by laws.
20 Restrictions on Disposal of Securities
Consolidated Annual Report for 2021
84
21 Shareholders
The consolidated Group (hereinafter “the Group”) consists of the Company and the following subsidiaries:
Registered office
Group’s share (%) as at 31
December
Activity
2021
2020
Šatrija, AB
Šatrijos g 3, Raseiniai
89.78
89.78
Manufacture of wearing
apparel
Gotija, UAB
Laisvės g. 33, Kaunas
100.00
100.00
Retail trade
MTF Mrija, PAT
Tomas Masarik str.13,
Mukačiov, Cietokšna iela 60
98.95
98.95
Production of knitted
articles
Aboutwear, UAB
Laisvės pr. 3, Vilnius
80.00
-
Retail and wholesale
trade
24 All Mutual Agreements Between Shareholders of Which the Issuer is Aware and Due to Which Restrictions
on Transfer of Securities and/or Voting Rights May Be Imposed
None
25 Employees
Average number of employees of Utenos Trikotažas AB group companies at the end of the period, by companies:
Company name
31/12/2021
31/12/2020
Change, per cent
Utenos Trikotažas, AB
797
761
4.7
Šatrija, AB
154
183
(15.8)
MTF Mrija, PAT
136
136
-
Gotija, UAB
-
1
(100)
Aboutwear, UAB
7
-
1,094
1,081
1.2
As at 31 December 2021, the total number of shareholders of Utenos Trikotažas AB was 914.
The shareholders that owned or controlled more than 5 per cent of the Issuer’s authorized share capital as at 31
December 2021 were as follows:
Shareholder’s
name
Company code
Address, country
Number of ordinary
registered shares
held (thousand)
Ownership
interest in the
authorized share
capital (per cent)
Voting rights
(per cent)
SBA Grupė
UAB
132206739
Upės st. 21, Vilnius,
Lithuania
8,771
92.31
92.31
Other
shareholders
-
-
732
7.69
7.69
22 Shareholders Holding Special Control Rights and Descriptions of These Rights
There are no restrictions.
23 All restrictions regarding voting rights
There are no restrictions.
Consolidated Annual Report for 2021
85
Employees related costs (thousand EUR) distribution, by companies:
Company name
2021
2020
Change, per cent
Utenos Trikotažas, AB
10,599
8,306
27.6
Šatrija, AB
2,073
2,206
(6.0)
MTF Mrija, PAT
580
482
20.3
Gotija, UAB
0
5
(100)
Utenas trikotaža, SIA
-
3
(100)
Aboutwear, UAB
188
-
100
13,440
11,002
22.2
The average monthly wages of the Company’s employees before taxes (EUR):
Average monthly salary of the Company’s employees is calculated as payroll expense (before taxes)/FTE.
The Company’s employee distribution by education (according to data as at 31 December 2021):
Group
Company
Group of employees
2021
2020
Change, per
cent
2021
2020
Change, per
cent
Managers
7,158
5,166
38.6
10,457
9,951
5.1
Managers
2,847
1,863
52.8
2,757
2,527
9.1
Specialists
1,239
1,129
9.7
1,298
1,434
(9.4)
Workers
880
862
2.1
989
1,008
(1.9)
1,080
953
13.3
1,186
1,208
(1.8)
Group of
employees
Group
Number of
employees
Higher
Non-higher
professional
Vocational
Secondary
Basic
Higher non-
university
Managers
50
28
7
5
2
-
8
Specialists
156
70
19
37
5
2
23
Workers
591
16
138
210
179
33
15
797
114
164
252
186
35
46
26 Management of the Group Companies
Company name
Managers
Utenos Trikotažas, AB
Petras Jašinskas
Vytautas Vaškys (since 08/03/2022)
Šatrija, AB
Giedrius Grondskis
MTF Mrija, PAT
Tatjana Roshchina
Gotija, UAB
Gytis Kundrotas (since 22//01/2022)
Aboutwear, UAB
Giedrė Vilkė
27 Management Incentives
According to the Remuneration Policy, management incentives are assigned by the decision of the Board taking into account
the objectives met.
28 Amendment Procedure of the Issuer’s Articles of Association
The Articles of Association of the Company shall be amended by the decision of the General Meeting of Shareholders adopted
in the manner prescribed by laws, except in cases specified in the Lithuanian Law on Companies. Following the decision by
the General Meeting of Shareholders to amend the Company’s Articles of Association, the full text of the amended Articles
of Association shall be drawn up and signed by the person authorised by the General Meeting of Shareholders.
The Company’s issued capital amounted to EUR 2,755.9 thousand and was divided into 9,503,000 ordinary registered shares
with par value of EUR 0.29 each.
Consolidated Annual Report for 2021
86
29 Issuer’s Management Bodies
The management bodies of the Company are listed below.
General Meeting of Shareholders
meeting
Audit Committee
Management Board
General Manager
The Articles of Association of Utenos Trikotažas AB stipulate that the Company shall have the following bodies: the General
Meeting of Shareholders, the Board and the General Manager. The Supervisory Board shall not be set up at the Company.
The Company’s Board shall be granted all powers stipulated in the Company’s Articles of Association including powers
assigned to it by laws. The Board shall deal with deliberation of collegial issues and decision making.
The Board shall deliberate and approve the Company’s operating strategy, management structure and job descriptions of
employees. The Board shall elect and remove from office the Company Manager, fix his salary and set other terms of the
employment contract. The Board shall specify information classified as the Company’s commercial secret. The Board shall
analyse and assess the Company’s draft annual and consolidated financial statements and proposed profit (loss)
appropriation and shall submit them to the General Meeting of Shareholders. The Board shall pass other decisions assigned
within its powers by legal acts, by the Company’s Articles of Association and by the decisions of the General Meeting of
Shareholders. The Board shall have a responsibility of convening and arranging the General Meetings of Shareholders in
due time. The Board of Utenos Trikotažas AB shall be composed of 4 members elected for the period of 4 years.
The Audit committee consists of 2 (two) independent members. The Audit committee members by the submission of the
Board are being appointed and withdrawn by the General Meeting of Shareholders. The members of the Committee are
elected for the term of 4 (four) years.
In 2021, the Audit committee held 2 (two) meetings (on 21 January 2021 and on 30 March 2021). During the meetings, the
Audit Committee considered the questions which fall under its competency.
The shareholders meeting held on 26 April 2017 confirmed Utenos Trikotažas AB operating policies. The meeting of
shareholders held on 26 April 2017 elected the Audit committee members: Šarūnas Radavičius and Inga Kuktienė.
Šarūnas Radavičius (born in 1968)
Independent member of the audit committee of Utenos Trikotažas AB since 30 November 2021 elected for the period of 4
years.
Education:
• Vilnius University, Accounting and control (1993), certified auditor of Lithuania;
Workplace:
• Director of Saluma, MB;
Participation in the management of other companies:
• Founder of Saluma, MB;
• Independent member of the audit committee of AKROPOLIS GROUP, UAB;
Inga Kuktienė (born in 1980)
Independent member of the audit committee of Utenos Trikotažas AB since 30 November 2021 elected for the period of 4
years.
Education:
• Vilnius University (Master’s degree), Service Management, and Stockholm University, Bachelor’s degree in
Economics and Management, certified auditor of Lithuania and risk management specialist;
Consolidated Annual Report for 2021
87
Workplace:
• Head of risk management department of SME Bank, UAB;
Participation in the management of other companies:
• Member of the Board of SME Bank, UAB;
• Independent member of the audit committee of Lietuvos oro uostai, VĮ.
The Duties of the Audit Committee:
o To observe the process of preparation of the Company’s financial reports;
o To review the systems of internal control, risk management and internal audit, if it exists in the Company;
o To observe the process of external audit;
o To observe how the external auditor or audit company follows the principles of independence and
objectivity;
o To provide the Board of the Company with written recommendations regarding the selection, appointment
and recall of an external audit company.
o To immediately inform the Managing Director of the company about information provided by the audit
company to audit committee about audit related problematic issues especially when significant control
defects related to financial statements occur.
The Rights of the Audit committee:
• To get complete information and/or documents (their copies) needed for the audit committee to perform their duties.
On the Audit committee request, administration of the Company must provide the information and/or documents
(their copies) to the Audit committee per 3 working days.
• To get complete information on details of accounting, financial and other operations of the company. On the Audit
committee request, administration of the Company as well as on its own initiative must inform the Audit committee
of the methods used to account for significant and/or unusual transactions where the accounting treatment may be
open to different approaches. In such case, a special consideration should be given to the Company’s operations in
off shores and/or activities carried out through special purpose vehicles (organizations), for the purpose to clarify
the justification of such operations.
The Audit committee members may be remunerated for their operations. Remunerations and the payment terms are
determined by the submission of the board by the General Meeting of Shareholders.
30 Members of the Collegial Bodies, the Company Manager, the Finance Manager
As at 31 December 2021:
Position
Full name
Number of the
Issuer’s shares held
End of the
term of office
Start of term of
office
End of the term
of office
End of term of
office
Board
Chairman of the Board
Dovilė Tamoševičienė
-
28/04/2021
28/04/2025
Member of the Board
Vytautas Vaškys
3
28/04/2021
28/04/2025
Independent member of the
Board
Artūras Užgalis
-
28/04/2021
28/04/2025
Independent member of the
Board
Nortautas Luopas
-
28/04/2021
28/04/2025
Head of Administration and the Chief Financial
Officer
General Manager
Petras Jašinskas
-
07/01/2020
28/02/2022
Finance Director
Živilė Jonaitytė
-
02/03/2020
-
Audit Committee
Independent auditor
Šarūnas Radavičius
-
30/11/2021
30/11/2025
Independent auditor
Inga Kuktienė
-
30/11/2021
30/11/2025
Remunerations were paid to the members of a collegial body of the Company (Members of the Board, Members of the Audit
committee) for their work.
Consolidated Annual Report for 2021
88
Information about Board members:
Dovilė Tamoševičienė (b. 1978 )
Chairwoman of the Board of Utenos Trikotažas AB from 28 April 2021.
Education:
• Vilnius University, Master’s degree in Economics.
Workplace:
• Head of Business Control of SBA Grupė, UAB
Participation in the management of other companies:
• Kauno Baldai AB, Board member;
• Šatrija AB, Board member;
• SBA Competence and Service Centre UAB, Board member;
• Robotex UAB, Board member;
• Klaipėdos Baldai AB, member of the Supervisory Board.
• Member of the Supervisory Board of Šilutės Baldai, AB.
Vytautas Vaškys (b. 1967)
Utenos Trikotažas AB, the Board Member since 29 April 2009, re-elected for a four-year term on 28 April 2021.
Education:
• Kaunas University of Technology, Master degree in International Management and Business Administration
(EMBA).
Workplace:
• Head of Business Risks of SBA Grupė, UAB.
Participation in the management of other companies:
• Kauno Baldai AB, Chairman of the Board;
• Šatrija AB, Board member;
• SBA Urban, UAB, Board member;
• MTF Mrija PAT, Supervisory Board member;
• SBA Competence and Service Centre UAB, Board member;
• Robotex, UAB, Board member.
Artūras Užgalis (b. 1989)
Independent member of the Board of Utenos Trikotažas AB since 28 April 2021 elected for the period of 4 years.
Education:
• Mykolas Romeris University, Master’s degree in Leadership and Change Management;
• Kaunas University of Technology, Bachelor’s degree in Food Technology and Engineering.
Workplace:
• Director of Dealja, MB;
Nortautas Luopas (b. 1979)
Independent member of the Board of Utenos Trikotažas AB since 28 April 2021 elected for the period of 4 years.
Education:
• Executive MBA, Baltic Management Institute;
• University of Klaipėda, Bachelor’s degree in Applied Mathematics and IT;
Workplace:
• Head of Private Customers, Digitisation and Analytics at Telia Lietuva, AB.
Nerijus Kalinauskas (b. 1978)
Board member of Utenos Trikotažas, AB since 30 November 2021, elected for the period of 4 years.
Position: Head of Strategic Marketing, SBA Grupė
Education:
• Lithuanian Academy of Music and Theatre, Master‘s degree in Film Management (2012).
Consolidated Annual Report for 2021
89
In 2021, no loans, guarantees, sponsorships were issued and no assets were disposed to members of the Company’s Board
and Management.
31 Information About Significant Agreements
The Company has concluded no significant agreements in which the Company is a party to and which would come into
effect, change or terminate as a result of the change in the control of the Company.
32 Information About the Compliance with the Governance Code
Utenos Trikotažas AB complies with the Corporate Governance Code for the Companies Listed on Vilnius Stock Exchange.
33 Information About Transactions with Related Parties
Results of transactions with related parties performed in 2021 are disclosed in the notes to the financial statements of Utenos
Trikotažas AB for the period ended as at 31 December 2021.
34 Data on Publicly Announced Information
The Company announces information on significant events (as well as other information required by laws) through the system
of information disclosure and communication Globe Newswire. Publicly announced information is also available on the
Company’s website at www.ut.lt and on the website of the Vilnius Stock Exchange at www.baltic.omxgroup.com.
35 Company’s Auditor
Utenos Trikotažas AB signed the agreement for the audit of the Financial Statements for 2021 with KPMG Baltics, UAB
(company code 111494971, the registered address: Lvivo St. 101, 08104, Vilnius). The annual remuneration for the audit
services is EUR 33,300 (thirty three thousand three hundred EUR) plus VAT.
36 General Information on the Group of Companies
36.1 Companies that Constitute the Group, Their Contact Data and Principle Activities
Company name
Šatrija AB
Legal form
Joint stock company
Registration date and place
1955, Šatrijos st.3, 4400 Raseiniai
Company code
172285032
Address
Šatrijos st.3, 4400 Raseiniai
Telephone
8 (428) 70611
Fax
8 (428) 70611
E-mail
raseiniai@satrija.lt
Website
www.satrija.lt
Principal activities
Manufacture of wearing apparel
Company name
Mukačevska Trikotažnaja Fabrika Mrija PAT
Legal form
Open public company
Registration date and place
1971, Tomas Masarik st.13, 89600 Mukachevo, Ukraine
Company code
00307253
Address
Tomas Masarik st.13, 89600 Mukachevo, Ukraine
Telephone
+ 380 (3131) 52780
Fax
+ 380 (3131) 52780
E-mail
mriya@mriya.ut.lt
Website
www.mriyamukachevo.com
Principal activities
Production of knitted articles
Consolidated Annual Report for 2021
90
Company name
Gotija UAB
Legal form
Private company
Registration date and place
1994, Laisvės al. 33, Kaunas
Company code
134181619
Address
Laisvės ave. 33, Kaunas
Telephone
8 (37) 205879
Fax
8 (37) 205879
E-mail
gotija@ut.lt
Website
None
Principal activities
Retail trade in knitwear products
Company name
Aboutwear UAB
Legal form
Private company
Registration date and place
2021, Laisvės ave. 3, Vilnius m., Vilnius city municipality, 04215
Company code
305758870
Address
Laisvės ave. 3, Vilnius m., Vilnius city municipality
Telephone
Fax
-
E-mail
help@aboutwear.com
Website
www.aboutwear.com
Principal activities
Retail and wholesale trade
Subsidiaries Šatrija AB, PAT MTF Mrija, Gotija UAB, Aboutwear UAB do not trade in securities in regulated markets.
37 Information on harmful transactions in which the issuer is a party (transactions that are not consistent with
the Company’s objectives or usual market terms and conditions, infringe interests of the shareholders or other
stakeholders).
There were no harmful transactions (those that are not in line with issuer‘s goals, not under usual market terms, harmful
to the shareholders or stakeholders’ interests) made in the name of the issuer that had or potentially could have negative
effects in the future on the issuer’s activities or business results. There were also no transactions where a conflict of
interest was present between issuer’s management’s, controlling shareholders’ or other related parties’ obligations to the
issuer and their private interests.
38 Diversity Policy
Diversity policy applies to the election of the Company’s manager, members of the Company’s management and
supervisory bodies. The top-level team should, depending on the law, be made up of sufficient diversity, including, for
example, gender, age, geographical origin, education and work experience.
39 Corporate Governance
(Information is prepared in accordance with the Law of the Republic of Lithuania on Companies Financial Reporting Law
(IX575), effective from 29 November 2017, applicable to annual reports of companies reporting periods beginning on or
after 1 of January 2017).
39.1 A reference to the applicable Corporate Governance Code and where it is publicly disclosed and/or by
reference to the publicly available complete information on corporate governance practices
The Company provides information on compliance with the applicable Corporate Governance Code in 2021 in the Annex
to the Consolidated Annual Report. The Company publishes its annual reports on the web page in Investors section.
39.2 If the provisions of the applicable Corporate Governance Code are divergent and/or non-compliant, the
provisions for which the derogations and/or non-compliance and the reasons
The Company publishes this information in 2021 in the Annex to the Consolidated Annual Report on Compliance with the
Corporate Governance Code, “Yes/No/Not applicable” and “Comment”.
39.3 Information on risk scale and risk management: Description of risk management related to the financial
statements, risk mitigation measures and the Company's internal control system
The preparation of the Company’s consolidated financial statements, internal control and financial risk management
systems, compliance with the legislation regulating the preparation of consolidated financial statements are monitored by
the Audit Committee.
The Company is responsible for the supervision and final oversight of the preparation of consolidated financial statements.
The Company is constantly reviewing International Financial Reporting Standards (IFRSs) to ensure timely
implementation of all IFRS developments in the financial statements, analyse transactions that are significant to the
Consolidated Annual Report for 2021
91
Company and the Group’s activities, ensure collection of information from the Group companies, and timely and correct
processing and preparation of that information for the financial statements, periodically informing The Board of the
Company on the progress of preparation of financial statements.
39.4 Information on significant direct or indirect holding of shares
Information on significant direct or indirect holding of shares is disclosed in Note 1 to the Group and the Company’s
financial statements for 2021.
39.5 Information on shareholders with specific control rights and a description of these rights
The Company does not have shareholders with special control rights.
39.6 Information on all existing limitations of voting rights, such as a certain percentage of votes or the number of
persons entitled to vote, restrictions on the use of voting rights or systems in which the property rights granted by the
securities are separated from the holder of the securities
The Company does not impose any restrictions on rights.
39.7 Information on the rules governing the election and amendment of the Board members, as well as changes
to the Articles of Association of the Company
The Company does not have the rules governing the election and amendment of the Board members. The Board of the
Company acts in accordance with the Law on Companies, the Articles of Association of the Company, the Rules of
Procedure of the Board and other legal acts. The members of the Board are always working to benefit the Company and
its shareholders.
The procedure for changing the Company’s Articles of Association does not differ from the Law on Companies.
39.8 Information on the powers of the members of the Board.
The members of the Board of the Company act in accordance with the Law on Companies, the Articles of Association,
the Rules of Procedure of the Board and other legal acts, and do not have special powers. The members of the Board
are always working to benefit the Company and its shareholders.
39.9 Information on the competence of the General Meeting of Shareholders, the rights of shareholders and their
implementation, if this information is not provided by law
The Company provides information about the competence of the General Meeting, the shareholders’ rights and their
implementation, as well as the organization of meetings of shareholders present in 2021 in the Annex to the Annual
Report on Compliance with the Corporate Governance Code in 2021.
39.10 Information on the composition of the management, supervisory bodies and their committees, and their
areas of activity
The Company provides information on the members of the Board of Company, the general manager in the Notes 26, 29,
30 of the Consolidated Annual Report for 2021, which outline the scope of the management’s activities, mention is made
of other important information related to the positions held.
39.11 Election of members of the Company’s manager, management and supervisory bodies is subject to
diversity policies related to aspects such as age, gender, education, and professional experience, description of
the objectives, policy objectives, methods and results of this policy during the reporting period. If the diversity
policy does not apply, the reasons for non-application are explained
The election of the members of the Board of Directors and the Head of the Company is subject to the diversity policy.
39.12 Information on the remuneration of each member of the management and supervisory body (average
salaries paid during the reporting period, with separate mention of bonuses, bonuses, bonuses and other
payments)
The members of the Board of the Company for the four-year term are elected at the General Meeting of Shareholders
and no employment contracts are concluded with them as they represent shareholders and are not employees of the
Company. On the basis of the decision of the Annual General Meeting of Shareholders, annual payments (tandems) to
the members of the Management Board for the work of the Board may be approved by approving the profit distribution
report. The Company did not issue loans to members of the management bodies, did not provide guarantees and
guarantees to ensure the fulfilment of their obligations.
The Board approves the main terms of the employment contract of the team members. Information on the remuneration
paid to the directors of the Company and the Group is disclosed in Note 25 to the financial statements of the Company
and the Group.
Consolidated Annual Report for 2021
92
39.13 Information on all agreements between shareholders (their essence, conditions).
The shareholders of the Company have no mutual agreements.
40 Subsequent events
Subsequent events are more widely disclosed in the financial statements.
There were no significant subsequent events that could have a significant effect on the Group and Company’s financial
statements.
Consolidated Annual Report for 2021
93
REMUNERATION REPORT
Executive Remuneration
Remuneration Policy
The Executive Remuneration Policy (hereinafter referred to as “the Remuneration Policy”) lays down the principles for
remuneration to the general manager and members of the Board of Utenos Trikotažas AB, and to define the main provisions
to be followed by the Company bodies in determining the monthly remuneration or any other pay to the general manager
and members of the Board of Utenos Trikotažas AB for work/activities and setting a variable part of the remuneration (if
applicable under the Remuneration Policy).
Principles laid down in the Remuneration Policy define the following elements of the executive remuneration:
- A fixed part of the remuneration – monthly salary (hereinafter – Fixed Part);
- A variable part of the remuneration – remuneration for the achievement of objectives/indicators (hereinafter –
Variable Part); or
- Other financial remuneration.
The Remuneration Policy shall apply to the general manager and members of the Board of the Company.
The Remuneration Policy contributes to the Company’s strategy, long-term objectives and interests, i.e.:
- Orientation to the business strategy and dynamism: the Remuneration Policy contributes to the implementation of
the Company’s strategy. The policy must be dynamic, responsive to the market situation, needs of the organization,
business development priorities and plans, and must encourage the required change in the organization.
- Result orientation: the Remuneration Policy encourages to achieve organizational and personal objectives, to build
competitive advantages and to improve.
- External competitiveness – the Remuneration Policy reflects market trends; it is aimed at attracting and retaining
Executives of the required qualifications for the Company.
The Remuneration Policy is aimed at providing appropriate incentives to Company Executives whose personal activities
have a significant impact on the Company’s business and on respecting organizational values in the Company’s activities.
Where the same person holds the position of the general manager and a member of the Board of the Company or the position
of a member of the Board and another job in the Company and/or in another company of the Group in which the Company
is a part (hereinafter – affiliated company), a single type of remuneration shall be paid to such Executive, i.e. total
remuneration for holding the position of the general manager or total remuneration for the job (the remuneration principles
for other jobs in the Company are laid down in the SBA Group remuneration policy), but no additional remuneration shall be
paid for duties as the member of the Board.
The Remuneration Policy must be applied in such a way as to avoid any discrimination on the basis of gender and on other
grounds. Men and women shall be equally remunerated for the same or an equivalent job/activity. In terms of implementing
the principles of gender equality and non-discrimination on other grounds, discrimination-free Executive remuneration means
discrimination-free remuneration for work/activity and any additional amounts paid under this Remuneration Policy.
Setting of the Monthly Salary
The monthly salary of the general manager shall be determined by the decision of the Board of the Company, and the
monthly salary to the members of the Board shall be determined by the decision of the General Meeting of Shareholders. In
all cases, the principle of internal equity must be respected when determining the manager’s monthly salary, taking into
account the Job Level or activity performed by the person where the remuneration to a member of the Board, who does not
have employment relationship with the Company, is determined.
The Executive monthly salary shall be reviewed based on:
- The performance of the Company – the achievement of the Company’s annual and/or long-term objectives.
- The budget for remuneration approved by the Company.
The Remuneration Policy provides for the possibility of Variable Part of remuneration for the general manager to encourage
the achievement of the Company’s annual and long-term objectives. The Variable Part shall not be allocated or paid to the
members of the Board. The Board of the Company shall approve the objectives, and weights and indicators of the objectives.
The following objectives may be set:
- financial;
- operational;
- manufacturing;
- qualitative.
The annual Variable Part paid to the general manager shall be calculated where not less than 100 per cent of the Company’s
objectives have been achieved The Board of the Company shall determine the amount of the annual Variable Part. The
annual Variable Part shall not be higher than 75 per cent of the annual salary of the general manager. The Board of the
Company may decide to apply long-term incentives and establish their principles.
Upon the termination of the employment contract, the general manager shall be entitled to the severance pay provided for
in the Labour Code of the Republic of Lithuania (if the general manager is at all entitled to it under the law), unless the parties
agree on a different severance pay in the employment contract.
No prior arrangements on the conditions for early retirement shall apply to Executives.
Consolidated Annual Report for 2021
94
The Board members of Utenos Trikotažas AB did received remuneration in 2021. There were no transactions with managers
granting shares or share options.
The tables provide information on the pre-tax remuneration to the members of the management bodies accrued in euros.
Executive remuneration, 2021
Executive remuneration, 2020
Remuneration of the parent and the Group’s employees
In 2021, the parent’s remuneration fund amounted to EUR 10.59 million (2020: EUR 8.32 million). The total remuneration
fund in 2021 amounted to EUR 13.44 million (in 2020: EUR 11.02 million). The tables below show the average monthly
remuneration of employees in euros before taxes in 2017–2021 (Variable and Fixed Part).The number of employees is
estimated as the full-time equivalent.
Full name
Position
Fixed Part
Variable
Part
Another
financial
remuneration
In total
Arūnas Martinkevičius
Chairman of the Board
-
-
-
-
Dovilė Tamoševičienė
Chairwoman of the Board
-
-
-
-
Artūras Užgalis
Independent member of the
Board
-
-
9,331
-
Nortautas Luopas
Independent member of the
Board
-
-
3,827
-
Auksė Žukauskienė
Member of the Board
-
-
-
-
Vytautas Vaškys
Member of the Board
-
-
-
-
Giedrius Grondskis*
Member of the Board
28,393
21,270
-
49,663
Petras Jašinskas
General Manager
125,487
30,034
-
155,521
Nerijus Kalinauskas
Member of the Board
-
-
-
-
* Giedrius Grondskis, Member of the Board of Utenos Trikotažas AB and General Manager of the subsidiary Šatrija AB, received a
remuneration from the subsidiary Šatrija AB. The information provided covers the period when he was a Board member of Utenos
Trikotažas AB.
Full name
Position
Fixed Part
Variable
Part
Another
financial
remuneration
In total
Arūnas Martinkevičius
Chairman of the Board
-
-
-
-
Dovilė Tamoševičienė
Member of the Board
-
-
-
-
Vytautas Vaškys
Member of the Board
-
-
-
-
Giedrius Grondskis*
Member of the Board
87,502
25,000
-
112,502
Gintautas Rudis
Chairman of the Board
-
-
-
-
Petras Jašinskas
General Manager
120,120
248
-
120,368
Algirdas Šabūnas
The Board Member, General
Manager
1,542
-
-
1,542
* Giedrius Grondskis, Member of the Board of Utenos Trikotažas AB and General Manager of the subsidiary Šatrija AB, received a
remuneration from the subsidiary Šatrija AB.
Consolidated Annual Report for 2021
95
Average monthly salary of the parent’s employees in EUR before taxes
** As from 2019, a change in taxation or remuneration took effect.
Average monthly salary of the Group’s employees in EUR before taxes
** As from 2019, a change in taxation or remuneration took effect.
Changes in the Company’s and the Group’s results during 2017–2021 (EUR’000)
Employee
category
2021
2020
2019
2018
2017
Number of
employees
Average
salary**
Number of
employees
Average
salary**
Number of
employees
Average
salary
Number of
employees
Average
salary
Number of
employees
Average
salary
General
Manager
1
10,457
1
9,951
1
11,081
1
8,615
1
8,691
Managers
46
2,757
42
2,527
48
1,947
43
1,498
46
1,407
Specialists
161
1,298
128
1,434
142
1,289
135
936
139
842
Workers
507
989
496
1,008
554
842
531
663
536
616
Employee
category
2021
2020
2019
2018
2017
Number of
employees
Average
salary**
Number of
employees
Average
salary**
Number of
employees
Average
salary
Number of
employees
Average
salary
Number of
employees
Average
salary
General
Manager
4
7,158
4
5,166
4
5,949
4
4,511
4
4,575
Managers
55
2,847
47
1,863
55
1,365
48
1,251
51
1,031
Specialists
191
1,239
153
1,129
177
990
170
725
172
655
Workers
4
7,158
4
5,166
4
5,949
4
4,511
4
4,575
Indicator
2021
2020
2019
2018
2017
Group
Parent
Group
Parent
Group
Parent
Group
Parent
Group
Parent
EBITDA (defined in
section 7)
(1,919)
(1,310)
1,184
778
1,710
1,337
2,032
1,785
1,470
846
Net profit
(3,111)
(2,948)
(422)
(273)
763
1,798
1,141
571
301
2,235
Consolidated Annual Report for 2021
96
APPENDIX TO THE ANNUAL REPORT
DISCLOSURE OF UTENOS TRIKOTAŽAS AB CONCERNING THE COMPLIANCE WITH THE GOVERNANCE CODE
FOR THE COMPANIES LISTED ON THE REGULATED MARKET IN 2021
Utenos Trikotažas AB (hereinafter referred to as the “Company”), acting in compliance with Article 22(3) of the Law of the
Republic of Lithuania on Securities and paragraph 24.5 of the Listing Rules of AB NASDAQ Vilnius, hereby discloses how it
complies with the Corporate Governance Code for the Companies listed on NASDAQ Vilnius as well as its specific provisions
or recommendations. In case of non-compliance with this Code or some of its provisions or recommendations, the specific
provisions or recommendations that are not complied with must be indicated and the reasons for such non-compliance must
be specified. In addition, other explanatory information indicated in this form must be provided.
PRINCIPLES/ RECOMMENDATIONS
YES/NO /NOT
APPLICABLE
COMMENTARY
1. Principle: General meeting of shareholders, equitable treatment of shareholders and shareholder rights
The corporate governance framework should ensure equitable treatment of each shareholder. The corporate governance
framework should protect the rights of the shareholders.
1.1. All shareholders should be furnished with equal opportunity to
familiarise with information provided for in legislation and (or)
documents and participate in the decision-making process regarding
significant corporate issues.
Yes
Yes, all shareholders have an
opportunity to familiarise with
information.
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 their holders.
Yes
The ordinary registered shares
which make the authorised capital of
the Company give the equal rights
for all share owners.
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 ordinary registered shares
which make the authorised capital of
the Company give the equal rights
for all share owners.
1.4. Exclusive transactions that are especially important, such as
transfer of all or almost all of the company's assets, which would
basically mean the transfer of the company, should be subject to
approval of the General meeting of shareholders.
Not applicable
None of such transactions were
made. The Company follows the
provisions of the Law on Companies
and the Company’s Articles of
Association.
1.5. Procedures of organising and participating in a general meeting
of shareholders should ensure equal opportunities for the
shareholders to effectively participate at the general meetings of
shareholders and should not prejudice the rights and interests of the
shareholders. The venue, date, and time of the general meeting of
shareholders should not hinder wide attendance of the shareholders.
In the notice about the general meeting of shareholders being
convened, the company should specify the date when draft
resolutions to be proposed should be last submitted.
Yes
No comment.
Consolidated Annual Report for 2021
97
1.6 If it is possible, in order to ensure shareholders living abroad the
right to access to the information, it is recommended that documents
on the course of the general shareholders’ meeting should be
published not only in Lithuanian language, but in English and /or other
foreign languages in advance. It is recommended that the minutes of
the general shareholders’ meeting after signing them and/or adopted
resolutions should be also published not only in Lithuanian language,
but in English and /or other foreign languages. It is recommended to
place this information on the company’s website. Documents may be
publicly available to the extent that publishing of these documents is
not detrimental to the company or the company’s commercial secrets
are not revealed.
Yes
No comment.
1.7 Shareholders who are entitled to vote should be furnished with the
opportunity to vote in the general shareholders’ meeting in person and
in absentia. Shareholders should not be prevented from voting in
writing in advance by completing the general voting ballot.
Yes
No comment.
1.8 With a view to increasing the shareholders’ opportunities to
participate effectively at general meetings of shareholders, the
companies are recommended to expand use of modern technologies
by allowing the shareholders to participate and vote in general
meetings of shareholders via electronic means of communication. In
such cases security of transmitted information and a possibility to
identify the identity of the participating and voting person should be
guaranteed.
No
The Company does not have opportunities
to apply modern technologies to voting at
general meetings of shareholders with a
view to ensuring security of shareholders’
rights due to legal regulation being
incompletely clear.
1.9. It is recommended that the notice on the draft decisions of the
general meeting of shareholders being convened should specify new
candidatures of members of the collegial body, their proposed
remuneration and the proposed audit company if these issues are
included into the agenda of the general meeting of shareholders.
Where it is proposed to elect a new member of the collegial body, it
is recommended that the information about his/her educational
background, work experience and other managerial positions held (or
proposed) should be provided.
Yes
This information about candidates for the
Board was provided to shareholders
together with the notice about the
convening of the general meeting of
shareholders (in accordance with
requirements of the Law on Companies of
the Republic of Lithuania) during which
members of the Board were elected, and
with the agenda of the general meeting of
shareholders.
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
No comment.
1
For the purposes of this Code, heads of the administration are the employees of the company who hold top level management positions.
Consolidated Annual Report for 2021
98
2. Principle: Supervisory board
2.1. Functions and liability of the supervisory board
The supervisory board of the company should ensure representation of the interests of the company and its
shareholders, accountability of this body to the shareholders and objective monitoring of the company’s operations
and its management bodies as well as constantly provide recommendations to the management bodies of the company.
The supervisory board should ensure the integrity and transparency of the company’s financial accounting and control
system.
2.1.1. Members of the supervisory board should act in good faith, with
care and responsibility for the benefit and in the interests of the
company and its shareholders and represent their interests, having
regard to the interests of employees and public welfare.
Not
applicable
There is no 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.
Not
applicable
2.1.3. The supervisory board should be impartial in passing decisions
that are significant for the company’s operations and strategy.
Members of the supervisory board should act and pass decisions
without an external influence from the persons who elected them.
Not
applicable
2.1.4. Members of the supervisory board should clearly voice their
objections in case they believe that a decision of the supervisory
board is against the interests of the company. Independent
2
members
of the supervisory board should: a) maintain independence of their
analysis and decision-making; b) not seek or accept any unjustified
privileges that might compromise their independence.
Not
applicable
2.1.5. The supervisory board should oversee that the company’s tax
planning strategies are designed and implemented in accordance
with the legal acts in order to avoid faulty practice that is not related
to the long-term interests of the company and its shareholders, which
may give rise to reputational, legal or other risks.
Not
applicable
2.1.6. The company should ensure that the supervisory board is
provided with sufficient resources (including financial ones) to
discharge their duties, including the right to obtain all the necessary
information or to seek independent professional advice from external
legal, accounting or other experts on matters pertaining to the
competence of the supervisory board and its committees.
Not
applicable
2
For the purposes of this Code, the criteria of independence of members of the supervisory board are interpreted as the criteria of
unrelated parties defined in Article 31(7) and (8) of the Law on Companies of the Republic of Lithuania.
Consolidated Annual Report for 2021
99
2.2. Formation of the supervisory board
The procedure of the formation of the supervisory board should ensure proper resolution of conflicts of interest and
effective and fair corporate governance.
2.2.1. The members of the supervisory board elected by the general
meeting of shareholders should collectively ensure the diversity of
qualifications, professional experience and competences and seek for
gender equality. With a view to maintain a proper balance between
the qualifications of the members of the supervisory board, it should
be ensured that members of the supervisory board, as a whole,
should have diverse knowledge, opinions and experience to duly
perform their tasks.
Not
applicable
2.2.2. Members of the supervisory board should be appointed for a
specific term, subject to individual re-election for a new term in office
in order to ensure necessary development of professional experience.
Not
applicable
2.2.3. Chair of the supervisory board should be a person whose
current or past positions constituted no obstacle to carry out impartial
activities. A former manager or management board member of the
company should not be immediately appointed as chair of the
supervisory board either. Where the company decides to depart from
these recommendations, it should provide information on the
measures taken to ensure impartiality of the supervision.
Not
applicable
2.2.4. Each member should devote sufficient time and attention to
perform his duties as a member of the supervisory board. Each
member of the supervisory board should undertake to limit his other
professional obligations (particularly the managing positions in other
companies) so that they would not interfere with the proper
performance of the duties of a member of the supervisory board.
Should a member of the supervisory board attend less than a half of
the meetings of the supervisory board throughout the financial year of
the company, the shareholders of the company should be notified
thereof.
Not
applicable
2.2.5. When it is proposed to appoint a member of the supervisory
board, it should be announced which members of the supervisory
board are deemed to be independent. The supervisory board may
decide that, despite the fact that a particular member meets all the
criteria of independence, he/she cannot be considered independent
due to special personal or company-related circumstances.
Not
applicable
2.2.6. The amount of remuneration to members of the supervisory
board for their activity and participation in meetings of the supervisory
board should be approved by the general meeting of shareholders.
Not
applicable
Consolidated Annual Report for 2021
100
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 organisation 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
3. Principle: Management Board
3.1. Functions and liability of the management board
The management board should ensure the implementation of the company’s strategy and good corporate governance
with due regard to the interests of its shareholders, employees and other interest groups.
3.1.1. The management board should ensure the implementation of
the company’s strategy approved by the supervisory board if the latter
has been formed at the company. In such cases where the
supervisory board is not formed, the management board is also
responsible for the approval of the company’s strategy.
Yes
No comment
3.1.2. As a collegial management body of the company, the
management board performs the functions assigned to it by the Law
and in the articles of association of the company, and in such cases
where the supervisory board is not formed in the company, it performs
inter alia the supervisory functions established in the Law. By
performing the functions assigned to it, the management board
should take into account the needs of the company’s shareholders,
employees and other interest groups by respectively striving to
achieve sustainable business development.
Yes
No comment
3.1.3. The management board should ensure compliance with the
laws and the internal policy of the company applicable to the company
or a group of companies to which this company belongs. It should
also establish the respective risk management and control measures
aimed at ensuring regular and direct liability of managers.
Yes
No comment
3.1.4. Moreover, the management board should ensure that the
measures included into the OECD Good Practice Guidance
3
on
Internal Controls, Ethics and Compliance are applied at the company
in order to ensure adherence to the applicable laws, rules and
standards.
Yes
No comment
3.1.5. When appointing the manager of the company, the
management board should take into account the appropriate balance
between the candidate’s qualifications, experience and competence.
Yes
No comment
3
Link to the OECD Good Practice Guidance on Internal Controls, Ethics and Compliance: https://www.oecd.org/daf/anti-
bribery/44884389.pdf
Consolidated Annual Report for 2021
101
3.2. Formation of the management board
3.2.1. The members of the management board elected by the
supervisory board or, if the supervisory board is not formed, by the
general meeting of shareholders should collectively ensure the required
diversity of qualifications, professional experience and competences
and seek for gender equality. With a view to maintain a proper balance
in terms of the current qualifications possessed by the members of the
management board, it should be ensured that the members of the
management board would have, as a whole, diverse knowledge,
opinions and experience to duly perform their tasks.
Yes
Members of the management bodies
of the Company work in a variety of
areas in other companies, which
ensures reasonableness of their
competences in respect of their held
positions.
3.2.2. Names and surnames of the candidates to become members of
the management board, information on their educational background,
qualifications, professional experience, current positions, other
important professional obligations and potential conflicts of interest
should be disclosed without violating the requirements of the legal acts
regulating the handling of personal data at the meeting of the
supervisory board in which the management board or individual
members of the management board are elected. In the event that the
supervisory board is not formed, the information specified in this
paragraph should be submitted to the general meeting of shareholders.
The management board should, on yearly basis, collect data provided
in this paragraph on its members and disclose it in the company’s
annual report.
Yes
This information about candidates
for the Board was provided to
shareholders together with the notice
about the convening of the general
meeting of shareholders (in
accordance with requirements of the
Law on Companies of the Republic
of Lithuania) during which members
of the Board were elected, and with
the agenda of the general meeting of
shareholders.
The required information on
members of the board is disclosed in
Notes 29-30 to the Company’s
annual report.
3.2.3. All new members of the management board should be
familiarised with their duties and the structure and operations of the
company.
Yes
Newly appointed members of the
management board are familiarised
with their duties and the structure
and operations of the 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.
Yes
No comment
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. Where the company decides to depart from these
recommendations, it should provide information on the measures taken
to ensure impartiality of the supervision.
Yes
The supervisory board in not formed
at the Company, the chairman of the
management board is not and has
not been the head of the Company.
3.2.6. Each member should devote sufficient time and attention to
perform his duties as a member of the management board. Should a
member of the management board attend less than a half of the
meetings of the management board throughout the financial year of the
company, the supervisory board of the company or, if the supervisory
board is not formed at the company, the general meeting of
shareholders should be notified thereof.
Yes
Members of the Company’s
management board perform their
duties in a responsible manner.
Consolidated Annual Report for 2021
102
3.2.7. In the event that the management board is elected in the cases
established by the Law where the supervisory board is not formed at
the company, and some of its members will be independent,
4
it should
be announced which members of the management board are deemed
as independent. The management board may decide that, despite the
fact that a particular member meets all the criteria of independence
established by the Law, he/she cannot be considered independent due
to special personal or company-related circumstances.
Yes
The required information on
members of the management board
is disclosed in Note 30 to the
Company’s annual report.
3.2.8. The general meeting of shareholders of the company should
approve the amount of remuneration to the members of the
management board for their activity and participation in the meetings of
the management board.
Yes
Remuneration to the members of the
management board is approved by
the general meeting of shareholders
of the Company.
3.2.9. The members of the management board should act in good
faith, with care and responsibility for the benefit and the interests of the
company and its shareholders with due regard to other stakeholders.
When adopting decisions, they should not act in their personal interest;
they should be subject to no-compete agreements and they should not
use the business information or opportunities related to the company’s
operations in violation of the company’s interests.
Yes
Members of the Company’s
management board perform their
duties in a responsible manner.
3.2.10. The management board should carry out an assessment of its
activities every year. It should include evaluation of the structure of the
management board, its work organisation and ability to act as a group,
evaluation of the competence and work efficiency of each member of
the management board, and evaluation whether the management
board has achieved its objectives. The management board should, at
least once a year, make public respective information about its internal
structure and working procedures in observance of the legal acts
regulating the processing of personal data.
No
No comment
4. Principle: Rules of procedure of the supervisory board and the management board of the company
The rules of procedure of the supervisory board, if it is formed at the company, and of the management board
should ensure efficient operation and decision-making of these bodies and promote active cooperation between
the company’s management bodies.
4.1. The management board and the supervisory board, if the latter is
formed at the company, should act in close cooperation in order to attain
benefit for the company and its shareholders. Good corporate
governance requires an open discussion between the management
board and the supervisory board. The management board should
regularly and, where necessary, immediately inform the supervisory
board about any matters significant for the company that are related to
planning, business development, risk management and control, and
compliance with the obligations at the company. The management
board should inform he supervisory board about any derogations in its
business development from the previously formulated plans and
objectives by specifying the reasons for this.
Not
applicable
Supervisory Council of the
Company
4
For the purposes of this Code, the criteria of independence of members of the management board are interpreted as the criteria of
unrelated parties defined in Article 33(7) of the Law on Companies of the Republic of Lithuania.
Consolidated Annual Report for 2021
103
4.2. It is recommended that meetings of the company’s collegial bodies
should be held at the respective intervals, according to the pre-
approved schedule. Each company is free to decide how often meetings
of the collegial bodies should be convened but it is recommended that
these meetings should be convened at such intervals that
uninterruptable resolution of essential corporate governance issues
would be ensured. Meetings of the company’s collegial bodies should
be convened at least once per quarter.
Yes
Meetings of the board are convened
once per quarter and more frequently
when necessary.
4.3 Members of a collegial body should be notified of the meeting being
convened in advance so that they would have sufficient time for proper
preparation for the issues to be considered at the meeting and a fruitful
discussion could be held and appropriate decisions could be adopted.
Along with the notice of the meeting being convened all materials
relevant to the issues on the agenda of the meeting should be submitted
to the members of the collegial body. The agenda of the meeting should
not be changed or supplemented during the meeting, unless all
members of the collegial body present at the meeting agree with such
change or supplement to the agenda, or certain issues that are
important to the company require immediate resolution.
Yes
No comment
4.4. In order to coordinate the activities of the company’s collegial
bodies and ensure effective decision-making process, the chairs of the
company’s collegial supervision and management bodies should
mutually agree on the dates and agendas of the meetings and close
cooperate in resolving other matters related to corporate governance.
Meetings of the company’s supervisory board should be open to
members of the management board, particularly in such cases where
issues concerning the removal of the management board members,
their responsibility or remuneration are discussed.
Not
applica
ble
Not applicable because there is only
the management board formed.
5. Principle: 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 judgement and integrity when performing their functions and provide with
recommendations concerning the decisions of the collegial body; nevertheless, the final decision should be
adopted by the collegial body.
5.1.1. Taking due account of the company-related circumstances and
the chosen corporate governance structure, the supervisory board of
the company or, in cases where the supervisory board is not formed,
the management board which performs the supervisory functions,
establishes committees. It is recommended that the collegial body
should form the nomination, remuneration and audit committees
5
.
Yes
No comment.
5.1.2. Companies may decide to set up less than three committees. In
such case companies should explain why they have chosen the
alternative approach, and how the chosen approach corresponds with
the objectives set for the three different committees.
No
Consolidated Annual Report for 2021
104
5.1.3. In the cases established by the legal acts the functions assigned
to the committees formed at companies may be performed by the
collegial body itself. In such case the provisions of this Code pertaining
to the committees (particularly those related to their role, operation and
transparency) should apply, where relevant, to the collegial body as a
whole.
Yes
No comment.
5.1.4. Committees established by the collegial body should normally be
composed of at least three members. Subject to the requirements of the
legal acts, committees could be comprised only of two members as well.
Members of each committee should be selected on the basis of their
competences by giving priority to independent members of the collegial
body. The chair of the management board should not serve as the chair
of committees.
Yes
The Audit Committee comprises two
independent members.
5.1.5. The authority of each committee formed should be determined by
the collegial body itself. Committees should perform their duties in line
with authority delegated to them and inform the collegial body on their
activities and performance on regular basis. The authority of each
committee defining its role and specifying its rights and duties should
be made public at least once a year (as part of the information disclosed
by the company on its governance structure and practice on an annual
basis). In compliance with the legal acts regulating the processing of
personal data, companies should also include in their annual reports the
statements of the existing committees on their composition, the number
of meetings and attendance over the year as well as the main directions
of their activities and performance.
No
Yes - the Audit Committee operates in
accordance with the approved
provisions of the Audit Committee.
Reports of the committees are not
published in the annual report.
5.1.6. With a view to ensure the independence and impartiality of the
committees, the members of the collegial body who are not members
of the committees should normally have a right to participate in the
meetings of the committee only if invited by the committee. A committee
may invite or request that certain employees of the company or experts
would participate in the meeting. Chair of each committee should have
the possibility to maintain direct communication with the shareholders.
Cases where such practice is to be applied should be specified in the
rules regulating the activities of the committee.
Yes
The Audit Committee has the right to
invite the head of the Company,
members of the management board,
chief finance officer, and other
employees responsible for finances, as
well as external auditors to participate in
its meetings.
5.2. Nomination Committee.
The legal acts may provide for the obligation to form a respective committee. For example, the Law on the Audit of Financial Statements of
the Republic of Lithuania provides that public-interest entities (including but not limited to public limited liability companies whose securities
are traded on a regulated market of the Republic of Lithuania and/or of any other Member State) are under the obligation to set up an audit
committee (the legal acts provide for the exemptions where the functions of the audit committee may be carried out by the collegial body
performing the supervisory functions).
Consolidated Annual Report for 2021
105
5.2.1. Key functions of the nomination committee should be the following:
1) to select candidates to fill vacancies in the membership of supervisory
and management bodies and the administration and recommend the
collegial body to approve them. The nomination committee should
evaluate the balance of skills, knowledge and experience in the
management body, prepare a description of the functions and capabilities
required to assume a particular position and assess the time commitment
expected;
2) assess, on a regular basis, the structure, size and composition of the
supervisory and management bodies as well as the skills, knowledge and
activity of its members, and provide the collegial body with
recommendations on how the required changes should be sought;
3) devote the attention necessary to ensure succession planning.
No
There is no nomination committee.
5.2.2 When dealing with issues related to members of the collegial body
who have employment relationships with the company and the heads of
the administration, the manager of the company should be consulted by
granting him/her the right to submit proposals to the Nomination
Committee.
No
There is no nomination committee.
5.3. Remuneration committee
The main functions of the remuneration committee should be as follows:
1) submit to the collegial body proposals on the remuneration
policy applied to members of the supervisory and management
bodies and the heads of the administration for approval. Such
policy should include all forms of remuneration, including the
fixed-rate remuneration, performance-based remuneration,
financial incentive schemes, pension arrangements and
termination payments as well as conditions which would allow
the company to recover the amounts or suspend the payments
by specifying the circumstances under which it would be
expedient to do so;
2) submit to the collegial body proposals regarding individual
remuneration for members of the collegial bodies and the heads
of the administration in order to ensure that they would be
consistent with the company’s remuneration policy and the
evaluation of the performance of the persons concerned;
3) review, on a regular basis, the remuneration policy and its
implementation.
No
There is no remuneration
committee.
5.4. Audit committee.
5.4.1. The key functions of the audit committee are defined in the legal
acts regulating the activities of the audit committee
6
.
Yes
The audit committee performs the
functions provided for in the
provisions of the audit committee.
5.4.2. All members of the committee should be furnished with complete
information on particulars of accounting, financial and other operations of
the company. The heads of the company’s administration should inform
the audit committee about the methods of accounting for significant and
unusual transactions where the accounting may be subject to different
approaches.
Yes
The audit committee performs the
functions provided for in the
provisions of the audit committee.
6
Issues related to the activities of audit committees are regulated by Regulation No. 537/2014 of the European Parliament and the Council
of 16 April 2014 on specific requirements regarding statutory audit of public-interest entities, the Law on the Audit of Financial Statements
of the Republic of Lithuania, and the Rules Regulating the Activities of Audit Committees approved by the Bank of Lithuania.
Consolidated Annual Report for 2021
106
5.4.3. The audit committee should decide whether the participation of the
chair of the management board, the manager of the company, the chief
finance officer (or senior employees responsible for finance and
accounting), the internal and external auditors in its meetings is required
(and, if required, when). The committee should be entitled, when needed,
to meet the relevant persons without members of the management bodies
present.
Yes
No comment
5.4.4. The audit committee should be informed of the internal auditor’s
work program, and should be furnished with internal audit’s reports or
periodic summaries. The audit committee should also be informed of the
work program of the external auditor and should be furnished with report
disclosing all relationships between the independent auditor and the
company and its group.
Yes
No comment
5.4.5. The audit committee should examine whether the company
complies with the applicable provisions regulating the possibility of
lodging a complaint or reporting anonymously his/her suspicions of
potential violations committed at the company and should also ensure
that there is a procedure in place for proportionate and independent
investigation of such issues and appropriate follow-up actions.
Yes
No comment
5.4.6. The audit committee should submit to the supervisory board or,
where the supervisory board is not formed, to the management board its
activity report at least once in every six months, at the time that annual
and half-yearly reports are approved.
Yes
No comment
6. Principle: 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.
The corporate governance framework should recognise the rights of stakeholders as established by law and
encourage active co-operation between companies and stakeholders in creating the company value, jobs and
financial sustainability. For the purposes of this Principle, the concept “stakeholders” includes investors,
employees, creditors, suppliers, clients, local community and other persons having certain interest in the company
concerned.
Any member of the company’s supervisory and management body should
avoid a situation, in which his/her personal interests are in conflict or may
be in conflict with the company’s interests. In case such a situation did
occur, a member of the company’s supervisory and management body
should, within reasonable time, inform other members of the same
collegial body or the company’s body that has elected him/her, or to the
company’s shareholders about a situation of a conflict of interest, indicate
the nature of the conflict and value, where possible.
Yes
No comment
7. Principle: 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.
Consolidated Annual Report for 2021
107
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
No comment.
7.2.The remuneration policy should include all forms of remuneration,
including the fixed-rate remuneration, performance-based remuneration,
financial incentive schemes, pension arrangements and termination
payments as well as the conditions specifying the cases where the
company can recover the disbursed amounts or suspend the payments.
Yes
The Company is in compliance
with the legislation regulating
labour relations effective in the
Republic of Lithuania. The
remuneration policy comprises
fixed-rate and variable
components of remuneration;
according to the policy, the
variable component of
remuneration is not paid to
executives if the level of
implementation of objectives is
below 100%.
7.3.With a view to avoid potential conflicts of interest, the remuneration
policy should provide that members of the collegial bodies which perform
the supervisory functions should not receive remuneration based on the
company’s performance.
Yes
According to the remuneration
policy, the variable component of
remuneration is not paid to
members of the collegial bodies.
7.4.The remuneration policy should provide sufficient information on the
policy regarding termination payments. Termination payments should not
exceed a fixed amount or a fixed number of annual wages and in general
should not be higher than the non-variable component of remuneration
for two years or the equivalent thereof. Termination payments should not
be paid if the contract is terminated due to inadequate performance.
No
The remuneration policy defines
termination payments; however, it
does not provide for specific
thresholds of such payments.
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 does not anticipate
nor apply schemes according to
which members of collegial bodies
and heads of the administration
are remunerated with shares,
share options, etc.
7.6.The company should publish information about the implementation of
the remuneration policy on its website, with a key focus on the
remuneration policy in respect of the collegial bodies and managers in the
next and, where relevant, subsequent financial years. It should also
contain a review of how the remuneration policy was implemented during
the previous financial year. The information of such nature should not
include any details having a commercial value. Particular attention should
be paid on the major changes in the company’s remuneration policy,
compared to the previous financial year.
Yes
The Company publishes a
remuneration report
Consolidated Annual Report for 2021
108
7.7.It is recommended that the remuneration policy or any major change
of the policy should be included on the agenda of the general meeting of
shareholders. The schemes under which members and employees of a
collegial body receive remuneration in shares or share options should be
approved by the general meeting of shareholders.
Yes
The remuneration policy has been
approved by the general meeting
of shareholders.
8. Principle: Role of stakeholders in corporate governance
The corporate governance framework should recognise 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. For the purposes of this Principle, the concept “stakeholders” includes investors,
employees, creditors, suppliers, clients, local community and other persons having certain interest in the company
concerned.
8.1.The corporate governance framework should ensure that the rights
and lawful interests of stakeholders are protected.
Yes
The Company has a collective
agreement concluded.
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 authorised capital, involvement of creditors
in corporate governance in the cases of the company’s insolvency, etc.
Yes
Chairman of the employees’ trade
union is constantly invited to
participate in meetings regarding
production and other meetings
important to the Company’s
management which take place on
a monthly basis.
8.3.Where stakeholders participate in the corporate governance process,
they should have access to relevant information.
Yes
Chairman of the employees’ trade
union is constantly invited to
participate in meetings regarding
production and other meetings
important to the Company’s
management which take place on
a monthly basis.
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
Representative of the employees’
trade union.
9. Principle: Disclosure of information
The corporate governance framework should ensure the timely and accurate disclosure of all material corporate
issues, including the financial situation, operations and governance of the company.
9.1.In accordance with the company’s procedure on confidential
information and commercial secrets and the legal acts regulating the
processing of personal data, the information publicly disclosed by the
company should include but not be limited to the following:
9.1.1. The financial and operating results of the company;
Yes
The information is published in the
Company’s financial statements,
and on websites of the Company
and the stock exchange.
Consolidated Annual Report for 2021
109
9.1.2. Objectives and non-financial information of the company;
Yes
No comment
9.1.3. persons holding a stake in the company or controlling it directly
and/or indirectly and/or together with related persons as well as
the structure of the group of companies and their relationships
by specifying the final beneficiary;
Yes
No comment
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
No comment
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;
No
No comment
9.1.6. potential key risk factors, the company’s risk management and
supervision policy;
Yes
No comment
9.1.7. the company’s transactions with related parties;
Yes
No comment
9.1.8. main issues related to employees and other stakeholders (for
instance, human resource policy, participation of employees in
corporate governance, award of the company’s shares or share
options as incentives, relationships with creditors, suppliers,
local community, etc.);
Yes
No comment
9.1.9. structure and strategy of corporate governance;
Yes
No comment
9.1.10. initiatives and measures of social responsibility policy and anti-
corruption fight, significant current or planned investment
projects.
This list should be deemed as a minimum recommendation, while the
companies are encouraged not to limit themselves to disclosure of the
information specified in 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
No comment
9.2 When disclosing the information specified in paragraph 9.1.1 of
recommendation 9.1, it is recommended that the company which is a
parent company in respect of other companies should disclose
information about the consolidated results of the whole group of
companies.
Yes
No comment
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
No comment
9.4 Information should be disclosed in such a way that neither
shareholders nor investors are discriminated with regard to the manner
or scope of access to information. Information should be disclosed to all
simultaneously.
Yes
The information is published on
websites of the Company and the
Vilnius stock exchange.
Consolidated Annual Report for 2021
110
10. Principle: Selection of the company’s audit firm
The company’s audit firm selection mechanism should ensure the independence of the report and opinion of the
audit firm.
10.1. With a view to obtain an objective opinion on the company’s
financial position 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
No comment.
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 Company complies with the
recommendation to have the
candidature for the audit firm to be
proposed to the general meeting of
shareholders by the management
board.
10.3. In the event that the audit firm has received remuneration from the
company for the non-audit services provided, the company should
disclose this publicly. This information should also be available to the
supervisory board or, if the supervisory board is not formed at the
company, by the management board of the company when considering
which audit firm should be proposed to the general meeting of
shareholders.
Yes
Except for translation services, no
services other than the audit of the
financial statements were provided
during the audit.