JOINT STOCK COMPANY
“STORENT INVESTMENTS”
(UNIFIED REGISTRATION NUMBER 40103834303)
SEPARATE ANNUAL REPORT FOR YEAR 2021
(The 8th financial year)
PREPARED IN ACCORDANCE WITH THE
I
NTERNATIONAL FINANCIAL REPORTING STANDARDS
AS ADOPTED BY THE EUROPEAN UNION
AND INDEPENDENT AUDITORS’ REPORT
Riga, 2022
STORENT INVESTMENTS AS Separate Annual Report 2021
Registered address: 15A Matrozu street, Riga, LV-1048
Registration number: 40103834303
2
CONTENTS
General information 3
Management report 4
Statement of management’s responsibility 6
Separate financial statements:
Separate statement of comprehensive income 7
Separate statement of financial position 8
Separate statement of cash flows 10
Separate statement of changes in equity 11
Notes to the separate financial statements 12
Independent auditors’ report 42
STORENT INVESTMENTS AS Separate Annual Report 2021
Registered address: 15A Matrozu street, Riga, LV-1048
Registration number: 40103834303
3
General information
Name of the company “STORENT INVESTMENTS”
Le
g
al status Joint Stock Compan
y
Number, place and date of registration 40103834303
Ri
g
a, 7 October 2014
Registered and business address Matrožu iela 15a
Riga, Latvia, LV-1048
Shareholders Levina Investments S.A.R.L. (Luxembourg) 73%
Bomaria SIA 13.5%
Supremo SIA 13.5%
Board of the Company Andris Bisnieks, member of the Board
A
ndris Pavlovs, member of the Board
Council of the Company Nicholas John Kabcenell, chairman of the Council
Baiba Onkele, member of the Council
Dal
g
in Burak, member of the Council
Annual report prepared by Marina Grigore
Chief accountant of Storent Investments AS
Type of activity Supervision and management of subsidiaries; performance of functions
of strategic and organizational planning and decision-making.
NACE code 70.22 Business and other management consultancy activities (NACE
rev. 2.0)
Reportin
g
y
ear 1 Januar
y
2021
–
31 December 2021
Previous reportin
g
y
ear 1 Januar
y
2020
–
31 December 2020
Name and address of the independent auditor
and the responsible sworn auditor
KPMG Baltics SIA
License Nr. 55
Vesetas 7, Riga, LV-1013,
Latvia
Armine Movsisjana
Latvian sworn auditor
Certificate No. 178
STORENT INVESTMENTS AS Separate Annual Report 2021
Registered address: 15A Matrozu street, Riga, LV-1048
Registration number: 40103834303
4
Management report
Type of activity of the Company
Storent Investments AS (hereinafter referred to as the “Company”) was established on 7 October 2014 and this is the eighth reporting
year of the Company. The Company was established along with the entry of a new financial investor and is a parent company of the
Storent Group. The main type of activity of the Company is to provide management and consultancy services to subsidiaries, which
accounts for the most part of the Company’s turnover.
Development of the Company and results of financial operations in the reporting year
The main type of activity of the Company is related to provision of all the companies of the Storent group with financial resources, region
differentiated sales strategies and activities, marketing initiatives and support of Storent brand, information technology systems, as well
as provision of management services to related companies. In the reporting year, the Company’s turnover decreased by 12% reaching
4.9 million euro, which was affected by Covid-19 and revised transaction terms with related parties. The reporting year closed with a
profit of EUR 2 141 469. Storent Investments AS balance sheet has a very strong and steady financing structure consisting of 76%
shareholders equity, 3% long term liabilities and 21% short term liabilities. Non-current assets constitute 97% of the total assets. The
Company’s business specifics historically was always having a working capital deficit due to the large amount of liabilities to finance
investments; however, this has not prevented the Company from meeting its obligations in accordance with their terms. Additional factor
contributing to the negative working capital is a technical default of one of bond covenants that resulted in the classification of full bond
liability as current (please see Note 22 for further details).
Although 2021 was much more successful than 2020, Storent Group’s performance in the reporting year was still negatively affected
by Covid-19 pandemic in all countries. The Covid-19 pandemic in 2021 did not directly affect the construction sector, as there were no
restrictions on construction sites, but it continued to affect overall economic activity. Rental revenues increased by 5%, while the
consolidated turnover decreased by 2% reaching 42.9 million euros. Although rental market still faces strong price competition and
rental equipment overcapacity, rental prices started to rise slowly. During the reporting year there were significant changes in the
Group’s rental fleet structure, with own equipment proportion decreasing from 57% in December prior year to 39% in December current
year.
Baltic region rental operations increased by 9% with almost identically increasing trends in all Baltic countries. The Baltic region
accounts for approximately 69% of the Group’s rental income. In 2021, the growth of construction market in Estonia remained at the
level of the previous year. The market growth is expected to be modest in 2022, and various construction projects will be implemented
during the year, such as Rail Baltica and its adjacent infrastructure and the next round of development of the Enefit power plant. In
2021, the Latvian construction market shrank by 6.2%. The largest decline was in construction of residential buildings, with a decrease
of 10.5%. In 2022, several large and medium-scale projects are planned, some of which will be implemented within the framework of
EU programs. Thus, the construction market is expected to continue to grow in the near future. In 2021, the Lithuanian construction
market grew by 11.6%. There was a significant increase in the residential segment, which amounted to 17%. In 2022, the Rail Baltica
project will continue, which will provide additional demand for rental equipment throughout the Baltics and give the management
additional confidence for 2022. The project has already actively started the construction phase in 2022, which will create the
greatest
demand for equipment.
Construction market volume historical data and forecast doesn’t always reflect the construction rental market potential. It depends on
the construction project types and stages at the exact year. The Group’s entities growth possibilities are higher in the markets, where
Storent has smaller share of the market. It’s expected that the lack of construction workforce will increase prices and demand of rental
construction equipment.
Nordic operations have decreased by 5% compared to 2020. Due to the constraints of the Covid-19 pandemic, construction volumes
have declined in 2021, and no rapid growth is expected in the near future. Storent in the Nordic countries has a relatively small market
share, and we do not link its development to market growth, but to long-term cooperation with customers. We have started 2022
promisingly, and with the start of the season we expect further growth. In December 2021, the management decided to close the heavy
team unit in Finland since demand for specific heavy equipment moving services has significantly decreased.
Operations of subsidiary Storent OOO in Kaliningrad have seen a significant revenue increase, reaching 21% increase compared to
2020, while the construction market shrank by 48.2% in 2021, mainly due to the Covid-19 pandemic. At the moment of issue of this
report, Storent OOO continues to operate without significant changes. Before 24 February 2022, the Russian entity operated quite
independently, and the Company’s management doesn’t see any major risks for further business activities. The Company monitors
and follows sanction restrictions, and so far they don’t affect subsidiary’s activities.
In 2021, the Group continues cooperation with split-rent and re-rent platform PreferRent, and at the end of 2021 56% of the total rental
fleet was supplied from PreferRent. It allowed to increase the Group’s efficiency since PreferRent took over a part of the fleet
management function and provided increased rental fleet capacity without the Group incurring additional financial liabilities. According
to approved Storent Group strategy, part of the rental fleet was sold to auction and to split-rent vendors, which resulted in own
equipment proportion decreasing from 57% to 39% of the total rental fleet volume at the year-end compared to the same period
previous reporting period. Investment plan for rental assets in 2021 was small compared to previous periods. Storent Group continued
to develop and invest in IT technologies. A flexible approach to rental fleet rotation among Storent Group companies ensured a quicker
response to construction market changes and, overall, a more efficient rental fleet usage. In summer 2021 Storent entities in the Baltics
joined PreferRent online rental platform that offers online rental services ordering from numerous rental companies in Baltics.
STORENT INVESTMENTS AS Separate Annual Report 2021
Registered address: 15A Matrozu street, Riga, LV-1048
Registration number: 40103834303
5
Management sees this as a modern additional sale channel to meet customer needs for the best rental solutions with the most
advantageous rental price.
Storent Group’s balance sheet has a stable structure consisting of 27% shareholders equity, 18% long term liabilities and 55% short
term liabilities. Non-current assets constitute 81% of the total assets. The Group’s business peculiarity historically was always having
a working capital deficit due to large amount of liabilities to finance investments in rental equipment; however, this has not prevented
the Group and the Company from meeting its obligations in accordance with their terms. Almost 1 million euros Group’s total bank
account balance at the end of the accounting period is sufficient to ensure the Group’s operational activities. The Group concluded the
financial year 2021 with a loss of 3.4 million euros, which was mostly affected by Covid-19 pandemic. The Group management worked
on efficiency increase by reducing headcount during 2021 by 35 people, as well as realized savings on other expenses positions during
the financial year.
In 2021, the Group continued to develop online rental service. Online ordering is a stable sales channel and it makes up almost 40%
of the total income of Storent in the Baltic states for the year 2021. Historically the highest numbers have been reached for digital
authorisations and electronically signed documents of 80% of all rental deliveries.
The future development of the Company
The Company management plans further development of its operations. The main focus in 2022 will be to continue online sales
development, digital transformation and efficiency increase. The Company will continue to transform its IT strategy to comply with the
scalability needs. In early 2022, Storent entities in the Baltics joined online logistics platform Cargopint that allows to organize
transportation in a more efficient manner and will give opportunity to serve a wider range of customers with a more competitive price.
The Company’s subsidiaries plan to continue selling own rental fleet and increase split-rent share in the total rental income from current
58% in 2021 to 66% during 2022. Management estimates that the construction industry will fully recover after Covid-19 pandemic in
the spring 2022, and construction volumes will return to the level of 2019 and start to grow further only from 2023. It is expected that
Rail Baltica project will give a significant positive impact on the construction industry in the Baltics.
Financial risk management
The Company’s key principles of financial risk management are laid out in Note 25.
Conditions and events after the end of the reporting year
In 2022, in order to meet minimal capital requirements according to respective country laws, the Company invested into the share
capital of the Estonian subsidiary in total an amount of EUR 1 550 000, into the share capital of the Finnish subsidiary in total an
amount of EUR 500 000, into the share capital of Swedish subsidiary in total an amount of EUR 250 000, and all investments are
used, among others, to settle liabilities towards other Storent Group companies.
In February 2022, Storent Investments AS (“the Issuer”) announced an instigation of written procedure for receipt of consent of
Noteholders holding the Notes to amend Terms and Conditions. In accordance with the proposed amendments to the Terms and
Conditions, the Issuer proposes to modify Shareholders Equity to Assets Ratio covenant to include in the equity calculation also loans
from the Issuer's shareholders and to modify Net Debt/EBITDA Ratio covenant to exclude loans from the Issuer's shareholders from
the net indebtedness of the Issuer. This will allow the Issuer to safely comply with the financial covenants until maturity of the Notes.
On 28 February 2022, voting has been closed and amendments have been approved.
Levina Investments S.a.r.l. has agreed to postpone the repayment of loan received by Storent Holding Finland Oy by additional one
year, and the final due date of the loan is December 2023. Amendments to the agreement have been signed in March 2022.
As a result of military actions started by the Russian Federation in Ukraine on 24 February 2022, the Group will apply all sanctions,
business restrictions, etc. initiated and introduced by the local and foreign authorities, and will disclose information that h
as significant
impact on the Group’s and the Company’s operations to investors in accordance with the procedure prescribed by the legal acts. It is
important to note that the procedure for the implementation of international sanctions and restrictive measures in the Republic of Latvia
is regulated by the Latvian Law on the Implementation of Economic and Other International Sanctions and other related legal acts.
Despite the fact that the Baltics have very limited direct economic relations with Russia, the crisis is likely to impact energy carriers’
prices as the Baltics, while being able to meet their energy demand without Russia, will be using more expensive alternatives. The
construction sector is also likely to be affected as many construction materials, which used to come from Russia and Belarus, now
need to be imported from elsewhere, at least until the current level of the conflict remains.
The exact effects of these trends cannot be
presently estimated. Today’s situation shows that market adapts to changes, and demand for rental equipment is as usual for the
beginning of the construction season.
As of the last day of the reporting year until the date of signing these separate financial statements, there have been no other events
requiring adjustment of or disclosure in the separate financial statements or notes thereto.
The management report was signed on 28 April 2022 on the Company’s behalf by:
Andris Bisnieks Andris Pavlovs
Member of the Board Member of the Board
The annual report was approved at the general shareholders’ meeting on ____________ 2022
STORENT INVESTMENTS AS Separate Annual Report 2021
Registered address: 15A Matrozu street, Riga, LV-1048
Registration number: 40103834303
6
Statement of management’s responsibility
The management of Storent Investments AS confirms that the separate financial statements have been prepared in accordance with
the applicable legislation requirements and present a true and fair view of the AS Storent Investments financial position as at 31
December 2021 and as at 31 December 2020 and its financial performance and cash flows for the years 2021 and 2020 then ended.
The management report contain a clear summary of AS Storent Investments and its subsidiaries business development and financial
performance. The financial statements have been prepared according to the International Financial Reporting Standards as adopted
by the European Union. During the preparation of the AS Storent Investments financial statements the management:
used and consequently applied appropriate accounting policies;
provided reasonable and prudent judgments and estimates;
applied a going concern principle unless the application of the principle wouldn’t be justifiable.
AS Storent Investments management is responsible for maintaining appropriate accounting records that would provide a true and fair
presentation of the AS Storent Investments financial position at a particular date and financial performance and cash flows and enable
the management to prepare the financial statements according to the International Financial Reporting Standards as adopted by the
European Union.
This statement of management’s responsibility was signed on 28 April 2022 on the Company’s behalf by:
Andris Bisnieks
Andris Pavlovs
Member of the Board
Member of the Board
STORENT INVESTMENTS AS Separate Annual Report 2021
Registered address: 15A Matrozu street, Riga, LV-1048
Registration number: 40103834303
7
Separate statement of comprehensive income
Note 2021 2020
EUR EUR
Net revenue 3
4 866 944 5 559 964
Personnel costs 8
(1 454 981) (1 736 449)
Other operating expenses 4
(1 525 759) (2 005 176)
Depreciation and amortization 5
(964 461) (965 657)
Interest and similar income 6
2 108 158 589 621
Interest payments and similar expenses 7
(885 742) (1 522 447)
Impairment losses 11,20b
(2 690) (3 747 244)
Profit (loss) before income tax
2 141 469 (3 827 388)
Corporate income tax - -
Profit (loss) after calculation of the corporate income tax
2 141 469 (3 827 388)
Profit (loss) of the reporting year
2 141 469 (3 827 388)
The notes on pages 12 to 41 are an integral part of these financial statements.
These separate financial statements were signed on 28 April 2022 on the Company’s behalf by:
Andris Bisnieks
Andris Pavlovs
Member of the Board
Member of the Board
Marina Grigore
Chief Accountant
STORENT INVESTMENTS AS Separate Annual Report 2021
Registered address: 15A Matrozu street, Riga, LV-1048
Registration number: 40103834303
8
Separate statement of financial position
ASSETS
Note 2021 2020
NON-CURRENT ASSETS EU
R
EU
R
Intan
g
ible assets
Development of intangible assets
985 288 418 813
Licenses and similar rights
20 798 52 140
Other intangible investments
1 023 726 1 416 174
TOTAL 9 2 029 812 1 887 127
Pro
p
ert
y,
p
lant and e
q
ui
p
ment
Other fixed assets
55 654 64 053
TOTAL 9 55 654 64 053
Ri
g
hts of use assets
Licenses and similar rights
23 806 49 774
Other fixed assets
13 189 77 089
TOTAL 10 36 995 126 863
Other non-current assets
Investments in subsidiaries
11 40 289 275 37 389 275
Loans to related parties
20b 1 393 651 3 701 825
TOTAL 41 682 926 41 091 100
TOTAL NON-CURRENT ASSETS 43 805 387 43 169 143
CURRENT ASSETS
Trade and other receivables
Trade receivables
4 390 2 664
Trade receivables from related parties
20a 1 033 971 2 450 811
Other receivables
12 7 774 7 774
Deferred expenses
13 26 384 133 885
TOTAL 1 072 519 2 595 134
Cash and cash e
q
uivalents 14 53 588 1 937 007
TOTAL CURRENT ASSETS
1 126 107 4 532 141
TOTAL ASSETS
44 931 494 47 701 284
The notes on pages 12 to 41 are an integral part of these financial statements.
These separate financial statements were signed on 28 April 2022 on the Company’s behalf by:
Andris Bisnieks
Andris Pavlovs
Member of the Board
Member of the Board
Marina Grigore
Chief Accountant
STORENT INVESTMENTS AS Separate Annual Report 2021
Registered address: 15A Matrozu street, Riga, LV-1048
Registration number: 40103834303
9
Separate statement of financial position
EQUITY
AND LIABILITIES
Note 2021 2020
EQUITY EU
R
EU
R
Share ca
p
ital 15 33 316 278 33 316 278
A
ccumulated losses:
Previous reporting periods retained earnings / (uncovered
losses
)
(1 297 947) 2 529 441
Profit (loss) of the reporting year
2 141 469 (3 827 388)
TOTAL EQUITY
34 159 800 32 018 331
LIABILITIES
Non-current liabilities
Lease liabilities 23 40 947 78 976
Borrowings from related parties
20c - 651 162
Other borrowings
21 1 504 527 3 107 487
Issued bonds
22 - 3 340 561
TOTAL 1 545 474 7 178 186
Current liabilities
Lease liabilities 23 8 283 54 922
Issued bonds
22 4 838 565 4 105 907
Borrowings from related parties
20c 1 935 000 -
Other borrowings
21 1 766 203 3 328 932
Trade payables
437 982 443 076
Payables to related parties
20a -
249 182
Taxes and mandatory state social insurance contribution
19 22 985 43 350
Other provisions
16 70 683 62 864
Other liabilities
17 45 321 55 057
Accrued liabilities
18 101 198 161 477
TOTAL 9 226 220 8 504 767
TOTAL LIABILITIES 10 771 694
15 682 953
TOTAL EQUITY AND LIABILITIES
44 931 494 47 701 284
The notes on pages 12 to 41 are an integral part of these financial statements.
These separate financial statements were signed on 28 April 2022 on the Company’s behalf by:
Andris Bisnieks
Andris Pavlovs
Member of the Board
Member of the Board
Marina Grigore
Chief Accountant
STORENT INVESTMENTS AS Separate Annual Report 2021
Registered address: 15A Matrozu street, Riga, LV-1048
Registration number: 40103834303
10
Separate statement of cash flows
Note 2021 2020
Cash flows from operating activities EUR EUR
Profit / (loss) before Income tax of the reporting period
2 141 469 (3 827 388)
Adjustments:
Amortisation of intangible assets
5 881 790 864 042
Depreciation of fixed assets
5 82 671 101 615
Loss from fixed assets disposals
43 303 54 904
Impairment losses on investments in related parties
11, 20b -
3 726 319
Income from investments in related parties
6 (2 011 114) (173 718)
Interest payments and similar expenses
7 882 294 1 508 094
Interest and similar income
6 (88 139) (415 825)
Result of operations before changes in working capital 1 932 274 1 838 043
Decrease / (increase) in receivables
1 609 041 6 632 930
(Decrease)/ increase in payables
(346 508) (235 857)
Gross cash flows from operations 3 194 807 8 235 116
Interest expenses
(737 577) (1 359 727)
Net cash flows from operating activities 2 457 230 6 875 389
Cash flows from investing activities
Acquisition of intangible investments and fixed assets
9,10 (1 052 182) (1 218 609)
Received dividends
2 011 114 173 718
Acquisition of shares of subsidiaries
11 (2 900 000) (7 585 743)
Loan repayment
2 714 673 4 970 000
Loans issued
(409 190) (521 151)
Net cash flows from investing activities 364 415 (4 181 785)
Cash flows from financing activities
Income from issued bonds
- 200 000
Loans received
1 935 000 -
Repayment of borrowings and bonds
(6 555 396) (3 399 726)
Lease payments
(84 668) (81 289)
Net cash flows from financing activities (4 705 064) (3 281 015)
Net (Decrease) / increase in cash (1 883 419) (587 411)
Cash at the beginning of the reporting year 1 937 007 2 524 418
Cash at the end of the reporting year 14 53 588 1 937 007
The notes on pages 12 to 41 are an integral part of these financial statements.
These separate financial statements were signed on 28 April 2022 on the Company’s behalf by:
Andris Bisnieks
Andris Pavlovs
Member of the Board
Member of the Board
Marina Grigore
Chief Accountant
STORENT INVESTMENTS AS Separate Annual Report 2021
Registered address: 15A Matrozu street, Riga, LV-1048
Registration number: 40103834303
11
Separate statement of changes in equity
Share capital
Previous years
retained earnings/
(uncovered losses)
Profit/ (loss) of the
reporting year
Total
EUR EUR EUR EUR
31 December 2019
33 316 278 1 566 125 963 316 35 845 719
Carrying over of profit of the
-
963 316 (963 316) -
Loss for the reporting year
-
-
(3 827 388) (3 827 388)
31 December 2020
33 316 278 2 529 441 (3 827 388) 32 018 331
Carrying over of profit of the
-
(3 827 388) 3 827 388 -
Profit for the reporting year
-
-
2 141 469 2 141 469
31 December 2021
33 316 278 (1 297 947) 2 141 469 34 159 800
The notes on pages 12 to 41 are an integral part of these financial statements.
These separate financial statements were signed on 28 April 2022 on the Company’s behalf by:
Andris Bisnieks
Andris Pavlovs
Member of the Board
Member of the Board
Marina Grigore
Chief Accountant
STORENT INVESTMENTS AS Separate Annual Report 2021
Registered address: 15A Matrozu street, Riga, LV-1048
Registration number: 40103834303
12
Notes to the separate financial statements
1. General information about the Company
STORENT INVESTMENTS AS (hereinafter – the Company) was registered in the Register of Enterprises of the Republic of Latvia on
7 October 2014. Registered address of the Company is Matrožu iela 15a, Riga. In November 2014 the Company became the Parent
company of the Storent Group. Starting from 20 November 2014 the largest shareholder of the Parent company of the Storent Group
is LEVINA INVESTMENTS S.A.R.L (Luxembourg) and ultimate controlling party is Convering Europe Fund III (SCS) SICAR. LEVINA
INVESTMENTS S.A.R.L as an investment entity does not prepare consolidated financial statements.
The main type of activity of the Company is related to provision of all the companies of the Storent group with financial resources,
maintenance of the Storent brand and information technology systems, as well as provision of management services of related
companies.
The separate financial statements of the Company for 2021 were approved by the decision of the Board on 28 April 2022. Shareholders
have the right to reject the financial statements prepared and issued by the Board and to request that new financial statements are
prepared.
2. Summary of significant accounting policies
(a) The framework for the preparation of financial statements
The Company’s separate financial statements have been prepared in accordance with the International Financial Reporting Standards
(IFRS) as adopted by the European Union (EU) and the interpretations issued by the International Financial Reporting Issues
Committee as adopted by the EU.
The amounts shown in these Financial Statements are derived from the Companies accounting records, appropriately reclassified for
recognition, measurement and presentation in accordance with the IFRS as adopted by the EU.
The financial statements were prepared according to the historical cost basis. The monetary unit used in the financial statements is
the official currency of the Republic of Latvia – the Euro. The financial statements cover the period from 1 January 2021 until 31
December 2021. The financial statements have been prepared in accordance with below mentioned measurement and recognition
principles. These principles were also used in the previous reporting year, unless stated otherwise. The consolidated financial
statements of STORENT INVESTMENTS AS are prepared separately.
(b) Use of estimates and judgements
Requirements of IFRS as adopted by EU set out that the preparation of financial statements requires the management of Company to
make assumptions that affect the amounts of assets, liabilities reported in the statements and off-balance at the day of preparation of
financial statements, as well as shown income and expenses of the reporting period. Actual results could differ from these estimates.
The following are the critical judgments and key estimates concerning the future, and other key sources of estimation uncertainty,
which exist at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets
and liabilities during the next reporting period. The most critical areas related to estimates of the recoverable amount of investments
in subsidiaries and the recoverable amount of loans granted, as well as the judgment on the Company's ability to continue as a going
concern.
The Company's ability to continue as a going concern
The Company's management evaluates the actual and potential impact of the Covid-19 pandemic and geopolitical situation in the
markets where Group operates on the economic activities and financial results of the Company and its subsidiaries. Management has
prepared the projected financial results and cash flows for 2022 demonstrating the Company’s and its subsidiaries’ ability to continue
as going concern and has already begun to take steps to address the expected liquidity and profitability shortages. For more
information, see Note 28.
Recoverable value of investments in subsidiaries
The Company management evaluates the carrying amounts of investments in subsidiaries and assesses whenever indications exist
that assets’ recoverable amounts are lower than their carrying amounts. The Company management calculates and records an
impairment loss on investments in subsidiaries based on the estimates related to the future return on them. Taking into consideration
the 5-year business plan for each of the subsidiaries, the Company’s management considers that no significant adjustments to the
carrying amounts of investments in subsidiaries are necessary as of 31 December 2021. Please see Note 11 for more information.
Recoverable value of intangible assets
The Company’s management evaluates the carrying amounts of intangible assets and assesses whenever indications exist that the
assets’ recoverable amounts are lower than their carrying amounts. The Company’s management calculates and records an
impairment loss on intangible assets based on the estimates related to the expected future use, alienation or sale of the assets. Taking
into consideration the Company’s planned level of activities, the Company’s management considers that no significant adjustments to
the carrying amounts of intangible assets fixed assets are necessary as of 31 December 2021. See Notes 9 and 11 for more
information.
STORENT INVESTMENTS AS Separate Annual Report 2021
Registered address: 15A Matrozu street, Riga, LV-1048
Registration number: 40103834303
13
2. Summary of significant accounting policies (cont.)
(b) Use of estimates and judgements (cont.)
Impairment losses on doubtful and bad debts, including recoverable amount of loans granted
The Company's management assesses the carrying amount of receivables and their recoverability, establishing provisions for doubtful
and bad debts, if necessary. The entity applies a simplified approach to trade receivables and recognizes life losses on receivables
based on a historical analysis of credit losses and also taking into account expected future developments. Expected creditors' losses
from receivables are calculated based on assumptions about default risk and expected loss level. In making these assumptions and
selecting data for the calculation of impairment, the Company takes into account its experience, current market conditions, as well as
future estimates at the end of each reporting period. Expected credit losses on receivables and loans to related parties are assessed
by determining and applying by the management the probability of default of each receivable and the expected loss in the event of
default. The Company's management has assessed receivables and believes that no significant additional provisions are required as
at 31 December 2021. See Note 2. (h) and Note 25 for more information.
Useful lives of intangible assets and fixed assets
Useful lives of intangible assets and fixed assets are reviewed at each balance sheet date and changed, if necessary, to reflect the
Company’s management current view on their remaining useful lives in the light of changes in technology, the remaining prospective
economic utilization of the assets and their physical condition.
(c) Foreign currency conversion
The monetary unit used in the financial statements is the official currency of the European Union (hereinafter – “EUR”), which is
Company’s functional and presentation currency.
All transactions in foreign currency are converted to EUR based on the European Central Bank exchange rate on trade date. On the
balance sheet date, foreign currency monetary assets and liabilities are translated at the European Central Bank exchange rate as at
31 December.
European Central Bank exchange rates:
31.12.2021. 31.12.2020.
EUR EUR
1 USD 0.88292 0.81493
1 GBP 1.19007 1.11231
1 NOK 0.10011 0.09551
1 SEK 0.09755 0.09966
1 RUB 0.01172 0.01093
Profit or losses from these transactions, as well as from the foreign currency monetary assets and liabilities denominated in EUR, are
recognized in the income statement.
(d) Intangible assets
Intangible assets are measured at historic cost amortized on a straight-line basis over the useful life of the assets, taking into account
that useful life is 3-5 years. Amortization of the remaining parts is calculated, using approximation methods in order to genuinely reflect
their useful life. If some events or a change in conditions indicates that the carrying value of an intangible asset may not be recoverable,
the value of the respective intangible asset is reviewed for impairment. Impairment loss is recognized if the carrying value of the
intangible assets exceeds its recoverable amount.
Development of intangible assets
According to IAS 38, an intangible asset arising from a development should be recognized only if the Company can demonstrate all of
the following:
a) the technical justification that the intangible asset can be completed so that it is available for use or sale;
b) its intention to complete the intangible asset and use or sell it;
c) its ability to use or sell the intangible asset
d) how the intangible asset will generate probable future economic benefits. Among other things, the Company may demonstrate the
existence of an intangible asset or the market for the intangible asset itself or, if it is intended for internal use, the usefulness of the
intangible asset;
e) the availability of sufficient technical, financial and other resources to complete the development of the intangible asset and to use
or sell it;
f) its ability to measure reliably the expenditure attributable to the intangible asset during its development.
STORENT INVESTMENTS AS Separate Annual Report 2021
Registered address: 15A Matrozu street, Riga, LV-1048
Registration number: 40103834303
14
2. Summary of significant accounting policies (cont.)
(d) Intangible assets (cont.)
A project initiated by the Company meets all the above criteria. The item “Development of intangible assets” currently includes only
those costs that the Company can reliably estimate. The development of intangible assets was started in 2020 and, in accordance with
the Company's management plans, will be continued in 2022. This intangible asset is recognized as a corporate asset because it
cannot generate independent cash flows but will be used in the operations of all Group companies. At the end of 2021, this item was
not assessed separately and was included in the impairment test of total assets, allocating this item by CGU equal to the current IT
cost allocation in the Storent group. Please also refer to note 2.(g) and note 11.
(e) Property, plant and equipment
Property, plant and equipment are carried in their historic cost less accumulated depreciation and impairment losses, if any.
Depreciation is calculated using the straight-line method to allocate the cost of the assets over their estimated useful lives:
Other fixed assets 2 - 5 years.
Depreciation is charged in the month when an item of property, plant or equipment was put into operation or used for business
purposes. Each part of an item of property, plant and equipment with a cost that is significant in relation to the total costs of the item
shall be depreciated separately. If the company depreciates some parts of a fixed asset individually, the remaining parts of this fixed
asset are also depreciated individually. The balance consists of those parts of the fixed asset, which are not important by themselves.
Depreciation methods, useful lives and residual values are reviewed at each reporting date and, if appropriate, amended.
If events or changes in circumstances indicate that the carrying amount of an item of property, plant and equipment may not be
recoverable, the carrying amount of the item is reviewed for impairment. See Note 2. (g) for more details.
The carrying amount of an item of property, plant and equipment is derecognized on disposal or when no future economic benefits are
expected from its use or disposal. The gain or loss (calculated as a difference between net disposal proceeds and the carrying amount
of the item of item of fixed asset) arising from the derecognition of an item of property, plant and equipment is recognized in profit or
loss in the period when the item is derecognized.
(f) Investments in subsidiaries
Investments in subsidiaries (i.e., where the Company holds more than 50% of interest in the share capital or otherwise controls the
investee company) are measured initially at cost. Control is achieved where the Company has the power to govern the financial and
operating policies of the investee company, and if Company has opportunity to reap the return of investments from the exercise of
such powers.
Subsequent to initial recognition, all investments are stated at historical cost less any accumulated impairment losses. The carrying
amounts of investments are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable. Impairment loss is recognized in the statement of profit and loss. Please also refer to note 2.(g).
(g) Impairment of non-financial assets
At the end of each reporting period, the Company reviews whether there is any indication that an asset, t.i. intangible assets, fixed
assets and investments in subsidiaries, may be impaired. Such verification is performed at the level of the Storent Group's cash-
generating units (CGU) level. Each of the Company's subsidiaries is identified as a separate CGU. Intangible assets owned by the
Company are allocated to the CGU for impairment assessment in the same way as the distribution of current IT costs in the Storent
Group. If any such indication exists or if the CGU annual impairment test needs to be done, the Company estimates the recoverable
amount of the relevant CGU. The recoverable amount of a CGU is its fair value less costs to sell or value in use, whichever is greater.
To determine impairment, assets are grouped at the lowest levels for which there are separately identifiable planned utilization
efficiencies. If the carrying amount of a CGU exceeds its recoverable amount, the CGU is impaired and the carrying amount of the
CGU is written down to its recoverable amount. For determining the value in use, the planned load of the equipment used by the CGU
and the average rental price are taken into account, as a result, the planned revenue and the payback period of the initial investment
are calculated. Impairment losses are recognized in the comprehensive income statement. Please also see Note 11.
At each balance sheet date, the Company reviews whether there is any indication that impairment loss recognized for an asset, except
for goodwill, in prior periods could have reduced or no longer exist. If such indications exist the Company estimates the recoverable
amount of the respective asset. Previously recognized impairment loss is reversed when and only when the estimates on the basis of
which the recoverable amount of the asset was determined have changed since the last time the impairment loss was recognized. In
such a case the carrying amount of an asset is increased to its recoverable amount. Where the value of an asset has increased, the
carrying amount of the asset may not exceed as a result of the increase in the carrying value which would have resulted less
depreciation were impairment loss not recognized in respect of the asset in prior years. Such increase in value is recognized in income
statement.
STORENT INVESTMENTS AS Separate Annual Report 2021
Registered address: 15A Matrozu street, Riga, LV-1048
Registration number: 40103834303
15
2. Summary of significant accounting policies (cont.)
(h) Financial assets and financial liabilities
Financial assets
Recognition, classification and subsequent measurement
A financial asset is recognised in the statement of financial position when the Company becomes party to a contract that is a financial
instrument.
On initial recognition, the Company classifies and measures a financial asset at amortised cost if it meets both of the following
conditions and is not designated as at FVTPL
with recognition in the income statement:
it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the
principal amount outstanding.
The Company classifies its financial assets as financial assets at amortised cost in line with its business model to hold the financial
assets and collect the contractual cash flows, which consist only of payments of principal and interest on the outstanding principal
amount. The assets in the statement of financial position that belong to this category are Loans to related parties, Trade receivables,
Trade receivables from related parties and Other receivables.
These assets are subsequently measured at amortised cost using the effective interest method. The amortised cost is reduced by
impairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in consolidated statement of
comprehensive income. Any gain or loss on derecognition is recognised in consolidated statement of comprehensive income.
A financial asset is derecognized if:
The contractual rights to the cash flows from the financial asset expire;
The Company retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation
to pay cash flows without material delay to a third party based on and earlier arrangement without any profit arising,
The Company transfers the contractual rights to receive the cash flows of the and either (a) it transfers substantially all the risks
and rewards of ownership of the financial asset to a third party, or (b) it neither transfers no retains substantially all the risks and
rewards of ownership of these assets but has transferred control over the item of financial asset.
Impairment of financial assets
Loans to related parties and trade receivables from related parties
The Company recognizes expected credit losses on issued loans, which are measured at amortized cost, even if no credit loss has
occurred. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since the date of
initial recognition of the financial asset or the previous reporting date. Expected credit losses on loans to related parties and receivables
from related parties are estimated using the EAD x PD x LGD approach, with management individually determining the default exposure
(EAD) of each obligor and applying the probability of default (PD) and expected loss for each obligor (LGD).
Taking into account that the cash flows of the Storent Group are centrally controlled, at the end of reporting period it is known how the
cash flows from related parties will be, the Company’s management has determined that the credit risk of the subsidiaries has not
increased significantly since the date of initial recognition of the financial asset or the previous reporting date.
Taking into account the above, the Company's management believes that as at 31 December 2021 and 31 December 2020, additional
provisions for possible credit losses from debts of related companies and loans to related companies are not required.
Trade receivables and Other receivables
The Company applies the simplified approach under IFRS 9. The Company always recognises expected lifetime credit losses over the
life cycle for trade receivables and other receivables. Lifetime credit losses represents the expected credit losses that will result from
all possible default events over the expected life of a financial instrument. The expected credit losses on these financial assets are
estimated using a provision matrix based on the Company’s historical credit loss experience over a two-year period, adjusted for factors
that are specific to the debtors.
The Company considers a financial asset to be in default when the borrower is in significant financial difficulty and is unlikely to pay its
credit obligations to the Company in full, without recourse by the Company to actions such as realising security (if any is held); or the
financial asset is more than 90 days past due. Such financial assets in default are considered to be credit-impaired.
Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets. Debts
are written off when their recovery is considered impossible.
STORENT INVESTMENTS AS Separate Annual Report 2021
Registered address: 15A Matrozu street, Riga, LV-1048
Registration number: 40103834303
16
2. Summary of significant accounting policies (cont.)
(h) Financial assets and financial liabilities (cont.)
Financial liabilities
Recognition, classification and subsequent measurement
A financial liability is recognised in the statement of financial position when the Company becomes party to a contract that is a financial
instrument.
All of the Company’s financial liabilities are classified as measured at amortised cost.
Financial liabilities are subsequently measured in fair value of the borrowing less costs associated with obtaining the borrowing. These
costs are an integral part of the effective interest rate of the borrowings and are accounted for as an adjustment to the effective interest
rate.
Financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and foreign
exchange gains and losses are recognised in consolidated statement of comprehensive income. Any gain or loss on derecognition is
also recognised in consolidated statement of comprehensive income.
A financial liability is derecognized, if the obligation specified in the contract is discharged or cancelled or expired. On derecognition of
a financial liability, the difference between the carrying amount extinguished and the consideration paid (including any non-cash assets
transferred or liabilities assumed) is recognised in comprehensive income.
Where there has been an exchange between an existing borrower and lender of debt instruments with substantially different terms, or
there has been a substantial modification of the terms of an existing financial liability, this transaction is accounted for as an
extinguishment of the original financial liability and the recognition of a new financial liability. The difference between the respective
carrying amounts is recognized in consolidated statement of comprehensive income.
Change in the terms of a financial liability
When changes in the contractual terms of a financial liability, such as expected cash flow dates, an assessment is made as to whether
the change is material and, accordingly, it is necessary to derecognise the liability. To determine whether the change is significant, the
Company evaluates qualitative factors and whether the difference between the carrying amount and the discounted value of the
changed expected future cash flows, applying the original effective interest rate of the financial liability, is equal to or greater than 10
percent. If a change in such contractual terms is recognized as material, it results in derecognition of the financial liability, the estimated
fair value of the liability is treated as a settlement of the existing financial liability, and the new liability is recognized at fair value plus
transaction costs. If the contractual condition is not recognized as material, the liability is not derecognised, the Company recalculates
the gross carrying amount of the financial liability and recognizes the gain or loss in the income statement.
Financial guarantees
The Company has issued a number of guarantees in favor of third parties for the liabilities of its subsidiaries. In assessing guarantees,
the Company applies the method described above to determine the expected credit losses on loans to related parties and receivables
from related parties, where EAD corresponds to the guaranteed amount at the end of the relevant period.
Offsetting
Financial assets and financial liabilities are offset and the net amount presented in the statement of financial position when, and only
when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis
or to realise the asset and settle the liability simultaneously.
(i) Cash and cash equivalents
Cash and cash equivalents include cash in bank and in hand, deposits held at call with banks with original maturities of three months
or less.
(j) Provisions
Provisions are recognised, when the Company has present obligation (legal or constructive) due to any past event and there is a
probability that an outflow of resources from the Company including economic benefits will be required to settle this obligation, and the
amount of the obligation can be measured reliably.
(k) Accrued liabilities for unused vacations
The amount of accrued liabilities is determined by multiplying average daily earnings of employees in the last 6 months by the number
of unused vacation days accumulated at the end of the reporting year, in additional calculating employer’s mandatory state social
insurance contributions.
(l) Contingent liabilities and assets
No contingent liabilities are recognised in these financial statements. Contingent liabilities are recognised only if it the probability that
an outflow of resources will be required is reasonably certain. Contingent assets in these financial statements are not recognised, yet
they are reflected solely where the possibility that economic benefits related to operations will reach the Company is sufficiently
substantiated.
STORENT INVESTMENTS AS Separate Annual Report 2021
Registered address: 15A Matrozu street, Riga, LV-1048
Registration number: 40103834303
17
2. Summary of significant accounting policies (cont.)
(m) Leases
The Company as lessee
The Company assesses whether a contract is or contains a lease, at inception of the contract. The Company recognises a right-of-use
asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases
(defined as leases with a lease term of 12 months or less) and leases of low value assets (such as tablets and personal computers,
small items of office furniture and telephones). The term of contract is assessed on the following criteria: the contract is concluded for
a specified period; the end of the lease term is stipulated in the agreement and the further extension of the agreement must be agreed
with the cooperation partner by concluding additional agreements. For these leases, the Company recognises the lease payments as
an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the
time pattern in which economic benefits from the leased assets are consumed.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date,
discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the lessee uses its incremental borrowing
rate.
Lease payments included in the measurement of the lease liability comprise:
Fixed lease payments (including in-substance fixed payments), less any lease incentives receivable;
Variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;
The amount expected to be payable by the lessee under residual value guarantees;
The exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and
Payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.
The lease liability is presented as a separate line in the statement of financial position.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective
interest method) and by reducing the carrying amount to reflect the lease payments made.
The Company remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
The lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment of
exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a
revised discount rate;
The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual
value, in which cases the lease liability is remeasured by discounting the revised lease payments using an unchanged discount
rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used);
A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is
remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate
at the effective date of the modification.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the
commencement day, less any lease incentives received and any initial direct costs. They are subsequently measured at cost less
accumulated depreciation and impairment losses.
Right-of-use assets are depreciated over period of lease term.
(n) Revenue recognition
The Company has applied and recognises income, using a 5-step model. The model consists of:
Determination of contractual relations;
Determination of contract performance obligation;
Determination of transaction price;
Attribution of transaction price to the performance obligation;
Recognition of income, when the Company has fulfilled the performance obligation.
The following criteria are used for determination of contractual relations:
The contractual parties have approved a contract and are committed to fulfil their liabilities;
The Company may identify the rights of each party in relation to deliverable goods or services;
The Company may identify settlement procedures for the goods or services;
The contract has commercial nature;
There is high possibility, that the Company will charge remuneration due to it in exchange for goods or services that will be
transferred to the customer.
STORENT INVESTMENTS AS Separate Annual Report 2021
Registered address: 15A Matrozu street, Riga, LV-1048
Registration number: 40103834303
18
2. Summary of significant accounting policies (cont.)
Management and consulting services
Fees for the provision of management and consultancy services are treated as variable remuneration because their amount is
determined on the basis of the actual costs of the services provided. Revenue from variable remuneration is recognized by the
Company only when it is probable that the uncertainty surrounding the variable remuneration will be resolved and the amount of
cumulative revenue recognized will not be significantly reduced. Management and consulting fees are calculated and recognized and
invoiced on a monthly basis when the actual costs are recorded and the uncertainty surrounding the variable remuneration is resolved.
The Company is not required to make significant judgments in determining the transaction price or the fulfillment of these performance
obligations.
A performance obligation exists when there is a good or service that is severable or when there is a series of separate goods or
services that are substantially the same. The Company's performance obligations are set out in its agreements with service recipients.
Determination of the transaction price and attribution to the performance obligation - the Company determines the transaction price in
contracts with service recipients for each performance obligation separately, which directly depends on the Company's actual costs
for the performance of the respective performance obligation, therefore attribution is not necessary.
The Company uses the relief for the financing component and does not adjust the transaction price, as the time between the customer's
payment and the performance obligation does not exceed one year.
(o) Corporate income tax and deferred corporate income tax
Corporate income tax expenses are included in financial statement based on management calculations according to laws of Republic
of Latvia.
Based on the Corporate Income tax law of the Republic of Latvia, starting from 1 January 2018 corporate income tax is applicable to
distributed profits and several expenses that would be treated as profit distribution. In case of reinvestment of profit, corporate income
tax shall not be applied. The applicable corporate income tax rate is 20%.
In accordance with International Accounting Standard No 12 “Income Taxes” requirements, income tax includes only taxes, which are
calculated based on taxable profit, thus corporate income tax calculated from the taxable base, which consists of conditionally
distributed profit, is presented in Other operating expenses.
In accordance with International Accounting Standard No 12 “Income Taxes” requirements, in cases where income tax is payable at a
higher or lower rate, depending on whether the profit is distributed, the current and deferred tax assets and liabilities are measured at
the tax rate applicable to undistributed profits. In Latvia the applicable rate for undistributed profits is 0%. Therefore, no deferred tax
assets and liabilities arise.
As a parent controls the dividend policy of its subsidiaries, it is able to control the timing of the reversal of temporary differences
associated with these investments including the temporary differences arising from undistributed profits. In cases the parent has
determined that subsidiary’s profits will not be distributed in the foreseeable future the parent company does not recognize a deferred
tax assets and liabilities.
(p) Transactions with related parties
Related parties represent both legal entities and private individuals related to the Group in accordance with the following rules:
a) person or a close member of that person’s family is related to a reporting entity if that person:
i. Has control or joint control over the reporting entity;
ii. Has significant influence over the reporting entity; or
iii. Is a member of the key management personnel of the reporting entity or of a parent of the reporting entity.
b) An entity is related to a reporting entity if any of the following conditions applies:
i. The entity and the reporting entity are members of the same group (which means that each parent, subsidiary and fellow
subsidiary is related to the others);
ii. One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which
the other entity is a member);
iii. Both entities are joint ventures of the same third party;
iv. One entity is a joint venture of a third entity and the other entity is an associate of the third entity;
v. The entity is a post-employment benefit plan for the benefit of employees of either the reporting entity or an entity related to
the reporting entity. If the reporting entity is itself such a plan, the sponsoring employers are also related to the reporting
entity;
vi. The entity is controlled, or jointly controlled by a person identified in a);
vii. A person identified in a) i) has significant influence over the entity or is a member of the key management personnel of the
entity (or of a parent of the entity).
viii. The entity, or any member of the group of which it is a part, provides key management personnel services to the reporting
entity or to the parent of the reporting entity.
STORENT INVESTMENTS AS Separate Annual Report 2021
Registered address: 15A Matrozu street, Riga, LV-1048
Registration number: 40103834303
19
2. Summary of significant accounting policies (cont.)
(q) Post balance sheet events
Only such post balance sheet events are presented in the financial statements which provide additional information on the Company’s
financial position at balance sheet date (adjusting events). If post balance sheet events are not adjusting, they are disclosed in the
financial statements only if they are material.
(r) International Financial Reporting Standards
New standards and amendments to standards, including any consequential amendments to other standards, effective for annual
periods beginning on 1 January 2021, have not had a material impact on these separate financial statements.
Standards issued but not yet effective
A number of new standards are effective for annual periods beginning after 1 January 2021 and earlier application is permitted;
however, the Company has not early adopted the new or amended standards in preparing these separate financial statements.
The following new and amended standards effective for annual periods beginning after 1 January 2021 are not expected to have a
significant impact on the Company’s consolidated financial statements:
Amendments to IAS 37 – Onerous contracts – Cost of Fulfilling a Contract (effective for annual periods beginning on or
after 1 January 2022, have not yet been adopted by the EU);
Annual Improvements to IFRS Standards 2018-2020 (effective for annual periods beginning on or after 1 January 2022,
have not yet been adopted by the EU);
Amendments to IAS 16 – Property, Plant and Equipment: Proceeds before Intended Use (effective for annual periods
beginning on or after 1 January 2022, not yet adopted by the EU);
Reference to Conceptual Framework – Amendments to IFRS 3 (effective for annual periods beginning on or after 1 January
2022, have not yet been adopted by the EU);
Amendments to IAS 1 – Classification of Liabilities as Current or Non-current (effective for annual periods beginning on or
after 1 January 2023, have not yet been adopted by the EU);
IFRS 17 Insurance Contracts and amendments to IFRS 17 Insurance Contracts (effective for annual periods beginning
on or after 1 January 2023, have not yet been adopted by the EU).
IFRSs currently adopted by the EU do not differ materially from those adopted by the International Accounting Standards Board (IASB),
except for some of the above-mentioned standards, amendments to existing standards and interpretations not yet endorsed by the EU
on 31 December 2021 (effective dates refer to IFRSs, issued by the IASB).
The Company decided not to introduce new standards, amendments to existing standards and interpretations before their effective
date. The Company anticipates that the adoption of these standards and amendments to existing standards will not have a material
impact on the Company's financial statements in the period of initial application.
STORENT INVESTMENTS AS Separate Annual Report 2021
Registered address: 15A Matrozu street, Riga, LV-1048
Registration number: 40103834303
20
3. Net revenue
2021 2020
By type of services EUR EUR
Management and consultancy services to related parties
4 861 227 5 528 877
Revenue from the sale of inventories
- 24 793
Rental revenue from related parties
5 717 6 294
TOTAL:
4 866 944 5 559 964
The Company has no contract liabilities from contracts with customers. Contracts assets from contracts with customers are reflected
in the items Trade receivables and Trade receivables from related companies:
2021 2020
EUR EUR
Trade receivables 4 390 2 664
Trade receivables from related parties 1 033 971 2 450 811
TOTAL: 1 038 361 2 453 475
2021 2020
By geographical area EUR EUR
Latvia 1 725 469 1 746 130
Finland 1 140 995 1 606 779
Lithuania 1 082 846 1 012 141
Estonia 624 491 762 933
Sweden 254 004 364 622
Russia 39 139 67 359
TOTAL: 4 866 944 5 559 964
4. Other operating expenses
2021 2020
EUR EUR
IT expenses 945 247 1 176 643
Insurance costs 134 622 158 331
Administration transport costs 103 872 100 330
Consultancy services * 78 936 151 205
Legal services 68 275 85 548
Short-term leases of offices and areas and maintenance costs 49 019 49 550
Marketing expenses 36 770 111 052
Communication expenses 4 567 6 299
Other administration expenses 104 451 166 218
TOTAL: 1 525 759 2 005 176
STORENT INVESTMENTS AS Separate Annual Report 2021
Registered address: 15A Matrozu street, Riga, LV-1048
Registration number: 40103834303
21
4. Other operating expenses (cont.)
* including payments for audit and non-audit services to company KPMG Baltics SIA:
2021
EUR
2020
EUR
Financial statement auditing services 47 882 41 200
Permitted tax services 79 79
TOTAL: 47 961 41 279
5. Depreciation and amortization
2021 2020
EUR EUR
Amortization of intangible assets (see Note 9) 881 790 864 042
Depreciation of fixed assets (see Note 9) 31 556 35 741
Amortization of rights of use assets (see Note 10) 51 115 65 874
TOTAL:
964 461 965 657
6. Interest and similar income
2021 2020
EUR EUR
Income from dividends*
2 011 114 173 718
Interest income from related parties
83 736 393 831
Proceeds from additional discounts
8 884 -
Repurchased bonds (price difference) (see Note 22)
4 403 21 994
Income from foreign exchange fluctuations
21 78
TOTAL:
2 108 158 589 621
*In 2021, the Company has received dividends income of EUR 1 935 452 from subsidiary Storent SIA and EUR 75 662 from subsidiary
Storent OOO (2020: EUR 173 718 from subsidiary Storent OOO).
7. Interest payments and similar expenses
2021 2020
EUR EUR
Interest on borrowings
630 530 1 121 719
Interest on raised funding
198 587 351 864
Interest on loans received from related parties
53 177 34 511
Loss from foreign exchange fluctuations
3 448 14 353
TOTAL:
885 742 1 522 447
STORENT INVESTMENTS AS Separate Annual Report 2021
Registered address: 15A Matrozu street, Riga, LV-1048
Registration number: 40103834303
22
8. Personnel costs and number of employees
2021 2020
EUR EUR
Salaries 903 347 1 457 939
Remuneration to contractors 394 796 335 311
National social security mandatory contributions 213 365 351 320
Provisions for bonuses (change) 7 819 (364 951)
Other personnel costs
(64 346) (43 170)
TOTAL: 1 454 981 1 736 449
2021 202
Personnel costs by function:
EUR EUR
Administration and finance staff 1 454 981 1 736 449
TOTAL: 1 454 981 1 736 449
2021 2020
Incl. executive management remuneration:
EUR EUR
Members of the Board
Salaries 452 849 813 000
National social security mandatory contributions 106 835 195 864
TOTAL: 559 684 1 008 864
2021 2020
Average number of employees during the reporting year 10 10
TOTAL: 10 10
STORENT INVESTMENTS AS Separate Annual Report 2021
Registered address: 15A Matrozu street, Riga, LV-1048
Registration number: 40103834303
23
9. Intangible assets and property, plant and equipment
Development
of intangible
assets
Licenses
and similar
rights
Other
intangible
assets
Other fixed
assets and
inventory
TOTAL
31 December 2019 EUR EUR EUR EUR EUR
Historical cost - 470 881 3 075 725 254 095 3 800 702
Accumulated amortisation and depreciation -
(317 864) (1 610 273)
(172 721)
(2 100 858)
Net carrying value - 153 018 1 465 452 81 374 1 699 844
2020
Net carrying value, opening - 153 018 1 465 452 81 374 1 699 844
Additions 418 813 - 767 091 20 119 1 206 023
Disposals, net - (151 133) (1 174) (11 165) (163 472)
Excluded depreciation
- 97 928 1 174 9 466 108 568
Accumulated amortisation and depreciation - (47 673) (816 369) (35 741) (899 783)
Net carrying value 418 813 52 140 1 416 174 64 053 1 951 180
31 December 2020
Historical cost 418 813 319 749 3 841 642 263 049 4 843 253
Accumulated amortisation and depreciation -
(267 609) (2 425 468)
(198 996)
(2 892 073)
Net carrying value 418 813 52 140 1 416 174 64 053 1 951 180
2021
Net carrying value, opening 418 813 52 140 1 416 174 64 053 1 951 180
Additions 566 475 938 457 062 27 707 1 052 182
Disposals, net - (7 641) (40 703) (19 221) (67 565)
Excluded depreciation - 7 641 40 703 14 671 63 015
Accumulated amortisation and depreciation - (32 280) (849 510) (31 556) (913 346)
Net carrying value 985 288 20 798 1 023 726 55 654 2 085 466
31 December 2021
Historical cost 985 288 313 046 4 258 001 271 535 5 827 870
Accumulated amortisation and depreciation - (292 248) (3 234 275) (215 881) (3 742 404)
Net carrying value 985 288 20 798 1 023 726 55 654 2 085 466
Fully amortized intangible assets and depreciated fixed assets
On 31 December 2021 intangible assets and fixed assets of the Company included assets with acquisition value of EUR 2 844 174
(31.12.2020.: EUR 1 960 486), which were completely written down into amortization and depreciation costs and are still actively used
in economic activity. Most of these intangible and fixed assets consist of computer programs, which continue to be used, and for which
annual maintenance and improvement fees are paid.
Development of intangible assets
In 2020, the Company has started to develop a new ERP system that meets the development trends of modern IT technologies in the
business environment, especially as a result of Covid-19, and will provide effective accounting of rental processes, control procedures
of the Company and its subsidiaries and operational information for the Company's management to make decisions. The item
“Development of intangible assets” currently includes only those costs that the Company can reliably measure and that meet the IFRS
criteria for capitalization.
STORENT INVESTMENTS AS Separate Annual Report 2021
Registered address: 15A Matrozu street, Riga, LV-1048
Registration number: 40103834303
24
10. Rights of use assets
Licenses and
similar rights
Other fixed
assets and
inventory
TOTAL
EUR EUR EUR
2020
Net carrying value, opening - 90 129 90 129
Additions 77 908 24 701 102 608
Accumulated amortisation and depreciation (28 134) (37 741) (65 875)
Net carrying value 49 774 77 089 126 863
31 December 2020
Historical cost 77 908 168 737 246 645
Accumulated amortisation and depreciation (28 134) (91 648) (119 782)
Net carrying value 49 774 77 089 126 863
2021
Net carrying value, opening 49 774 77 089 126 863
Disposals, net - (81 844) (81 844)
Excluded depreciation - 43 091 43 091
Accumulated amortisation and depreciation (25 968) (25 147) (51 115)
Net carrying value 23 806 13 189 36 995
31 December 2021
Historical cost 77 908 86 893 164 801
Accumulated amortisation and depreciation (54 102) (73 704) (127 806)
Net carrying value 23 806 13 189 36 995
The Company has entered into a Microsoft license lease and several car lease agreements as a lessee in accordance with IFRS 16.
The average lease term is 3.5 years. The license lease term is 3 years. The maturity analyses of lease liabilities is presented in Note
23.
Amounts recognized in profit and loss:
Note 2021
EUR
2020
EUR
Amortization expense on right of use assets 10 (51 115) (65 874)
Interest expenses on lease liabilities (9 846) (12 854)
Short term and low value lease expenses (81 310) (82 847)
TOTAL: (142 271) (161 575)
STORENT INVESTMENTS AS Separate Annual Report 2021
Registered address: 15A Matrozu street, Riga, LV-1048
Registration number: 40103834303
25
11. Investments in subsidiaries
The Company had the following investments in its subsidiaries as at 31 December 2021:
31.12.2021 31.12.2020
Company Address % EUR EU
R
STORENT SIA Zolitūdes iela 89, Rīga, LV-1046, Latvia 100 10 921 613 10 921 613
STORENT UAB Savanorių pr. 180B, Vilnius, LT-03154,
Vilniaus m., Lithuania
100 11 842 694 9 942 694
STORENT OU Betooni 15/Paneeli 5, Tallina, 11415, Estonia 100 13 683 177 13 683 177
STORENT OU Impairment losses 100 (3 722 619) (3 722 619)
STORENT Holding Finland OY Virkatie 16, Vantaa, FI-01510, Finland 100 3 652 500 2 652 500
STORENT AS PB 1441, Vika, N-0116, Oslo, Norway 100 3 700 3 700
STORENT AS Impairment losses 100 (3 700) (3 700)
STORENT AB Arrendevagen 50, 163 44, Spanga,
stokholma, Sweden
100 3 328 973 3 328 973
STORENT OOO* 4 Bolshaja Okruznaja ulica 33, 236009,
Kaliningrad, Russian Federation
100 582 937 582 937
TOTAL: 40 289 275 37 389 275
Summary about STORENT Holding Finland OY subsidiary 31.12.2021 31.12.2020
Company Address % EUR EUR
STORENT OY Virkatie 16, Vantaa, FI-01510, Finland 100 3 658 409 2 658 409
*
STORENT OOO
The Company management has evaluated the recoverable amount of each investment related to geopolitical situation with increased
focus on entity in Russia, Kaliningrad. At the moment of issue of this report Storent OOO continues to operate without significant
changes. Before 24 February 2022 Russia entity operated quite independently, management don’t see any major risks for further
business activities. Company monitors and follows sanction restrictions and so far they doesn’t affect subsidiaries activities.
2021 2020
Movement of investments in subsidiaries EUR EUR
At the beginning of the year 37 389 275 33 529 851
Investment in Storent OU - 3 600 000
Investment in Storent UAB 1 900 000 500 000
Investment in Storent AB - 2 085 743
Investment in Storent Holding Finland Oy 1 000 000 1 400 000
Impairment charge - (3 726 319)
TOTAL: 40 289 275 37 389 275
Investments made in subsidiaries Storent UAB and Storent Holding Finland Oy in 2021 for the total amount of EUR 2 900 000 were
made in cash by transferring the respective amounts to the bank accounts of the subsidiaries.
31.12.2021 31.12.2020
Movement of impairment EUR EUR
Impairment of investments in subsidiaries
At the beginning of the year (3 726 319) (307 026)
Impairment for Storent OU - (3 419 293)
Total impairment of investments in subsidiaries: (3 726 319) (3 726 319)
31.12.2021 31.12.2020
Distribution of impairment by position EUR EUR
Investment in Storent OU 11 (3 722 619) (3 722 619)
Investment in Storent AS 11 (3 700) (3 700)
Total accruals for impairment: (3 726 319) (3 726 319)
STORENT INVESTMENTS AS Separate Annual Report 2021
Registered address: 15A Matrozu street, Riga, LV-1048
Registration number: 40103834303
26
11. Investments in subsidiaries (cont.)
Name
Country
Business Establishment / purchase date
Company
STORENT SIA Latvia Renting of construction machinery and equipment April 17, 2008
STORENT UAB Lithuania Renting of construction machinery and equipment November 27, 2008
STORENT OU Estonia Renting of construction machinery and equipment July 7, 2009
STORENT Holding
Finland OY
Finland Activities of head offices September 4, 2012
STORENT AS Norway Renting of construction machinery and equipment January 15, 2013
STORENT AB Sweden Renting of construction machinery and equipment June 27, 2013
STORENT OOO Russian Federation Renting of construction machinery and equipment 1 August 2017
Audited Profit
(
loss
)
of the re
p
ortin
g
y
ea
r
E
q
uit
y
2021 2020 2021 2020 31.12.2021 31.12.2020
Name EUR EUR EUR EUR
STORENT SIA Yes Yes 1 319 382 (289 168) 15 469 380 14 149 998
STORENT UAB Yes Yes (184 727) (1 521 053) (1 448 512) (1 263 785)
STORENT OU Yes Yes (1 675 012) (2 034 909) (5 545 579) (3 870 567)
STORENT Holding Finland OY Yes Yes (876 222) (732 354) (794 259) 81 963
STORENT AS No No (2 885) (6 250) (54 947) (52 062)
STORENT AB Yes Yes (464 899) (1 106 857) (595 328) (130 429)
STORENT OOO No No 181 286 110 725 647 576 466 290
STORENT Holding Finland OY subsidiary:
STORENT OY Yes Yes (1 825 155) (1 476 933) (1 699 930) 125 224
The Company management has evaluated the recoverable amount of each investment. It has been evaluated whether ownership
interest in subsidiaries has been impaired. When performing an impairment test for ownership interest in subsidiaries, the recoverable
amount – value in use – is determined by discounting future cash flows of each subsidiary. The calculation is based on the following
assumption: each subsidiary is considered to be a separate cash-generating unit (CGU). This test is performed also to assess the
recoverability of capitalized development costs for intangible assets, which are allocated to the subsidiaries. Cash flows are planned
based on actual results and 5-year business plan which uses the following assumptions: Storent Group’s amortisation and depreciation
costs, IT costs, management fee, insurance costs and interest expenses are allocated in the budget of each subsidiary according to
fleet proportion in the subsidiary. By using the same fleet proportion all the Group’s liabilities for equipment purchase are allocated in
impairment calculation. Cash flows beyond that five-year period have been extrapolated using a steady 3 per cent (2020: 3 per cent)
per annum growth rate. A post-tax discount rate of 10.24% (8,98% in 2020) was applied to determine the recoverable present value
of assets. Discount rate forecasts are based on the actual cost of capital of Storent group companies
The recoverable amount of long-term investments largely depends on the assumptions used in the assessment relating to net turnover
growth, EBITDA margin and growth rate, timing of growth, as well as the ability of Company’s management to implement these
assumptions and the development of the Baltic construction equipment rental market in general. Any unfavorable changes in these
assumptions that may be caused by volatility of the market, in which the Company or its subsidiaries operate, may have a negative
influence of the carrying amount of the Company’s investments in subsidiaries reflected in the balance sheet as at 31 December 2021.
STORENT INVESTMENTS AS Separate Annual Report 2021
Registered address: 15A Matrozu street, Riga, LV-1048
Registration number: 40103834303
27
11. Investments in subsidiaries (cont.)
Sensitivity analysis
The Company has conducted an analysis of the sensitivity of the impairment test to changes in the key assumptions used to determine
the recoverable amount for each of the CGUs. Analysis of the sensitivity is based on same assumptions as impairment test and as
described above. Management estimated that all Baltic countries will reach a similar EBITDA margin level by increasing sales and
significantly improving efficiency in Lithuania and Estonia. Covid-19 pandemic has been negatively impacted results in previous
periods, with the introduction of online processes and improved efficiency, as well as increased sales and prices, will result in a relatively
faster increase in EBITDA.
31.12.2021 Latvia Lithuania Estonia Finland Sweden Russian
Federation
EBITDA margin 16%-18%
2022-2026 in
terminal year
16% (2021:
actual 18%)
9%-18% 2022-
2026 in
terminal year
9% (2021:
actual 16%)
1%-18% 2022-
2026 in
terminal year
1% (2021:
actual -8%)
15%-18%
2022-2026 in
terminal year
15% (2021:
actual 14%)
14%-16%
2022-2026 in
terminal year
14% (2021:
actual 8%)
48%-40%
2022-2026 in
terminal year
48% (2021:
actual 51%)
EBITDA
the growth rate
2% 9% 18% 3% 2% -8%
Cash flow
calculation
periods
5 years + the
terminal year
5 years + the
terminal year
5 years + the
terminal year
5 years + the
terminal year
5 years + the
terminal year
5 years + the
terminal year
Discount rate 10,24% 10,24% 10,24% 10,24% 10,24% 10,24%
Terminal growth
rate
0,59% 0,59% 0,59% 0,59% 0,59% 0,59%
31.12.2020 Latvia Lithuania Estonia Finland Sweden Russian
Federation
EBITDA margin 12%-16%
2021-2025 in
terminal year
16% (2020:
actual 18%)
12%-17%
2021-2025 in
terminal year
17% (2020:
actual 11%)
3%-14% 2021-
2025 in
terminal year
14% (2020:
actual -6%)
24%-25%
2021-2025 in
terminal year
25% (2020:
actual 14%)
10%-19%
2021-2025 in
terminal year
19% (2020:
actual 4%)
36%-37%
2021-2025 in
terminal year
37% (2020:
actual 37%)
EBITDA
the growth rate
4% 5% 9% 1% 9% 1%
Cash flow
calculation
periods
5 years + the
terminal year
5 years + the
terminal year
5 years + the
terminal year
5 years + the
terminal year
5 years + the
terminal year
5 years + the
terminal year
Discount rate 8,98% 8,98% 8,98% 8,98% 8,98% 8,98%
Terminal growth
rate
0,62% 0,62% 0,62% 0,62% 0,62% 0,62%
STORENT INVESTMENTS AS Separate Annual Report 2021
Registered address: 15A Matrozu street, Riga, LV-1048
Registration number: 40103834303
28
11. Investments in subsidiaries (cont.)
Main key assumptions, that can affect recoverable amount and impairment change is EBITDA budget execution and WACC rate.
The table below shows the impact of the change in these two assumptions on the value headroom/(impairment) of the cash-
generating unit.
Weighted average cost of capital 10,24%
(8,98% in 2020)
EBITDA target reached by 90%
EBITDA
target
reached
by 90%
EBITDA
target
reached
by 80%
EBITDA
target
reached
by 90%
EBITDA
target
reached
by 80%
Weighted
average cost
of capital
9,24%
Weighted
average cost
of capital
11,24%
Weighted
average cost
of capital
7,98%
Weighted
average cost
of capital
9,98%
m EUR 2021 2021 2020 2020 2021 2021 2020 2020
Storent SIA 22,26 18,10 15,65 12,02 27,86 18,18 20,44 12,23
Storent UAB 10,45 7,82 12,56 10,19 14,07 7,82 15,91 10,18
Storent OU 1,09 -0,38 -0,31 -1,37 2,87 -0,25 1,35 -1,50
Storent AB -0,14 -0,60 4,56 3,54 0,29 -0,47 5,98 3,54
Storent Oy 2,28 0,03 15,08 11,9 4,56 0,55 18,71 12,49
Storent OOO 1,54 1,28 0,50 0,33 1,75 1,38 0,66 0,38
KOPĀ: 37,48 26,25 48,04 36,61 51,40 27,21 63,05 37,32
Based on the calculations, a decrease in EBITDA would lead to the fact that the carrying amount of Estonian and Swedish subsidiaries,
including the allocated corporate assets, may not reach the expected recoverable amount as of December 31, 2021. The management
of the Storent Group, in close cooperation with the management of the Estonian and Swedish subsidiaries, carefully considers and
implements the sales strategy in Estonia and Sweden in order to prevent non-compliance with the planned EBITDA level.
Management believes that reasonably possible changes in the key assumptions underlying the recoverable amount of other
investments will not result in the total carrying amount exceeding the total recoverable amount of the related investments.
12. Other receivables
31.12.2021 31.12.2020
EUR EUR
Guarantee deposits
7 774 7 774
TOTAL:
7 774 7 774
13. Deferred expenses
31.12.2021 31.12.2020
EUR EUR
Software maintenance
17 255 119 605
Personnel expenses
3 771 11 343
Other deferred expenses
3 500 -
Insurance expenses
1 858 2 937
TOTAL:
26 384 133 885
14. Cash and cash equivalents
31.12.2021 31.12.2020
EUR EUR
Cash in bank, EUR
53 588 1 937 007
TOTAL: 53 588 1 937 007
STORENT INVESTMENTS AS Separate Annual Report 2021
Registered address: 15A Matrozu street, Riga, LV-1048
Registration number: 40103834303
29
15. Share capital
Registered share capital of the Company on 31.12.2021 and 31.12.2020 is EUR 33 316 278, consisting of 33 316 278 shares. The
nominal value of a share is EUR 1. All shares have equal voting right and dividend entitlement.
Shareholders of the Company as at 31 December 2021:
Shareholder
Country
Number of
shares
Amount
EUR
Participating
interest
“Levina Investments” S.A.R.L. Luxembourg 24 320 882 24 320 882 73,0%
Supremo SIA Latvia 4 497 698 4 497 698 13,5%
Bomaria SIA Latvia 4 497 698 4 497 698 13,5%
TOTAL: 33 316 278 33 316 278 100%
Shareholders of the Company as at 31 December 2020:
Shareholder
Country
Number of
shares
Amount
EUR
Participating
interest
“Levina Investments” S.A.R.L. Luxembourg 24 320 882 24 320 882 73,0%
Supremo SIA Latvia 4 497 698 4 497 698 13,5%
Bomaria SIA Latvia 4 497 698 4 497 698 13,5%
TOTAL: 33 316 278 33 316 278 100%
16. Other provisions
31.12.2021 31.12.2020
EUR EUR
Provisions for personnel bonuses 70 683 62 864
TOTAL:
70 683 62 864
Changes in provisions can be reflected as follows:
31.12.2021 31.12.2020
EUR EUR
At the beginning of the year 62 864 427 815
Created provisions 71 297 96 913
Used provisions (63 478) (427 815)
Reversed provisions - (34 049)
At the ending of the year 70 683 62 864
17. Other liabilities
31.12.2021 31.12.2020
EUR EUR
Salaries payable 45 321 55 057
TOTAL:
45 321 55 057
STORENT INVESTMENTS AS Separate Annual Report 2021
Registered address: 15A Matrozu street, Riga, LV-1048
Registration number: 40103834303
30
18. Accrued liabilities
31.12.2021 31.12.2020
EUR EUR
Accrued liabilities for unused vacations 80 663 85 874
Accrued liabilities for audit services 12 600 12 360
Accrued liabilities for consultations received 3 971 53 300
Other accrued liabilities 3 964 9 943
TOTAL: 101 198 161 477
19. Taxes and mandatory state social insurance contributions
31.12.2021 31.12.2020
EUR EUR
National social security mandatory contributions 10 080 28 042
Personal income tax 12 985 15 408
Value added tax (83) (83)
Risk duty 3 (17)
TOTAL: 22 985 43 350
20. Transactions with related parties
20.(a) Transactions with related parties:
Related party Year
Goods and
services
provided
Interest
income
Goods
purchased
and
services
received
Payables
related
parties
Interest
expenses
Receivables
from related
parties
Subsidiaries: EUR EUR EUR EUR EUR EUR
STORENT SIA 2020 1 721 336 344 427 (96 796) (238 053) - -
2021 1 725 469 7 018 (85 243) - (22 048) 37 120
STORENT UAB 2020 1 012 142 - - - - 1 217 599
2021 1 082 847 - - - - 9 914
STORENT OU 2020 762 933 19 083 - (11 129) - -
2021 624 491 2 455 - - - 440 506
STORENT Holding Finland OY 2020 - 28 620 - - - 37 177
2021 - 35 573 - - - 72 750
STORENT AB 2020 364 622 - - - - 78 646
2021 254 004 - - - - 65 651
STORENT AS 2020 - 1 701 - - - 7 074
Impairment loses (note 11) 2020 - - - - - (7 074)
STORENT AS 2021 - 2 690 - - - 9 764
Impairment loses (note 11) 2021 - - - - - (9 764)
STORENT OOO 2020 67 359 - - - - -
2021 39 139 - - - - 2 056
STORENT OY 2020 1 606 779 - - - - 1 117 389
2021 1 140 994 36 000 - - - 405 974
TOTAL 2020: 5 535 171 393 831 (96 796) (249 182) - 2 450 811
TOTAL 2021: 4 866 944 83 736 (85 243) - (22 048) 1 033 971
In 2021 the costs of services received from related parties were not capitalized. In 2020, Storent AB's debt for services provided was
capitalized to investment in the subsidiary for the total amount of EUR 535 744.
STORENT INVESTMENTS AS Separate Annual Report 2021
Registered address: 15A Matrozu street, Riga, LV-1048
Registration number: 40103834303
31
20.(b) Loans to related parties
Maturity
date
Loan amount Actual interest rate
(%)
31.12.2021
EUR
31.12.2020
EUR
SIA “STORENT” 31.12.2022. 930 000 6 - 930 000
SIA “STORENT” 31.12.2022. 1 684 673 1.434 - 1 684 674
OY “STORENT
Holding Finland”
31.12.2023. 793 651 6 793 651 487 151
OY ”Storent” * 600 000 6 600 000 600 000
AS “STORENT” 31.12.2023. 44 224 6 44 224 44 224
Impairment losses AS “STORENT” (44 224) (44 224)
Long term liabilities: 1 393 651 3 701 825
Short term liabilities: - -
*Long-term capital loan without a specified maturity. The repayment shall be decided by the Board of Directors of Storent Oy. The
Board of Directors shall notify the repayment to the Storent Investments at least thirty (30) days prior the repayment of capital. The
principal of the Capital Loan may be repaid only to the extent that the amount of the unrestricted equity of the company added with all
the capital loans of the company exceeds at the moment of the repayment the losses of the company according to the balance sheet
of the last audited or later bookings.
31.12.2021 31.12.2020
Movement of impairment EUR EUR
Impairment of trade receivables from related parties and loans (51 298) (30 373)
Storent AS, trade receivables from related parties (2 690) (1 701)
Storent AS, loans - (19 224)
Total impairment of loans and receivables: (53 988) (51 298)
31.12.2021 31.12.2020
Distribution of impairment by positions Note EUR EUR
Storent AS, trade receivables from related parties 20 (a) (9 764) (7 074)
Storent AS, loans 20 (b) (44 224) (44 224)
Total impairment of loans and receivables: (53 988) (51 298)
Loans to related parties issued without security and their recoverability is assessed individually.
20.(c) Borrowings from related parties
Maturity
date
Loan
amount
Actual interest rate
(%)
31.12.2021
EUR
31.12.2020
EUR
Bomaria SIA 31.12.2022 6 680 872 6 - 325 581
Supremo SIA 31.12.2022 6 680 872 6 - 325 581
Storent SIA 15.07-26.12.2022 1 935 000 6 1 935 000 -
Long term liabilities: - 651 162
Short term liabilities: 1 935 000 -
Borrowings from related parties are received without security.
20.(d) Terms and conditions applicable to transactions with related parties
Unsettled liabilities have not been secured in any way at the end of the year, and settlements are made in cash. No guarantees
have been provided or received for any receivables from related parties with the exception of those disclosed in Note 27.
STORENT INVESTMENTS AS Separate Annual Report 2021
Registered address: 15A Matrozu street, Riga, LV-1048
Registration number: 40103834303
32
20.(e) Interest on loans to related parties and borrowings from related parties
Loan interest
income
Borrowing interest
expenses
31.12.2021 31.12.2020 31.12.2021 31.12.2020
EUR EUR EUR EUR
Shareholders of the Company - - 31 129 34 511
Subsidiaries of the Company 83 736 393 831 22 048 -
KOPĀ: 83 736 393 831 53 177 34 511
21. Other borrowings
In 2015 – 2019, the Company received loans from Haulotte Group AB, Yanmar Construction Equipment Europe S.A.S. and SA
Manitou BF. Total loans amounted to EUR 16 254 002 with interest rate 2,49% - 4% per annum. Loans repayment date are shown
in table below.
As collateral for contracts with Haulotte Group AB, Yanmar Construction Equipment Europe S.A.S Group and SA Manitou BF
promissory notes for each payment have been registered.
Maturity Amount
Actual
interest
rate (%)
31.12.2021 31.12.2020
EUR EUR
AB Haulotte Group 01.10.2021 5 500 000 2.49 - 1 006 646
AB Haulotte Group 01.09.2022 1 003 836 3.94 151 065 352 484
AB Haulotte Group 01.09.2022 1 994 007 3.94 318 798 743 861
AB Haulotte Group 01.09.2021 1 006 969 4 - 202 087
AB Haulotte Group 15.09.2022 1 004 278 4 201 525 470 277
AB Haulotte Group 01.08.2024 1 607 292 4 1 110 362 1 514 103
SAS Yanmar construction equipment Europe 01.09.2021 995 7003 4 - 199 804
SAS Yanmar construction equipment Europe 15.09.2022 1 075 956 4 215 909 503 842
SAS Yanmar construction equipment Europe 04.08.2023 643 014 4 444 204 605 733
SA Manitou BF 04.08.2024 1 192 550 4 905 126 1 055 980
Incremental cost allocation (1 223 078) - (76 259) (218 398)
Total: 3 270 730 6 436 419
Total Non-current liabilities: 1 504 527 3 107 487
Total Current liabilities: 1 766 203 3 328 932
Total loans origination fees and costs amounted to EUR 1 223 078. The Company treated these fees and costs as incremental
costs related to attracted finance. These fees and costs are on integral part of the effective interest rate of the loans and are treated
as an adjustment to the effective interest rate.
Reconciliation of movements other borrowings to cash flows arising from financing activities:
2021 2020
EU
R
EU
R
Balance at the beginning of the year 6 436 419 7 093 073
Proceeds from other borrowings - -
Repayment of other borrowings (3 282 837) (718 020)
Total changes from financing cash flows (3 282 837) (718 020)
Reclassification to Lease liabilities - (20 017)
Incremental cost allocation amortization 142 928 76 845
Proceeds from additional discount (9 671) -
Interest expense 159 092 207 760
Interest paid (175 201) (203 222)
Total liability-related other changes 117 148 61 366
Balance at the end of the year 3 270 730 6 436 419
STORENT INVESTMENTS AS Separate Annual Report 2021
Registered address: 15A Matrozu street, Riga, LV-1048
Registration number: 40103834303
33
22. Issued bonds
In 2017, Company issued bonds with current maturity date 30.06.2021 and coupon interest rate 8%, nominal value of one bond is
100 eur, total nominal value was 10 000 000 eur. As at 31 December 2020, the Company has settled bonds of this issue for total
amount 5 950 000 eur. As at 31 December 2021, the Company has fully settled the remaining outstanding bonds of this issue. Bonds
were listed on the official bond list of AS “Nasdaq Riga.”
In 2020, Company issued second emission of bonds with maturity date 19.10.2023, coupon interest rate 8%, bond nominal value
100 eur and total nominal value 15 000 000 eur. Bonds are listed on the official bond list of AS “Nasdaq Riga.”
Issued bonds
Emission
date
Maturity
date Amount
Actual
interest
rate (%)
31.12.2021
EUR
31.12.2020
EUR
ISIN code LV0000802304 01.07.2017 30.06.2021 4 050 000 8 - 4 050 000
ISIN code LV0000802411 19.03.2020 19.10.2023 15 000 000 8 4 870 500 3 446 300
Accrued interest for bonds coupon
payment (LV0000802411)
78 378 55 907
Incremental cost allocation
emission LV0000802411 *
(110 313) (105 739)
TOTAL: 4 838 565 7 446 468
Total Non-current liabilities: - 3 340 561
Total Current liabilities: 4 838 565 4 105 907
On 31.12.2021. liabilities for bonds are reflected as short-term liabilities because the financial covenant Net debt / EBITDA ratio is
not fulfilled at the end of the reporting period. These circumstances do not present additional risks to the Company in view of the
post-balance sheet events (please, see the information presented below on the written procedure that took place in February 2022).
Borrowings against issued bonds are unsecured. Full amount of borrowings is repayable upon maturity date. Coupon payment is
payable on a quarterly basis.
Total borrowing origination fees and costs amounted to 223 970 EUR. The Company treated these fees and costs as incremental
costs related to attract the financing. These fees and costs are an integral part of the effective interest rate of the loans and are
treated as an adjustment to the effective interest rate.
Reconciliation of movements of issued bond liabilities to cash flows arising from financing activities:
31.12.2021
EUR
31.12.2020
EUR
Balance at the beginning of the year 7 446 468 9 932 913
Proceeds from bonds - 200 000
Repayment of bonds (2 621 397) (2 681 706)
Total changes from financing cash flows (2 621 397) (2 481 706)
Incremental cost allocation amortization, net (4 574) (38 652)
Proceeds from bond repurchases below nominal value (4 403) (21 994)
Interest expense 513 271 898 742
Interest paid (490 800) (842 835)
Total liability-related other changes 13 494 (4 739)
Balance at the end of the year 4 838 565 7 446 468
STORENT INVESTMENTS AS Separate Annual Report 2021
Registered address: 15A Matrozu street, Riga, LV-1048
Registration number: 40103834303
34
22. Issued bonds (cont.)
According to Terms and Conditions for 2020 emission, the following financial covenants have to be met:
Shareholders Equity to Assets Ratio may not be lower than 25 (twenty-five) per cent at the end of each Quarter.
“Shareholders Equity to Assets Ratio” means the Issuer’s total shareholders’ equity expressed as a per cent of the Issuer’s
consolidated amount of assets as at the end of each Quarter determined on the basis of the Issuer’s consolidated quarterly
financial statements.
Net Debt/EBITDA Ratio for the for the previous 12 (twelve) months may not be higher than 4.5: (a) as at the end of each Quarter
determined on the basis of the Issuer’s consolidated monthly financial statements for the previous 12 (twelve) months; and (b)
as at 31 December each year, as determined on the consolidated basis on the basis of each of the Issuer’s annual financial
reports.
“Net Debt/EBITDA Ratio” means the ratio of interest-bearing liabilities – (minus) cash to EBITDA of the respective measurement
period.
“EBITDA” means the net income of the measurement period before: (a) any provision on account of taxation; (b) any interest,
commission, discounts or other fees incurred or payable, received or receivable in respect of financial indebtedness; (c) any items
treated as exceptional or extraordinary; (d) any depreciation and amortisation of tangible and intangible assets; and (e) any re-
valuation, disposal or writing off of assets.
*On 2 April 2020 AS Storent Investments announced an instigation of written procedure for receipt of consent of Noteholders holding
the Notes to amend Terms and Condition of bonds with ISIN LV0000802411. In accordance with the proposed amendments to the
Terms and Conditions, the Issuer proposed to exclude the Net Debt/EBITDA financial covenant from the Terms and Conditions till
31 December 2021, which will allow the Issuer to reorganize its activities in case of a possible decrease in turnover and to continue
to fulfil its obligations. On 28 April 2020 voting has been closed and amendments have been approved,
with the Net Debt/EBITDA
financial covenant being applicable to the Issuer from 31 December 2021.
In February 2022, Storent Investments AS announced an instigation of written procedure for receipt of consent of Noteholders holding
the Notes to amend Terms and Condition of bonds with ISIN LV0000802411. In accordance with the proposed amendments to the
Terms and Conditions, the Issuer proposes to modify Shareholders Equity to Assets Ratio covenant to include in the equity calculation
also loans from the Issuer's shareholders and to modify Net Debt/EBITDA Ratio covenant to exclude loans from the Issuer's
shareholders from the net indebtedness of the Issuer. This will allow the Issuer to safely comply with the financial covenants until
maturity of the Notes. On 28 February 2022 voting has been closed and amendments have been approved.
Transactions with bonds in 2021
Emission with ISIN code LV0000802304
On 1 December 2020 AS Storent Investments, by exercising the rights provided for in Clause 16 of the Terms and Conditions of
Notes (ISIN LV0000802304), which inter alia provides Storent's right at any time to purchase the Notes in any manner and at any
price in the secondary market, hereby announced repurchase of the Notes in the nominal value not exceeding 1,000,000 EUR. The
price at which Storent was ready to repurchase the Notes was not higher than the nominal value of the Notes. Interest accrued until
14 December 2020 (inclusive) was added to the repurchased Notes. As a result of repurchase Storent has repurchased notes in the
nominal value of 950 000 EUR in December 2020 and 50 000 EUR in January 2021.
On 11 January 2021 AS Storent Investments, by exercising the rights provided for in Clause 16 of the Terms and Conditions of Notes
(ISIN LV0000802304), which inter alia provides Storent's right at any time to purchase the Notes in any manner and at any price in
the secondary market, hereby announced repurchase of the Notes in the nominal value not exceeding 1,000,000 EUR. The price at
which Storent was ready to repurchase the Notes was not higher than the nominal value of the Notes. Interest accrued until 22
January 2021 (inclusive) was added to the repurchased Notes. As a result of repurchase Storent has repurchased notes in the
nominal value of 1 000 000 EUR.
On 25 February 2021 AS Storent Investments offered to the noteholders who own the notes of AS Storent Investments maturing on
30 June 2020 (ISIN LV0000802304) an opportunity to exchange the Existing Notes owned by them with the New Notes (ISIN
LV0000802411). The exchange ratio is one-to-one, and the noteholders may apply for the exchange with any number of the Existing
Notes owned by them. On 16 March 2021 the first stage of subscription for AS Storent Investments new notes with ISIN code
LV0000802411
ended, where the investors agreed to exchange the notes of AS Storent Investments maturing on 30 June 2020 (ISIN
LV0000802304) with the New Notes in the total nominal amount of 1 424 200 EUR. Notes issued by AS Storent Investments (ISIN:
LV0000802304) included in the Exchange trading system was decreased to EUR 2 625 800. The decrease is in the amount of
exchanged bonds.
On 22 March 2021 AS Storent Investments decreased the emission amount of the notes (ISIN LV0000802304) included in the
Exchange trading system by EUR 1 575 800. The decrease was in the amount of repurchased bonds.
On 30 June 2021 AS Storent Investments has redeemed the remaining outstanding notes (ISIN LV0000802304) by transferring
principal and interest payments to the bondholders.
STORENT INVESTMENTS AS Separate Annual Report 2021
Registered address: 15A Matrozu street, Riga, LV-1048
Registration number: 40103834303
35
23. Lease liabilities
By asset type
Maturity
Actual interest
rate, (%)
31.12.2021
EUR
31.12.2020
EUR
Balance sheet
value of leased
assets on
31.12.2021
EUR
Other fixed assets 2022-2023 5% - 10,3% 20 677 79 460 13 189
Licenses and similar rights 2022 10,3% 28 553 54 438 23 806
TOTAL:
49 230 133 898 36 995
Total Non-current liabilities: 40 947 78 976
Total Current liabilities: 8 283 54 922
Reconciliation of movements of lease liabilities to cash flows arising from financing activities:
31.12.2021
EUR
31.12.2020
EUR
Balance at the beginning of the year
133 898 89 930
Repayment of lease liabilities
(84 668) (81 289)
Total changes from financing cash flows
(84 668) (81 289)
New leases
-
90 022
Reclassification from Other borrowings
-
20 017
Interest expenses accrued
13 826
15 218
Interest paid
(13 826) -
Total liability-related other changes
-
125 257
Balance at the end of the year
49 230
133 898
STORENT INVESTMENTS AS Separate Annual Report 2021
Registered address: 15A Matrozu street, Riga, LV-1048
Registration number: 40103834303
36
24. Financial instruments
The company's main financial instruments are short-term and long-term loans received, receivables from buyers and customers,
money, received long-term and short-term borrowings and financial lease. The main purpose of these financial instruments is to ensure
the financing of the Company's economic activities. The Company also faces a number of other financial instruments, such as trade
and other receivables, trade payables and other creditors arising directly from its business.
In accordance with IFRS 13, the levels of the fair value hierarchy are:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The table shows the carrying amounts and fair values of financial assets and financial liabilities. Fair value is determined at initial
recognition and for disclosure purposes at the end of each reporting period. None of the Company's financial assets or financial
liabilities are measured at fair value.
Fair value of Trade receivables and Other receivables with no stated interest rate and cash and cash equivalents is deemed to
approximate their face value on initial recognition and carrying value on any subsequent date as the effect of discounting is immaterial
and therefore not disclosed in these financial statements. Cash and cash equivalents and deposits in credit institutions and are highly
liquid assets, therefore their carrying amount approximates their fair value on initial recognition and thereafter, as the effect of
discounting is not material and is therefore not disclosed in these financial statements.
Fair value of financial liabilities with outstanding maturities shorter than six months, other than issued bonds, is deemed to
approximate their face value on initial recognition and carrying value on any subsequent date as the effect of discounting is immaterial
and therefore not disclosed in these financial statements.
Fair value of financial liabilities with outstanding maturities longer than six months, other than issued bonds, is estimated based on
the present value of future principal and interest cash flows, discounted using the effective interest rate of the corresponding
agreement which, in the management’s view, represents the market rate of interest at the measurement date for companies similar
to the Company.
The Company’s issued bonds are classified as Level 3 in the fair value hierarchy. The market for these bonds is not assessed as an
active market. The significant non-observable key input to determining the fair value of the issued bonds is that no adjustment to the
observable quotes is required.
All of the Group’s financial assets and financial liabilities are determined to be Level 3 in the fair value hierarchy. There were no
transfers between fair value hierarchy levels in 2021 and in 2020.
STORENT INVESTMENTS AS Separate Annual Report 2021
Registered address: 15A Matrozu street, Riga, LV-1048
Registration number: 40103834303
37
24. Financial instruments (cont.)
Categories of financial assets and liabilities as at 31.12.2021 and as at 31.12.2020:
31.12.2021 31.12.2020
Financial assets Carrying amount Fair value Carrying amount Fair value
EUR EUR EUR EUR
Loans and receivables held at amortised cost
- Trade receivables from related companies 4 390 4 390 2 664 2 664
- Trade receivables 1 033 971 1 033 971 2 450 811 2 450 811
- Other receivables 7 774 7 774 7 774 7 774
- Cash and cash equivalents 53 588 53 588 1 937 007 1 937 007
TOTAL financial assets:
1 099 723 1 099 723
4 398 256 4 398 256
31.12.2021 31.12.2020
Financial liabilities Carrying amount Fair value Carrying amount Fair value
EUR EUR EUR EUR
Financial liabilities held at amortized cost
- Loans from related companies -
-
651 162 651 162
- Issued bonds 4 838 565 4 875 661 7 446 468 7 455 800
- Lease liabilities 49 230 49 231 133 898 133 898
- Loans from related parties 1 935 000 1 935 000 - -
- Other borrowings 3 270 730 3 270 730 6 436 419 6 436 419
- Trade payables 437 982 437 982 443 076 443 076
- Trade payables to related parties -
-
249 182 249 182
- Other payables 68 306 68 306 98 407 98 407
TOTAL financial liabilities:
10 599 813 10 636 910
15 458 612 15 467 944
25. Financial risk management
The Company’s operations are subject to the following financial risks: currency risk, credit risk and liquidity risk.
Foreign currency risk
Foreign currency risk is the risk of financial losses incurred by the Company due to adverse fluctuations in foreign currency exchange
rates. This risk arises when financial assets denominated in a foreign currency do not match financial liabilities in that currency which
results in open currency positions for the Company. The Company does not have any material financial assets and liabilities
denominated in currencies other than the Euro. Therefore, during the reporting year the Company’s exposure to foreign currency
risk was not significant.
Credit risk
Credit risk is the risk that the Company incurred a financial loss if counterparties fail to fulfil their obligations to the Company. The
Company has credit risk exposure related to cash, trade receivables and issued loans.
Cash
Credit risk in relation to cash in bank is managed by evaluating the banks to cooperate with, this reducing the probability of losing
financial resources.
Trade receivables
The Company monitors outstanding trade receivables on a regular basis.
Loans issued
The Company controls the credit risk by evaluating financial performance indicators of loan recipients.
Liquidity risk
Liquidity risk is the risk that the Company will not be able to timely and in full to ensure fulfilling its own commitments. Liquidity risk
arises when terms of payments of financial assets and liabilities are not correlating. The Company’s liquidity risk management is to
maintain adequate cash and cash equivalent amount and provide sufficient financing in order to be able to fulfil its obligations in
time. The Company management considers that the Company will have sufficient cash resources and its liquidity will not be
compromised. Please see Note 28.
STORENT INVESTMENTS AS Separate Annual Report 2021
Registered address: 15A Matrozu street, Riga, LV-1048
Registration number: 40103834303
38
25. Financial risk management (cont.)
At 31 December 2021 and 31 December 2020, the maturity of the financial liabilities of the Company, based on undiscounted
payments provided for in the agreements can be disclosed as follows:
Expected
interest
p
a
y
ments
Carrying
amount
31.12.2021 < 3 month 3-6 month 6-12 month 1-5 years TOTAL TOTAL TOTAL
EUR EUR EUR EUR EUR EUR EUR
Issued bonds
(97 410) (97 410) (194 820) (5 260 140) (5 649 780) (811 215) 4 838 565
Loans from related parties - - (2 030 376)* - (2 030 376) (95 376) 1 935 000
Lease liabilities (35 110) (1 649) (3 847) (12 546) (53 152) (3 922) 49 230
Other borrowings (617 106) (451 123) (755 728) (1 629 993) (3 453 950) (183 220) 3 270 730
Trade payables (437 982) - - - (437 982) - 437 982
Other financial liabilities (68 306) - - - (68 306) - 68 306
TOTAL: (1 255 914) (550 182) (2 984 771) (6 902 679) (11 693 546) (1 093 733) 10 599 813
*Loans received from Storent SIA. As the Company is the parent company of Storent SIA, the management expects that the loans
maturity will be extended, or the loans will be refinanced by concluding new loan agreements with Storent SIA.
Expected
interest
payments
Carrying
amount
31.12.2020 < 3 month 3-6 month 6-12 month 1-5 years TOTAL TOTAL TOTAL
EUR EUR EUR EUR EUR EUR EUR
Issued bonds (1 149 926) (129 926) (3 118 926) (3 515 226) (7 914 004) (467 536) 7 446 468
Loans from related parties - - - (718 675) (718 675) (67 513) 651 162
Lease liabilities (42 959) (8 150) (15 085) (86 624) (152 818) (18 920) 133 898
Other borrowings (1 131 635) (603 152) (1 721 220) (3 443 329) (6 899 336) (462 917) 6 436 419
Trade payables (443 076) - - - (443 076) - 443 076
Trade payables to related
p
arties
(249 182) - - - (249 182) - 249 182
Other financial liabilities (98 407) - - - (98 407) - 98 407
TOTAL: (3 115 185) (741 228) (4 855 231) (7 763 854) (16 475 498) (1 016 886) 15 458 612
26. Capital management
The purpose of the Company’s capital management is to provide a high credit rating and a balanced structure of capital to ensure
successful activity of the Company and to maximize the Company’s share value. The Company is not subject to any externally imposed
capital requirements. The Company is controlling the structure of capital and adjusts this structure according to economic conditions.
To control and adjust the capital structure, the Company can change conditions of payment of dividends to shareholders, to return
them part of shares or to issue new shares. In 2021 and 2020, there were no changes introduced to purposes, policy or processes
related to capital management.
31.12.2021 31.12.2020
EUR EUR
Interest bearing loans and borrowings 10 093 525 14 016 785
Trade and other payables 506 288 541 483
Less cash and cash equivalents (53 588) (1 937 007)
Net debt 10 546 225 12 621 261
Equity 34 159 800 32 018 331
Net debt to equity ratio: 0.31 0.39
STORENT INVESTMENTS AS Separate Annual Report 2021
Registered address: 15A Matrozu street, Riga, LV-1048
Registration number: 40103834303
39
27. Issued guarantees
The Company has issued a number of guarantees in favor of third parties for the liabilities of its subsidiaries. In assessing the expected
credit losses on these guarantees, the management individually determines and applies the probability of default of each subsidiary
and the expected loss in the event of default, using the method described in Note 2 (h). Evaluating the ability of the subsidiaries to
meet their obligations as at 31 December 2021 and 31 December 2020, the Company management believes that no significant
additional accruals for credit losses are required.
In 2014 Storent Investments AS issued a guarantee to Luminor Līzings SIA due to concluded factoring contracts between: Storent SIA
and Luminor Līzings SIA, the guarantee is valid till full liability repayment. At the time of preparation of the financial statements the
Company management has not identified circumstances that would indicate that an outflow of economic benefits from the Company
will be required to settle the obligation.
In 2016, 2017 and 2018 Storent Investments AS issued a guarantee to Luminor Līzings SIA due to concluded lease contracts between
Storent SIA and Luminor Līzings SIA. The amount of the guarantee is
4 633 177 EUR and guarantee is valid till 30 April 2025. At the
time of preparation of the financial statements the Company management has not identified circumstances that would indicate that an
outflow of economic benefits from the Company will be required to settle the obligation.
In 2016, 2017 and 2018 Storent Investments AS issued a guarantee to UniCredit Leasing SIA due to concluded financial lease
contracts between Storent SIA and UniCredit Leasing SIA. The amount of the guarantee is 881 522 EUR and guarantee is valid till 31
December 2023. At the time of preparation of the financial statements the Company management has not identified circumstances
that would indicate that an outflow of economic benefits from the Company will be required to settle the obligation.
In 2017 Storent Investments issued guarantee to Luminor Liising AS due to factoring contract between Storent OU and Luminor Liising
AS. The amount of the guarantee is 400 000 EUR and guarantee is valid till full liability repayment. At the time of preparation of the
financial statements the Company management has not identified circumstances that would indicate that an outflow of economic
benefits from the Company will be required to settle the obligation.
In 2020 Storent Investments issued guarantee to NORDEA RAHOITUS SUOMI OY due to concluded lease contracts between Storent
Oy and NORDEA RAHOITUS SUOMI OY. The amount of the guarantee is 2 622 028 EUR and guarantee is valid till full liability
repayment. At the time of preparation of the financial statements the Company management has not identified circumstances that
would indicate that an outflow of economic benefits from the Company will be required to settle the obligation.
AS Storent Investments issued a guarantee to Levina Invesmtnets S.a r.l. due to concluded loan agreement between Storent Holding
Finland Oy and Levina Invesmtnets S.a r.l. The amount of the guarantee is 6 023 340 EUR and guarantee is valid till full loan
repayment. At the time of preparation of the financial statements the Company management has not identified circumstances that
would indicate that an outflow of economic benefits from the Company will be required to settle the obligation.
28. Going concern of the Company
The Company’s financial performance in the reporting year was a profit of EUR 2 141 469 (2020: loss of EUR 3 827 388). At the end
of the year, the Company’s current liabilities exceeded its current assets by EUR 8 100 113 (31.12.2020: current liabilities exceeded
current assets by EUR 3 972 626), as a result of significant borrowings approaching maturity and technical non-compliance with one
of the bond covenants as at 31 December 2021 as stated in Note 22. Both of these conditions may cast significant doubts on the
Company’s ability to continue as a going concern.
The Company management has evaluated the current and potential impact of Covid-19 pandemic and geopolitical situation
in the
Baltic and Nordic region as a result of the Russian Federation commencing war activity in Ukraine. Management has prepared
forecasted financial results and cash flows for 2022 demonstrating the Company’s and its subsidiaries’ ability to continue as going
concern and already started to take steps to address the expected liquidity and profitability shortages, such as:
Storent Group continues to become more efficient by developing online sales and paper-less rental process. Despite overall wage
increase in all countries, personal costs are estimated to increase only by 5% during 2022 compared to 2021. In 2021, the
management has decided to close one of the Finnish company's economic activities – Heavy team. In spring 2022 Management
plans to start outsourcing of transportation services in Finland, that will give a decrease of headcount and associated costs in
Finland by 10%.
In 2022, Storent Group plans to increase rental income in all its countries of operation by 3%-4%, reaching the turnover level of
2019 before Covid-19. Further revenue and profitability growth is expected in the following years as already disclosed in Note 11.
Storent Holding Finland Oy has received agreement to postpone the repayment of loan and accrued interest in amount of EUR
6 023 340 as at 31 December 2021 to Levina Investments S.a.r.l. by additional year with the final due date of the loan being
December 2023. Amendments to agreement have been signed.
Storent SIA and Storent Oy continue to perform optimization of the rental equipment fleet by selling old and not-in-demand
equipment. By the date of issuing these financial statements, both companies have sold equipment with the net book value EUR
1 913 232 for total gross proceeds of EUR 2 128 567. According to budget it is planned to sell equipment with the net book value
EUR 3.3 million for total gross proceeds of EUR 4 million. Proceeds from equipment sales will be used for debt repayment
assuring the Group’s and the Company’s liquidity.
STORENT INVESTMENTS AS Separate Annual Report 2021
Registered address: 15A Matrozu street, Riga, LV-1048
Registration number: 40103834303
40
28. Going concern of the Company (cont.)
In February 2022, Storent Investments AS announced an instigation of written procedure for receipt of consent of Noteholders
holding the Notes to amend Terms and Condition. In accordance with the proposed amendments to the Terms and Conditions,
the Company proposes to modify Shareholders Equity to Assets Ratio covenant to include in the equity calculation also loans
from the Company’s shareholders and to modify Net Debt/EBITDA Ratio covenant to exclude loans from the Company’s
shareholders from the net indebtedness of the Company. This will allow the Company and the Group to safely comply with the
financial covenants until maturity of the Notes. On 28 February 2022 voting has been closed and amendments have been
approved.
The Company management has evaluated the geopolitical situation and its impact on the Group companies and especially the
subsidiary entity in Russia, Kaliningrad. At the moment of issue of these financial statements Storent OOO continues to operate
without significant changes. Before 24 February 2022, the Russian entity operated quite independently, and the management
doesn’t see any major risks for further business activities. The Company monitors and follows sanction restrictions and, so far,
these don’t affect the subsidiary’s activities. Despite the general increase in the market uncertainty, no direct impact on the
operations of other Group companies is observed.
Based on above, the Group management plans further development of all subsidiaries. The main focus in 2022 will be to continue
online sales development, digital transformation and efficiency increase. The Group will continue to transform its IT strategy to comply
with the scalability needs. In early 2022, Storent entities in the Baltics joined online logistics platform Cargopint that allows to organize
transportation in a more efficient manner and will give opportunity to serve a wider range of customers with a more competitive price.
Management estimates that the construction industry will fully recover after Covid-19 pandemic in the spring 2022, and construction
volumes will return to the level of 2019 and start to grow further only from 2023. It is expected that Rail Baltica project will give a
significant positive impact on the construction industry in the Baltics. In the first quarter of 2022, the total unaudited consolidated
revenue of the Company and its subsidiaries exceeded the budget by 5%. Compared to the first quarter of 2021, total unaudited
revenue has increased by 14%, rental income - by 16%, EBITDA margin is higher by 2% and the amount of losses is decreased by
28%.
Storent Group will continue an active sales strategy and offer customers to use the online platform, which is simple to use, to achieve
the planned turnover and liquidity and profitability indicators. Taking into account the information currently available, the most recent
key performance indicators of the Company and its subsidiaries and the actions taken by management, the Company and its
subsidiaries expect to continue operations as a going concern. As such, these separate financial statements have been prepared on
the basis that the Company will continue as a going concern, and do not include any adjustments that might be necessary if the going
concern assumption would not be applicable. However, the success of the management actions outlined above is directly dependent
on the ability of the Company and its subsidiaries to increase revenue from operating activities as a result of the expected recovery
of the construction industry and significant improvement of the operational efficiency of the Company and its subsidiaries in a short
time frame. Management cannot rule out the possibility that the geopolitical situation and possible reinforcement of anti-Covid-19
security measures introduced by governments or the negative impact of such measures on the economic environment in which the
Company and its subsidiaries operate, could adversely affect the Company and its subsidiaries, their financial position and
performance in the medium and long term, including its investments in subsidiaries’ recoverable amount (please see Note 11, which
describes the significant unobservable inputs used in estimating recoverable amount) and the Company’s and its subsidiaries’ ability
to meet the terms and conditions of the borrowing agreements and payment terms, which presents a material uncertainty in relation
to the Company’s and its subsidiaries’ ability to continue as a going concern. We will continue to monitor the situation closely and
take the necessary steps to mitigate to the extent possible the effects of new events and circumstances.
STORENT INVESTMENTS AS Separate Annual Report 2021
Registered address: 15A Matrozu street, Riga, LV-1048
Registration number: 40103834303
41
29. Post balance sheet events
Non-adjusting events
In 2022, in order to meet minimal capital requirements according to respective country laws, the Company invested into the share
capital of the Estonian subsidiary in total an amount of EUR 1 550 000, into the share capital of the Finnish subsidiary in total an
amount of EUR 500 000, into the share capital of Swedish subsidiary in total an amount of EUR 250 000, and all investments are
used, among others, to settle liabilities towards other Storent Group companies.
In February 2022, Storent Investments AS announced an instigation of written procedure for receipt of consent of Noteholders holding
the Notes to amend Terms and Condition. In accordance with the proposed amendments to the Terms and Conditions, the Issuer
proposes to modify Shareholders Equity to Assets Ratio covenant to include in the equity calculation also loans from the Issuer's
shareholders and to modify Net Debt/EBITDA Ratio covenant to exclude loans from the Issuer's shareholders from the net
indebtedness of the Issuer. This will allow the Issuer to safely comply with the financial covenants until maturity of the Notes. On 28
February 2022 voting has been closed and amendments have been approved.
Levina Investments S.a.r.l. has agreed to postpone the repayment of loan received by Storent Holding Finland Oy by additional one
year, and the final due date of the loan is December 2023. Amendments to the agreement have been signed in March 2022.
During the period between the last day of the financial year and the date of signing of these separate financial statements there have
been no other events that would have required adjustments or disclosure in the separate financial statements.
These separate financial statements were signed on 28 April 2022 on the Company’s behalf by:
Andris Bisnieks
Andris Pavlovs
Member of the Board
Member of the Board
Marina Grigore
Chief Accountant
* * *
KPMG Baltics SIA
Vesetas iela 7
Riga, LV-1013
Latvia
T: + 371 67038000
kpmg.com/lv
kpmg@kpmg.lv
KPMG Baltics SIA, a Latvian limited liability company and a
member firm of the KPMG global organization of independent
member firms affiliated with KPMG International Limited, a
private English company limited by guarantee.
Independent Auditors’ Report
To the shareholders of Storent Investments AS
Report on the Audit of the Separate Financial Statements
Our Opinion on the Separate Financial Statements
We have audited the accompanying separate financial statements of Storent Investments
AS (“the Company”) set out on pages 7 to 41 of the accompanying separate Annual Report,
which comprise:
the separate statement of financial position as at 31 December 2021,
the separate statement of comprehensive income for the year then ended,
the separate statement of changes in equity for the year then ended,
the separate statement of cash flows for the year then ended, and
the notes to the separate financial statements, which include a summary of significant
accounting policies and other explanatory notes.
In our opinion, the accompanying separate financial statements give a true and fair view of
the separate financial position of Storent Investments AS as at 31 December 2021, and of
its separate financial performance and separate cash flows for the year then ended in
accordance with International Financial Reporting Standards (IFRSs) as adopted by the
European Union.
Basis for Opinion
In accordance with the ’Law on Audit Services’ of the Republic of Latvia we conducted our
audit in accordance with International Standards on Auditing adopted in the Republic of Latvia
(ISAs). Our responsibilities under those standards are further described in the Auditors’
Responsibility for the Audit of the Separate Financial Statements section of our report.
We are independent of the Company in accordance with the International Ethics Standards
Board for Accountants’ International Code of Ethics for Professional Accountants (including
International Independence Standards) (IESBA Code) and independence requirements
included in the ’Law on Audit Services’ of the Republic of Latvia that are relevant to our audit
of the separate financial statements in the Republic of Latvia. We have also fulfilled our other
professional ethics responsibilities and objectivity requirements in accordance with the
IESBA Code and the ’Law on Audit Services’ of the Republic of Latvia.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Material Uncertainty Related to Going Concern
We draw attention to Note 28 of the separate financial statements, which indicates that the
Company earned a profit of EUR 2 141 469 during the year ended 31 December 2021 (2020:
incurred a loss of EUR 3 402 850) and, as of that date, the Company’s current liabilities
exceeded its current assets by EUR 8 100 113 (31.12.2020: the Company’s current liabilities
exceeded its current assets by EUR 3 972 626. As stated in Note 28, the Company’s
profitability and liquidity depend directly on the results of operations and financial position of
its subsidiaries. The management has prepared forecasted financial results and cash flows
for 2022 demonstrating the Company’s and its subsidiaries’ ability to continue as going
concern and already started to take steps to address the expected liquidity and profitability
shortages. The success of these actions is primarily dependent on the ability of the Company
and its subsidiaries to increase revenue from operating activities as a result of the expected
recovery of the construction industry and reduce costs as a result of optimized operations.
However, management cannot rule out the possibility that the geopolitical situation, possible
reinforcement of Covid-19 security measures introduced by governments or the negative
impact of such measures on the economic environment, in which the Company and its
subsidiaries operate, could adversely affect the Company and its subsidiaries. These events
and conditions, along with other matters as set forth in Note 28, indicate that a material
uncertainty exists that may cast significant doubt on the Company’s ability to continue as a
going concern. Our opinion is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the separate financial statements of the current period. These
matters were addressed in the context of our audit of the separate financial statements as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
In addition to the matters described in the Material Uncertainty Related to Going Concern
section, we have determined the matter described below to be the key audit matter to be
communicated in our report.
Impairment of intangible assets and investments in subsidiaries
The Company’s intangible assets as at 31 December 2021 amounted to EUR 2 029 812
(31 December 2020: EUR 1 887 127) and investments in subsidiaries as at 31 December
2021 amounted to EUR 40 289 275 (31 December 2020: EUR 37 389 275). Non-financial
asset impairment charge for the year ended 31 December 2021 amounted to EUR 0 (year
ended 31 December 2020: EUR 3 419 293).
Reference to the separate financial statements: Note 2 (b) “Use of estimates and
judgements”, Note 2 (d) “Intangible assets”, Note 2 (f) “Investments in subsidiaries” and
Note 2 (g) “Impairment of non-financial assets” (accounting policy); Note 9 “Intangible
assets” and Note 11 “Investments in subsidiaries” (Notes to the separate financial
statements).
Key audit matter Our response
Due to the fact that impairment
indicators were identified as at 31
December 2021, as discussed in
Note 11, the Company estimated
the recoverable amount of its
investments in subsidiaries to
which development of intangible
assets is allocated and recognized
an impairment loss at the above
date.
Our audit procedures included, among others:
evaluating against the requirements of the
relevant financial reporting standards the
Company’s accounting policy for identification of
impairment, and measurement and recognition of
any impairment losses in respect of intangible
assets and investments in subsidiaries;
understanding the Company’s and its
subsidiaries’ business planning process, including
The assessment of the
recoverable amount and
impairment of the Company’s
intangible assets and investments
in subsidiaries balances
incorporated significant
management judgement in
respect of assumptions such as
forecast operating performance,
timing of resulting cash
collections and disbursements, as
well as discount rates. Small
changes in the above
assumptions can result in
materially different outcomes.
This, therefore, gives rise to
inherent estimation uncertainty
related to the carrying amount of
these assets recorded in the
separate financial statements.
Due to the above factors, we
considered impairment of
intangible assets and investments
in subsidiaries to be a key audit
matter.
the preparation and validation of financial and cash
flow forecasts and testing the design and
implementation of selected key internal controls
over the Company’s business planning process;
assisted by our own valuation specialists,
challenging the reasonableness of the key
assumptions used in the determination of the
prospective financial information, such as the
forecast amounts of sales and timing of cash
collections, forecast amounts of expenses and
capital expenditure, and timing of cash
disbursements, discount rate and terminal growth
rate based on our understanding of the
Company’s and its subsidiaries’ activities and by
reference to publicly available industry/market
reports;
considered the reasonableness of the Company’s
performed sensitivity analysis showing the impact
of a reasonable change in the impairment testing
assumptions, to determine whether an
impairment charge was required;
performing independent sensitivity analysis,
including assessing the effect of a reasonably
possible change in the key assumptions;
considered whether the Company’s disclosures
regarding the sensitivity of the outcome of the
impairment testing to changes in key
assumptions complete and accurately reflected
the estimation uncertainty in the valuation in line
with the applicable requirements of the relevant
financial reporting standards.
Reporting on Other Information
The Company’s management is responsible for the other information. The other information
comprises:
General Information, as set out on page 3 of the accompanying separate Annual Report,
the Management Report, as set out on pages 4 to 5 of the accompanying separate
Annual Report,
the Statement on Management Responsibility, as set out on page 6 of the accompanying
separate Annual Report,
the Statement of Corporate Governance, as set out in a separate statement provided by
Storent Investments AS management and available on the Nasdaq Baltic exchange
website https://nasdaqbaltic.com, Storent Investments AS, section Reports.
Our opinion on the separate financial statements does not cover the other information
included in the separate Annual Report, and we do not express any form of assurance
conclusion thereon, except as described in the Other Reporting Responsibilities in
Accordance with the Legislation of the Republic of Latvia Related to Other Information
section of our report.
In connection with our audit of the separate financial statements, our responsibility is to read
the other information and, in doing so, consider whether the other information is materially
inconsistent with the separate financial statements or our knowledge obtained in the audit
or otherwise appears to be materially misstated.
If, based on the work we have performed and in light of the knowledge and understanding
of the Company and its environment obtained in the course of our audit, we conclude that
there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Other Reporting Responsibilities in Accordance with the Legislation of the Republic of Latvia
Related to Other Information
In addition, in accordance with the ‘Law on Audit Services‘ of the Republic of Latvia with
respect to the Management Report, our responsibility is to consider whether the
Management Report is prepared in accordance with the requirements of the ‘Law on the
Annual Reports Annual Reports’ of the Republic of Latvia.
Based solely on the work required to be undertaken in the course of our audit, in our opinion,
in all material respects:
the information given in the Management Report for the financial year for which the
separate financial statements are prepared is consistent with the separate financial
statements; and
the Management Report has been prepared in accordance with the requirements of
the ‘Law on the Annual Reports Annual Reports’ of the Republic of Latvia.
In accordance with the ‘Law on Audit Services‘ of the Republic of Latvia with respect to the
Statement of Corporate Governance, our responsibility is to consider whether the Statement
of Corporate Governance includes the information required in section 56.1, first paragraph,
clause 3, 4, 6, 8 and 9, as well as section 56.2, second paragraph, clause 5, and third
paragraph of the ‘Financial Instruments Market Law‘ of the Republic of Latvia and if it
includes the information stipulated in section 56.2 second paragraph, clause 1, 2, 3, 4, 7 and
8 of the ‘Financial Instruments Market Law‘ of the Republic of Latvia.
In our opinion, the Statement of Corporate Governance includes the information required in
section 56.1, first paragraph, clause 3, 4, 6, 8 and 9, as well as section 56.2, second
paragraph, clause 5, and third paragraph of the ‘Financial Instruments Market Law‘ of the
Republic of Latvia and it includes the information stipulated in section 56.2 second paragraph,
clause 1, 2, 3, 4, 7 and 8 of the ‘Financial Instruments Market Law‘ of the Republic of Latvia.
Responsibilities of Management and Those Charged with Governance for the Separate
Financial Statements
Management is responsible for the preparation of the separate financial statements that give
a true and fair view in accordance with IFRSs as adopted by the European Union and for such
internal control as management determines is necessary to enable the preparation of
separate financial statements that are free from material misstatement, whether due to fraud
or error.
In preparing the separate financial statements, management is responsible for assessing the
Company’s ability to continue as a going concern, disclosing, as applicable, matters related
to going concern and using the going concern basis of accounting unless management either
intends to liquidate the Company or to cease operations, or has no realistic alternative but to
do so.
Those charged with governance are responsible for overseeing the Company’s financial
reporting process.
Auditors’ Responsibility for the Audit of the Separate Financial Statements
Our objectives are to obtain reasonable assurance about whether the separate financial
statements as a whole are free from material misstatement, whether due to fraud or error,
and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs
will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of
these separate financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the separate financial
statements, whether due to fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence that is sufficient and appropriate to
provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Company’s
ability to continue as a going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditors’ report to the related disclosures in the
separate financial statements or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditors’ report. However, future events or conditions may cause the Company to cease
to continue as a going concern.
Evaluate the overall presentation, structure and content of the separate financial
statements, including the disclosures, and whether the separate financial statements
represent the underlying transactions and events in a manner that achieves a fair
presentation.
We communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied
with relevant ethical requirements regarding independence, and communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence,
and where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with those charged with governance, we determine those
matters that were of most significance in the audit of the separate financial statements of
the current period and are therefore the key audit matters. We describe these matters in our
auditors’ report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
Other Reporting Responsibilities and Confirmations Required by the Legislation of the
Republic of Latvia and the European Union when Providing Audit Services to Public Interest
Entities
We were appointed by the Company’s shareholders meeting on 4 October 2021 to audit the
separate financial statements of Storent Investments AS for the year ended 31 December
2021. Our total uninterrupted period of engagement is 2 years, covering the periods ending
31 December 2020 to 31 December 2021.
We confirm that:
our audit opinion is consistent with the additional report presented to the Audit
Committee of the Company;
as referred to in the paragraph 37.6 of the ’Law on Audit Services’ of the Republic
of Latvia we have not provided to the Company the prohibited non-audit services
(NASs) referred to of EU Regulation (EU) No 537/2014. We also remained
independent of the audited entity in conducting the audit.
For the period to which our statutory audit relates, we have not provided any services to the
Company in addition to the audit, which have not been disclosed in the Management Report
or in the separate financial statements of the Company.
KPMG Baltics SIA
Licence No. 55
Armine Movsisjana
Chairperson of the Board
Latvian Sworn Auditor
Certificate No. 178
Riga, Latvia
28 April 2022
THIS DOCUMENT HAS BEEN SIGNED WITH A SECURE ELECTRONIC SIGNATURE AND IT
HAS A TIME-STAMP