JOINT-STOCK COMPANY
STORENT INVESTMENTS
(REGISTRATION NUMBER 40103834303)
CONSOLIDATED ANNUAL REPORT 2021
PREPARED IN ACCORDANCE WITH THE
INTERNATIONAL FINANCIAL REPORTING STANDARDS
AS ADOPTED BY THE EUROPEAN UNION
AND INDEPENDENT AUDITORS’ REPORT
Riga, 2022
* This version of consolidated financial statements is a translation from the original, which was prepared in the Latvian
language. All possible care has been taken to ensure that the translation is an accurate representation of the original.
However, in all matters of interpretation of information, the original language version of consolidated financial
statements takes precedence over this translation.
STORENT INVESTMENTS AS Сonsolidated Annual Report
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
Consolidated financial statements
Consolidated statement of comprehensive income 7
Consolidated statement of financial position 8
Consolidated statement of cash flows 10
Consolidated statement of changes in equity 11
Notes to the consolidated financial statements 12
Independent auditors’ report 55
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
3
General information
Name of the Group’s Parent company
Legal status of the Group’s Parent company
The Group Parent company’s registration
number, place and date
40103834303
Riga, 7 October 2014
Registered address of the Group’s Parent
company
Shareholders of the Group’s Parent company
Bomaria LTD (Latvia) 13.5%, Andris Bisnieks
Supremo LTD (Latvia) 13.5%, Andris Pavlovs
Members of the Board
Andris Bisnieks, Member of the Board
Andris Pavlovs, Member of the Board
Members of the Council
Nicholas Kabcenell, Chairman of the Council
Baiba Onkele, Member of the Council
Dalgin Burak, Member of the Council
Group’s type of operations
Group’s NACE code
77.32 (2.0 rev) Rental and leasing of construction and civil engineering
machinery and equipment
Independent auditor and sworn auditor name
and address
KPMG Baltics SIA
Vesetas street 7, Riga
Latvia, LV – 1013
License No. 55
Armine Movsisjana
Latvian Sworn Auditor
Certificate No. 178
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
4
Management report
The Group’s type of operations
Storent Investments AS (hereinafter – the Group’s Parent company or Storent Investments AS) and its subsidiary companies (hereinafter
– the Group) was established on 07 October 2014. The first company of the Group - Storent SIA - was established in 2008 by Andris
Bisnieks and Andris Pavlovs with an objective to become one of the leading equipment rental companies in the Baltics and nearest
European countries. At the end of 2008, a subsidiary Storent UAB was established in Lithuania and one year later a subsidiary Storent
OU was launched in Estonia. At the end of year 2012, a subsidiary Storent Oy was established in Finland. In February 2013 a subsidiary
Storent AB was founded in Sweden, and in June 2013 a subsidiary Storent AS was established in Norway. In December 2016 Storent Oy
completed the acquisition of Leinolift Oy (now company name changed to Storent Oy), a Finnish lifting equipment rental company. On 01
August 2017, Storent finalized the second acquisition, by purchasing Cramo operations in Latvia and Kaliningrad. In summer 2017, Storent
started rental operations in Sweden. Currently, only the Norwegian entity doesn’t conduct economic activity. At the end of the reporting
year the Group consists of 9 entities with the parent company Storent Investments AS and 8 subsidiaries in the Baltics and Nordic
countries. The objective is to provide customers with rental equipment solutions utilizing modern digital tools, team expertise and providing
excellent service. Online sales channel with advanced IT solutions ensures fast, convenient and contactless rental process with
competitive pricing.
Development of the Company and results of financial operations in the reporting year
Although 2021 was much more successful than 2020, Storent Group’s performance in the reporting year still was negatively affected by
Covid-19 pandemic in all countries. Rental revenues increased by 5%, the consolidated turnover increased by 2% reaching 42.9 million
euros. Construction markets in Baltic countries increase although in Latvia it ir decreased by 6.2%. 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. 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.
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. Management sees this as an modern
additional sale channel to meet customer needs for the best rental solutions with the most advantageous rental price.
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
5
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. As of 31 December 2021 the working capital deficit is increased
due to the technical default of one of the bond covenants, which led to the classification of all bond liability as current. Nevertheless, these
circumstances do not present additional risks to the Group in view of the post-balance sheet events (please, see the information presented
below on the written covenant modification procedure that took place in February 2022).
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 Company 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 Group
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.
The Group plans 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 33.
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 has 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 consolidated financial statements, there have been no other events
requiring adjustment of or disclosure in the consolidated financial statements or notes thereto.
On behalf of the Group, the management report was signed on 28 April 2022 by:
Andris Bisnieks
Andris Pavlovs
Member of the Board
Member of the Board
Consolidated annual report is approved in shareholders meeting on _____________ 2022
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
6
Statement of management’s responsibility
The Group’s management confirms that the consolidated financial statements have been prepared in accordance with the applicable
legislation requirements and present a true and fair view of the Group’s financial position as at 31 December 2021 and as at as at 31
December 2020 and its financial performance and cash flows for the years 2021 and 2020 then ended. The management report contains
a clear summary of the Group’s business development and financial performance. The consolidated financial statements have been
prepared according to the International Financial Reporting Standards as adopted by the European Union. During the preparation of the
Group’s consolidated 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.
The Group’s management is responsible for maintaining appropriate accounting records that would provide a true and fair presentation of
the Group’s financial position at a particular date and financial performance and cash flows and enable the management to prepare the
consolidated financial statements according to the International Financial Reporting Standards as adopted by the European Union.
On behalf of the Group, this statement of management’s responsibility was signed on 28 April 2022 by:
Andris Bisnieks
Andris Pavlovs
Member of the Board
Member of the Board
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
7
Consolidated statement of comprehensive income
Notes 2021 2020
EUR EUR
Net revenue 3 42 917 107 42 124 274
Other operating income 4 1 305 015 448 862
Cost of materials and services 5 (23 781 296 ) (20 235 265 )
Personnel costs 11 (8 777 053 ) (9 906 113 )
Other operating expenses 6 (5 951 414 ) (7 221 673 )
Depreciation and amotrization
7 (6 687 147 ) (8 887 521 )
Impairement gain / (loss) on trade receivables and cotract asset
Impairement loss on goodwill
Finance income 8 23 597 67 728
Finance expenses 9 (2 442 651 ) (3 155 359 )
Profit / (loss) before income tax (3 345 195 ) (10 784 875 )
Income tax income / (expenses) 10 (57 655 ) (548 604 )
Profit / (loss) for the year (3 402 850 ) (11 333 479 )
Items that may be reclasified subsequently to profit or loss
Exchange differences on foreign currency operations (23 033 ) (81 776 )
Other comprehensive income/(loss) for the year (23 033 ) (81 776 )
Total comprehensive income/(loss) for the year (3 425 883 ) (11 415 255 )
The notes on pages 12 to 54 are an integral part of these consolidated financial statements.
On behalf of the Group these consolidated financial statements were signed on 28 April 2022 by:
Andris Bisnieks
Andris Pavlovs
Member of the Board
Member of the Board
Baiba Onkele
Chief financial officer
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
8
Consolidated statement of financial position
ASSETS
Note 31.12.2021 31.12.2020
NON-CURRENT ASSETS EUR EUR
Intangible assets
Licences and similar rights 20 816 52 159
Other intangible assets 1 030 135 1 426 696
Intangible assets in process 985 288 418 813
Goodwill 11 316 707 11 316 707
TOTAL Intangible assets 12 13 352 946 13 214 375
Property, plant and equipment
Lands and buildings 204 070 219 125
Machinery and equipment 9 382 163 10 404 644
Other fixed assets 369 586 666 242
TOTAL Property, plant and equipment 13 9 955 819 11 290 011
Rights of use assets
Rights of use assets 14 13 428 294 22 314 597
Other non-current assets
Deferred income tax assets 10 1 286 -
TOTAL Other non-current assets 1 286 -
TOTAL NON-CURRENT ASSETS 36 738 345 46 818 983
CURRENT ASSETS
Inventories 15 1 150 870 1 108 345
Asstes held for sale 16 406 596 -
Receivables
Trade receivables 17 5 928 929 7 527 683
Contract assets 18 4 192 13 804
Other receivables 19 232 513 268 777
Prepaid expenses 20 119 628 287 808
TOTAL Receivables 6 285 262 8 098 072
Cash and cash equivalents 21 920 267 3 720 140
TOTAL CURRENT ASSETS 8 762 995 12 926 557
TOTAL ASSETS 45 501 340 59 745 540
The notes on pages 12 to 54 are an integral part of these consolidated financial statements.
On behalf of the Group these consolidated financial statements were signed on 28 April 2022 by:
Andris Bisnieks
Andris Pavlovs
Member of the Board
Member of the Board
Baiba Onkele
Chief financial officer
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
9
Consolidated statement of financial position
EQUITY AND LIABILITIES
Note 31.12.2021 31.12.2020
EQUITY EUR EUR
Share capitals 22 33 316 278 33 316 278
Reserves:
Foreign currency translation reserve (48 136 ) (25 103 )
Other reserves 26 774 26 774
Accumulated losses:
Retained earings / (losses) (21 181 067 ) (17 778 217 )
TATAL EQUITY 12 113 849 15 539 732
CREDITORS
Long-term liabilities
Issued bonds 24 3 340 561
Borrowings from related parties 31 (c) 6 275 219
Lease liabilities 25 6 789 551 11 158 537
Other borrowing 26 1 504 527 3 107 487
Deferred income tax liabilities 1 286 -
TOTAL Long-term liabilities 8 295 364 23 881 804
Short-term liabilities
Issued bonds 24 4 838 565 4 105 907
Borrowings from related parties 31 (c) 6 123 340 -
Lease liabilities 25 5 133 199 6 211 840
Liabilities directly associated with the assets held for sale 16 23 039 -
Other borrowing 26 1 766 203 3 328 932
Contract liabilities 18 404 345 552 477
Trade payables 3 945 995 3 301 952
Corporate income tax 17 472 -
Taxes and mandatory state social insurance contributions
27 923 160 958 575
Deferred income 28 79 443 136 550
Other provisions 23 138 903 116 919
Other liabilities 29 389 481 423 336
Accured liabilities 30 1 308 982 1 187 516
TOTAL Short-term liabilities 25 092 127 20 324 004
TOTAL LIABILITIES 33 387 491 44 205 808
TOTAL EQUITY ND LIABILITIES 45 501 340 59 745 540
The notes on pages 12 to 54 are an integral part of these consolidated financial statements.
On behalf of the Group these consolidated financial statements were signed on 28 April 2022 by:
Andris Bisnieks
Andris Pavlovs
Member of the Board
Member of the Board
Baiba Onkele
Chief financial officer
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
10
Consolidated statement of cash flows
2021 2020
Notes EUR EUR
Cash flows from operating activities
Loss for the year (3 402 850 ) (11 333 479 )
Adjustments:
Income tax expenses 57 655 548 604
Amortisation of intangible assets and depreciation of
property, plant and equipment
12,13,14
Net result on disposal of property, plant and equipment 138 892 440 353
Interest expense 9 2 398 072 3 130 566
Provision decrease 21 984 (524 525 )
Impairment losses on intangible assets and goodwill - 4 029 644
Operating results before changes in working capital 5 901 077 5 178 684
Receivables (increase)/ decrease 1 812 710 (2 584 212 )
Inventories decrease / (increase) (42 523 ) 99 739
Payables (decrease)/ increase 479 537 966 145
Cash flows from operating activities 8 150 801 3 660 356
Interest paid (1 754 859 ) (2 298 055 )
Corporate income tax paid (37 505 ) -
Net cash flow generated from operating activities 6 358 437 1 362 301
Cash flows from investing activites
Purchases of intangible assets and property, plant and equipment (2 225 314 ) (2 606 124 )
Proceeds from sale of property, plant and equipment 6 665 804 10 336 145
Net cash used in investing activities 4 440 490 7 730 021
Cash flows from financing
Proceeds from bonds 200 000
Repayment of borrowings from credit institutions - (15 161 )
Repayment of bonds (2 625 800 ) (2 703 700 )
Repayment of other borrowings (3 933 999 ) (718 020 )
Repayment of lease liabilities (7 015 968 ) (5 900 916 )
Net cash used in financing activities (13 575 767 ) (9 137 797 )
Foreign curreny exchange (23 033 ) (126 545 )
Net cash flow for the year (2 799 873 ) (172 020 )
Cash and cash equivalents at the beginning of the reporting year 3 720 140 3 892 160
Cash and cash equivalents at the end of the reporting year 21 920 267 3 720 140
The notes on pages 12 to 54 are an integral part of these consolidated financial statements.
On behalf of the Group these consolidated financial statements were signed on 28 April 2022 by:
Andris Bisnieks
Andris Pavlovs
Member of the Board
Member of the Board
Baiba Onkele
Chief financial officer
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
11
Consolidated statement of changes in equity
Share capital
Foreign
currency
translation
reserve
Other
reserves*
Retained
earnings /
(losses)
Total
EUR EUR EUR EUR EUR
Balance at 31 December 2019 33 316 278 56 673 26 774 (6 444 738 ) 26 954 987
Balance at 31 December 2020 33 316 278 (25 103 ) 26 774 (17 778 217 ) 15 539 732
Balance at 31 December 2021 33 316 278 (48 136 ) 26 774 (21 181 067 ) 12 113 849
Loss for the year
Other comprehensive
expenses
Other comprehensive
expenses
Loss for the year
* One of the Group’s subsidiaries has an obligation to allocate certain percentage from financial year’s profit to reserves.
The notes on pages 12 to 54 are an integral part of these consolidated financial statements.
On behalf of the Group these consolidated financial statements were signed on 28 April 2022 by:
Andris Bisnieks
Andris Pavlovs
Member of the Board
Member of the Board
Baiba Onkele
Chief financial officer
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
12
Notes to the consolidated financial statements
1. General information
Storent Investments AS (hereinafter – the Group’s Parent company or Storent Investments AS) was registered in the
Company Register of the Republic of Latvia on 7 October 2014. Registered address of the Group’s Parent company is
15A Matrozu street, Riga, Latvia . Starting from 20 November 2014, the major shareholder of the Group’s Parent company is
LEVINA INVESTMENTS S.A.R.L (Luxemburg) and ultimate controlling party is Convering Europe Fund III (SCS) SICAR .
LEVINA INVESTMENTS S.A.R.L as an investment entity does not produce consolidated financial statements. There have
The Group’s Parent company and its subsidiaries Storent SIA, UAB Storent, Storent OÜ, Storent AB, Storent AS,
Storent OOO, Storent Holding Finland OY and Storent Oy (hereinafter – the Group) main operations relate to the rental of
industrial equipment.
2. Summary of significant accounting policies
(a) Basis of preparation
The consolidated 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 consolidated financial statements have been prepared on the historical cost basis. Income statement classified by
expense type. Statement of cash flows is prepared using the indirect method.
The accompanying consolidated financial statements are presented in the official currency of the Republic of Latvia, the euro
(hereinafter – EUR).
These Consolidated Financial Statements are authorized for issue by the Company’s Management Board on 28 April 2022,
and are subject to the approval of the shareholders. The shareholders have the right to reject these Consolidated Financial
Statements prepared and issued by the Management Board and the right to request that new Consolidated Financial
Statements are prepared and issued.
(b) Consolidation
As at 31 December 2021 the Group’s Parent company had control over the following subsidiaries:
*indirect shareholding
The separate financial statements of the subsidiaries have been consolidated into the Group’s consolidated financial
statements, consolidating the respective assets, liabilities, revenue and expense items. The subsidiaries controlled by the
Group’s Parent company are included in the consolidation. Control is achieved when the Group:
• has power over the investee;
• is exposed, or has rights, to variable returns from its involvement with the investee; and
• has the ability to use its power to affect its returns.
The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to
one or more of the three elements of control listed above.
Name
Country
Type of business
Date of incorporation /
acquisition
Share of
interest
Subsidiaries
Storent SIA
Latvia
Rental of industrial equipment
17 April 2008
100%
Storent UAB
Lithuania
Rental of industrial equipment
27 November 2008
100%
Storent OU
Estonia
Rental of industrial equipment
7 July 2009
100%
Storent Holding Finland Oy
Finland
Rental of industrial equipment
4 September 2012
100%
Storent AB
Sweden
Rental of industrial equipment
15 January 2013
100%
Storent AS
Norway
Rental of industrial equipment
27 June 2013
100%
Storent Oy*
Finland
Rental of industrial equipment
21 December 2016
100%*
Storent OOO
Russia
Rental of industrial equipment
01 August 2017
100%
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
13
2. Summary of significant accounting policies (cont.)
(b) Consolidation (cont.)
Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses
control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are
included in the consolidated statement of comprehensive income and other comprehensive income from the date the
Company gains control until the date when the Company ceases to control the subsidiary. The Group Parent company’s and
its subsidiaries’ financial years are equal and represent the calendar year. For the purposes of preparing the consolidated
financial statements uniform accounting policies have been applied.
The consolidated financial statements include all assets, liabilities, revenue, expenses, gains, losses and cash flows of Storent
Investments AS and its subsidiaries Storent SIA, Storent UAB, Storent OÜ, Storent Holding Finland Oy, Storent AB, Storent
AS, Storent OOO and Storent Oy in the manner as if Storent Investments AS and its subsidiaries were a single entity.
Upon consolidation inter-company unrealized profit, inter-company transactions, balances, inter-company interest in entities
and other transactions between group companies are eliminated. Unrealised losses are eliminated in the same way as
unrealised gains, but only to the extent that there is no evidence of impairment.
(c) Foreign currency transactions
The monetary unit used in the consolidated financial statements is the official currency of the European Union – euro (EUR),
which is Group’s Parents company and some of the subsidiaries functional and presentation currency. The functional currency
of Storent AS is Norwegian krone, of Storent AB is Swedish krone and of Storent OOO is Russian ruble.
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 reference 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 loss from exchange rate differences, as well as from the foreign currency monetary assets and liabilities denominated
in euro, are recognized in the consolidated statement of comprehensive income.
(d) Consolidation of foreign subsidiaries
Consolidating foreign subsidiaries into the consolidated financial statement, the Group’s Parent company translated the
monetary and non-monetary assets and liabilities at the European Central Bank reference exchange rate ruling at the closing
balance sheet date, and revenue and expense items of the foreign subsidiaries at the reference exchange rates at the dates
of the transactions. Exchange differences arising on recognizing asset and liability items, translating at exchange rates, are
recognized in other comprehensive income and accumulated in equity.
(e) Use of judgements, estimates and assumptions
Preparation of the consolidated financial statements according to the IFRS requires the Group’s management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities. The determination of estimates is based on comprehensive information, current and expected economic conditions
available to the management. Actual results could differ from those estimates.
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
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2. Summary of significant accounting policies (cont.)
(e) Use of judgements, estimates and assumptions (cont.)
The following are the critical judgments and key estimates concerning the future, and other key sources of estimation
uncertainty, which exist at the reporting date of the financial statements that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities during the next reporting period:
- Note 12 – Recoverable value of goodwill and other non-current non-financial assets;
The Group’s management reviews the carrying amounts of intangible assets, including goodwill, and property, plant and
equipment, and assesses whether indications exist that the assets’ recoverable amounts are lower than their carrying
amounts. The Group’s management calculates and records an impairment loss on intangible assets and fixed assets based
on the estimates related to the expected future use, planned liquidation or sale of the assets. Taking into consideration the
Group’s planned level of activities and the estimated value in use of the assets, the Group’s management considers that no
significant adjustments to the carrying values of intangible assets and fixed assets are necessary as of 31 December 2021.
(f) Fair value
The fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. The objective of a fair value measurement is to estimate the price at which an
orderly transaction to sell the asset or to transfer the liability would take place between market participants at the measurement
date under current market conditions. For fair value calculation the Group determines the following:
- the particular asset or liability that is the subject of the measurement (consistently with its unit of account);
- for a non-financial asset, the valuation premise that is appropriate for the measurement (consistently with its highest
and best use);
- the principal (or most advantageous) market for the asset or liability;
- market approach is the valuation technique(s) the Group uses for the measurement – it uses prices and other
relevant information generated by market transactions involving identical or comparable (similar) assets, liabilities,
or a group of assets and liabilities (e.g., a business).
(g) Segment information
Reportable segments are operating segments or aggregations of operating segments that meet specified criteria. An operating
segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses
(including revenues and expenses relating to transactions with other components of the Group), is a component of the Group
whose operating results are regularly reviewed by the Group’s chief operating decision maker to make decisions about
resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.
Segment information is presented for Group’s operating segments, which are determined by geographical split. Operating
segments are managed separately and they are separately reported in internal management reporting to the Council and the
Board.
(h) Revenue recognition
The Group recognises revenues according to IFRS 15 “Revenues from contracts with customers”, using the 5-step model.
The model consists of:
1. Determination of contractual relations;
2. Determination of contract performance obligation;
3. Determination of transaction price;
4. Attribution of transaction price to the performance obligation;
5. Recognition of income, when the Group 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 Group may identify the rights of each party in relation to deliverable goods or services;
- The Group may identify settlement procedures for the goods or services;
- The contract has commercial nature;
There is high possibility, that the Group will charge remuneration due to it in exchange for goods or services that
will be transferred to the customer.
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
15
2. Summary of significant accounting policies (cont.)
(h) Revenue recognition (cont)
Determination of contract performance obligation.
The performance obligation exists, if there are distinct goods or services transferred to the customer or a series of distinct
goods or services that are substantially the same and that have the same pattern of transfer to the customer. Group has
considerate following factors as to whether a promise to transfer goods or services to the customer is not separately
identifiable:
- Group does provide a significant service of integrating the goods or services with other goods or services promised
in the contract;
- the goods or services are highly interrelated or highly interdependent.
Determination of transaction price
The transaction price is the amount to which Group expects to be entitled in exchange for the transfer of goods and services.
When making this determination, Group will consider past customary business practices. Where a contract contains elements
of variable consideration, the entity will estimate the amount of variable consideration to which it will be entitled under the
contract. Variable consideration can arise, for example, as a result of discounts, rebates, performance bonuses.
Attribution of the transaction price to the performance obligation
Generally, the contract with the customer includes a specified transaction price for each performance obligation. If applicable,
the Group uses the adjusted market assessment method for determination of the market price. A discount is applied
proportionally for each performance obligation, based on the relative goods or services sales prices. Any overall discount
compared to the aggregate of standalone selling prices is allocated between performance obligations on a relative standalone
selling price basis. In certain circumstances, it may be appropriate to allocate such a discount to some but not all of the
performance obligations.
Customers can earn loyalty points that are redeemable against any future transactions of the Group’s products. The points
accumulate and expire after one year. The Group recognizes this as a separate performance obligation and allocates a part
of the transactions price applying the same principles as described above. The amount allocated to the loyalty points is initially
deferred and recognised as revenue when loyalty points are redeemed or on expiry.
Recognition of revenue, when the Group has fulfilled the performance obligation
Transport and related services revenue
Revenue is recognised over time as the services are provided, that is based on criteria that the customer simultaneously
receives and consumes all of the benefits provided by the Group and, generally, invoiced on a monthly basis.
Fulfillment of performance obligations for transport and related services is measured based on the output method –
performance to date, and there is no significant judgement applied to determine the fulfilment of the performance obligations.
Revenue from sale of inventories and property, plant and equipment used for renting
Revenue is recognised at a point in time when the corresponding asset is delivered to and accepted by the customer, thus,
transferring the control and fulfilling the performance obligation, and, generally, invoiced at that point in time.
Contract assets and liabilities
Contracts with customers are presented in the Group’s statement of financial position as a receivable. Invoices according the
contract are generated at least once per month. Invoices are usually payable within 15-45 days. A contract liability is presented
in the statement of financial position where a customer has paid an amount of consideration prior to the Group performing by
transferring the related good or service to the customer.
(i) Employee benefits
Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected
to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided
by the employee and the obligation can be estimated reliably.
STORENT INVESTMENTS AS Сonsolidated Annual Report
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2. Summary of significant accounting policies (cont.)
(j) Government grants
The Group recognises a government grant when it has reasonable assurance that it will comply with the relevant conditions
and the grant will be received.
A government grant that becomes receivable as compensation for expenses or losses already incurred or for the purpose of
giving immediate financial support to the entity with no future related costs is recognised in profit or loss of the period in which
it becomes receivable.
Government grants related to assets, including non-monetary grants at fair value, are presented in the statement of financial
position either by setting up the grant as deferred income or by deducting the grant in arriving at the carrying amount of the
asset.
(k) Income tax
The corporate income tax consists of the income tax calculated for the reporting year and deferred income tax. It is recognised
in comprehensive income.
Current tax
Corporate income tax for the reporting year (Lithuania)
The corporate income tax for the reporting year has been calculated, by applying the corporate income tax rate of 15% to the
taxable income for the tax year.
Corporate income tax for the reporting year (Estonia and Latvia)
The company’s net profit is not subject to corporate income tax; however, income tax is levied on all dividends paid by the
Company. Corporate income tax in Latvia and Estonia is calculated at the profit distribution (20/80 from net amount to be paid
to shareholders). Corporate income tax will be recognized as tax payable at the period when shareholders decide to distribute
profit.
Corporate income tax for the reporting year (Finland)
The corporate income tax for the reporting year has been calculated, by applying the corporate income tax rate of 20% to the
taxable income for the tax year.
Corporate income tax for the reporting year (Sweden)
The corporate income tax for the reporting year has been calculated, by applying the corporate income tax rate of 20.6% to
the taxable income for the tax year.
Corporate income tax for the reporting year (Russia)
The corporate income tax for the reporting year has been calculated, by applying the corporate income tax rate of 20% to the
taxable income for the tax year.
Deferred tax
Deferred income tax arising due to temporary differences between the tax bases of assets and liabilities and their carrying
amounts in these consolidated financial statements has been calculated, using the liability method for all countries the Group
operates. Deferred income tax assets and liabilities are determined using the tax rates that are expected to apply when the
related temporary differences reverse. The key temporary differences result from different depreciation tax rates applied under
tax and accounting legislation and tax losses carried forward.
A deferred tax asset shall be recognized for the carry forward of unused tax losses and unused tax credits to the extent that
it is probable that future taxable profit will be available against which the unused tax losses and unused tax credits can be
utilized. When considering whether a deferred tax asset can be recognized the management uses their judgment in estimating
whether there will be sufficient taxable profits in the future and about their timing and the overall future tax planning strategy.
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
17
2. Summary of significant accounting policies (cont.)
(k) Income tax (cont.)
Deferred income tax and profit distribution in (Latvia and Estonia)
Specific accounting for deferred tax due to tax regimes have been applied in the respect of Latvia and Estonia. According to
legislation requirements in these countries corporate income tax is applicable to distributed profits. In case of reinvestment of
profit, corporate income tax shall not be applied.
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 and Estonia, the applicable rate for
undistributed profits is 0%.
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. Therefore, in the
consolidated financial statements the Group could recognize deferred tax assets and liabilities in the respect of its investments
in subsidiaries using tax rate applicable to distributed profits. In cases the parent has determined that subsidiary’s profits will
not be distributed in the foreseeable future the parent does not recognize a deferred tax assets and liabilities.
(l) Finance income and finance costs
The Group’s finance income and finance costs include:
- Interest income;
- Interest expense;
- the foreign currency gain or loss on financial assets and financial liabilities;
Interest income or expense is recognised using the effective interest method. The ‘effective interest rate’ is the rate that exactly
discounts estimated future cash payments or receipts through the expected life of the financial instrument to:
- the gross carrying amount of the financial asset; or
- the amortised cost of the financial liability.
In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the asset
(when the asset is not credit-impaired) or to the amortised cost of the liability. However, for financial assets that have become
credit-impaired subsequent to initial recognition, interest income is calculated by applying the effective interest rate to the
amortised cost of the financial asset. If the asset is no longer credit-impaired, then the calculation of interest income reverts
to the gross basis.
(m) Intangible assets
Goodwill
The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the
acquisition-date fair values of the assets transferred by the Group, liabilities incurred by the Group to the former owners of
the acquiree and the equity interests issued by the Group in exchange for control of the acquiree. Acquisition-related costs
are recognised in comprehensive income as incurred. Goodwill is measured as the excess of the sum of the consideration
transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer's previously held
equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the
liabilities assumed. Goodwill is disclosed in intangible assets section.
Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business less
accumulated impairment losses, if any. Impairment test is performed annually or more frequently if events or changes in
circumstances indicate that it might be impaired.
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
18
2. Summary of significant accounting policies (cont.)
(m) Intangible assets (cont.)
For the purpose of impairment testing, recoverable amount - value in use - is determined by discounting the future cash flows
generated from the continuing use of assets and was based on the following key assumptions: Cash flows were projected
based on financial budgets approved by the management covering a five-year period. Each of the Group’s subsidiaries was
determined to be a separate cash-generating unit (“CGU”). Cash flows were calculated separately for each CGU, key
assumptions for calculations are the same for all CGU: five-year business plan for each CGU, discount factor, which is based
on WACC calculation, and Group total IBD was divided between each CGU according to fleet proportion. The five-year
business plan is based on the following assumptions: Group’s amortisation and depreciation costs, IT costs, management
fee, insurance costs and interest expenses are allocated to individual budget of each CGU according to fleet proportion
allocated. Fleet proportion was calculated as a percent from total Group fleet according to fleet location to the date, when
impairment test was performed. By using the same fleet proportion all Group’s liabilities for equipment purchase are allocated
in impairment calculation. Loss from goodwill impairment is recognized in consolidated statement of comprehensive income.
Please, also refer to Note 12.
Other intangible assets
Other intangible assets primarily comprise capitalized costs of internally developed software. Other intangible assets are
measured at historical cost amortized on a straight-line basis over the useful life of the assets. 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 costs of intangible assets
Development expenditure is capitalised only if the expenditure can be measured reliably, the product or process is technically,
and commercially feasible, future economic benefits are probable, and the Group intends to and has sufficient resources to
complete development and to use or sell the asset. Otherwise, such expenditure is treated as research costs and recognised
in comprehensive income as incurred. In the reporting period, the Group did not incur any research costs.
After the Group has started to use the developed intangible asset, the recognized development costs are reclassified to the
respective intangible asset group and subsequently measured at cost less accumulated amortisation and any accumulated
losses.
Development costs are presented as Intangible assets in progress and are stated at historical cost. This includes the cost of
development and other directly attributable expenses. Intangible assets in progress are not amortized as long as the
respective assets are not completed and put into operation.
Expenditure on research activities, if any, is recognised in comprehensive income as incurred.
Amortisation
Amortisation is calculated based on the cost of intangible assets less their estimated residual values, which, generally, are
insignificant, using the straight-line method over their estimated useful lives, and is recognised in comprehensive income.
Goodwill is not amortised. Amortisation methods, useful lives and residual values are reviewed at each reporting date and
adjusted, if appropriate, to reflect the Group’s management current view on their remaining useful lives in the light of changes
in technology. The estimated useful lives of other intangible assets for current and comparative periods are as follows:
Trademarks and domains
5 years
Software licenses
3 years
(n) Property, plant and equipment
Property plant and equipment is stated at historical cost less accumulated depreciation and impairment. The acquisition costs
include all expenditures attributable to binging the asset to working condition. In addition to direct purchasing expenses, it
also includes other expenses related to the acquisition, such as transportations and assembling costs. Subsequent
expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to
the Group.
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
19
2. Summary of significant accounting policies (cont.)
(n) Property, plant and equipment (cont.)
Depreciation is calculated using the straight-line method. The estimated useful lives of property, plant and equipment for
current and comparative periods are as follows:
Machinery and equipment
4 - 12 years
Other
2 - 5 years
Construction in progress represents property, plant and equipment under construction and is stated at historical cost. This
includes the cost of construction and other directly attributable expenses. Construction in progress is not depreciated as long
as the respective assets are not completed and put into operation.
Leasehold improvements are amortised over the shorter of the useful life of the improvement and the term of the lease
agreement.
Depreciation is calculated based on the cost of items of property, plant and equipment less their estimated residual values
using the straight-line method over their estimated useful lives, and is recognised in comprehensive income. 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 is depreciated
separately. Any gain or loss on disposal of an item of property, plant and equipment is recognised in comprehensive income.
Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted, if appropriate, to
reflect the Group’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. Group has fixed assets that are fully
amortized and still are in use.
(o) Impairment of tangible and intangible assets other than goodwill
At the end of each reporting period, the Group assesses the carrying amounts of its tangible and intangible assets to determine
whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not
possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash
generating unit to which the asset belongs. Each Group’s subsidiary was determined as separate CGU.
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments
of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been
adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying
amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised
immediately in consolidated statement of comprehensive income.
When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash generating unit) is increased to
the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in
prior years.
(p) Borrowings
Borrowings are recognized initially at fair value, net of transaction costs incurred.
After initial measurement, borrowings are carried at amortized cost using the effective interest rate method. The amortized
value is calculated including any acquisition related discount or premiums and payments that are an integral part of the
effective interest rate and transaction costs. Amortized cost is calculated by taking into account any loan or borrowing issue
costs, and any discount or premium related to loans or borrowings.
(q) Inventories
Inventories are stated at the lower of cost and net realizable value.
Costs incurred in bringing the inventories to their present location and condition is measured for as follows:
- Consumables and finished goods are measured at cost of purchase applying “first in first out” (FIFO) method;
Net realizable value is the estimated selling price in the ordinary course of business, less all estimated costs of completion
and costs necessary to make the sale, as well as assesses the physical condition of inventories during the annual
stock count. Net realizable value is stated as cost less allowances.
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
20
2. Summary of significant accounting policies (cont.)
(r) Non-current assets classified as held for sale
Non-current assets that will be recovered through sale rather than through continuing use are classified as non-current assets
classified as held for sale.
The conditions that must be met before a non-current asset can be classified as held for sale are as follows:
• The non-current asset must be available for immediate sale in its present condition subject only to terms that are
usual and customary for sale of such assets; and
• Its sale must be highly probable, i.e.
- management must be commited to a plan to sell the non-current assets;
- an active program to locate a buyer and complete the plan must be initiated;
- the non-current assets must be actively marked for sale ar a reasonable price in relation to its current fair value;
- the sale should be expected to qualify for recognition as a completed sale within one year from date of classification;
- actions required to complete the plan should indicate that it is unlikely that the plan be changed significantly or be
withdrawn.
At the end of the reporting year Group management has commited plan and list of non-current assets, that will be recovered
through sale; sales chanel to realize this sale has found. All assets were ready for immediate sale. Non-current assets that
are classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell.
(s) Cash and cash equivalents
Cash and cash equivalents include cash in bank and in hand, deposits held at call with banks with maturities of three months
or less.
(t) Contingent liabilities and assets
The Group does not recognize any contingent liabilities in these financial statements. Contingent liabilities are disclosed,
unless the probability that an outflow of resources will be required is remote. No contingent assets are recognized by the
Group, they are disclosed if it is probable, that the economic benefits related to the transaction will flow to the Group.
(u) Provisions
A provision is recognized if the Group has a present obligation (legal or constructive) as a result of a past event, and it is
probable that an outflow of resources embodying economic benefits will be required from the Group to settle the obligation,
and a reliable estimate can be made of the amount of the obligation. If the Group expects that the expenditure required to
settle the provision will be reimbursed by another party partly or fully, e.g., under the terms of an insurance contract, the
reimbursement is recognized as a separate asset when and only when it is virtually clear that the reimbursement will be
received. In the consolidated statement of comprehensive income, the expense relating to a provision may be presented net
of the amount recognized for a reimbursement. Where the effect of the time value of money is material, the provisions are
calculated by discounting the future expected cash outflows, using a pre-tax discount rate that reflects current market
assessment of the time value of money and the risks specific to the liability. If discounting is used, increase in provisions is
gradually recognized as borrowing costs.
(v) 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 Group becomes party to a contract that is a
financial instrument. On initial recognition, the Group classifies and measures a financial asset at amortised cost if it meets
both of the following conditions and is not designated as at FVTPL:
• 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.
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
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2. Summary of significant accounting policies (cont.)
(v) Financial assets and financial liabilities (cont.)
The Group 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 Trade receivables and
Other receicables. These assets are subsequently measured at amortised cost using the effective interest method. The
amortised cost is reduced by impairment losses. 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 Group 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 Group 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
The Group applies the simplified approach under IFRS 9. The Group always recognises lifetime ECL (expected credit losses)
for trade receivables and contract assets. Lifetime ECL 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 Group’s historical credit loss experience in each geographical location of
operations separately over a two-year period, adjusted for factors that are specific to the debtors (please see also Note 17).
General economic conditions and an assessment of both the current as well as the forecast direction of conditions at the
reporting date, including time value of money are not incorporated into the calculation.
The Group 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 Group in full, without recourse by the Group 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.
Factoring
The Group has entered into certain factoring contracts, by which it sells the receivables to a factor and receives a part of the
amount due immediately and the remainder when the customer settles its liability towards the factor. When the Group sells
the receivables to the factor, it derecognizes the corresponding financial assets and recognizes a new receivable due from
the factor. The Group’s factoring contracts are considered as factoring without rights of regress. The proceeds received from
the factor are presented in the Statement of cash flows as cash flows from operating activities.
Financial liabilities
Recognition, classification and subsequent measurement
A financial liability is recognised in the statement of financial position when the Group becomes party to a contract that is a
financial instrument.
All of the Group’s financial liabilities are classified as measured at amortised cost. 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.
STORENT INVESTMENTS AS Сonsolidated Annual Report
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Registration number: 40103834303
22
2. Summary of significant accounting policies (cont.)
(v) Financial assets and financial liabilities (cont.)
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.
Please refer to relevant Notes.
Offsetting
Financial assets and financial liabilities are offset and the net amount presented in the statement of financial position when,
and only when, the Group 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.
(w) Leases
The Group as lessor
Leases, for which the Group is a lessor, are classified as finance or operating leases. Whenever the terms of the lease transfer
substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases
are classified as operating leases. The Group, as a lessor, has not classified any lease as a financial lease.
When the Group is an intermediate lessor, it accounts for the head lease and the sublease as two separate contracts. The
sublease is classified as a finance or operating lease by reference to the right-of-use asset arising from the head lease.
Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease. Initial direct
costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and
recognised on a straight-line basis over the lease term. The Group as a lessor, generally, concludes short-term operating
lease contracts with no non-cancellable period.
The Group as lessee
The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group 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). For these leases, the Group 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. Group lease payments are based on
concluded financial lease agreements with fixed lease payment schedule.
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.
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
23
2. Summary of significant accounting policies (cont.)
(w) Leases (cont.)
The Group 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 the period of the lease term.
(x) Related party transaction
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.
(y) Post balance sheet events
Only such post balance sheet events adjust amounts recognized in the consolidated financial statement, which provides
additional information on the conditions that existed at balance sheet date (adjusting events). If post balance sheet events
are not adjusting, they are disclosed in the consolidated financial statements only if they are material.
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
24
2. Summary of significant accounting policies (cont.)
(z) 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 consolidated 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 Group has not early adopted the new or amended standards in preparing these consolidated 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 Group’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 Group anticipates that the adoption of these new standards and amendments to the existing standards will have no
material impact on the consolidated financial statements of the Group in the period of initial application.
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
25
3. Net revenue and operating segments
Net revenue by products and services
2021
EUR
2020
EUR
Rental revenue – own equipment
8 206 914
10 800 065
Rental revenue – sub-lease of right-of-use assets (see also Note 14)
5 202 688
7 083 860
Rental revenue – equipment under split rent arrangements (see also
Note 14)
19 268 349
13 269 855
TOTAL Rental income:
32 677 951
31 153 780
Transport and related services revenue
9 509 383
9 565 003
Revenue from sale of inventories
783 847
1 463 331
Cash discounts to customers
(54 074)
(57 840)
TOTAL Revenue from contracts with customers:
10 239 156
10 970 494
TOTAL:
42 917 107
42 124 274
Operating segments
Segment information is presented for the Group’s operating segments, which are determined by geographical split. The Group has
disclosed the items and amounts by operating segment as reported in internal management reporting to the Council and the Board.
Net revenue per geographical location
2021
EUR
2020
EUR
Latvia
14 296 515
14 198 895
Lithuania
10 581 119
8 957 279
Estonia
4 602 489
4 786 806
TOTAL Baltic (Latvia, Estonia and Lithuania):
29 480 123
27 942 980
Finland
10 390 040
11 141 525
Sweden
2 391 517
2 493 566
TOTAL Nordic (Finland and Sweden):
12 781 557
13 635 091
Russia, Kaliningrad
655 427
546 203
TOTAL:
42 917 107
42 124 274
The Group defines operating result as net revenues and other operating income less cost of materials and services, personnel costs,
other operating expenses, depreciation and amortization and impairment gain/(loss).
Operating result per geographical location
2021
EUR
2020
EUR
Baltic (Latvia, Estonia and Lithuania)
1 822 640
(4 774 393)
Nordic (Finland and Sweden)
(3 164 211)
(3 167 696)
Russia, Kaliningrad
233 649
135 310
Elimination of inter-segment operating result
75 121
109 535
Finance income
130 257
67 728
Finance expenses
(2 442 651)
(3 155 359)
Consolidated profit/(loss) before tax:
(3 345 195)
(10 784 875)
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
26
3. Net revenue and operating segments (cont.)
Property, plant and equipment, right of use assets and intangible assets are disclosed both on individual geographical location level and
on an aggregated basis, in line with internal management reporting to the Council and the Board.
Property, plant and equipment and right of use assets per geographical
location, net book value
31.12.2021
EUR
31.12.2020
EUR
Finland
8 877 339
10 734 786
Sweden
1 878 538
2 446 435
TOTAL Nordic (Finland and Sweden):
10 755 877
13 181 221
Latvia
6 716 476
10 272 012
Lithuania
3 599 576
5 826 521
Estonia
2 137 333
4 146 616
TOTAL Baltic (Latvia, Estonia and Lithuania):
12 453 385
20 245 149
Russia, Kaliningrad
151 046
128 464
TOTAL:
23 360 308
33 554 834
Intangible assets (including goodwill) and right of use assets
per geographical location, net book value
31.12.2021
EUR
31.12.2020
EUR
Finland
1 829 525
1 645 263
Sweden
163 575
142 949
TOTAL Nordic (Finland and Sweden):
1 993 100
1 788 212
Latvia
1 350 511
1 377 293
Lithuania
8 958 003
8 982 107
Estonia
695 464
749 452
TOTAL Baltic (Latvia, Estonia and Lithuania):
11 003 978
11 108 852
Russia, Kaliningrad
379 673
367 085
TOTAL:
13 376 751
13 264 149
TOTAL NON-CURRENT NON-FINANCIAL ASSETS:
36 737 059
46 818 983
4. Other operating income
By type
2021
EUR
2020
EUR
Insurance reimbursements received
270 049
226 865
Cost reimbursement
218 730
81 379
Received government grant*
106 660
-
Recognized deferred income (see also Note 28)
57 107
135 111
Other income
10 501
5 507
Gains on sale of property, plant and equipment used for renting, net
641 968
-
TOTAL:
1 305 015
448 862
*One of the Group’s entities has received government grant under the program of government support related to Covid-19 pandemic.
Support programm was intended to compensate the decrease in net working capital. Entity has fulfilled all the conditions for the use of
this support and recognized received amount in Other operating income in the reporting period. There are no conditions, under which
the entity would have to repay the received support.
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
27
5. Cost of materials and services
a) Costs of raw materials and ancillary materials
2021
EUR
2020
EUR
Cost of materials
617 517
711 862
Renting equipment adjustments as a result of stock counts
2 697
3 292
TOTAL:
620 214
715 154
b) Other external costs
2021
EUR
2020
EUR
Equipment rent related costs (see also Note 14)
13 730 924
9 382 817
Transport and assembly services
6 315 953
6 971 627
Repairs and maintenance services
3 114 205
3 165 667
TOTAL:
23 161 082
19 520 111
TOTAL:
23 781 296
20 235 265
6. Other operating expenses
2021
EUR
2020
EUR
Rent of offices, areas and maintenance costs
2 341 573
2 261 106
IT expenses
969 333
1 216 773
Administration transport costs
473 897
504 456
Other administrative expenses
460 242
548 915
Written-off doubtful debts
451 512
628 236
Remuneration to contractors
371 897
303 306
Losses on sale of property, plant and equipment used for renting, net*
-
544 525
Marketing expenses
263 428
460 329
Insurance costs
231 932
297 025
Legal services
146 906
119 388
Communication expenses
135 356
155 616
Consulting and other services**
105 338
181 998
TOTAL:
5 951 414
7 221 673
*Storent SIA and Storent Oy, on an ongoing basis, performs optimization of the rental equipment fleet by selling equipment, which is no
longer in demand in rental market. The increase in rental equipment sold in 2021 and 2020 is related to the management’s initiated change
in the Group’s operating model to increase the share of rental equipment provided by split-rent vendors.
Gains / (losses) on sale of property, plant and equipment used for
renting, net calculation:
2021
EUR
2020
EUR
Gross income from sale of property, plant and equipment used for renting
6 546 191
9 480 164
Cost of sold property, plant and equipment used for renting
(5 904 223)
(10 024 689)
TOTAL Gains / (losses) on sale of property, plant and equipment
used for renting, net:
641 968
(544 525)
Net gains are presented under Other operating income, while Net losses are presented under Other operating expenses.
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
28
6. Other operating expenses (cont.)
**including audit fee to KPMG Baltics SIA:
2021
EUR
2020
EUR
Financial statements audit fee
90 298
82 264
TOTAL:
90 298
82 264
7. Depreciation and amortization
2021
EUR
2020
EUR
Depreciation of property, plant and equipment used for renting
677 978
3 445 912
Depreciation of property, plant and equipment used for own needs
410 320
402 059
Rights of use assets amortization
4 710 549
4 167 912
Amortization of intangible assets
888 300
871 638
TOTAL:
6 687 147
8 887 521
8. Finance income
2021
EUR
2020
EUR
Foreign exchange income
21 076
40 010
Interest income calculated using the effective interest method
2 521
27 718
TOTAL:
23 597
67 728
9. Finance expenses
2021
EUR
2020
EUR
Interest on borrowings* calculated using the effective interest method
1 132 433
1 205 286
Interest on leases
743 920
928 440
Interest on bonds* calculated using the effective interest method
513 271
987 153
Interest on factoring**
6 109
9 687
Interest on overdraft
2 340
-
Foreign exchange losses
9 755
-
Other expenses
34 823
24 793
TOTAL:
2 442 651
3 155 359
*Interest expenses presented above are incurred by financial instruments presented in the Group’s financial liabilities at amortized cost
in accordance with IFRS 9.
**In 2014 Group has signed factoring contract with Nordea Bank AB, which improved liquidity of the Group. The management of the
Group treats this contract as factoring without rights of regress. In 2021, the maturity of these contracts was been prolonged till
31.03.2022.
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
29
10. Income tax and deferred income tax assets / liabilities
2021
EUR
2020
EUR
Corporate income tax calculated for the year
(55 847)
(15 807)
Deferred income tax changes due to temporary differences
(1 808)
(532 797)
Corporate income tax recognized in consolidated statement of
comprehensive income:
(57 655)
(548 604)
The Group’s reconciliation of the effective tax rate is based on its domestic tax rate, with a reconciling item in respect of tax rates applied
by Group companies in other jurisdictions. The reconciliation of the effective tax rate is based on an applicable tax rate that provides the
most meaningful information to users.
Reconciliation of the actual corporate income tax with calculated theoretical tax:
2021
EUR
2020
EUR
Profit / (loss) before income tax, subject to corporate income tax
(3 345 195)
(10 784 875)
The calculated theoretical corporate income tax – at 20%
20,0%
(669 039)
20,0%
(2 156 975)
Effect of tax rates in foreign jurisdictions
(0,31%)
10 465
(0,32%)
34 195
Permanent differences:
Impact of Goodwill write-off
-
-
(7,49%)
807 358
Non-deductible expenses and other permanent differences
(1,55%)
51 827
(1,10%)
118 192
Unrecognized temporary differences (tax losses carried forward)
(19,86%)
664 402
(16,19%)
1 745 833
The actual corporate income tax for the reporting year:
(1,72%)
57 655
(5,09%)
548 604
Deferred income tax:
The Group management has determined that eligable subsidiary’s profits will not be distributed in the foreseeable future, and, thus, the
Group has not recognized related deferred tax liabilities. The unrecognized deferred tax liabilities as at 31 December 2021 amount to
EUR 1 644 260 (31.12.2020: EUR 1 314 414).
The unused tax losses, for which deferred tax asset is recognized only to the extent of taxable temporary differences, as at 31 December
2021 consist of EUR 8 270 226 (31.12.2020: EUR 6 925 394) that expire from 2028 to 2031 and EUR 5 945 637 (31.12.2020:
EUR 5 348 402) that, under certain conditions, do not expire. There are no other material deductible temporary differences and unused
tax credits for which no deferred tax asset is recognised.
The Group’s management has prepared a Business plan for the next five-years and evaluated the actual and potential impact of Covid-
19 pandemic. Based on the five‑year business plan for Finland, Sweden and Lithuania the management doesn’t see that the next five-
years’ taxable profit will be enough to cover the previous tax losses. As a result, the Group’s management decided to recognize deferred
tax assets only in the amount equal to the deferred tax liabilities that are expected to reverse in future reporting periods.
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
30
10. Income tax income and deferred income tax assets / liabilities (cont.)
Movement in deferred tax
balances
Balance at 31 December 2021
2021
Net balance at 1
January
Recognised in
profit or loss
Currency
revaluation
effect
Deferred tax
assets
Deferred tax
liabilities
EUR
Net
Accelerated depreciation for tax
purposes
687 528
179 886
-
867 414
-
867 414
Tax losses carried forward
(2 339 515)
(760 907)
(1 808)
(3 102 130)
(3 102 230)
-
Loss allowances
(93 807)
(81 546)
-
(175 353)
(175 353)
-
Other items
(39)
(27)
-
(66)
(66)
-
Unrecognized deferred tax
asset
1 745 833
664 402
-
2 410 235
2 410 235
-
-
1 808
(1 808)
-
(867 414)
867 414
Set-off
866 128
(866 128)
Net deferred tax
(1 286)
1 286
Movement in deferred tax
balances
Balance at 31 December 2020
2020
Net balance at 1
January
Recognised in
profit or loss
Currency
revaluation
effect
Deferred tax
assets
Deferred tax
liabilities
EUR
Net
Accelerated depreciation for tax
purposes
600 394
87 134
-
687 528
-
687 528
Tax losses carried forward
(1 059 399)
(1 266 952)
(13 164)
(2 339 515)
(2 339 515)
-
Loss allowances
(58 286)
(35 521)
-
(93 807)
(93 807)
-
Employee benefits
3 333
(3 333)
-
-
-
-
Other items
(5 675)
5 636
-
(39)
(39)
-
Unrecognized deferred tax
asset
-
1 745 833
-
1 745 833
1 745 833
-
(519 633)
532 797
(13 164)
-
(687 528)
687 528
Set-off
687 528
(687 528)
Net deferred tax
-
-
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
31
11. Personnel costs and number of employees
2021
EUR
2020
EUR
Salaries
6 647 507
7 334 351
State social security mandatory contributions
1 753 257
2 009 422
Other personnel costs
376 289
562 340
TOTAL:
8 777 053
9 906 113
Executive management remuneration:
2021
EUR
2020
EUR
Board members
Salaries
452 849
813 000
State social security mandatory contributions
106 835
195 864
TOTAL:
559 684
1 008 864
2021
2020
Average number of employees during the reporting year
262
297
TOTAL:
262
297
Personnel costs by function:
2021
EUR
2020
EUR
Sales
3 297 263
3 835 358
Customer services
3 572 331
4 155 315
Administration and finance staff
1 907 459
1 915 440
TOTAL:
8 777 053
9 906 113
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
32
12. Intangible assets
Licenses and
similar rights
Other
intangible
assets
Intangible
assets in
progress
Goodwill TOTAL
EUR EUR EUR EUR EUR
At 31 December 2019
Historical cost 558 543 3 815 816 - 15 346 352 19 720 711
Accumulated amortisation (405 507) (2 343 674) - - (2 749 181)
Net carrying value 153 036 1 472 142 - 15 346 352 16 971 530
FY 2020
Net carrying value, opening 153 036 1 472 142 - 15 346 352 16 971 530
Additions - 778 519 418 813 - 1 197 332
Write-off (53 204) - - (4 029 645) (4 082 849)
Amortisation (47 673) (823 965) - - (871 638)
Net carrying value, closing 52 159 1 426 696 418 813 11 316 707 13 214 375
At 31 December 2020
Historical cost 505 339 4 594 335 418 813 11 316 707 16 835 194
Accumulated amortisation (453 180) (3 167 639) - - (3 620 819)
Net carrying value 52 159 1 426 696 418 813 11 316 707 13 214 375
FY 2021
Net carrying value, opening 52 159 1 426 696 418 813 11 316 707 13 214 375
Additions 937 459 636 566 475 - 1 027 048
Write-off - (177) - - (177)
Amortisation (32 280) (856 020) - - (888 300)
Net carrying value, closing 20 816 1 030 135 985 288 11 316 707 13 352 946
At 31 December 2021
Historical cost 506 276 5 053 794 985 288 11 316 707 17 862 065
Accumulated amortisation (485 460) (4 023 659) - - (4 509 119)
Net carrying value 20 816 1 030 135 985 288 11 316 707 13 352 946
All intangible assets are used by the Group.
Fully amortized intangible assets
On 31 December 2021, intangible assets of the Group included assets with acquisition value of EUR 2 717 463 (31.12.2020.:
EUR 1 810 858), which were completely written down into amortization costs and are still actively used in economic activity. Most of
these intangible 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 Group 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 Group and operational information for the Group’s management to make decisions. The item “Intangible assets in progress”
currently includes only those costs that the Group can reliably measure and that meet the IFRS criteria for capitalization.
Goodwill by CGU
31.12.2021
EUR
31.12.2020
EUR
Storent SIA
680 035
680 035
Storent UAB
8 742 675
8 742 675
Storent OU
542 475
542 475
Storent Oy
1 021 937
1 021 937
Storent OOO
329 585
329 585
11 316 707
11 316 707
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
33
12. Intangible assets (cont.)
At the moment of issue of these financial statements the CGU of Storent OOO continues to operate without significant changes. Before
24 February 2022 Russia CGU operated quite independently, management don’t see any major risks for further business activities. The
Group monitors and follows sanction restrictions and so far they don’t affect the CGU’s activities. Storent OOO has no internal
transactions with other subsidiaries.
The key assumptions used in the estimation of the recoverable amount (value in use) are the following:
31.12.2021
Storent SIA
Storent UAB
Storent OU
Storent Oy
Storent AB
Storent OOO
EBITDA margin
16%-18% in
years 2022-
2026, 16% in
terminal year
(2021 actual:
16%)
9%-18% in
years 2022-
2026, 9% in
terminal year
(2021 actual:
16%)
1%-18% in
years 2022-
2026, 1% in
terminal year
(2021 actual: -
8%)
15%-18% in
years 2022-
2026, 15% in
terminal year
(2021 actual: -
14%)
14%-16% in
years 2022-
2026, 14% in
terminal year
(2021 actual: -
8%)
48%-40% in
years 2022-
2026, 48% in
terminal year
(2021 actual: -
51%)
EBITDA growth
rate
2%
9%
18%
3%
2%
-8%
Period of cash
flows forecast
5 years +
terminal year
5 years +
terminal year
5 years +
terminal year
5 years +
terminal year
5 years +
terminal year
5 years +
terminal year
WACC
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
Storent SIA
Storent UAB
Storent OU
Storent Oy
Storent AB
Storent OOO
EBITDA margin
12%-16% in
years 2021-
2025, 16% in
terminal year
(2020 actual:
18%)
12%-17% in
years 2021-
2025, 17% in
terminal year
(2020 actual:
11%)
3%-14% in
years 2021-
2025, 14% in
terminal year
(2020 actual: -
6%)
24%-25% in
years 2021-
2025, 25% in
terminal year
(2020 actual:
14%)
10%-19% in
years 2021-
2025, 19% in
terminal year
(2020 actual:
4%)
36%-37% in
years 2021-
2025, 37% in
terminal year
(2020 actual:
37%)
EBITDA growth
rate
4%
5%
9%
1%
9%
1%
Period of cash
flows forecast
5 years +
terminal year
5 years +
terminal year
5 years +
terminal year
5 years +
terminal year
5 years +
terminal year
5 years +
terminal year
WACC
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%
To determine the key assumptions of EBITDA margin and EBITDA growth rate, the Group management has considered both the Group’s
past experience as well the future trends and forecasts of the construction market in the specific country where the CGU is located.
The recoverable value of goodwill and other non-current non-financial assets significantly depends on the assumptions used in the
assessment of recoverable value with respect to EBITDA margin and EBITDA growth rate and the Group management’s ability to realize
those assumptions, as well the overall development of Baltic and Nordic construction market. Any adverse changes to these assumptions
caused by volatility of the market the Group operates in, may negatively influence the recoverable value of goodwill and other non-
current non-financial assets recognized on the Group’s balance sheet as of 31 December 2021. Please refer further to Notes 35 and 36.
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
34
12. Intangible assets (cont.)
Sensitivity analysis
The Group 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 to which goodwill is allocated. 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. In the future, the Finnish company will focus more on
rental services, in 2021 the Heavy Team department was closed, which will have a positive effect. The company will also look for
opportunities to outsource transport services, thus increasing its efficiency. Much greater emphasis will be placed on the efficient use of
the rental park, getting rid of unprofitable products and adapting to market demand.
The key assumptions that may affect the recoverable value and, thus, the carrying amount of the cash-generating units are the fulfilment
of the EBITDA budget and the weighted average cost of capital. 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
28,15
63,06
37,32
Based on the calculations, a decrease in EBITDA would lead to the fact that the carrying amount of Estonian and Swedish CGUs,
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 CGUs, 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.
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
35
13. Property, plant and equipment
Land and
buildings
Machinery and
equipment
Other fixed
assets
Construction in
progress
TOTAL
EUR EUR EUR EUR EUR
at 31 December 2019
Historical cost 307 058 38 065 065 3 553 628 10 007 41 935 759
Accumulated depreciation (72 877) (20 494 749) (2 657 616) - (23 225 243)
Net carrying value 234 181 17 570 316 896 012 10 007 18 710 516
FY 2020
Net carrying value, opening 234 181 17 570 316 896 012 10 007 18 710 516
Additions - 1 119 763 182 052 - 1 301 815
Transfered - - - (10 007) (10 007)
Transfered from ROU at the end of the lease
(Note 14)
- 5 505 841 68 017 - 5 573 858
Disposals, net (4 080) (10 345 364) (88 756) - (10 438 200)
Depreciation (10 976) (3 445 912) (391 083) - (3 847 971)
Net carrying value, closing 219 125 10 404 644 666 242 - 11 290 011
at 31 December 2020
Historical cost 302 978 34 345 305 3 714 941 - 38 363 224
Accumulated depreciation (83 853) (23 940 661) (3 048 699) - (27 073 213)
Net carrying value 219 125 10 404 644 666 242 - 11 290 011
FY 2021
Net carrying value, opening 219 125 10 404 644 666 242 - 11 290 011
Additions - 1 064 647 133 618 - 1 198 265
Reclassification to assets held for sale - (344 995) - - (344 995)
Transfered from ROU at the end of the lease
(Note 14)
- 5 668 427 37 105 - 5 705 532
Disposals, net - (6 732 582) (72 114) - (6 804 696)
Depreciation (15 055) (677 978) (395 265) - (1 088 298)
Net carrying value, closing 204 070 9 382 163 369 586 - 9 955 819
at 31 December 2021
Historical cost 302 978 34 000 802 3 813 550 - 38 117 330
Accumulated depreciation (98 908) (24 618 639) (3 443 964) - (28 161 511)
Net carrying value 204 070 9 382 163 369 586 - 9 955 819
All property, plant and equipment classified as Machinery and equipment and Other fixed assets are leased out by the Group under
operating lease terms. Other types of property, plant and equipment are used by the Group.
Machinery and equipment that has been prepared for selling in the beginning of 2022 is classified in this consolidated annual report as
Assets held for sale. Please see Note 16.
A number of fully depreciated property, plant and equipment are still used for the Group’s business operations. The total historical cost
of such property, plant and equipment as at 31 December 2021 amounted to EUR 9 683 288 (31.12.2020: EUR 10 288 432).
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
36
14. Rights of use assets
Licenses and
similar
rights
Land and
buildings
Machinery and
equipment
Other fixed
assets
Total
EUR EUR EUR EUR EUR
At 1 January 2020 - 1 114 244 29 987 732 738 107 31 840 083
Additions
77 907 125 832 97 165 200 474 501 378
Transferred to PP&E at the end of the lease on
transfer of ownership (see Note 13)
- - (5 505 841) (68 017) (5 573 858)
Derecognition - (285 094) - - (285 094)
Amortization (28 133) (318 007) (3 573 082) (248 690) (4 167 912)
Net carrying value at 31 December 2020
49 774 636 975 21 005 974 621 874 22 314 597
At 1 January 2021 49 774 636 975 21 005 974 621 874 22 314 597
Additions
- 16 602 1 473 375 101 401 1 591 378
Reclassification to assets held for sell
- - (61 601) - (61 601)
Transferred to PP&E at the end of the lease on
transfer of ownership (see Note 13)
- - (5 668 427) (37 104) (5 705 531)
Amortization (25 969) (245 627) (4 301 396) (137 557) (4 710 549)
Net carrying value at 31 December 2021
23 805 407 950 12 447 925 548 614 13 428 294
All rights of use assets classified as Machinery and equipment and Other fixed assets are leased out by the Group under operating
lease terms. Other types of rights of use assets are used by the Group for own purposes.
For information on incremental borrowing rates applied to lease liabilities, refer to Note 25.
Premises rent agreements that can be discontinued by sending letter to premises holder one to six months before termination, are not
classified as rights of use assets since both parties have unilateral rights to terminate the contract and there is historical evidence of
such right being exercised by both parties. Forklift rent agreements, without specified forklift serial number in agreement also are not
classified as rights of use assets as those can be replaced by service provider and there is a history of such replacement at decision
by service provider.
Amounts recognized in profit and loss:
2021
EUR
2020
EUR
Revenue from sub-lease of rights-of-use assets (see also Note 3)
5 202 688
7 083 860
Revenue from sub-lease of assets, for which lease liabilities are not
recognized (see also Note 3)*
19 268 349
13 269 855
Expense related to variable lease payments not included in the
measurement of the lease liability*
(13 730 924)
(9 382 817)
Depreciation expenses on right-of-use assets
(4 710 549)
(4 167 912)
Interest expense on lease liabilities
(743 920)
(928 440)
Expense relating to short-term leases
(1 575 702)
(1 439 742)
TOTAL:
3 709 942
4 434 804
*The Group does not recognize lease liabilities and right-of-use assets for machinery and equipment leased from split-rent vendors as the
lease payments are entirely variable depending on sub-lease rental income.
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
37
15. Inventories
31.12.2021
EUR
31.12.2020
EUR
Goods for resale (at cost)
548 301
513 318
Consumables (at cost)
602 569
595 027
TOTAL:
1 150 870
1 108 345
16. Assets held for sale
By the end of year 2021, Group management decided to sell the old equipment, which is no longer competitive in the market. Selected
equipment for sales has been reclassified and moved from property, plant and equipment and rights of use assets to non-current assets
held for sale. Before reclasification of equipment its balance value was compared to an estimated fair value less costs to sell. Estimated
fair value less costs to sell was determined at market prices for same equipment with a similar technical condition. It was found that the
balance value of equipment was lower than the estimated fair value less costs to sell. Therefore, revaluation of fixed assets is not necessary
by the end of year 2021. There are no cumulative income or expenses included in Other comprehensive income relating to assets held
for sale.
Reclassification of statmenet of financial positions
31.12.2021
EUR
Property, plant and equipment
344 995
Rights of use assets
61 601
Non-current assets classified as held for sale
406 596
Lease liabiltites (see Note 25)
23 039
Liabilitities directly associated with non-current assets
classified as held for sale
23 039
17. Trade receivables
31.12.2021
EUR
31.12.2020
EUR
Trade receivables
8 188 384
9 834 871
Allowance for doubtful debts
(2 259 455)
(2 307 188)
TOTAL:
5 928 929
7 527 683
Interest is not charged on late payment of receivables. Generally, trade receivables are due within 15 - 45 days.
Allowance for doubtful debts is expressed as lifetime expected credit loss and is calculated on a collective basis using simplified
approach under IFRS 9.
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The Group’s management
has established a credit policy under which each new customer is analysed individually for creditworthiness before the Group’s
standard payment and delivery terms and conditions are offered. The Group’s review includes external ratings, if they are available,
financial statements, credit agency information and industry information. Sale limits are established for each customer and reviewed
yearly. Any sales exceeding those limits require approval from the entity management or Group management. Monitoring customer
credit risk is going on daily basis. Monitoring includes actual information from credit agency and review past due trade payables by
each entity debt controllers. Please also see Note 33.
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
38
17. Trade receivables (cont.)
Main assumption of simplified approach under IFRS 9:
The appropriate grouping
Group uses debt grouping by countries for measurement of loss allowances on a collective
basis
Period
Group uses a 2-year period to estimate historical loss rate
Historical loss rate
Calculation done, excluding Storent intercompany sales and sales to lease companies (lease-
back). Excluded also debts from Crent SIA (Cramo SIA), that was merged with Storent SIA in
December 2017
Timeframes used in
calculation
Current / Due 1-30 / Due 31-60 / Due 61-90 / Due 91-180 / Due 181-360 / Due 361+ /
Never Paid
Macro-economic factors
The Group did not find any material connection between actual credit loss rate and macro-
economic factors. In the management’s view, this is due to the construction sector often used
to stimulate economic activity during an economic downturn.
Forward-looking information
In line with the conclusion on macro-economic factors above, the Group presumes that
historical loss rates will prevail also in the future, and no adjustments at historical loss rates
are done.
Trade receivables are not secured or collaterized.
The gross carrying amount of a trade receivables is written off when the Group has no reasonable expectations of recovering a trade
receivable in its entirety or a portion thereof. The Group individually makes an assessment with respect to the timing and amount of
write-off based on whether there is a reasonable expectation of recovery. The Group expects no significant recovery from the amounts
written off. However, trade receivables that are written off could still be subject to enforcement activities in order to comply with the
Group’s procedures for recovery of amounts due.
Changes in the allowance for doubtful debts
31.12.2021
EUR
31.12.2020
EUR
At the beginning of the year
2 307 188
2 322 753
Increase
403 779
612 671
Written-off
(451 512)
(628 236)
TOTAL:
2 259 455
2 307 188
The Group’s gross trade receivables as at 31 December 2021 have decreased compared to 31 December 2020. During 2021,
notwithstanding Covid-19 impact on the economy, there has been no significant increase in overdue amounts, including in credit-
impaired balances. For details on overdue receivables by ageing category see Note 33.
18. Contract assets and contract liabilities
The following tables provide information about receivables, contract assets and contract liabilities from contracts with customers.
The contract assets primarily relate to the Group’s rights to consideration for work completed but not billed at the reporting date. The
contract assets are transferred to receivables when the rights become unconditional. This usually occurs when the Group issues an
invoice to the customer.
Contracts balances
31.12.2021
EUR
31.12.2020
EUR
Receivables, which are included in ‘Trade receivables’
8 188 384
9 834 871
Contract assets
4 192
13 804
TOTAL:
8 192 576
9 848 675
The contract liabilities primarily relate to the loyalty points earned by the customers as part of the Group’s customer loyalty program,
which was launched in 2020, and advances received from customers for performance obligations not yet performed.
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
39
18. Contract assets and contract liabilities (cont.)
Contracts balances
31.12.2021
EUR
31.12.2020
EUR
Contract liabilities – loyalty program
(131 408)
(302 402)
Contract liabilities – advances from customers
(272 937)
(250 075)
TOTAL:
(404 345)
(552 477)
Changes in contract liabilities:
31.12.2021
EUR
31.12.2020
EUR
At the beginning of the year
(552 477)
(265 423)
Revenue recognized from amounts included in contract liabilities
at the beginning of the period
552 477
265 423
Revenue deferred during the period
(404 345)
(552 477)
TOTAL:
(404 345)
(552 477)
19. Other receivables
31.12.2021
EUR
31.12.2020
EUR
Guarantee deposit
162 930
197 371
Advances to suppliers
39 961
32 854
Refundable value-added tax
26 813
35 664
Advances to employees
2 809
2 888
TOTAL:
232 513
268 777
20. Prepaid expenses
31.12.2021
EUR
31.12.2020
EUR
Other deferred expenses
119 628
287 808
Total:
119 628
287 808
21. Cash and cash equivalents
31.12.2021
EUR
31.12.2020
EUR
Cash in bank and cash, EUR
590 279
3 456 603
Cash in bank and cash, RUB
268 740
100 796
Cash in bank and cash, SEK
61 248
162 741
TOTAL:
920 267
3 720 140
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
40
22. Share capital of the Parent company
Registered share capital of the Group’s Parent 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.
Parent company's shareholders as of 31 December 2020:
Shareholder
Numbers of
shares
Amount
EUR
Participating
interest (%)
Levina Investments S.A.R.L. (Luxembourg)
24 320 882
24 320 882
73.0%
“Bomaria” SIA
4 497 698
4 497 698
13.5%
“Supremo” SIA
4 497 698
4 497 698
13.5%
TOTAL:
33 316 278
33 316 278
100%
Parent company's shareholders as of 31 December 2021:
Shareholder
Numbers of
shares
Amount
EUR
Participating
interest (%)
Levina Investments S.A.R.L. (Luxembourg)
24 320 882
24 320 882
73.0%
“Bomaria” SIA
4 497 698
4 497 698
13.5%
“Supremo” SIA
4 497 698
4 497 698
13.5%
TOTAL:
33 316 278
33 316 278
100%
23. Other provisions
31.12.2021
EUR
31.12.2020
EUR
Provisions for employee bonuses
121 518
94 898
Provisions for expenses
17 385
22 021
Total:
138 903
116 919
Provisions for employee bonuses and provisions for expenses are expected to result in cash outflows within a year of the reporting
date. The uncertainty arises from the fact that the information on specific cash outflow amounts is not available to the management as
at the reporting date. The Group does not expect any reimbursements with respect to the above amounts.
Changes in the provisions:
31.12.2021
EUR
31.12.2020
EUR
At the beginning of the year
116 919
641 444
Provisions made
405 354
208 354
Provision used
(383 370)
(732 879)
TOTAL:
138 903
116 919
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
41
24. Issued bonds
In 2017, the Group 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 Group 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, the Group 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 Group 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 quarter basis.
*Total borrowing origination fees and costs amounted to 223 970 EUR. The Group 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 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 Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
42
24. 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. 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 notes (ISIN LV0000802304) included in the Exchange trading system by
transferring principal and interest payments to the bondholders.
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
43
25. Lease liabilities
By asset type
Maturity
Interest
rate, (%)*
31.12.2021
EUR
31.12.2020
EUR
Balance sheet value of
leased assets on
31.12.2021
EUR
Leasing companies (various
asset types)
Various (2021 -
2024)
1.8-5.5%
+3M
EURIBOR
10 653 575
14 614 940
32 493 283
Redemption contracts
(various asset types)
31.12.2022
1.5%
71 934
442 147
420 153
Supplier funding (various
asset types)
28.07.2022
2%-8.67%
497 309
1 318 354
2 864 582
Premise’s rent
31.12.2023
10.3%
638 885
691 419
1 062 961
Car rent
Various
(2021-2023)
10.3%
32 493
249 078
68 503
IT sofware
2022
10.3%
28 554
54 439
77 908
Liabilities directly associated
with assets held for sale
2022
2%-8.67%
23 039
-
61 601
Total:
11 945 789
17 370 377
37 048 991
Total Non-current liabilities:
6 789 551
11 158 537
Total Current liabilities:
5 156 238
6 211 840
The maturity of lease liabilities disclosed in Note 33.
*Equals the incremental borrowing rate applied to measure the lease liabilities.
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
17 370 377
22 866 881
Repayment of lease liabilities
(7 015 968)
(5 880 898)
Total changes from financing cash flows
(7 015 968)
(5 880 898)
New leases
1 591 378
384 394
Interest expenses accrued
743 920
929 272
Interest paid
(743 920)
(929 272)
Total liability-related other changes
1 591 378
384 394
Balance at the end of the year
11 945 787
17 370 377
Total cash outflow for leases for the reporting year amounts to:
2021
EUR
2020
EUR
Repayment of lease liabilities
7 015 968
5 880 898
Interest paid
743 920
929 272
Expenses relating to short-term leases
1 575 702
1 439 742
TOTAL:
9 335 590
8 249 912
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
44
26. Other borrowings
In 2015 – 2019, the Group 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 showed 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
EUR
Actual interest
rate (%)
31.12.2021
EUR
31.12.2020
EUR
Haulotte Group SA
01.10.2021
4 957 370
2.49
-
1 006 667
Haulotte Group SA
01.09.2022
1 003 836
3.94
151 065
352 484
Haulotte Group SA
01.09.2022
1 994 007
3.94
318 798
743 861
Haulotte Group SA
01.09.2021
1 006 969
4
-
202 065
Haulotte Group SA
15.09.2022
1 004 278
4
201 525
470 277
Haulotte Group SA
01.08.2024
2 009 115
2.8
1 110 362
1 514 103
Yanmar Construction Equipment
Europe S.A.S
01.09.2021
995 703
4
-
199 804
Yanmar Construction Equipment
Europe S.A.S
15.09.2022
1 075 956
4
215 909
503 842
Yanmar Construction Equipment
Europe S.A.S
04.08.2024
803 768
2.8
444 204
605 733
SA Manitou BF
04.08.2024
1 403 000
2.8
905 126
1 055 981
Incremental cost allocation
(1 058 151)
(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 1 058 151. The Group 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 of other borrowings to cash flows arising from financing activities:
31.12.2021
EUR
31.12.2020
EUR
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
-
(20 017)
Incremental cost allocation amortization
142 139
76 845
Proceeds from additional discount
(8 884)
-
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
Changes in the incremental cost allocation:
31.12.2021
EUR
31.12.2020
EUR
At the beginning of the year
218 398
295 244
Incremental cost increase
-
186 605
Written off as adjustment to effective interest rate
(142 139)
(263 451)
TOTAL:
76 259
218 398
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
45
27. Taxes and national mandatory social insurance contributions
31.12.2021
EUR
31.12.2020
EUR
Personal income tax
152 732
172 189
State social security mandatory contributions
169 326
205 836
Value added tax
597 654
577 256
Risk duty
3 448
3 294
TOTAL:
923 160
958 575
28. Deferred income
31.12.2021
EUR
31.12.2020
EUR
Gain on sale-and-leaseback transactions
79 443
136 550
Total:
79 443
136 550
Total Non-current deferred income:
-
-
Total Current deferred income:
79 443
136 550
Sale-and-leaseback transactions
In 2016 to 2018, the Group entered into sale-and-leaseback transactions that resulted in sales proceeds exceeding the carrying amount
of these assets, and the difference has been accounted as Deferred income. In line with IFRS 16 transition requirements, the Group
continues to amortize the deferred gain on a strength-line method over the lease term for each of such assets.
In 2019, the Group entered into two sale-and-leaseback agreements, for which the Group assessed that the transactions did not result
in a sale as the Group continued to control the underlying assets. The Group presents the received financing as lease liabilities and
presents the excess of financing received over the carrying amount of the underlying assets as deferred liabilities.
Changes in the deferred income:
31.12.2021
EUR
31.12.2020
EUR
At the beginning of the year
136 550
271 661
Amortised and included in income of reporting year (See Note 4)
(57 107)
(135 111)
TOTAL:
79 443
136 550
29. Other liabilities
31.12.2021
EUR
31.12.2020
EUR
Payroll
381 482
413 569
Other payables
7 999
9 767
TOTAL:
389 481
423 336
30. Accrued liabilities
31.12.2021
EUR
31.12.2020
EUR
Accrues liabilities for unused employee vacations
964 054
866 863
Other accrued liabilities
268 929
236 165
Accrued liabilities for defined contribution pension insurance
75 999
84 488
TOTAL:
1 308 982
1 187 516
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
46
31. Related party transactions
31. (a) Related party transactions
Related party
Year
Goods and services
received
EUR
Payables to related
companies
EUR
Companies that have control over the Group’s activities:
Levina Investments S.A.R.L
2020
-
(5 624 057)
2021
-
(6 023 340)
Companies with significant influence over the Group’s activities:
Supremo SIA
2020
(19 890)
(325 581)
2021
(18 000)
-
Bomaria SIA
2020
(19 890)
(325 581)
2021
(18 000)
-
The companies controlled by the Group’s officers or their relatives: *
Meistari ZS
2020
(5 063)
(406)
2021
(5 789)
(406)
Total 2020:
(44 843)
(6 275 625)
Total 2021:
(41 789)
(6 023 746)
* Payables to the companies controlled by the Group’s management or their relatives are included in the balance sheet item Trade
payables, in the amount of EUR 406 as at 31 December 2021 (2020: EUR 406).
31. (b) Terms and conditions of transactions with related parties
The due from and due to amounts outstanding at the end of the reporting year are unsecured and will be settled in cash. No guarantees
have been issued or received for the related party due from amounts.
31. (c) Borrowings from related companies
Maturity
Interest rate
%
31.12.2021
EUR
31.12.2020
EUR
Levina Investments S.A.R.L.
31.12.2022.
14
6 123 340
5 624 057
Bomaria LTD
31.12.2022.
6
-
325 581
Supremo LTD
31.12.2022.
6
-
325 581
Total Non-current liabilities:
6 275 219
Total current liabilities:
6 123 340
-
Full amount of loans is repayable upon maturity date. In February 2022, the Company’s subsidiary Storent Holding Finland Oy has
received confirmation to postpone the repayment of loan received from Levina Investments S.a.r.l. by additional one year, and the final
due date of the loan is December 2023. Amendments to the agreement have been signed.
Reconciliation of movements of borrowing from related companies to cash flows arising from financing activities:
31.12.2021
EUR
31.12.2020
EUR
Balance at the beginning of the year
6 275 219
5 541 347
Repayment of the borrowings from related companies
(651 162)
-
Total changes from financing cash flows
(651 162)
-
Interest expense
830 413
733 872
Interest paid
(331 130)
-
Total liability-related other changes
499 283
733 872
Balance at the end of the year
6 123 340
6 275 219
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
47
32. Financial instruments
Current and non-current loans and borrowings, trade receivables, cash and finance lease are the Group’s key financial instruments.
The financial instruments are held to finance the operating activities of the Group. The Group handles many other financial instruments,
e.g., trade and other receivables, trade and other payables that arise. None of the Group’s financial assets or financial liabilities are
measured at fair value. Fair value is determined at initial recognition and, for disclosure purposes, at each reporting date.
Categories of financial assets and liabilities
As at 31.12.2021
As at 31.12.2020
Financial assets
Carrying
amount
Fair value
Carrying
amount
Fair value
Loans and receivables held at amortised cost
- Trade receivables
5 928 929
5 928 929
7 527 683
7 527 683
- Other receivables
232 613
232 613
268 777
268 777
- Cash and cash equivalents
920 267
920 267
3 720 140
3 720 140
TOTAL financial assets:
7 081 809
7 081 809
11 516 600
11 516 600
As at 31.12.2021
As at 31.12.2020
Financial liabilities
Carrying amount
Fair value
Carrying
amount
Fair value
Financial liabilities held at amortized cost
- Issued bonds
4 838 565
4 875 661
7 446 468
7 455 800
- Loans from related companies
6 123 340
6 123 340
6 275 219
6 275 219
- Lease liabilities
11 945 789
11 945 789
17 370 377
17 370 377
- Other borrowings
3 270 730
3 270 730
6 436 419
6 436 419
- Trade payables
3 945 995
3 945 995
3 301 952
3 301 952
- Other payables
1 734 458
1 734 458
1 631 986
1 631 986
TOTAL financial liabilities:
31 858 877
31 895 973
42 462 421
42 471 753
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
48
33. Financial risk management
When measuring the fair value of an asset or a liability, the Group uses observable market data as far as possible. Fair values are
categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.
— Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
— Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as
prices) or indirectly (i.e., derived from prices).
— Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value
measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the
entire measurement.
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.
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 Group.
The Group’s Parent 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 determing 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.
The key risks associated with the Group’s financial instruments are credit risk, liquidity risk, interest rate risk and currency risk. The
management develops risk management policy in respect of each of the risks.
Credit risk
Credit risk is the risk that the Group incurred a financial loss if counterparty will fail to fulfil their obligations to the Group. The Group
has credit risk exposure related to trade receivables, cash and cash equivalents. The Group controls its credit risk by closely monitoring
the customer payment history and setting separate terms and conditions to individual customers. In addition, the Group closely
monitors receivables balances to minimize the possibility of bad debts.
In terms of receivables as at 31 December 2021 and 2020 the Group did not have a significant credit risk concentration in respect of
a single transaction partner or a group of partners of similar transactions.
The Group manages credit risk by independently assessing counterparty credit history and defining acceptable credit limit. The Group
regularly monitors the overdue trade receivables. Trade receivables have a carrying amount which is reduced by loss allowances for
bad and doubtful trade receivables (see Note 17).
The maximum credit risk exposure at 31 December 2021 was EUR 7 081 809 (31.12.2020: EUR 11 516 600).
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
49
33. Financial risk management (cont.)
At 31 December 2021 and 31 December 2020, the exposure to credit risk for trade receivables by geographic region was as follows:
Carrying amount
EUR
2021
2020
Baltics
4 845 944
6 298 480
Nordics
1 054 320
1 217 362
Other
28 665
11 841
5 928 929
7 527 683
Weighted-
average
loss rate
Gross
carrying amount
Loss
allowance
Creditimpaired
EUR
Current (not past due)
0,4%
4 569 765
(16 053)
No
1–30 days past due
3,5%
1 079 728
(37 871)
No
31–60 days past due
12,3%
273 051
(33 468)
No
61–90 days past due
49,3%
110 940
(54 638)
No
More than 90 days past due
98,3%
2 154 900
(2 117 425)
Yes
Total at 31 December 2021
8 188 384
(2 259 455)
-
Weighted-
average
loss rate
Gross
carrying amount
Loss
allowance
Creditimpaired
EUR
Current (not past due)
0,6%
6 176 299
(37 122)
No
1–30 days past due
3,0%
1 023 109
(30 461)
No
31–60 days past due
16,3%
274 043
(44 576)
No
61–90 days past due
61,9%
125 439
(77 605)
No
More than 90 days past due
94,7%
2 235 981
(2 117 424)
Yes
Total at 31 December 2020
9 834 871
(2 307 188)
-
Sensitivity analysis
A reasonably possible change in the weighted average loss rates at 31 December would have affected the measurement of loss allowance
of trade receivables and affected profit or loss by the amounts shown below. This analysis assumes that all other variables remain constant,
and that loss rate is floored at 0% and capped at 100% of the gross carrying amount.
31 December 2021
31 December 2020
Effect in euro
Increase
Decrease
Increase
Decrease
Change in loss rate of 3
percentage points
246 856
(138 452)
295 046
(146 647)
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
50
33. Financial risk management (cont.)
Liquidity risk
Liquidity risk is the risk that the Group 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 Group'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 Group
manages its liquidity risk by maintaining adequate cash and cash equivalents, planning payments of trade payables as well as
developing and analysing future cash flows. The budgeting system used by the Group is helpful in the management and control of
liquidity risk management.
The Group's management considers that the Group will have sufficient cash resources and its liquidity will not be compromised. As at
31 December 2021, the Group's liquidity ratio was 0,35. As at 31 December 2020, the Group's liquidity ratio was 0,64. Please refer to
Note 35 for going concern considerations.
At 31 December 2021 and 2020 the maturity of the financial liabilities of the Group, based on undiscounted payments provided for in
the agreements can be disclosed as follows:
31.12.2021.
Contractual cash flows
Expected
interest
payments
Carrying
amount
< 3 months
3-6 months
6-12 months
1-5 years
Total
Total
Total
Issued bonds
(97 410)
(97 410)
(194 820)
(5 260 140)
(5 649 780)
(811 215)
4 838 565
Loans from
related
companies
-
-
-
(7 951 457)
(7 951 457)
(1 828 117)
6 123 340
Lease liabilities
(761 864)
(1 695 878)
(3 178 601)
(7 108 215)
(12 744 558)
(798 769)
11 945 789
Other
borrowings
(617 106)
(451 123)
(755 728)
(1 629 993)
(3 453 950)
(183 220)
3 270 730
Trade payables
(3 945 995)
-
-
-
(3 95 995)
-
3 945 995
Tax and other
payables
(1 621 978)
(112 480)
-
-
(1 734 458)
-
1 734 458
(7 144 353)
(2 356 891)
(4 129 149)
(21 849 805)
(35 480 198)
(3 621 321)
31 858 877
31.12.2020.
Contractual cash flows
Expected
interest
payments
Carrying
amount
< 3 months
3-6 months
6-12 months
1-5 years
Total
Total
Total
Issued bonds
(1 149 926)
(129 926)
(3 118 926)
(3 515 226)
(7 914 004)
(523 443)
7 390 561
Loans from
related
companies
-
-
-
(7 235 853)
(7 235 853)
(960 634)
6 275 219
Lease liabilities
(996 833)
(2 091 169)
(3 872 305)
(11 896 790)
(18 857 097)
(1 486 720)
17 370 377
Other
borrowings
(1 131 635)
(603 152)
(1 721 220)
(3 443 329)
(6 899 336)
(462 917)
6 436 419
Trade payables
(3 301 952)
-
-
-
(3 301 952)
-
3 301 952
Tax and other
payables
(1 504 817)
(127 169)
-
-
(1 631 986)
-
1 631 986
(8 085 163)
(2 951 416)
(8 712 451)
(26 091 198)
(45 840 228)
(3 433 714)
42 406 514
Please also see Note 35 describing liquidity management and going concern considerations.
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
51
33. Financial risk management (cont)
Interest rate risk
Interest rate risk is the risk of financial losses incurred by the Group due to adverse fluctuations in interest rates. The Group is exposed
to interest rate risk mainly related to its current and non-current lease liabilities, while the interest rates on the Group’s other liabilities
are fixed and, thus, not subject to interest rate risk. This exposes the Group to the risk that interest expenses will increase in a situation
when interest rates go up. The average interest rate on the Group’s liabilities is disclosed in Notes 24, 25, 26 and 31 c. The Group
doesn’t use derivative financial instruments to manage its exposure to interest rate risk.
As the variable part of the interest rate applied to lease liabilities is floored at 0%, the sensitivity of the Group’s comprehensive income
and equity (as a result of the lease liabilities (see Note 25) with a variable interest rate element of 3M EURIBOR) to a reasonably possible
interest rate change of +/- 0.5%, other variables remaining constant, is considered immaterial to the Group’s financial performance.
Foreign currency risk
Foreign currency risk is the risk of financial losses incurred by the Group 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.
The Group does not have any material balances of financial assets and liabilities denominated in currencies other than the Euro. All of
the Group’s borrowings and lease liabilities are denominated in Euro, and, thus, not subject to foreign currency risk.
The Group is exposed to foreign currency risk mainly arising from transactions denominated in the Russian rubles (RUB) due to entity
operating in Russia Kaliningrad region and Swedish krona (SEK) due to entity operating in Sweden.
The summary quantitative data about the Group’s exposure to currency risk as reported to the management of the Group is as follows:
31 December 2021
31 December 2020
SEK
RUB
SEK
RUB
Trade receivables
379 185
87 263
513 673
56 222
Trade payables
(127 388)
(13 828)
(136 264)
(4 853)
Net statement of financial position exposure
251 797
73 435
377 409
51 369
Next six months’ forecast sales
1 304 793
286 773
1 393 118
252 290
Next six months’ forecast purchases
(1 189 041)
(158 320)
(1 298 090)
(170 925)
Net forecast transaction exposure
115 752
128 453
95 028
81 365
Net exposure
367 549
201 888
472 437
132 734
The following exchange rates have been applied.
Average rate
Year-end spot rate
EUR
2021
2020
2021
2020
SEK 1
0.0986
0.0954
0.0976
0.0997
RUB 1
0.0115
0.0122
0.0117
0.0109
Sensitivity analysis
A reasonably possible strengthening (weakening) of the euro, Swedish krona, Russian ruble against all other currencies at 31 December
would have affected the measurement of financial instruments denominated in a foreign currency and affected equity and profit or loss by
the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any
impact of forecast sales and purchases.
Profit or loss
Equity, net of tax
Effect in euro
Strengthening
Weakening
Strengthening
Weakening
SEK (10% movement)
41 344
(41 344)
(22 937)
22 937
RUB (30% movement)
60 547
(60 547)
103 942
(103 942)
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
52
34. Capital management
The purpose of the management of Group capital is to provide a high credit rating and balanced structure of capital to ensure successful
activity of the Group and to maximize Group’s share value. The Group is not subject to any externally imposed capital requirements.
The Group is controlling structure of the capital and adjusts that structure according to economic conditions. For control and adjustment
of structure of the capital, the Group can change conditions of payment of dividends to shareholders, to return them part of shares or
to release new shares. In 2021 and 2020 there were no changes introduced to purposes, policy or processes related to management
of the capital.
31.12.2021
EUR
31.12.2020
EUR
Interest bearing loans and borrowings
26 178 424
37 472 576
Trade and other payables
5 680 453
4 933 938
Less cash and cash equivalents
(920 267)
(3 720 140)
Net debt
30 938 610
38 686 374
Equity
12 113 849
15 539 732
Net debt to equity ratio:
2.55
2.49
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
53
35. Going concern of the Group
The Group’s financial performance in the reporting year was a loss of EUR 3 402 850 (2020: loss of EUR 11 333 479), which is a result
of a slower than planned receovery in revenues due to lasting Covid-19 impact. At the end of the year, the Group’s current liabilities
exceeded its current assets by EUR 16 329 132 (31.12.2020: current liabilities exceeded current assets by EUR 7 397 447), 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 24. Both of these conditions may cast significant doubts on the Group’s ability to continue as a going concern.
The Group’s 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 work on operational efficiency by developing online sales and paper-less rental process. Despite overall
wage increase in all countries, personnel 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 lines of business – Heavy team. In spring 2022, management
plans to start outsourcing 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 12.
• 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 the budget for 2022 it is planned to further 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
servicing assuring Group’s and the Company’s liquidity.
• 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 current 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 subsidiaries’ 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 Cargopoint 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 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 revenue 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 Storent Group and the actions taken by management, Storent Group entities expect to continue operations
as a going concern. As such, these consolidated financial statements have been prepared on the basis that the Group 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 Group 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 Group 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 Group operates, could adversely affect the Group, its financial position and performance in the medium and
long term, including its subsidiaries’ recoverable amount (please see Note 11, which describes the significant unobservable inputs used
in estimating recoverable amount) and the Group’s ability to meet the terms and conditions of the borrowing agreements and payment
STORENT INVESTMENTS AS Сonsolidated Annual Report
Registered address: 15A Matrozu Street, Riga, LV-1048
Registration number: 40103834303
54
terms, which presents a material uncertainty in relation to the Group’s 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.
36. 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.
Please also refer to events and conditions described in Note 35.
During the period between the last day of the financial year and the date of signing of these consolidated financial statements there have
been no other events that would have required adjustments or disclosure in the consolidated financial statements.
On behalf of the Group these consolidated financial statements were signed on 28 April 2022 by:
Andris Bisnieks
Andris Pavlovs
Member of the Board
Member of the Board
Baiba Onkele
Chief financial officer
* * *
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 Consolidated Financial Statements
Our Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated financial statements of Storent
Investments AS (“the Company”) and its subsidiaries (“the Group”) set out on pages 7 to
54 of the accompanying consolidated Annual Report, which comprise:
the consolidated statement of financial position as at 31 December 2021,
the consolidated statement of comprehensive income for the year then ended,
the consolidated statement of changes in equity for the year then ended,
the consolidated statement of cash flows for the year then ended, and
the notes to the consolidated financial statements, which include a summary of
significant accounting policies and other explanatory notes.
In our opinion, the accompanying consolidated financial statements give a true and fair view
of the consolidated financial position of Storent Investments AS and its subsidiaries as at
31 December 2021, and of its consolidated financial performance and its consolidated 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 Consolidated Financial Statements section of our report.
We are independent of the Group 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 consolidated 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 35 of the consolidated financial statements, which indicates that
the Group incurred a net loss of EUR 3 402 850 during the year ended 31 December 2021
(2020: loss of EUR 11 333 479) and, as of that date, the Group’s current liabilities exceeded
its current assets by EUR 16 329 132 (31.12.2020: the Group’s current liabilities exceeded
its current assets by EUR 7 397 447). As stated in Note 35, 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 are primarily
dependent on the ability of the Group 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 Storent Group operates, could adversely affect the Storent Group. These events
and conditions, along with other matters as set forth in Note 35, indicate that a material
uncertainty exists that may cast significant doubt on the Group’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 consolidated financial statements of the current period. These
matters were addressed in the context of our audit of the consolidated 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 goodwill and other non-current non-financial assets
The Group’s goodwill and other non-current non-financial assets as at 31 December 2021
amounted to EUR 36 737 059 (31 December 2020: EUR 46 818 983). Impairment charge
of goodwill and other non-current non-financial assets for the year ended 31 December
2021 amounted to EUR 0 (year ended 31 December 2020: EUR 4 029 645).
Reference to the consolidated financial statements: Note 2 (e) “Use of judgements,
estimates and assumptions”, Note 2 (m) “Intangible assets”, Note 2 (n) “Property, plant
and equipment” and Note 2 (o) “Impairment of tangible and intangible assets other than
goodwill” (accounting policy); Note 12 “Intangible assets”, Note 13 “Property, plant and
equipment” and Note 14 “Rights of use assets” (Notes to the consolidated 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 12, Note 13 and Note 14,
the Group estimated the recoverable
amount of its cash generating units, to
which goodwill and other non-current non-
financial assets are allocated, and
recognized an impairment loss at the above
date.
The assessment of the recoverable amount
and impairment of the Group’s goodwill and
other non-current non-financial assets
Our audit procedures included, among
others:
evaluating against the requirements of
the relevant financial reporting
standards the Group's accounting policy
for identification of impairment, and
measurement and recognition of any
impairment losses in respect of goodwill
and other non-current non-financial
assets;
balances incorporated significant
management judgement in respect of
factors 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 subjectivity in the carrying
value of these assets recorded in the
consolidated financial statement
Due to the above factors, we considered
impairment of goodwill and other non-
current non-financial assets to be a key audit
matter.
understanding the Group’s business
planning process, including the
preparation and validation of financial
and cash flow forecasts and testing the
design and implementation of selected
key internal controls over the Group’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 capital
expenditure and timing of cash
disbursements, discount rate and
terminal growth rate based on our
understanding of the Group’s activities
and by reference to publicly available
industry/market reports;
considered the reasonableness of the
Group’s 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 Group’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 Group’s management is responsible for the other information. The other information
comprises:
General information, as set out on page 3 of the accompanying consolidated Annual
Report,
the Management Report, as set out on pages 4 to 5 of the accompanying consolidated
Annual Report,
the Statement on Management Responsibility, as set out on page 6 of the accompanying
consolidated Annual Report,
the Statement of Corporate Governance for 2021, as set out in 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 consolidated financial statements does not cover the other information
included in the consolidated 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 consolidated financial statements, our responsibility is to
read the other information and, in doing so, consider whether the other information is
materially inconsistent with the consolidated financial statements or our knowledge obtained
in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed and in light of the knowledge and understanding
of the Group 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 and Consolidated 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
consolidated financial statements are prepared is consistent with the consolidated
financial statements; and
the Management Report has been prepared in accordance with the requirements of
the ‘Law on the Annual Reports and Consolidated 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, in all material respects, 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 Consolidated
Financial Statements
Management is responsible for the preparation of the consolidated 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
consolidated financial statements that are free from material misstatement, whether due to
fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing
the Group’s ability to continue as a going concern, disclosing, as applicable, matters related
to going concern and using the going concern basis of accounting unless management either
intends to liquidate the Group or to cease operations, or has no realistic alternative but to do
so.
Those charged with governance are responsible for overseeing the Group’s financial
reporting process.
Auditors’ Responsibility for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated 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 consolidated financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence that is sufficient and appropriate to
provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Group’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 Group’s
ability to continue as a going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditors’ report to the related disclosures in the
consolidated financial statements or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditors’ report. However, future events or conditions may cause the Group to cease to
continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial
statements, including the disclosures, and whether the consolidated financial
statements represent the underlying transactions and events in a manner that achieves
a fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the
entities or business activities within the Group to express an opinion on the consolidated
financial statements. We are responsible for the direction, supervision and performance
of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied
with relevant ethical requirements regarding independence, and 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 consolidated 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
consolidated financial statements of Storent Investments AS and its subsidiaries 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 Group;
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 Group the prohibited non-audit services (NASs)
referred to of EU Regulation (EU) No 537/2014. We also remained independent of
the audited group in conducting the audit.
For the period to which our statutory audit relates, we have not provided any services to the
Group in addition to the audit, which have not been disclosed in the Management Report or
in the consolidated financial statements of the Group.
Report on the Auditors’ Examination of the European Single Electronic Format (ESEF) Report
In addition to our audit of the accompanying consolidated financial statements, as included
in the consolidated Annual Report, we have also been engaged by the management of the
Group to express an opinion on compliance of the consolidated financial statements prepared
in a format that enables uniform electronic reporting (“the ESEF Report”)
with the
requirements of the Commission Delegated Regulation (EU) 2019/815 of 17 December 2018
supplementing Directive 2004/109/EC of the European Parliament and of the Council with
regard to regulatory technical standards on the specification of a single electronic reporting
format (the “RTS on ESEF”).
Responsibilities of Management and Those Charged with Governance for the ESEF Report
Management is responsible for the preparation of the consolidated financial statements in a
format that enables uniform electronic reporting that complies with the RTS on ESEF. This
responsibility includes:
—
the preparation of the consolidated financial statements in the applicable xHTML format;
—
the selection and application of appropriate iXBRL tags, using judgment where
necessary;
—
ensuring consistency between digitised information and the consolidated financial
statements presented in human-readable format; and
—
the design, implementation and maintenance of internal control relevant to the
application of the RTS on ESEF.
Those charged with governance are responsible for overseeing the financial reporting
process.
Auditors’ Responsibility for the Examination of the ESEF Report
Our responsibility is to express an opinion on whether the ESEF report complies, in all
material respects, with the RTS on ESEF, based on the evidence we have obtained. We
conducted our reasonable assurance engagement in accordance with International Standard
on Assurance Engagements 3000 (Revised), Assurance Engagements Other than Audits or
Reviews of Historical Financial Information (ISAE 3000) issued by the International Auditing
and Assurance Standards Board.
A reasonable assurance engagement in accordance with ISAE 3000 involves performing
procedures to obtain evidence about compliance with the RTS on ESEF. The nature, timing
and extent of procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material departures from the requirements of set out in the RTS
on ESEF, whether due to fraud or error. Our procedures included, among other things:
—
obtaining an understanding of the tagging process;
—
tracing the tagged data to the consolidated financial statements of the Group presented
in human-readable format;
—
evaluating the completeness of the Group’s tagging of the consolidated financial
statements;
—
evaluating the appropriateness of the Group’s use of iXBRL elements selected from the
ESEF taxonomy and creation of extension elements where no suitable element in the
ESEF taxonomy has been identified;
—
evaluating the use of anchoring in relation to the extension elements; and
—
evaluating the appropriateness of the format of the consolidated financial statements.
We believe that the evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Opinion
In our opinion, the ESEF Report of the Group as at and for the year ended 31 December 2021
has been prepared, in all material respects, in accordance with the requirements of the RTS
on ESEF.
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.