ANNUAL REPORT
INVESTMENT FRIENDS SE
AS AT JUNE 30, 2024
FOR THE PERIOD SINCE 01/07/2023 TILL 30/06/2024
PREPARED IN ACCORDANCE WITH
INTERNATIONAL FINANCIAL REPORTING STANDARDS (EU)
TALLINN 8/11/2024
Investment Friends SE
Estonia, Harju county, Tallinn, Tornimae Str 5, 10145
Registry code: 14617862
Email: info@ifsa.pl
INVESTMENT FRIENDS SE
GENERAL INFORMATION
Company's name: INVESTMENT FRIENDS SE
Registry code: 14617862
Address: Estonia, Harju County, Tallinn, Tornimae Str. 5, 10145
E-mail: info@ifsa.pl
Website: www.ifsa.pl
Reporting period: 01/07/2023 - 30/06/2024
Auditor: KPMG Baltics OÜ
Members of the Supervisory Board
Wojciech Hetkowski
Jacek Koralewski
Małgorzata Patrowicz
Anna Kajkowska
Members of the Management Board
Agnieszka Gujgo
2
Table of contents:
I. GENERAL INFORMATION ABOUT THE ISSUER………………………………..2
II. SELECTED FINANCIAL DATA............................................................................4
III. MANAGEMENT LETTER....................................................................................6
IV. MANAGEMENT REPORT....................................................................................7
V. CORPORATE GOVERNANCE REPORT ………….……..…………………….…..13
VI. REMUNERATION REPORT……………………………….……………………..…….21
VII. FINANCIALSTATEMENTS...............................................................................22
VIII. STATEMENT OF COMPLIANCE…………………………..………………..………52
IX. MANAGEMENT BOARD'S PROPOSAL ON PROFIT DISTRIBUTION...53
X. NDEPENDENT AUDITOR’S REPORT ………………………………….......…....54
3
II. SELECTED FINANCIAL DATA
Selected financial data
Year
01/07/2023 -
30/06/2024
In EUR thous.
Year
01/07/2022 -
30/06/2023
In EUR thous.
Net interest income
35
87
Profit (loss) from operational
activities
4
71
Profit (loss) before tax
2
77
Net profit (loss)
2
77
Net cash flow from operating
activities
-14
21
Current assets
1 476
1 469
Short-term liabilities
54
51
Equity
1 422
1 418
Share capital
6 885
405
Weighted average number of
ordinary shares
32 466 575
4 122 740
Profit (loss) from continuing
operations per share (EÜRO)
0,00
0,02
Profit (loss) per share (EÜRO)
0,00
0,02
Book value per share (EÜRO)
0,02
0,35
4
II. a Effective interest income
Effective interest income
Year
01/07/2023-
30/06/2024
in thous. EUR
Year
01/07/2022-
30/06/2023
in thous. EUR
Interest revenue
391
390
Other interest income
0
0
Interest expenses
0
0
Interest income
391
390
5
III. MANAGEMENT LETTER
Dear Sirs,
we provide the annual report of Investment Friends SE (hereinafter ‘the Company’)
presenting the financial results and key facts of the Company's operations for the
period from July 1, 2023 to June 30, 2024.
The Company has consistently implemented activities aimed at achieving the goals
set for the Management Board, which at the same time were also the expectations
the Shareholders participating in the General Meetings. The steps taken in previous
years and their effects allow us to think, that the decision of changing the strategy
of the Company’s development, taken a few years ago, brought measurable effects,
which resulted in positive financial result and financial activity in the scope of
granting loans ensured stability for the Company.
Agnieszka Gujgo
Member of the Management Board
6
IV. MANAGEMENT REPORT
The main fields of activity
In the reporting period, the main activity of the Company was financial activity,
including granting loans. The Company, implementing its business profile in the
field of granting loans, has concluded agreements with Polish and Estonian
entities. The Company intends to continue its operations in the area of lending
activities.
In the reporting period, the Company obtained revenues mainly from its financial
service activity, i.e., interest on loans granted.
General (macroeconomic) development
The Company undertakes financial activities, especially related to granting loans
to business entities, mostly to related parties.
In the opinion of the Management Board, activity in this area is developing
especially in the Polish market. Entrepreneurs who have not obtained financing
from a bank, usually reach out to companies which provide lending services and
declare high flexibility depending on the needs of a particular customer and their
collateral capabilities.
Financial markets are characterized by high volatility, which increases the risk of
running a business such as lending services, but on the other hand it gives an
opportunity to earn above-average profits in a relatively short time.
The key factors influencing the volatility of stock prices on financial markets
include:
• economic situation – in the country and in the world,
• monetary policy of central banks,
• internal situation of the Company or on a given market,
• situation on foreign markets.
The Company notices development potential in the field of providing financial
services for this kind of entities and, accordingly, intends to continue its business
activity in this segment.
Financial instruments, financial risk management objectives and policies
The main risks arising from financial instruments of the Company are: interest
rate risk, liquidity risk, credit risk, risk related to financial collaterals. The
Management Board is responsible for establishing of risk management in the
Company as well as for supervision of their compliance. The purpose of the
7
Company's risk management policies is to identify and analyse the risks to which
the Company is exposed, establishing appropriate restrictions and controls, as
well as by monitoring adjustment of the risks and limits accordingly. The
Management Board identifies potential risks by analysing each transaction of the
Company. Due to the simple structure of the Company, there are no problems with
communicating information in a timely manner. The Management Board is
responsible for designing, introducing, and ensuring adequate and effective
actions aimed at achieving the goal. Also, appropriate experience and education
of the Management Board allows to minimize the influence of risks on the
operating activity. The Company's Management Board monitors risks on an
ongoing basis and manages it in a logical and systematic way, in accordance with
established methods.
Description of significant external and internal factors
Considering the specifics of the activity, i.e., financial service activities in the field
of granting loans, the results are currently and will be significantly influenced by:
- the general market prosperity on lending market and the level of interest rates,
- the proper realization by the borrowers of their obligations resulting from
concluded loan agreements, as well as course of execution process and
vindication of loans terminated, if such agreements occur,
- borrowers' field of activity and related risks,
- efficiency of administrative and legal procedures,
- opportunity to gain new borrowers,
- the economic situation and investing circumstances in Poland, Estonia, and the
region,
- access to external financing sources,
- cooperation with other financial entities.
- changes in market prices, such as foreign exchange rates, interest rates
(including currency risk).
The risk related to the possibility of fluctuations in the exchange rate of one
currency against another may lead to both a deterioration of the financial
situation of the entity and its improvement. The Company's revenues and cash
flows from operating activities are dependent on changes in market interest
rates, because one cash loan agreement is concluded with a variable interest rate.
Significant risk factors are described on pages 39-43 of the annual report.
Structure of the share capital
As at the balance-sheet date of 30/06/2024 and as at the date of publication of
the report the Company holds 68 850 000 issued shares.
During the financial year, the Company's share capital was increased by EÜR
6 480 000 from EÜR 405 000 to EÜR 6 885 000.
The changes were a result of a bonus issue of Shares.
8
Share capital of the Company
- As of the balance sheet date of 30/06/2023, the Company's share capital
amounted to EÜR 405 000,
- As of the balance sheet date of 30/06/2024 the Company's share capital
amounted to EÜR 6 885 000.
As of the balance sheet date 30/06/2024, the Company's equity is less than 50%
of its share capital and does not meet the requirements of § 301 of the Estonian
Commercial Code. The Management Board of Investment Friends will propose a
reduction of the share capital to the General Meeting of Shareholders.
Information about the Company and shareholders
As at the balance sheet date 30/06/2024 Investment Friends SE has no
subsidiaries, and it does not create its own consolidation group.
At the end of the previous financial year, i.e., as of 30/06/2023 the Company also
did not have any subsidiaries and did not form its own consolidated group.
According to the best knowledge of the Management Board the direct
shareholder is Patro Invest OÜ headquartered in Tallinn, Estonia that owns 63,85
% contribution in the share capital and 63,85 % of votes at the General Meeting
of Shareholders of the Company.
As at 30/06/2024 and 30/06/2023 the Company did not own any capital
investments in the form of shares and stock of other entities.
Qualifying holding pursuant to the provisions of § 9 of the Securities Market
Act.
The table below presents shareholding structure as at 30/06/2024
It presents shareholders holding 5% or more of voting rights at the
General Meeting of the Company.
Damian Patrowicz holds 100% of Patro Invest OÜ
9
No.
Shareholder
Number of
shares
% of shares
Number of
votes
% of votes
1
PATRO
INVEST OÜ
43 961 150
63,85
43 961 150
63,85
total
68 850 000
100
68 850 000
100
The table below presents shareholding structure as at 30/06/2023. It
presents shareholders holding 5% or more of voting rights at the General
Meeting of the Company.
Damian Patrowicz holds 100% of Patro Invest OÜ
Board members
Members of the Board of Directors as of the balance sheet date and as of the date
of publication of the interim report do not directly or indirectly hold any shares
in the Company.
Members of the Supervisory Board
As at the balance sheet date and as at the date of publication of the annual report,
members of the Supervisory Board do not hold directly or indirectly shares of the
Company.
Provisions and rules for the election, appointment, resignation, and dismissal
of the members of the Management Board of the Company established by
legislation.
There are general rules for the election, appointment, resignation, and dismissal
of the members of the Management board of a Company established by the
Estonian Commercial Code, in particular § 308, § 309 and others. Section V of the
Company's Articles of Association contains principles similar to the general rules
of the Commercial Code. Information about the description of management and
supervisory bodies and their composition have been described in the corporate
governance report
Competences and election of the Supervisory Board
In accordance with the provisions of point 5.3. of the Company's Articles of
Association, members of the Company’s Management Board are appointed and
dismissed by the Supervisory Board, which also decides on the remuneration of
members of the Management Board. Members of the Supervisory Board are
elected by the Company's General Meeting of shareholders.
10
No.
Shareholder
Number of
shares
% of shares
Number of
votes
% of votes
1
PATRO
INVEST OÜ
2 540 000
62,716
2 540 000
62,716
total
4 050 000
100
4 050 000
100
Resolutions and rules for amendment of the articles of association of the
company
In accordance with point 4.9.1 of the Company's Articles of Association, any
amendment of the Company’s Articles of Association is included in the General
Meeting of Shareholders’ competencies.
In accordance with point 4.5 of the Articles of Association, the General Meeting is
able to adopt valid resolutions, if more than half of all votes are represented at
the General Meeting, if the applicable legal acts do not provide for a higher
majority of votes.
If an enough number of shareholders does not participate in General Meeting, in
order to ensure a majority of votes, in accordance with point 4.5, the Management
Board of the Company within three weeks, but not earlier than after seven days,
convenes a new General Meeting with the same agenda. In this way, the General
Meeting is competent to adopt resolutions regardless of the number of votes
represented. Resolutions of the eneral Meeting are adopted, when more than half
of all votes represented at the General Meeting support the resolution, and there
is no other requirement arising from applicable legal acts. .
List of the most important events in the reporting period
- On January 11, 2024, the Company published on its website www.ifsa.pl and
in current report ESPI No. 2/2024, a document prepared in connection with the
intention to apply for the admission and introduction of 64.800.000 (sixty-four
million, eight hundred thousand) shares of Investment Friends SE without a
nominal value for trading on the regulated market operated by the Warsaw Stock
Exchange in Warsaw S.A.
The above-mentioned document was prepared and published as a result of the
adoption of Resolution No. 3 by the General Meeting of Shareholders regarding
the issue of Shares on January 11, 2024.
- on January 30, 2024, the Company informed Shareholders by publishing an
appropriate announcement that the Commercial register (Ariregister) of Estonia
has registered the increase in the share capital of Investment Friends SE resulting
from the resolutions adopted at the Ordinary General Meeting of Shareholders on
January 11, 2024.
From the date of registration of the articles of association, the share capital of
Investment Friends SE amounts to EÜR 6 885 000 and it is divided into 68 850
000 shares without the nominal.
Information on average employment
The Company did not have any employees in the financial year lasting since July
1, 2023 to June 30, 2024 and in the previous financial year since July 1, 2022 to
June 30, 2023.
11
Information regarding the selected auditor and the contract signed with
them.
The Company has signed an agreement for the audit of the annual financial
statements for the period covered by this report with the audit Company KPMG
Baltics OÜ registration number 10096082.
Remuneration for the Auditor will be paid according to the Agreement concluded
between the Company and KPMG Baltics OÜ, which was established on market
conditions.
Selected ratios of Investment Friends SE
RATIO
30/06/2024
30/06/2023
ROA
0,001
0,052
ROE
0,001
0,054
ROA – Return on Assets:, the ratio of a Company's net profit to the value of its assets (net
profit / assets)
ROE – Return on Equity: the ratio of a Company's net profit to the value of its equity (net
profit / equity)
12
V. CORPORATE GOVERNANCE REPORT
The Company's statement regarding the compliance with the Best Practice for
GPW Listed Companies 2021 and Corporate Governance Principles is available
on the Company's website www.ifsa.pl, in the "Regulations" section, the "Good
practices" on corporate governance.
During the reporting period, Investment Friends SE was subject to the corporate
governance standards contained in the document “Best Practice for GPW Listed
Companies 2021”, which were adopted by resolution of the Stock Exchange
Supervisory Board no. 13/1834/2021 of March 29, 2021 for companies listed on
the WSE Main Market - "Best Practices of WSE Listed Companies 2021" (Best
Practices 2021, DPSN2021).
In fulfilling the disclosure requirements regarding the application of corporate
governance standards, Investment Friends SE is guided by the principles of an
effective and transparent information policy and communication with the market
and investors. The Company was informed on July 30,2022 by the stock exchange
announcement No. 1/2021. of the current corporate governance principles "WSE
Listed Companies Good Practices 2021".
The scope of the Company’s deviation from clauses of the collection of
adopted corporate governance principles,
The Company undertook to apply all corporate governance principles contained
in ‘Best Practice for GPW Listed Companies 2021’, except for the following:
DISCLOSÜRE POLICY, INVESTOR COMMÜNICATIONS
1.2. Companies make available their financial results compiled in periodic reports
as soon as possible after the end of each reporting period; should that not be
feasible for substantial reasons; companies publish at least preliminary financial
estimates as soon as possible.
Comments of the Company: The Company publishes periodic reports within
deadlines arising from applicable Estonian law.
1.3. Companies integrate ESG (environmental, social, and governance) factors in
their business strategy, including in particular:
1.3.1. environmental factors, including measures and risks relating to climate
change and sustainable development.
Comments of the Company: The main activity of the Company is granting loans.
The company is unable to determine the ESG impact of the loans granted.
1.3.2. social and employee factors, including among other actions taken and
planned to ensure equal treatment of women and men, decent working
13
conditions, respect for employees’ rights, dialogue with local communities,
customer relations.
Comments of the Company: The Company explains that the principles of
sustainable development and respect for social and employee rights and interests
are applied in the strategy of its activity. In this regard, the Company complies
with all applicable laws and guidelines. As at the time of publication of this report
no written rules have been drawn up because there are no employees.
1.4. To ensure quality communications with stakeholders, as a part of the
business strategy, companies publish on their website information concerning
the framework of the strategy, measurable goals, including in particular long-
term goals, planned activities and their status,defined by measures, both financial
and non-financial. ESG information concerning the strategy should among
others:
Comments of the Company: The Company publishes a number of financial and
non-financial measures, as well as information on the adopted development
strategy both on the Company’s website and publishing current and periodic
reports. The Company indicated that it does not publish information on its
development plans and the progress of their implementation separately. The
Company also does not publish forecasts.
1.4.1 explain how the decision-making processes of the Company integrate
climate change, including the resulting risks.
Comments of the Company: Due to the above-mentioned in point 1.3.1. marginal
impact of the Company's activity on the natural environment, the Company does
not publish additional explanations in this scope.
1.4.2. present the equal pay index for employees, defined as the percentage
difference between the average monthly pay (including bonuses, awards and
other benefits) of women and men in the last year, and present information about
actions taken to eliminate any pay gaps, including a presentation of related risks
and the time horizon of the equality target.
Comments of the Company: Due to the fact that as at the date of submitting this
statement, the Company’s application of the rules of respect for respecting social
and employee matters has not been formalized, the Company does not publish
additional information in the scope covered by this point.
1.5. Companies disclose at least on an annual basis the amounts expensed by the
Company in support of culture, sports, charities, the media, social organisations,
trade unions, etc. If the company pay such expenses in the reporting year, the
disclosure presents a list of such expenses.
Comments of the Company: The Company does not conduct sponsorship
activities.
1.6. Companies participating in the WIG20, mWIG40 or sWIG80 index hold on a
quarterly basis and other companies hold at least on an annual basis a meeting
with investors to which they invite in particular shareholders, analysts, industry
experts and the media. At such meetings, the Management Board of the Company
14
presents and comments on the strategy and its implementation, the financial
results of the Company and its group, and the key events impacting the business
of the Company and its group, their results and outlook. At such meetings, the
Management Board of the Company publicly provides answers and explanations
to questions raised.
Comments of the Company: The Company is not included in the WIG20, mWIG40
or sWIG80 index. The Company gives comprehensive explanations within the
bounds of law to all questions of shareholders and investors. The Company
maintain electronic communication with investors. Separate meeting with
investors, analysts, industry experts and media representatives are not organized
due to the lack of interest in this form of obtaining information about the
Company by investors.
MANAGEMENT BOARD, SÜPERVISORY BOARD
1. Companies should have in place a diversity policy applicable to the
Management Board and the Supervisory Board, approved by the Supervisory
Board and the General Meeting, respectively. The diversity policy defines
diversity goals and criteria, among others including gender, education, expertise,
age, professional experience, and specifies the target dates and the monitoring
systems for such goals. With regard to gender diversity of corporate bodies, the
participation of the minority group in each body should be at least 30%
Comments of the Company: Crucial personnel decisions in relations to the
Company’s governing bodies and its key managers are taken by the General
Meeting and the Supervisory Board.
2.3. 2.3. At least two members of the Supervisory Board meet the criteria of being
independent referred to in the Act of 11 May 2017 on Auditors, Audit Firms and
Public Supervision, and have no actual and material relations with any
shareholder who holds at least 5% of the total vote in the Company.
Comments of the Company: The Decision to elect Members of the Supervisory
Board is within the competence of the General Meeting of Shareholders.
Shareholders acts on the basis of their competences and trust in individual
candidates, appoint the composition of the Supervisory Board. Depending on the
decision of the General Meeting, the Company may or may not fulfil this criterion
periodically, depending on the selected composition of the Supervisory Board.
Currently, the Supervisory Board does not fulfil the independence criteria, as only
one member of the Supervisory Board is independent, and assessment of the risk
resulting from this is within the competence of the General Meeting.
2.11. In addition to its responsibilities laid down in the legislation, the
Supervisory Board prepares and presents an annual report about activities of
Supervisory Board to the General Meeting once per year.
Comments of the Company: In accordance with the applicable provisions of the
Estonian law, the Company does not publish or submit to the General Meeting for
approval a report on activities of the Supervisory Board.
15
INTERNAL SYSTEMS AND FÜNCTIONS
3.9. The Supervisory Board monitors the efficiency of the systems and functions
referred to in principle 3.1 among others on the basis of reports provided
periodically by the persons responsible for the functions and the Company’s
Management Board and makes annual assessment of the efficiency of such
systems and functions according to principle 2.11.3.
In case when the Company has an audit committee, it monitors the effectiveness
of the systems and functions referred to in principle 3.1, however, it does not
exempt the Supervisory Board from preparing an annual assessment of the
effectiveness of these systems and functions.
Comments of the Company: In accordance with the applicable provisions of the
Estonian law, the Company does not publish or submit a report on activities of
the Supervisory Board to the General Meeting for approval.
GENERAL MEETING, SHAREHOLDER RELATIONS
4.1. Companies should enable their shareholders to participate in a General
Meeting by means of electronic communication (e-meeting) if justified by the
expectations of shareholders notified to the Company, provided that the
Company is in a position to provide the technical infrastructure necessary.
Comments of the Company: The Company considers that the costs of enabling
shareholders to participate in the General Meeting by means of electronic
communication (meeting) are too high. Nevertheless, the Management Board
indicates, that the structure of the Company’s shareholding means that the
shareholders are not interested in participating in the Company’s General
Meeting in electronic form.
At the same time, the Company's Articles of Association and the Regulations of
the General Meeting do not prescribe the possibility of participating in the
Meeting by means of electronic communication.
4.3. Companies provide a public real-life broadcast of the General Meeting.
Comments of the Company: The Company recognizes that the costs of
broadcasting the General Meeting are too high. At the same time, the
Management Board indicates that the Company's shareholding structure causes
the lack of interest in the General Meeting. At the same time, the Company's
Articles of Association and the General Meeting Regulations do not prescribe
transmission of the meeting.
4.6. To help shareholders participating in a General Meeting to vote on
resolutions with adequate understanding, draft resolutions of the General
Meeting concerning matters and decisions other than points of order should
contain a justification, unless it follows from documentation tabled to the General
Meeting. If a matter is put on the agenda of the General Meeting at the request of
a shareholder or shareholders, the Management Board requests presentation of
16
the justification of the proposed resolution, unless previously presented by such
shareholder or shareholders.
Comments of the Company: As at the date of publication of this statement, the
Company does not publish any additional justification for the draft resolutions of
the General Meeting. So far, the shareholders of the Company have not expressed
interest in the additional discussion of the matter of the General Meetings.
Shareholders with major holdings of shares
The table below presents shareholders holding 5% or more of voting rights
at the General Meeting as at 30/06/2024, based on the statements received by
the Company under applicable laws.
Damian Patrowicz holds 100% in Patro Invest OU
The table below presents the shareholders holding 5% or more votes at the
General Meeting of Shareholders as at 30/06/2023, based on the declarations
received by the Company pursuant to the rules in force – in accordance with the
data presented in the annual report for the financial year 2022/2023.
Damian Patrowicz holds 100% in Patro Invest OU
17
Lp.
Shareholder
Number of
shares
% of shares
Number of
votes
% of votes
1
PATRO INVEST
OÜ
43 961 150
63,85
43 961 150
63,85
total
68 850 000
100
68 850 000
100
Lp.
Shareholder
Number of
shares
% of
shares
Number of
votes
% of votes
1
PATRO INVEST
OÜ
2 540 000
62,716
2 540 000
62,716
total
4 050 000
100
4 050 000
100
Holders of securities that give specific control rights and a
description of those rights
Investment Friends SE shares do not confer any specific control rights.
Restrictions on voting rights
Such restrictions do not apply to the Company's shares.
Restrictions on transferability of
ownership of the Company's shares
In accordance with the Articles of Association of Investment Friends SE there are
no restrictions on transferability of ownership of the Company's shares.
Rules governing the appointment and removal of Management
members and their rights
The listed Company Investment Friends SE is managed by the Management
Board, its Members act in the interest of the Company and are responsible for its
activities. The activities of the Management Board includes, in particular,
managing the company, commitment to setting its strategic goals and their
implementation, as well as ensuring the company efficiency and security.
The company is supervised by an effective and competent Supervisory
Board. Members of the Supervisory Board act in the interest of the Company and
are guided by the independence of their own opinions and decisions. The
Supervisory Board in particular makes recommendations on the Company's
strategy and controls the work of the Management Board in achieving strategic
goals and monitors the achieved results.
The Members of the Management Board are appointed by the Supervisory Board
and the
Members of the Supervisory Board are elected by the Company's General Meeting
of shareholders. (Article of Association, point IV).
Amendments to the Articles of Association
Amendments to the Articles of Association require a resolution of the General
Meeting . The notice convening a General Meeting whose agenda includes
amendments to the Articles of Association should contain existing provisions of
the Articles of Association and the proposed amendments. Where justified by a
significant scope of the intended amendments, the notice may include a draft of
18
a new text of the Articles of Association together with a list of its new or amended
provisions.
The text of the Articles of Association is available on the Company's website at:
http://www.ifsa.pl/statut.php
Proceedings of the General Meetings and its powers
The General Meetings of the Company are held in accordance with the rules
set out in the Commercial Code, the Articles of Association of Investment Friends
SE and the applicable capital market laws.
Composition of the Management Board and description of the
activities of the Investment Friends SE Management and Supervisory
body
in 2023/2024
Management Board:
Agnieszka Gujgo
Supervisory Board
Wojciech Hetkowski
Jacek Koralewski
Małgorzata Patrowicz
Anna Kajkowska
The main task of the Management Board is to manage the Company's activities
and represent it, but is also responsible for planning, implementing, and ensuring
adequate and effective actions aimed at achieving the goal. The Supervisory
Board exercises permanent supervision over the Company's activities in all areas
of its operations. The main duties of Supervisory Board members also include
appointing, dismissing, and suspending members of the Company's Management
Board, delegating members of the Supervisory Board to perform tasks in replace
the members of the Management board. Due to the simple structure of the
Company, there are no problems with communicating information in a timely
manner between the Management Board and the Supervisory Board.
Description of the Company’s internal control systems and risk
management with regard to the process of preparing financial statements.
Due to the simplified structure and relatively limited number of financial risks,
the Company's Management Board has not developed and implemented a written
procedure for the internal control and risk management system in the
preparation of financial statements, however the Company approaches financial
reporting with the greatest care.
19
The Management Board of the Company is responsible for the internal control
system in the Company and its effectiveness in terms of the correctness of
preparing financial statements and periodical reports. Financial statements and
periodic reports are prepared based on financial data from the financial and
accounting system, where they are recorded in accordance with the principles of
the adopted accounting policy in accordance with the Accounting Act. The audit
of the correctness of the preparation of periodic financial statements is
conducted thanks to the annual financial audits carried out by independent
auditors. In the reporting period, the financial report was prepared by the
Management Board of the Company and consulted with a professional entity - the
Galex Law Firm, which provides consulting services on a contractual basis. Üsing
the consulting services of the specialized Law Firm, the Management Board is
able to conduct an analysis of the formal correctness of the submitted documents,
prepare mandatory financial reports, including quarterly, half-yearly and annual
financial reports.
20
VI. REMUNERATION REPORT
This remuneration report has been prepared in accordance with the
remuneration principles for the Company’s Management Board member.
The Management Board of the Company consists of one board member. Mrs.
Agnieszka Gujgo was initially appointed by the Supervisory Board to serve on the
Board of Directors on 18/06/2018 for a three-year term. Subsequently, the term
was extended by resolution of the Supervisory Board. The current term of office
runs until 18/06/2027.
Management Board Members are selected by the Supervisory Board of the
Company based on their expertise in the sector the Company is operating,
A member of the Management Board does not receive a remuneration. Members
of the Company's Supervisory Board also do not receive remuneration. Members
of the Management Board and Supervisory Board are not granted remuneration
in the form of financial instruments.
Investment Friends SE is not a member of a capital group, therefore it is not
required to report remuneration received from the entitites belonging to the
same capital group.
21
VII. FINANCIAL STATEMENTS
1. STATEMENT OF FINANCIAL POSITION
SSTATEMENT OF FINANCIAL POSITION
Note
30 June 2024
(in thous. EUR)
30 June 2023
(in thous. EUR)
A s s e t s
Current assets
2
1 476
1 469
Short-term receivables
4
1 452
1 432
Cash and cash equivalents
5
22
35
Short-term accruals
2
2
T o t a l A s s e t s
1 476
1 469
L i a b i l i t i e s
Equity
1 422
1 418
Share capital
6
6 885
405
Differences from conversion to EÜRO
110
108
Share premium
161
6 435
Reserves
0
206
Retained earnings / Ündistributed profit (loss)
-5 734
-5 736
II. Short-term liabilities
54
51
Trade payables
1
1
Provisions
53
50
T o t a l e q u i t y a n d l i a b i l i t i e s
1 476
1 469
Book value of equity
7
1 422
1 418
Number of shares, authorised and fully paid
7
68 850 000
4 050 000
Book value pershare (in EUR)
7
0,02
0,35
Diluted number of shares (in pcs)
7
68 850 000
4 050 000
Diluted book value per share (in EUR)
7
0,02
0,35
The annual financial statements notes on pages 26-51 are an integral part of the annual
financial statements.
22
2. STATEMENT OF PROFIT OR LOSS
STATEMENT OF PROFIT OR LOSS
Note
Period ended on
30/06/2024
(in thous. EUR)
Period ended on
30/06/2023
(in thous. EUR)
Net interest income
8
35
87
Gross profit (loss) on sales
35
87
General and administrative costs
35
16
Other operating revenues
4
0
Profit (loss) from operational activity
4
71
Financial revenues
0
6
Financial costs
2
0
Profit (loss) before tax
2
77
Net profit (loss)
2
77
Weighted average number of ordinary shares
32 466 575,00
4 122 740,00
Profit (loss) per ordinary share (in EURO)
0,00
0,02
Diluted weighted average number of ordi-
nary shares (in units)
32 466 575,00
4 122 740,00
Diluted profit (loss) per one share (in EUR)
0,00
0,02
The annual financial statements notes on pages 26-51 are an integral part of the annual
financial statements.
3. STATEMENT OF OTHER COMPREHENSIVE INCOME
STATEMENT OF OTHER COMPRE-
HENSIVE
INCOME
Period ended on
30/06/2024
(in thous. EUR)
Period ended on 31/06/2023
(in thous. EUR)
Net profit (loss) for the period
2
77
Other comprehensive income (loss), in-
cluding:
2
284
- differences from conversion to EÜRO - will
not be reclassified to the income statement
2
284
Total other comprehensive income (loss)
for the period
4
361
The annual financial statements notes on pages 26-51 are an integral part of the annual
financial statements.
23
4.STATEMENT OF CHANGES IN EQÜITY
STATEMENT OF CHANGES IN EQUITY
Note
Period ended on
30/06/2024
(in thous. EUR)
Period ended on
30/06/2023
(in thous. EUR)
Opening balance of equity (OB)
1 418
2 618
Opening balance of share capital
6
405
8 100
Changes in share capital
6
6 480
-7 695
a) increases (due tos) – reduction the
nominal value of the shares
6
6 480
0
b) decreases (due to) - reduction of
the nominal value of the shares
0
-7 695
Closing balance of share capital
6
6 885
405
Supplementary capital at the beginning of
the period
6 435
301
Changes in supplementary capital
6 274
6 134
a) increases (due to) the result of the
nominal value of shares
0
7 695
b) decreases (due to) decrease in the
nominal value of shares
-6 274
-1 561
Supplementary capital at the end of the
period
161
6 435
Other reserves at the beginning of the pe-
riod
206
206
Changes in other capital reserves
206
0
a) increases (due to) decrease in
share capital
0
0
b) Decreases (due to) increase in
share capital
206
0
Other reserve capital at the end of the pe-
riod
0
206
Retained earnings
-5 728
-5 813
increase (due to)
2
77
(a) profit/loss for the period
2
77
decrease (due to)
0
0
b) coverage of loss from supple-
mentary capital
0
0
Retained earnings
-5 734
-5 736
Foreign exchange differences at the begin-
ning of the period
108
-176
Changes in exchange rate differences
2
284
increases
2
284
decreases
0
0
Exchange rate differences at the end of
the period
110
108
Closing balance at the end of the period
1 422
1 418
The annual financial statements notes on pages 26-51 are an integral part of the annual
financial statements
24
5.CASH FLOW STATEMENT
CASH FLOW STATEMENT
(indirect method)
Note
Period ended on
30/06/2024
(in EUR thousands)
Period ended
on 30/06/2023
(in EUR thousands)
Operating activities
A.I. Gross profit (loss)
2
77
A.II. Adjustments total
-16
-56
Difference between accrued and received in-
terest
9
-18
33
Loans granted
0
-1250
Received loan repayments
0
1161
Change in reserves
3
2
Change in receivables and accruals
-1
0
Change in liabilities
0
-2
A.III. Net cash flow from operating activities
-14
21
B. Exchange differences
1
-1
Net cash flow, total (A.III+/-B)
-13
20
Balance change in cash
-13
20
Cash at the beggining of the period
35
15
Cash at the end of the period
22
35
The annual financial statements notes on pages 26-51 are an integral part of the annual
financial statements.
25
Notes to the financial statements
Note 1.
Accounting policy
1.1 General information
Investment Friends SE (hereinafter referred to as the “Company” or “Investment
Friends ”), a Company based on Polish capital, operates in Estonia and Poland.
The financial statements of the Company for 2023/2024 were signed by the member
of Management Board of Investment Friends SE on 8/11/2024.
In accordance with the requirements of the Commercial Code of the Republic of
Estonia, the annual report prepared by the Management Board and approved by
the Supervisory Board, which also includes the financial statements, is approved by
the General Meeting of Shareholders. Shareholders have the right not to approve
the annual report prepared by the Management Board and approved by the
Supervisory Board and to request that a new report is prepared.
1.2. Basis of preparation of financial statements
The Company’s 2022/2023 annual financial statements have been prepared in
conformity of International Financial Reporting Standards as endorsed in the
European Ünion (“IFRS (EÜ)”). The Company has consistently applied the
accounting policies throughout all periods presented, unless stated otherwise.
The annual financial statements for 2023/2024 have been prepared on a going
concern basis.
The preparation of annual financial statements in conformity with IFRS (EÜ) requires
the use of certain critical accounting estimates.
It also requires management to exercise its judgment in the process of applying the
Company’s accounting policies. Changes in assumptions may have a significant
impact on the financial statements in the period the assumptions changed. The
management of the Company believes the underlying assumptions in the
preparation of annual financial statements for 2023/2024 are appropriate. These
annual financial statements consist of statements of financial position, statement of
profit or loss, statement of comprehensive income, statement of changes in equity,
statement of cash flows, and explanatory notes.
The annual financial statements are presented in euros and all values are rounded
to the nearest thousand (€000), except when otherwise indicated. The original annual
financial statements of the Company have been prepared is English. In case of the
conflict with Polish or Estonian translation, the English version shall prevail.
1.3. Functional and reporting currency
The functional currency of the Company is Polish zloty (PLN) and reporting
(presentational) currency is euro (EÜR).
26
Balance sheet items are calculated according to the exchange rate announced by
the European Central Bank as at the balance sheet day.
Items in the statement of profit or loss and in the cash flow statement are
converted at the exchange rate being the arithmetic average exchange rates
announced by the European Central Bank for the financial year.
1.4. Accounting policies, changes in accounting estimates and errors (IAS 8)
When an IFRS (EÜ) specifically applies to a transaction, other event, or condition,
the accounting policy or policies applied to that item shall be determined by
applying the IFRS (EÜ). In the absence of an IFRS (EÜ) that specifically applies to
a transaction, other event or condition, management shall use its judgement in
developing and applying an accounting policy that results in information that is
relevant to the economic decision-making needs of users and reliable.
The Company selects and applies its accounting policies consistently for similar
transactions, other events, and conditions, unless an IFRS (EÜ) specifically
requires or permits categorization of items for which different policies may be
appropriate. If an IFRS (EÜ) requires or permits such categorization, an
appropriate accounting policy shall be selected and applied consistently to each
category.
The Company changes an accounting policy only if the change is required by IFRS
(EÜ) or results in the financial statements providing reliable and more relevant
information about the effects of transactions, other events, or conditions on the
entity’s financial position, financial performance, or cash flows. When a change
in accounting policy is applied retrospectively the Company adjusts the opening
balance of each affected component of equity for the earliest prior period
presented and the other comparative amounts disclosed for each prior period
presented as if the new accounting policy had always been applied.
The effect of a change in an accounting estimate shall be recognized prospectively
by including it in profit or loss in the period of the change, if the change affect that
period only or the period of the change and future periods, if the change affects
both. The Company corrects material prior period errors retrospectively in the
first set of financial statements authorized for issue at their discovery by restating
the comparative amounts for the prior period(s) presented in which the error
occurred; or if the error occurred before the earliest prior period presented,
restating the opening balances of assets, liabilities and equity for the earliest
prior period presented.
27
1.5. Impact of new and revised standards and interpretations
The accounting policies used in the preparation of these financial statements are
the same as those used by the Company in its financial statements for the year
ended June 30, 2023, except as described below.
Üpdated standards effective for annual reporting periods beginning on or after
January 1, 2024.
Certain new or revised standards and issued interpretations that are effective for
the Company's annual reporting periods beginning on or after January 1, 2024
and that were not adopted by the Company prior to their effective date.
Amendments to IAS 1 Presentation of Financial Statements (Classification of
liabilities as current or non-current) – the amendments aim to ensure
consistency in the application of the requirements by helping companies
determine whether liabilities and other obligations with an uncertain settlement
date should be classified as current (to be settled within 12 months) or non-
current. The
amendments clarify what is meant by a right to defer settlement; that the right to
defer must exist at the end of the reporting period; this classification is not
affected by the probability that the entity will exercise the right to defer
repayment; and that only if the derivative embedded in the convertible liability is
itself an equity instrument will the terms of the liability not affect its
classification.
Valid for annual reporting periods beginning on or after 1 January 2023. The EÜ
has approved the changes.
The Company does not expect the amendments to have a material impact on its
financial statements upon initial adoption.
Amendments to IAS 7 "Statement of Cash Flows" - the amendments aim to
disclose information about suppliers' financing mechanisms that enable users of
financial statements to evaluate the effect of these mechanisms on the entity's
liabilities and cash flows and on its exposure to liquidity risk.
Valid for annual reporting periods beginning on or after 1 January 2024. The EÜ
has approved the changes.
The Company does not expect the amendments to have a material impact on its
financial statements upon initial adoption.
Amendments to IFRS 7 Financial Instruments – Disclosures (Supplier Financing
Arrangements) – the amendments are intended to draw attention to other factors
that an entity may consider when making disclosures, which include, but are not
limited to, whether the entity:
• has committed sources of financing (e.g. in the form of corporate
bonds) or other financing means (e.g. available credit lines) that it can use to meet
liquidity needs;
•
•
holds deposits with central banks to meet liquidity needs;
has well-diversified sources of funding;
28
• is exposed to significant concentrations of liquidity risk related to its
assets or funding sources;
• has internal control processes and contingency plans for managing
liquidity risk;
• has instruments that contain contingent accelerated repayment
provisions (e.g. in the event of a deterioration in the entity's credit rating);
• has instruments that could require the posting of collateral (e.g. margin
calls in the case of derivatives);
• has instruments with an option to settle the financial obligation by
delivering cash (or another financial asset) or by delivering its own shares;
• has instruments that provide for settlement by way of set-off or has
used or has access to facilities under supplier financing arrangements that provide
the entity with deferred payment terms or the entity's suppliers with early payment
terms.
Valid for annual reporting periods beginning on or after 1 January 2024. The EÜ has
approved the changes.
The Company does not expect the amendments to have a material impact on its
financial statements upon initial adoption.
1.6. Financial assets (IFRS 9, IAS 32)
Classification
The Company classifies financial assets into the following measurement categories:
− those at fair value (either through other comprehensive income or
through profit or loss);
− those carried at amortised cost.
The classification depends on the Company's business model for managing its
financial assets and the contractual terms of the cash flows.
Registration and derecognition
Purchases and sales of financial assets under normal market conditions are recognized
on the trade date, the date on which the Company commits to purchase or sell the
asset. Financial assets are derecognised when the rights to receive cash flows from
the asset have expired or have been transferred and the Company has transferred
substantially all risks and rewards of ownership.
29
Measurement
Financial assets (unless they are receivables from a buyer that does not have a
significant financing component and are initially measured at transaction price)
are initially measured at fair value and in the case of assets do not measure at fair
value through profit or loss, related acquisition costs of assets are added to the
initial value.
Debt instruments
Subsequent recognition of debt instruments depends on the Company's business
model for managing its financial assets and the contractual cash flows of the
financial assets.
Assets held for the purpose of collecting contractual cash flows that have only
cash flows and interest payable are recognised at amortised cost using the
effective interest rate method. Impairment losses are deducted from the adjusted
acquisition cost. Interest income, foreign exchange gains and losses and
impairment losses are recognised in the income statement.
Gains or losses on derecognition are recognised in the income statement under
“Other operating income / expense”.
As of 30 June 2023, and 30 June 2024 and during 2023/2024, financial assets of
the Company were classified as at amortised cost.
Impairment of financial assets
The impairment loss model is applied to financial assets at amortized cost.
Financial assets carried at amortized cost consist of loan receivables, other
receivables, cash, and cash equivalents.
Expected credit losses are probability-weighted estimated credit losses. Credit
loss is the difference between the contractual cash flows of the Company and the
expected cash flows of the Company, discounted at the original effective interest
rate.
Measurement of expected credit loss takes into account: (i) an unbiased and
probabilistic amount that estimates several different outcomes, (ii) the time
value of money and (iii) reasonable and reasonable information available at the
end of the reporting period conditions and forecasts of future economic
conditions.
30
The Company measures impairment as follows:
− cash and cash equivalents at low credit risk (senior management consid-
ers a low credit risk assessment of at least one of the major credit rating
agencies) to be equivalent to expected credit losses within 12 months;
− for all other financial assets, the amount of credit losses expected to be
incurred over a 12-month period, unless the credit risk (i.e., the expected
life of the financial asset in default) has increased significantly after initial
recognition; if the risk is significantly increased, the credit loss is meas-
ured at an amount equal to the expected credit loss over a lifetime.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. Loans and
receivables are initially recognised at their fair value plus transaction costs. After
initial recognition, loans and receivables are carried at amortised cost using the
effective interest rate method. This method is used to calculate interest income
on the receivable in subsequent periods. Financial assets are adjusted for
impairment losses.
Impairment is based on expected credit loss. The principle of expected credit loss
is to show the overall trend in the deterioration or improvement in the credit
quality of a financial asset. Impairment losses on financial assets classified at
amortised cost are recognised as a provision for impairment.
Expected credit losses are probability-weighted estimated credit losses that, at
the reporting date, consider all relevant information, including information about
past events, current conditions, reasonable and reasonable future events, and
forecasts of economic conditions. At the end of each reporting period, the
Company conducts a review to determine whether there has been a material
increase in risk compared to the last estimate. Indicators of increased credit risk
include, but are not limited to, overdue payments over 30 days, significant
financial difficulties of the debtor, possible bankruptcy or restructuring of the
debtor. Impairment charges are recognised in the income statement under “Other
operating costs”. If receivables are uncollectible, they are written off together
with a provision for impairment.
Receivables are generally recognised as current assets when they are due to be
settled within 12 months after the balance sheet date. Receivables that are due
later than 12 months after the balance sheet date are recognised as non-current
assets. Financial assets that do not include SPPI (Solely Payment of Principal and
Interest) cash flows are recognised at fair value through Information on financial
instruments profit or loss.
Impairment of Credits and Loans
31
The Company’s impairment estimation is based on the "Expected Credit Loss"
(ECL) concept. Consequently, the Company determines impairment allowances
based on expected credit losses, considering future economic conditions in
assessing the credit risk of a given exposure.
The methodology and assumptions used to estimate the impairment of credit
exposures are regularly monitored to reduce discrepancies between estimated
and actual losses. To assess the adequacy of impairment allowances established
through both individual and collective analysis, a periodic historical review
(backtesting) is conducted, no less than annually, and results are used to define
actions aimed at improving the process quality.
The implemented impairment model applies to financial assets classified under
IFRS 9 as financial assets measured at amortized cost or at fair value through
other comprehensive income. According to IFRS 9, credit exposures are
categorized as follows:
Stage 1 – non impaired exposures where the expected credit loss is
estimated over a 12-month period.
Stage 1 – non impaired exposured identified with a significant increase in
credit risk, where the expected credit loss is calculated over the entire
lifetime of the financial asset.
Stage 3 – exposures with identified impairment indicators for which the
expected credit loss is calculated over the entire lifetime of the financial
asset.
Measurement of Expected Credit Loss
Since the implementation of IFRS 9 in 2018, the Company's impairment
estimation has relied on the Expected Credit Loss (ECL) model. This approach
necessitates the calculation of impairment allowances based on expected credit
losses and incorporates projections of future economic conditions when
assessing the credit risk of each exposure. The impairment model applies to
financial assets classified under IFRS 9 as financial assets measured at amortized
cost or at fair value through other comprehensive income. According to IFRS 9,
credit exposures are classified as follows:
Stage 1 – non-impaired exposures where the expected credit loss is
estimated over a 12-month horizon
Stage 2 - non-impaired exposures with a significant increase in credit risk
(SICR), where the expected credit loss is estimated over a lifetime
horizon, i.e., until the exposure's maturity.
Stage 3 – impaired exposures there the expected credit loss is estimated
over a lifetime horizon (until the financial asset is fully recovered)
In accordance with IFRS 9, the Company has adopted the definition of default,
both for expected credit losses and for impairment assessment, which includes
the following criteria:
32
▪ a delay in payment exceeding 90 days from the due date of the receivable.
Üpon repayment of a financial asset previously classified as in default, the
Company reclassifies the relevant financial assets as not impaired.
Information on financial instruments
As at 30/06/ 2024
Classes of financial instruments
Amortised cost
Total
Financial assets total
1 476
1 476
Loans granted
1 451
1 451
- including interest
75
75
Cash and cash equivalents
22
22
Short-term accruals
2
2
Total financial liabilities
54
54
Trade and other liabilities
1
1
Short-term reserves
53
53
As at 30/06/ 2023
Classes of financial instruments
Amortised cost
Total
Financial assets total
1 469
1 469
Loans granted
1 432
1 432
-including interest
55
55
Cash and cash equivalents
35
35
Other receivables
2
2
Professional judgment
If a given transaction is not regulated by any standard or interpretation, the
Management Board, guided by its subjective judgment, determines, and applies
accounting policies which will ensure that the financial statements will contain
correct and reliable information and :
− correctly, clearly, and fairly present the assets and financial situation of
the Company, the results of its activities and cash flows,
− reflect the economic content of the transaction,
− are objective,
− is prepared in accordance with the principle of prudent valuation,
33
− is complete in all material respects.
When valuating the loans, the debtor's solvency is taken into account. We take
into account the risk of non-repayment. If there is no risk of repayment, we value
the loans at their nominal value. There are conducted proper analysis.
The Management Board makes decisions considering all the potential
consequences of its decisions. Hence, the decision-making process is based on
multi-stage analysis of, inter alia, borrowers' collaterals.
Uncertainty of estimates
When applying the accounting principles in force in the Company, the
Management Board is obliged to make estimates, judgments, and assumptions
regarding the amounts of valuation of individual assets and liabilities. The
estimates and related assumptions are based on historical experience and other
factors considered relevant. The actual results may differ from the adopted
estimated values. The preparation of the financial statements requires the
Management Board of the Company to make estimates, as much of the
information contained in the financial statements cannot be measured precisely.
The Management Board verifies the adopted estimates based on changes in the
factors considered when making them, new information or past experiences.
Therefore, the estimates made as of June 30, 2024 may be changed in the future.
In the report for 2023/2024, the Management Board assesses that there are no
other significant areas with regard to which there is a risk related to uncertainty
of estimates.
Areas where the disclosure of information may be necessary depending on
specific facts and circumstances:
• recognition and measurement of provisions, if there is uncertainty regarding
the outcome of legal proceeding - as of the balance sheet date, the Company is not
involved in any ongoing legal proceedings; therefore, it does not recognize or
measure any provisions in this regard.
• recognition and measurement of liabilities related to uncertain tax positions -
as of the balance sheet date, the Company does not have any uncertain tax
positions, therefore, it does not recognize or measure liabilities related to such
positions.
• measurement of liabilities for long-term employee benefits - as of the balance
sheet date, the Company does not employ any personnel; therefore, there is no
need to measure liabilities related to any employee benefits.
These and other matters are subject to the disclosure requirements outlined in
IAS 1 only when there is a significant risk of material adjustments to the carrying
amounts of assets and liabilities in the next reporting period.
34
1.7. Cash and cash equivalents, cash flows (IAS 7)
Cash and cash equivalents are cash at bank and on hand, short-term extremely
high liquidity investments (up to three months) that are readily convertible into
a known amount of cash and which are subject to an insignificant risk of changes
in value.
The statement of cash flows reports cash flows during the period classified by
operating, investing, and financing activities. The Company reports cash flows
from operating activities using the indirect method whereby net profit or loss is
adjusted for the effects of transactions of a non-cash nature, any deferrals, or
accruals of past or future operating cash receipts or payments, and items of
income or expense associated with investing or financing cash flows.
1.8. Share Capital (IAS 1)
Ordinary shares are included within equity. The expenditures related to the issue
of ordinary shares are recognised as a reduction of equity. Treasury shares
repurchased by the parent Company are recognised as a reduction of equity (in
the line item “Treasury shares”). Disbursements and contributions related to
treasury shares are recognised in equity.
1.9. Capital from sales of shares above their nominal value (IAS 1)
The differences between the fair value of the payment received and the nominal
value of shares are recognized in the share premium. In the event of buyout of
shares, the amount paid for the shares is charged to equity and is disclosed in the
statement of financial position under equity.
The costs of issuing shares, incurred when establishing a joint-stock Company or
increasing the share capital, reduce the entity's supplementary capital to the
amount of the excess of the issue value over the par value of the shares, and the
remaining part is classified as financial costs.
1.10. Statutory reserve capital (IAS 1)
Reserve capital is formed to comply with the requirements of the Commercial
Code of the Republic of Estonia. During each financial year, at least 5% of the net
profit shall be transferred to reserve capital until reserve capital reaches one-
tenth of share capital. Reserve capital may be used to cover a loss or to increase
share capital. Payments shall not be made to shareholders from reserve capital.
In the statement of financial position statutory reserve is recognised in other
reserves.
1.11. Earnings per share (IAS 33)
Basic earnings per share is calculated by dividing the profit for the year
attributable to ordinary equity holders of the Company by the weighted average
35
number of shares outstanding during the year. Diluted earnings per share is
calculated by dividing the profit attributable to equity holders of the Company
(after adjusting for interest on the convertible preference shares) by the weighted
average number of shares outstanding during the year plus the weighted average
number of shares that would be issued on conversion of all the dilutive potential
shares into shares.
1.12. Financial liabilities (IFRS 9, IAS 32)
All financial liabilities (trade payables, other short and long-term liabilities,
borrowings, etc.) are initially recognised at their fair value, less any transaction
costs. They are subsequently recognised at amortised cost, using the effective
interest rate method.
The amortised cost of the current financial liabilities generally equals their
nominal value; therefore, current financial liabilities are stated in the statement
of financial position at redemption value. To calculate the amortised cost of non-
current financial liabilities, they are initially recognised at fair value of the
proceeds received (net of transaction costs incurred) and an interest expense is
calculated on the liability in subsequent periods using the effective interest rate
method.
A financial liability is classified as current when it is due to be settled within 12
months after the balance sheet date or the Company does not have an
unconditional right to defer settlement of the liability for at least 12 months after
the balance sheet date. Interest-bearing liabilities that are due within 12 months
after the balance sheet date, but which are refinanced after the balance sheet date
as long-term, are recognised as short-term interest-bearing liabilities. Also,
borrowings are classified as short-term if the lender had at the balance sheet date
the contractual right to demand immediate payment of the borrowing due to the
breach of conditions set forth in the agreement.
1.13. Provisions and contingent liabilities (IAS 37)
Provisions are recognized when the Company has a present obligation (legal or
constructive) because of a past event it is probable that the Company will be
required to settle the obligation, and a reliable estimate can be made of the
amount of the obligation.
The amount recognized as a provision is the best estimate of the consideration
required to settle the present obligation at the end of the reporting period,
considering the risks and uncertainties surrounding the obligation. When a
provision is measured using the cash flows estimated to settle the present
36
obligation, its carrying amount is the present value of those cash flows (when the
effect of the time value of money is material).
When some or all the economic benefits required to settle a provision are
expected to be recovered from a third party, a receivable is recognized as an asset
if it is virtually certain that reimbursement will be received.
Contingent liabilities are those liabilities the realization of which is less probable
than non-realization or the amount of which cannot be measured sufficiently
reliably. The Company does not recognize contingent liabilities but discloses brief
description of the nature of the contingent liability and, where practicable an
estimate of its financial effect; an indication of the uncertainties relating to the
amount or timing of any outflow; and the possibility of any reimbursement unless
the possibility of any outflow in settlement is remote.
1.14. Revenue recognition (IFRS 15)
Interest income
Interest income is recognized when it is probable that the economic benefits
associated with the transaction will flow to the Company and the amount of the
revenue can be measured reliably. Interest income is recognized on an accrual
basis.
Interest income includes interest related to financial instruments measured at
amortized cost and financial assets measured at fair value through other
comprehensive income using the effective interest rate method. The effective
interest rate method is a way of calculating the amortized cost of a financial asset
or liability and allocating interest income or expense and certain fees (that are an
integral part of the effective interest rate) to the appropriate period. The effective
interest rate is the rate that exactly discounts estimated future cash flows (over
the life of the financial instrument) to the gross carrying amount of the
asset/amortized cost of the liability. In calculating the effective interest rate, the
Company estimates cash flows considering all contractual terms of the financial
instrument, but does not take into account any potential future losses from
defaulted loans. This calculation includes all fees paid or received between the
parties to the agreement that are integral to the effective interest rate.
Interest income includes interest and fees (received or due) recognized in the
effective interest rate calculation for loans and advances. Üpon recognizing the
impairment of a financial instrument measured at amortized cost and those
measured at fair value through other comprehensive income, interest income is
recognized in the income statement but is calculated based on the newly
37
determined carrying amount of the financial instrument (i.e., the amount reduced
by the impairment allowance).
1.15.Operating segments (IFRS 15, IFRS 8)
A segment is a distinguishable component of the Company, which generates
revenues and incurs expenditures. The segment reporting is presented in respect
of operating and geographical segments. The Company operates in only one
business area, therefore the segment reporting is not relevant.
1.16. Income tax (IAS 12)
Corporate income tax in EstoniaAccording to the Income Tax Act entered into
force in Estonia on 1 January 2000, it is not the company's profits that are taxed
but net dividends paid. Income tax is paid on dividends, fringe benefits, gifts,
donations, costs of reception of guests, non-business payments and transfer price
adjustments. The effective income tax rate is 20/80 on net dividends paid out.
Starting from 2019, it is possible to apply a more favourable tax rate on dividend
payments (14/86). The more favourable tax rate can be applied to a dividend
distribution that amounts to up to three preceding years’ average dividend
distribution that has been taxed at 20/80 rate.
1.17. Related parties (IAS 24)
A related party is a person or entity that is related to the entity that is preparing
its financial statements. A related party transaction is a transfer of resources,
services, or obligations between a reporting entity and a related party, regardless
of whether a price is charged. Such transactions could have an effect on the profit
or loss and financial position of the Company. For this reason, knowledge of the
Company’s transactions, outstanding balances, including commitments, and
relationships with related parties may affect assessments of its operations by
users of financial statements, including assessments of the risks and
opportunities facing the Company.
The Company discloses the related party relationship when control exists,
irrespective of whether there have been transactions between the related parties.
The Company considers key members of the management (Supervisory and
Management Board), their close relatives and entities under their control or
significant influence as well as associated companies as related parties.
1.18. Events after the reporting period (IAS 10)
Events after the reporting period are those events, favourable and unfavourable,
that occur between the end of the reporting period and the date when the
financial statements are authorized for issue. Events after the reporting period
38
are those that provide evidence of conditions that existed at the end of the
reporting period (adjusting events after the reporting period) and those that are
indicative of conditions that arose after the reporting period (non-adjusting
events after the reporting period).
Note 2.
Description of significant factors of risks and threats
The main types of risk arising from the Company's financial instruments include
interest rate risk, liquidity risk, credit risk. The Management Board is responsible
for establishing the risk management rules and supervision. The principles of
risk management aim to identify and analyse the risks that the Company is
exposed to, by establishing appropriate limits and controls.
Interest rate risk
When determining the loan terms for each borrower, the Company individually
negotiates the contract interest rate. The interest rates below are contracted
rates.
At the balance sheet date, the interest rate structure of the Company’s interest-
bearing financial instruments was as follows:
The Company has no liabilities related to received loans.
As at 30/06/2023 the interest rate structure of the Company’s financial
instruments was as follows:
The Company has no liabilities related to received loans.
39
Interest rate
Fixed/variable
interest rate
Damar Patro ÜÜ
2,5%
Fixed
Patro Invest sp. z o.o. w likwidacji
24,5%
Fixed
Interest rate
Fixed/variable
interest rate
Damar Patro ÜÜ
2,5%
Fixed
Patro Administracja Sp. z o.o.
5%
Fixed
Patro Invest sp. z o.o. w likwidacji
24,5%
Fixed
Credit risk
a) Credit Risk Assessment – credit risk refers to the potential loss that may occur
if a counterparty in a transaction fails to meet its contractual obligations, resul-
ting in the inability to provide expected cash flows. The Company's credit risk is
primarily associated with loans granted by the Company, cash and cash equiva-
lents, and deposits. The scope of the Company’s credit risk is largely influenced
by specific circumstances. Additionally, the Company’s Management considers
general factors such as the legal status of the client (private or public entity), the
client’s geographical location, industry sector, current economic conditions, and
future economic forecasts. To mitigate credit risk, the payment discipline of cu-
stomers and their ability to meet obligations should be monitored on a daily ba-
sis.
(b) Credit quality of financial assets – The Company applies a simplified approach
to measuring expected credit loss under IFRS 9, using lifetime expected credit
losses.Historical loss rates are adjusted to account for current and forward-loo-
king information on macroeconomic factors that may affect the ability of custo-
mers to settle their receivables. Based on the principles outlined above, the im-
pact of impairment losses on the Company's cash flows was insignificant.
The Company is exposed to risks arising from fluctuations in exchange rates,
which is why a sensitivity analysis of exchange rate changes and their impact on
net profit and equity has been added. However, the Company is not exposed to
risk arising from changes in interest rates, as it has not granted or received any
loans with variable interest rates.
Information regarding financial assets, along with a descpription of the collateral
held, has been discloded in note 4.
Liquidity risk
Liquidity risk management process bases on monitoring estimated cash-flows,
and adjusting final maturity of assets and liabilities, analysing working capital
and maintaining an access to alternate sources of funding. The aim of the
Company is to maintain the balance between funding continuity and flexibility,
through using sources of funding such as loan overdraft facility.
Maturity dates of liabilities as of 30/06/2024
40
30/06/2024
in thous. EÜR
Total
Repayment date
< 1 year
1-2 years
2-3
years
over 3
years
Trade liabilities
1
1
0
0
0
Other liabilities
0
0
0
0
0
Other obligations
53
53
0
0
0
Total
54
54
0
0
0
Maturity dates of liabilities as of 30/06/2023
Current financial liquidity ratio as of 30/06/2023 indicates that for every one
eur of short-term liabilities there were EÜR 28,80 of current assets, meanwhile,
as of 30/06/2024 EÜR 27,33. It should be noted that this is a positive outcome,
as the ratio does not fall within the optimal range in both examined years and its
level for the financial year 2022/2023 may indicate excess liquidity.
The maturity dates of assets as at 30/06/2024
30/06/2024
in thous. EÜR
Total
Repayment date
< 1 year
1-2 years
2-3
years
over 3
years
Cash
22
22
0
0
0
Loans granted
1 451
1 451
0
0
0
-including interest
75
75
0
0
0
Other receivables
2
2
0
0
0
Total
1 475
1 475
0
0
0
The maturity dates of assets as at 30/06/2023
30/06/2023
in thous. EÜR
Total
Repayment date
< 1 year
1-2 years
2-3 years
over 3
years
Cash
35
35
0
0
0
Loans granted
1 432
1 432
0
0
0
-including interest
55
55
0
0
0
Other receivables
2
2
0
0
0
Total
1 469
1 469
0
0
0
The entities that the Company provides financing to are related parties; therefore,
therethe Company does not have a control policy. The related parties have
received loans for investments in the stock market or for granting further loans.
The Company is exposed to credit risk concentration. Currently, the Company has
two significant borrowers. The Company continuously monitors the entities it
finances. Management assesses the likelihood of a borrower's insolvency at its
41
30/06/2023
in thous. EÜR
Total
Repayment date
< 1 year
1-2 years
2-3
years
over 3
years
Trade liabilities
1
1
0
0
0
Other liabilities
0
0
0
0
0
Other obligations
50
50
0
0
0
Total
51
51
0
0
0
discretion. Management considers the possibility of borrower insolvency based
on its own assessment.
Risk of shares price’s fluctuations and limited liquidity
Immanent feature of market trading is the shares’ price fluctuations and short-
term fluctuations of turnover. It might result in sale or purchase of the qualifying
holding of the Company’s shares will relate to a necessity to accept significantly
less favourable price than the reference price. The Company cannot also exclude
significant, temporary limitations of liquidity which may significantly hamper
sales or purchase of the Company’s shares.
Currency risk
Liquidity risk management process bases on monitoring estimated cash-flows,
and adjusting final maturity of assets and liabilities, analysing working capital
and maintaining an access to different sources of funding. The aim of the
Company is to maintain the balance between funding continuity and flexibility,
through using loans.
Due to the stable exchange rate of euro to zloty, the financial assets and liabilities
denominated in these currencies were not subject to significant risk. The
euro/zloty exchange rate is characterized by a low level of volatility.
To illustrate the currency risk arising from fluctuations in exchange rates, the
Company conducted a sensitivity analysis:
Change in
exchange rate
Exchange rate
after the change
Interest
EÜR’000
Impact on
gross
result
EÜR’000
Impact on
net result
EÜR’000
Impact on
equity
EÜR’000
+ 10%
4,8115
35
4
4
4
+ 5%
4,5928
35
3
3
3
- 5%
4,1554
35
-2
-2
-2
- 10%
3,9367
35
-4
-4
-4
Risk related to related parties
There are interpretations indicating the possibility of emerging risks consisting
in the negative impact of links between members of the Company’s bodies on
their decisions. This applies to the impact of these links on the Company’s
Supervisory Board regarding the day-to- day supervision of the Company’s
operations. While assessing the probability of such a risk, one should consider
the fact that the supervisory bodies are subject to the control of another body –
the General Meeting, and in the interest of the members of the Supervisory Board
it is to perform their duties in a reliable and lawful manner.
42
Risk related to the shareholding structure
As at the balance sheet date 63,85% of the share capital and 43 961 150 votes at
the Company’s General Meeting belong directly to Patro Invest OÜ, as a result of
which the above Shareholder has a significant impact on the resolutions adopted
at the Company’s General Meeting.
Risk related to the economic situation in Poland and Estonia
The economic situation in Poland has a significant impact on the financial results
achieved by all entities including the Company itself, because the success of
development of companies investing in financial instruments and conducting
financial services largely depends on the conditions of running a business.
Risk related to the armed conflict in Ukraine
Due to the ongoing armed conflict in Ükraine, the Company’s operations are
moderately exposed to the consequences of the war. As at the date of publication
of the report, the Company does not anticipate extending the conflict beyond the
territory of Ükraine therefore, no impact on the operating activities of the
Company is expected.
Management judgements
As at the day of preparation of the annual report, the Management Board
according to their best knowledge, does not recognize any threat in terms of
fulfilling his obligations and financial liquidity. The Company settles its liabilities
systematically and has not taken any credits or loans taken or other significant
obligations. The Company dedicates its financial resources for conducted lending
activity and intends to develop this activity gradually. Possible surpluses are
located on temporary deposits in safe banks. Because of the fact that the main
activity of the Company is the granting of loans, the proper and prompt
fulfillment of the contractual obligations of the borrowers has a significant
impact on the Company's results and maintaining.
Note 3.
Capital management
The Management Board’s policy is to maintain a solid capital base to maintain
investor confidence and to ensure the future development of business operations.
The company manages its capital to maintain the ability to continue operations,
including the implementation of planned investments, so that it can generate
returns for shareholders.
In line with market practice, the Company monitors capital, among others, based
on the equity ratio and the loans and other sources of financing / EBITDA ratio.
43
The equity ratio
intangible
assets)
In order to
maintain
external
financing
*Equity
ratio
**EBITDA =
Profit
N
ot
e
4
As at
30/06/2024
is calculated
to the balance
financial
at a reasonable
= equity / total
(loss) on
as the
sheet
liquidity
assets
operating
EXPLANATORY
Financial
ratio
total.
and
level of
activities
of the net
creditworthiness
costs.
+ deprecation
NOTES
assets
val
ue
of
assets
(equity
allowing
obtaining
l
e
s
s
4
4
Selected data
30/06/2024
(in EÜR thousands)
30/06/2023
(in EÜR thousands)
Equity
1 422
1 418
Balance sheet total
1 476
1 469
Equity ratio*
0,96
0,97
Net profit/(loss) for the period
2
77
EBITDA**
4
71
Borrower
12 months
period -
principal
12
months
period –
interest
1-5
years
Interest
rate
Currency
Repayment
date
Collateral
s
Damar Patro
ÜÜ
1 376
60
0
2,5%
EÜR
30/06/2025
Investment
Friends SE is
entitled for
each of these
loans to fill in
the bill of ex-
change in the
amount of the
Borrower's ob-
ligation resul-
ting from the
concluded loan
agreement, re-
duced by the
payments
made by the
Borrower to-
wards this ob-
ligation and
increased by
the value of
unpaid inte-
rest, as well as
Patro Invest
Sp. z o.o. w
likwidacji *
0
15
0
24,5%
PLN
25/10/2019
As at June 30,
2024 disclosed
in note
*In the years
2019
receivables
from
amount of
EÜR 51
amounting to
EÜR Patro
Invest Sp. z
in full to the
Company Płock.
As at
30/06/2023
all
the
9
.
and 2020
the
Company
958,44. The
14 789,34
o.o. w
likwidacji
Patro
loans were
the Company
Patro
impairment
EÜR. After
with
Administracja
granted
Invest SP.
did
the balance
registered
Sp.
to the related
made an impairment
z o.o. w
not cover
sheet
office in
z o.o. with
entities
charge
likwidacji in the
amount of
date the claim Płock
was transferred
registered
and
was
o
n
the
total
inter
est
fr
o
m
office
in
4
5
any default in-
terest and
other inciden-
tal costs in the
event of fai-
lure to repay
the full amo-
unt of the loan
together with
incidental lia-
bilities within
the required
time limit.
Total
1 376
75
0
Borrower
12 months
period
1-5 years
Interest
rate
Currency
Repayment
date
Collaterals
Damar Patro ÜÜ
1 402
0
2,5%
EÜR
30/06/2024
Investment
Friends SE is
entitled for each
of these loans to
fill in the bill of
exchange in the
amount of the
Borrower's
obligation
resulting from the
concluded loan
agreement,
reduced by the
payments made
by the Borrower
towards this
obligation and
increased by the
value of unpaid
interest, as well
as any default
interest and other
incidental costs
in the event of
failure to repay
Patro Invest OÜ
16
0
9%
EÜR
30/06/2023
Patro Invest Sp.
z o.o. w
likwidacji
14
0
24,5%
PLN
25/10/2019
the full amount of
the loan together
with incidental
liabilities within
the required time
limit.
Total
1 432
0
* The loan for Patro Invest OÜ was repaid fully in July 2023.
As at June 30, 2023 all the loans were granted to the related entities and was
disclosed in note 9.
Note 5
Cash and cash equivalents
The Company on the basis of agreement concluded with IFSE ÜÜ with registered
office in Tallinn ( Estonia) shares two bank account with this Company in curren-
cies PLN and EÜRO.
Note 6
Share capital
In the reporting year 2023/2024 the share capital of the Company increased by
EÜR 6 480 thous. as a result of the issuance of the premium, i.e., from the surplus
accumulated in the reserve capital (6 274 thous. EÜR) and other reserve capitals
(EÜR 206 thous. to 6 885 thous.)
SHARE CAPITAL
June 30
2024
In thous. EUR
June 30
2023
In thous.
EUR
Opening balance of share capital
405
8 100
Increase of share capital
6 480
0
Decrease of share capital due to the nominal value of
shares decrease
0
7 695
Closing balance of share capital
6 885
405
46
CASH AND CASH EQUIVALENTS
June 30
2024
In thous. EUR
June 30
2023
In thous. EUR
Cash on the bank accounts
22
35
Cash and cash equivalents, total
22
35
In case the equity capital is lower than 50% of the share capital, in order to meet
§ 301 of the Estonian Commercial Companies Code, the Board proposes to the
General Meeting to take action to reduce the share capital of the Company. The
Company convenes a relevant General Meeting, during which the share capital is
reduced to the reserve capital. In this way, the requirement of § 301 of the
Estonian Commercial Companies Code is met.
Share capital as
of 30.06.2024
Type of action
Number of shares
Share capital
Ordinary shares
68 850 000
6 885 000 euro
TOTAL
68 850 000
6 885 000 euro
As of June 30, 2024, the number of shares without nominal value is 6,885,000. As
of the balance sheet date, there are no rights or restrictions associated with each
class of shares, and there are no shares transferred for issue under an agreement
or other contracts.
Share capital as
of 30.06.2023
Type of action
Number of shares
Share capital
Ordinary shares
4 050 000
405 000 euro
TOTAL
4 050 000
405 000 euro
47
RESERVE CAPITAL
June 30
2024
In thous.
EUR
June 30
2023
In thous.
EUR
Opening balance of reserve capital
6 435
301
Increase in reserve capital due to the result of nominal
value of shares
0
7 695
Decrease in reserve capital due to the decrease of the
nominal value of shares
6 274
1 561
Closing balance of reserve capital
161
6 435
As of June 30, 2023, the number of shares without nominal
As of June 30, 2023, there were no rights or restrictions
shares, and there were no shares reserved for issuance
agreements.
Note 7
Book value per share
Book value of equity as of 30.06.2024
Number of shares as of 30/06/2024
Book value per share (in EÜRO)
Diluted number of shares
Diluted book value per share (in EÜRO)
Book value of equity as of 30.06.2023
value was 405,000.
on particular classes of
under options or other
1 422 thous. EÜR
68 850 000
0,02 EÜR
68 850 000
0,02 EÜR
1 418 thous. EÜR
Number of shares as of 30.06.2023
4 050 000
Book value per share (in EÜRO)
0,35 EÜR
Diluted number of shares
4 050 000
Diluted book value per share (in EÜRO)
Profits per share
Profit per share as at 30/06/2024
Weighted average number of shares 32 466 575
Profit/loss for 12 months 2 thous. EÜR
Profit/loss per one ordinary share 0,00 EÜR
Profit per share as at 30/06/2023
Weighted average number of shares 4 122 740
Profit/loss for 12 months 77 thous. EÜR
Profit/loss per one ordinary share 0,02 EÜR
Note 8
In accordance with the requirements of IFRS 8, operating
identified based on internal reports on those elements
regularly verified by persons deciding about allocating
ment and assessing its financial results. The Company
activity of providing other financial services.
The Company’s main activity is granting loans, there are
ment reporting is not applicable.
48
0,35 EÜR
segments should be
of the Company that are
resources to a given seg-
conducts a homogeneous
no other activities, seg-
Revenues from interest
NET INCOME FROM SALES OF PRODUCTS
(MATERIAL STRUCTURE - TYPES OF ACTIVITY)
30 June
2024
in thous. EUR
30 June
2023
in thous. EUR
revenues from interest
35
87
- including: from related entities
35
87
Data on revenues from related entities can be found in note 9
Geographical information
Below we present revenues from clients divided into operating areas.
GEOGRAPHICAL AREA FOR
FINANCIAL ACTIVITY
01/07/2023 –
30/06/2024
(in thous. EUR)
01/07/2022 –
30/06/2023
(in thous. EUR)
Estonia
35
78
Poland
0
9
Total for the financial activity
35
87
Information on leading clients.
In the period 01/07/2023-30/06/2024 the Company achieved revenues from
transactions with an external single client which exceed 10% of the entity's total
revenues:
• Client no. 1 –100% of total revenues
In the period 01/07/2022-30/06/2023 the Company achieved revenues from
transactions with an external single client which exceed 10% of the entity's total
revenues:
• Client no. 1 – 51% of total revenues
• Client no. 2 – 40% of total revenues
49
Division into reporting
Note 9
Balances
Parent Company: Patro
OÜ is a natural person Damian
shareholder of Fon SE, Atlantis
segments
and transactions
Invest OÜ in
Patrowicz).
SE, Investment
with related
Tallinn (100%
shareholder
The
parent
Friend
s
entities
of
Patro Company
is also Capital
SE.
Inves
t
the
main
50
Reporting segments
01/07/2023 – 30/06/2024
(in thous. EUR)
Estonia
Poland
Assets
1 459
17
Commitments
54
0
Profit/loss
14
-12
Related party
transactions for the
period ended
30/06/2024
Interest
income
loans granted
loans repaid
Loan and
interest
receivables
Parent
Company:
Patro Invest
OÜ
0
0
18
0
Key Management Board members and all companies they directly or indirectly own:
Patro Invest sp. z o.o. w
likwidacji
0
0
0
15
Damar Patro
ÜÜ
35
0
0
1 437
total (note: 4,8)
35
0
18
1 452
Related party
transactions for the
period ended
30/06/2023
Interest
income
loans granted
loans repaid
Loan and
interest
receivables
Loan and interest receivables:
Patro Invest
OÜ
44
1 250
1 250
16
Key Management Board members and all companies they directly or indirectly own::
Patro Invest sp. z o.o. w
likiwdacji
7
0
0
14
Damar Patro
ÜÜ
35
0
359
1 402
Patro Administracja sp.
z o.o.*
1
0
803
0
total (note 4,8)
87
1 250
2 412
1 432
Remuneration of the Supervisory Board and the Management Board:
No remuneration of Management and Supervisory Board members for the fiscal
year and the previous year.
Note 10
Contingent assets and liabilities
Tax authorities have the right to inspect the Company's tax records for up to 5
years after the filing of the tax return and, in the event of errors, impose
additional taxes, interest and penalties.
The tax authorities did not conduct any tax audits at the Company in 2023-2024.
Note 11
Significant events after the balance sheet date
Assessing all available information corresponding to the next twelve months
from the end of the reporting period, the Management Board of the compan pre-
pared a report for the period from 01/07/2023 to 30/06/2024, assuming the
Company's continued operations. The Company has been profitable to date and
continues to be so. It has easy access to financial resources. According to the Ma-
nagement, this does not require a detailed analysis or the search for alternative
sources of financing.
Due to the fact that as of the balance sheet date the Company's equity is less than
50% of the share capital, i.e., it does not meet the requirements of § 301 of the
Estonian Commercial Code, the Issuer's Management Board will propose to the
Shareholders at the next General Meeting to adopt an appropriate resolution to
reduce the share capital.
After the balance sheet date, the receivable from Patro Invest Sp. z o.o. in liquida-
tion with its registere office in Płock resulting from unpaid interest on the loan
concluded on January 26, 2017 (annexed on October 5, 2018 and March 15, 2019)
was transferred in its entirety to Patro Administracja Sp. z o.o. withits registered
office in Płock by an assignment agreement concluded on September 25, 2024 for
theamount of PLN 223,888.93i.e. 52.5 thousand euro (according to the NBP ex-
change rate of 24/09/2024. Patro Administracja sp. z o. o. settled the amount in
accordance with the assignment agreement.
At present, the war in Ükraine does not have an impact on the Company's
situation. Investment Friends SE does not anticipate that military actions in
Ükraine will negatively affect the Company's operational activities.
51
VIII. STATEMENT OF COMPLIANCE
The Management Board confirms that the Management report, corporate
governance report and remuneration report as set out on pages 7 to 21 gives a
true and fair view of the key events that occurred during the reporting period and
their impact on the financial statements contains a description of the key risks
and uncertainties and reflects material transactions with related parties..The
Management Board confirms the correctness and completeness of Investment
Friends SE financial statements for the year 2023/2024 as set out on pages from
22 to 51 and that:
• the accounting policies used in preparing the financial statements are in
compliance with International Financial Reporting Standards as adopted
in the European Ünion;
• the financial statements give a true and fair view of the financial position,
financial performance and cash flows of the Company;
• Investment Friends SE is going concern.
Signature
Member of the Management Board of the Issuer
Agnieszka Gujgo
52
IX. MANAGEMENT BOARD'S PROPOSAL ON PROFIT DISTRIBUTION
In accordance with § 332 of the Estonian Commercial Companies Code, the
Management Board hereby proposes to the General Meeting of Shareholders that
the Company's profit after tax (net profit) for the financial year 2023/2024,
amounting to EÜR 2,000, as disclosed in the Company's annual separate financial
statements for the year ended 30/06/2024, be allocated as follows:
- the amount of EÜR 2,000 (two thousand euros) shall be allocated to the
Company's reserve capital.
The Management Board decides to request the Supervisory Board to assess this
proposal for the distribution of the Company's net profit for the financial year
2023/2024 and to submit it for consideration to the General Meeting of
Shareholders, in accordance with § 332 of the Estonian Commercial Code.
Signature
Member of the Management Board of the Issuer
Agnieszka Gujgo
53
KPMG Baltics OÜ
Ahtri 4
Tallinn 10151
Estonia
Telephone
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Internet
+372 6 268 700
+372 6 268 777
www.kpmg.ee
Independent Auditors’ Report
To the shareholders of Investment Friends SE
The Auditor’s Report of the Annual Financial Statements
Opinion
We have audited the financial statements of Investment Friends SE (the Company), which comprise the statement of
financial position as at 30 June 2024, the statement of profit and loss, other comprehensive income and the statements
of cash flows and changes in equity for the year then ended, and notes, comprising material accounting policies and
other explanatory information.
In our opinion, the financial statements presented on pages from 22 to 51 present fairly, in all material respects, the
financial position of the Company as at 30 June 2024, and its financial performance and its cash flows for the year then
ended in accordance with International Financial Reporting Standards as adopted by the European Union.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (Estonia). Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section
of our report. We are independent of the Company in accordance with the Code of Ethics for Professional Accountants
(Estonia) (including Independence Standards) and we have fulfilled our other ethical responsibilities in accordance with
these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
financial statements of the current period. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Value of the loans granted
Granted loans consist of loans granted and interest in the amount of 1 452 thousand euros, which is 98,4% of the
company's assets. Of the loans granted, 100% are loans to related parties.
We refer to the following note in the financial statements: Note 4 "Financial Assets."
The key audit matter
How the matter was adressed in our audit
The value of the loans granted is assessed using the
amortized cost method, as described in Note 1 of the
financial statements.
The valuation of these loans is an area of estimation, as
it relies on management's assessments based on their
past experience and assumptions.
During the audit procedures, we performed, among
other things, the following:
• Reviewed the terms of loan agreements and
verified the consistency of accounting data with the
agreements;
• Verified the accuracy of balances with confirmation
of balances;
• Reviewed and analyzed the financial data of the
borrowers and ensured that management’s
assessments were consistent with our
understanding;
• Checked the receipt of loan payments after the
balance sheet date;
• Assessed the adequacy of the disclosed
information and its compliance with IFRS
requirements.
KPMG Baltics OÜ, an Estonian limited liability company and a
member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG
International”), a Swiss entity. Reg no 10096082.
Other Information
Management is responsible for the other information. The other information comprises the management report, letter
of the management board, corporate governance report, remuneration report, selected financial data and general
information about the issuer, but does not include the financial statements and our auditors’ report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial statements or our knowledge
obtained in the audit, or otherwise appears to be materially misstated. With respect to the remuneration report, our
responsibility also includes considering whether the remuneration report has been prepared in accordance with the
requirements of Article 135
3
(3) of the Securities Market Act.
If, based on the work we have performed, 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. In our opinion, the remuneration report has
been prepared in accordance with the requirements of Article 135
3
(3) of the Securities Market Act.
Responsibilities of Management and Those Charged with Governance for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with
International Financial Reporting Standards as adopted by the European Union, and for such internal control as
management determines is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic
alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting process.
Auditors’ Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the 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
International Standards on Auditing (Estonia) 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 financial statements.
As part of an audit in accordance with Standards on Auditing (Estonia), we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may
cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the
financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based
on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may
cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures,
and whether the financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during
our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence and where applicable, actions taken to eliminate threats or
safeguards applied.
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the 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.
Other Requirements of the Auditors' Report
We were appointed by those charged with governance on 8 May 2024 to audit the financial statements of Investment
Friends SE for the year ended 30 June 2024. Our total uninterrupted period of engagement is 1 year, covering the
period ended on 30 June 2024.
We confirm that we have not provided to the Company the prohibited non-audit services (NASs) referred to in Article
5(1) of EU Regulation (EU) No 537/2014. We also remained independent of the audited entity in conducting the audit.
KPMG Baltics OÜ
Licence No 17
Eero Kaup
Certified Public Accountant, Licence No. 459
Tallinn, 8 November 2024
