SPECIALIAL CLOSED-ENDED TYPE
PRIVATE EQUITY INVESTMENT COMPANY
INVL Technology
DECEMBER 2023 PREPARED IN ACCORDANCE WITH INTERNATIONAL FINANCIAL
REPORTING STANDARTS AS ADOPTED BY THE EUROPEAN UNION PRESENTED
TOGETHER WITH INDEPENDENT AUDITOR
Special closed-end type private capital investment company
INVL Technology
Gyn j str. 14, LT-01109 Vilnius Company code 300893533
Phone +370 5 279 0601 Account No LT66 7044 0600 0604 2883
Fax +370 5 279 0530 SEB bank
E-mail: info@invltechnology.lt
CONFIRMATION OF RESPONSIBLE PERSONS
8 April 2024
Following the Information Disclosure Rules of the Bank of Lithuania and the Law on Securities
(Article 12) of the Republic of Lithuania, management of INVL Technology hereby confirms that, to
the best of 2023 are prepared in
accordance with International Financial Reporting Standards (IFRS) as adopted by the European
Union, give true and fair view of the assets, liabilities, financial position and profit or loss of INVL
Technology.
Presented Annual Report for 2023 includes a fair review of the development and performance of the
business and position of the company and
main risks and contingencies faced thereby.
ENCLOSED:
financial statements for 2023.
Annual Report for 2023.
Chairman of the Investment Committee
of INVL Technology
Head of alternative funds accounting of
the Management Company INVL Asset Management Agn
Chairman of the Investment Committee of INVL
Financial
Statements for 2023, also Annual Report for 2023
and Confirmation of responsible persons with a
qualified electronic signature.
Head of alternative funds accounting of the
Management Company of INVL Technology, signs the
Company s Financial Statements for 2023, and
Confirmation of responsible persons with a qualified
electronic signature.
3
Translation note:
This version of the financial statements has been prepared in Lithuanian and English languages. In all matters
of interpretation of information, views or opinions, the Lithuanian language version of the financial
statements takes precedence over the English language version.
TABLE OF CONTENTS
BASIC DETAILS ........................................................................................................................................4
STATEMENT OF COMPREHENSIVE INCOME ....................................................................................... 5
STATEMENT OF FINANCIAL POSITION ................................................................................................. 6
STATEMENT OF CASH FLOWS ..............................................................................................................7
STATEMENT OF CHANGES IN EQUITY.................................................................................................. 8
NOTES TO THE FINANCIAL STATEMENTS ........................................................................................... 9
1 General information...............................................................................................................................9
2 Basis of preparation and material accounting policies........................................................................10
3 Accounting estimates and judgements ...............................................................................................15
4 Financial assets at fair value through profit or loss.............................................................................16
5 Cash and cash equivalents .................................................................................................................20
6 Loans...................................................................................................................................................20
7 Reserves .............................................................................................................................................20
8 Provisions............................................................................................................................................21
9 Borrowings ..........................................................................................................................................22
10 Other current liabilities .....................................................................................................................22
11 Net Asset Value (a non-IFRS measure) ..........................................................................................22
12 Dividends and interest income.........................................................................................................22
13 Other expenses (including remuneration for statutory audit)...........................................................22
14 Income tax .......................................................................................................................................22
15 Earnings per share...........................................................................................................................23
16 Related-party transactions...............................................................................................................24
17 Segment reporting ...........................................................................................................................25
18 Financial instruments by category ...................................................................................................25
19 Financial risk management ..............................................................................................................26
20 Events after the reporting period .....................................................................................................29
ANNUAL REPORT...................................................................................................................................30
................................................................................................. 12
INVL TECHNOLOGY UTIB
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in EUR thousands unless otherwise stated)
4
BASIC DETAILS
Management
Supervisory Board
(until 20 February 2023)
(until 20 February 2023)
Gintaras Rutkauskas (until 20 February 2023)
Management Company
INVL Asset Management UAB
Investment committee
Mr. Chairman)
Mrs. Vida
Mr. Vytautas Plunksnis
Mr.
Depository
AB SEB bank
Address of registered office and company code
Registered office address:
,
Vilnius,
Lithuania
Company code 300893533
Banks
AB SEB bank
These financial statements were authorized for issue by the Management Company and signed on 8 April 2024.
The document is signed with a
qualified electronic signature
The document is signed
with a
qualified electronic signature
Chairman of the Investment
Committee INVL Technology
Head of alternative funds
accounting at INVL Asset
Management UAB
INVL TECHNOLOGY UTIB
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in EUR thousands unless otherwise stated)
5
STATEMENT OF COMPREHENSIVE INCOME
Notes
2023
2022
Income
Net change in fair value of financial assets 4 9,
949
(424)
Dividend income 12
500
800
Interest income 12 292
138
Total net income 10,741
514
Management fee 2.8
(481)
(590)
Success fee/fee reversal 8 (4,906
)
2,339
Other expenses 13 (182
)
(148)
Total operating expenses
(5,569
)
1,601
Operating profit (loss) 5,172
2,115
Finance costs (7)
-
Profit (loss) before tax for the reporting period 5,165
2,115
Income tax 14 -
-
Profit (loss) for the reporting period 5,165
2,115
Other comprehensive income for the reporting period, net
of
tax
-
-
TOTAL COMPREHENSIVE INCOME FOR THE
REPORTING PERIOD
5,165
2,115
Basic and diluted earnings (deficit) per share (in EUR) 15 0.43
0.18
INVL TECHNOLOGY UTIB
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in EUR thousands unless otherwise stated)
6
STATEMENT OF FINANCIAL POSITION
Notes
As at
31 December 2023
As at
31 December 2022
ASSETS
Non-current assets
Financial assets at fair value through profit or loss
4
44,
890
34,
941
Loans 6
1,
895
1,
895
Total non-current assets
46,785
36,836
Current assets
Loans 6
1,
354
878
Cash and cash equivalents 5
749
733
Total current assets
2,
103
1,611
Total assets
48,
888
38,447
EQUITY AND
LIABILITIES
Equity
Share capital 1
3,
531
3,
531
Share premium
8,
268
8,
268
Own shares
(280)
(294)
Reserves 7
10,337
10,257
Retained earnings
21,673
16,508
Total equity
43,529
38,270
Liabilities
Provisions for success and accrued management fees
8
4,906
-
Total long-term liabilities
4,906
-
Current liabilities
Borrowings 9
300
-
Other current liabilities 10 153
177
Total current liabilities
453
177
Total liabilities
5,
359
177
Total equity and liabilities
48,
888
38,
447
INVL TECHNOLOGY UTIB
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in EUR thousands unless otherwise stated)
7
STATEMENT OF CASH FLOWS
Notes
2023
2022
Cash flows from operating activities
Net profit for the reporting period 5,165
2,115
Adjustments for:
Dividend income 12 (500)
(800)
Interest income 12 (292)
(138)
Interest expenses 7
Net change in fair value of financial assets 4 (9,949)
424
Provisions for success and accrued management fees 8 (4,906)
(2,
339)
(663)
(738)
Changes in working capital:
Dividends received 12 500
800
Increase (decrease) in other current liabilities (31)
(11)
Cash flows from (used in) operating activities 469
789
Income tax paid - -
Net cash flows from (used in) operating activities (194)
51
Cash flows from investing activities
Interest received 0 316 25
Loans granted 0 (1,150)
(2,
070)
Loan repayments received 0 650 600
Net cash flows from (used in) investing activities (184)
(1,
445)
Cash flows from financing activities
Repurchase of own shares - -
Received payments for share based awards 94 30
Received loans 300 -
Net cash flows from (used in) financing activities 394 30
Foreign exchange effect on the balance of cash and
cash equivalents
- -
Net increase (decrease) in cash and cash equivalents 16 (1,
364)
Cash and cash equivalents in the beginning of the
period
733 2,097
Cash and cash equivalents at the end of the period 5 749 733
INVL TECHNOLOGY UTIB
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in EUR thousands unless otherwise stated)
8
STATEMENT OF CHANGES IN EQUITY
Share
capital
Share
premium
Own
shares
Legal
reserve
Reserve for
acquisition
of own
shares
Reserves
for share
-
based
payments
Retained
earnings
Total
Balance at 31 December
2021 3,
531
8,
268
(296)
354
9,
800
75
14,
393
36,
125
Purchase of own shares
-
-
-
-
-
-
-
-
Share based payments
-
-
2
-
-
28
-
30
Redistribution of retained
earnings to the reserves
-
-
-
-
-
-
-
-
Total transactions with
owners of the Company,
recognized directly in equity
-
-
2
-
-
28
-
30
Net profit (loss) for 2022
-
-
-
-
-
-
2,115
2,115
Total
comprehensive income
for 2022
-
-
-
-
-
-
2,115
2,115
Balance at 31 December
2022
3,531
8,268
(294)
354
9,800
103
16,508
38,270
Purchase of own shares
-
-
-
-
-
-
-
-
Share based payments
-
-
14
-
-
80
-
94
Redistribution of retained
earnings to the reserves
-
-
-
-
-
-
-
-
Total transactions with
owners of the Company,
recognized directly in equity
-
-
14
-
-
80
-
94
Net profit (loss) for 2023
-
-
-
-
-
-
5,165
5,165
Total
comprehensive income
for 2023
-
-
-
-
-
-
5,165
5,165
Balance at 31 December
2023
3,
531
8,
268
(280)
354
9,
800
183
21,673
43,529
INVL TECHNOLOGY UTIB
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR thousands unless otherwise stated)
9
NOTES TO THE FINANCIAL STATEMENTS
1 General information
INVL Technology UTIB (company code 300893533, ) is a closed-ended type investment company
registered in the Republic of Lithuania. 4, Vilnius, Lithuania.
On 14 July 2016 the Company has been issued a closed-ended type investment company (UTIB) license by the Bank of
activities are supervised by the Bank of
Lithuania, thereby providing additional security to the investors.
INVL Technology strategy is to invest in national-level European IT businesses with high globalization potential and grow them
into global players by utilizing the sales channels and intellectual capital of the managed companies.
to ensure efficiency and control of investments. The Investment Committee consists of 4 (four) representatives of the
Management Company (employees, members of management bodies of the Management Company, other persons appointed
by a decision of the Board of the Management Company). The purpose of the Investment Committee is to ensure the Managed
he adopted decisions. On 29 April 2021, the Company approved the establishment
of the Supervisory Board of the Company which replaced the Advisory Committee, formed back in April 2017. The purpose of
the Supervisory Board is to ensure the representation of the interests of the Company's shareholders, the accountability of this
In accordance with the new
version of the Republic of Lithuania Law on Companies which entered into effect on 30 November 2022 and according to the
provisions of section 1 of article 78 therein, the requirement to form a collegial body with supervisory functions no longer applies
to investment companies specified in the Republic of Lithuania Law on Collective Investment Undertakings with the legal form
y
with supervisory function the Supervisory Board has been eliminated on 2 February 2023. It was envisaged that the
Management Company may form an Advisory Committee of the Company.
The Company operates as a cluster of IT businesses working with large corporate and public entities. The entities managed by
the Company are classified into 3 functional groups: business climate improvement and e-government, IT services and software,
and cyber security. NRD Group companies belong to the business climate improvement and e-government group, the cyber
security group covers NRD CS, whereas the IT services and software group is formed by joining the areas of IT infrastructure
and IT intensive in At the end of 2023 INVL Technology portfolio consists of 17 operating companies. At the
end of 2022 INVL Technology portfolio consisted of 18 operating companies.
The Company has an agreement on depository services with SEB Bankas which acts as
The Management Company manages the portfolio of investment instruments of the Company following principles of
diversification set in the Articles of Association (the conformity of the portfolio of investment instruments of the Company to those
incorporation documents and to choose the Depository). The Company cannot invest more than 30% of net asset value of the
Company into any single issuer of the instrument. The indicator may be exceeded up to 4 years after the date the Company
became a closed-ended investment company. More detailed requirements are lined out in the Articles of Association of the
Company and in Note 19.1.
As at 31 December 2023 and 2022 authorized share capital was divided into 12,175,321 ordinary registered
no shares of the Company. The shareholders holding ownership to or otherwise controlling over 5% authorized
share capital (by number of votes held) are as follows as of 31 December 2023 and 31 December 2022:
Number of shares
held as at 2023.12.31
%
share of share
capital 2023.12.31
Number of
shares
held as at 2022.12.31
%
share of share
capital 2022.12.31
LJB Investments UAB
(controlling
shareholder Mr. Alvydas Banys)
2,424,152
19.91%
2,424,152
19.91%
INVL LIFE UAB (
controlling
shareholder
)
1,873,678
15.39%
1,873,678
15.39%
Ms.
1,466 421
12.04%
1,466,421
12.04%
Lietuvos Draudimas AB
909,090
7.47%
909,090
7.47%
Mr.
675,452
5.55%
675,452
5.55%
Mr. Alvydas Banys
618,745
5.08%
618,745
5.08%
Company (own shares)
101,252
0.83%
106,799
0.88%
Other minor shareholders
4,106,531
33.73%
4,100,984
33.68%
Total
12,175,321
100.00%
12,175,321
100.00%
have been traded in the Baltic Secondary List of NASDAQ Vilnius stock exchange since 4 June 2014.
In 2023 and 2022 the Company did not have own employees.
INVL TECHNOLOGY UTIB
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR thousands unless otherwise stated)
10
2 Basis of preparation and material accounting policies
2.1 Basis of preparation
Statement of compliance
The
as adopted by the European Union (EU).
The Company meets the definition criteria of an investment entity under IFRS 10. The Company has no subsidiaries that provide
therefore no subsidiaries to be consolidated and the Company does
not prepare consolidated financial statements.
These financial statements have been prepared on a historical cost basis, except for financial assets measured at fair value
through profit or loss. The financial statements are presented in EUR thousands, and all the amounts have been rounded to the
nearest thousand unless otherwise stated.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also
requires the management to exercise its judge
involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial
statements are disclosed in Note 3
circumstances, events or actions, actual results may ultimately differ from these estimates.
Adoption of new and/or changed IFRSs and International Financial Reporting Interpretations Committee (IFRIC) interpretations
The following IFRSs amendments were adopted by the Company for the first time in the financial year ended 31 December
2023:
- amendments to IAS 1 and IFRS practice statement 2: Disclosure of accounting policies;
- amendments to IAS 8: Definition of accounting estimates;
- amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction;
- amendments to IAS 12: International Tax Reform Pillar Two Model Rules;
- IFRS 17 Insurance Contracts.
IAS 1 was amended to require companies to disclose their material accounting policy information rather than their significant
accounting policies. The amendment provided the definition of material accounting policy information. The amendment also
clarified that accounting policy information is expected to be material if, without it, the users of the financial statements would be
unable to understand other material information in the financial statements. The amendment provided illustrative examples of
accou t
to IAS 1 clarified that immaterial accounting policy information need not be disclosed. However, if it is disclosed, it should not
The am
.
All amendments adopted as of 1 January 2023 had no impact on the Co
December 2023.
Standards adopted by the EU but not yet effective and have not been early adopted
Amendments to existing standards and new standards, which are adopted by the EU, but not yet effective, are not relevant to
the Company.
Standards not yet adopted by the EU
Amendments to existing standards and new standards, which are not yet adopted by the EU are not relevant to the Company.
INVL TECHNOLOGY UTIB
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR thousands unless otherwise stated)
11
2 Basis of preparation and material accounting poli
2.2 Investment entity and consolidated financial statements
Investment entity
The Company has multiple unrelated investors. The Company has multiple investments. Ownership interests in the Company
are in the form of equity securities issued by the Company ordinary registered shares. In accordance with IFRS, the Company
meets all the requirements for an investment entity:
(i) obtains funds from investors for the purpose of providing them with investment management services.
(ii) commits to investors that its business purpose is to invest for capital appreciation, investment income or both;
(iii) measures and evaluates its investments and makes investment decisions on a fair value basis as a key criterion.
Subsidiaries
The Company meets the definition of an investment entity as defined by IFRS 10 and is required to account for the investments
in its subsidiaries at fair value through profit and loss. The fair value of subsidiary investments is determined on a consistent
basis as described in the Note 4.
Where the Company is deemed to control an underlying portfolio company, whereby the control is exercised via voting rights or
indirectly through the ability to direct the relevant activities in return for access to a significant portion of the variable gains and
losses derived from those relevant activities, the underlying portfolio company and its results are also not consolidated and are
instead reflected at fair value through profit or loss.
2.3 Functional and presentation currency
The financial statements are prepared in euros (EUR), which is
are rounded to the nearest thousand (EUR thousand) unless otherwise stated. Due to the rounding effects, the totals in the
tables may not add up.
2.4 Fair value estimation
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. The fair value of investments that are not traded in active markets is determined
by using valuation techniques. Such valuation techniques may include the most recent transactions in the market, the market
price for similar transactions, discounted cash flow analysis or any other valuation models.
At the end of each reporting period fair values for unlisted equity securities are determined by the external qualified valuer using
valuation techniques. Such valuation techniques may include earnings multiples (based on the budget earnings or historical
earnings of the issuer and earnings multiples of comparable listed companies) and discounted cash flows (based on the
expected future cash flows discounted at an appropriate discount rate). The Company adjusts the valuation model as deemed
necessary for factors such as non-maintainable earnings, seasonality of earnings, market risk differences in operations relative
to the peer multiples etc. The valuation techniques also consider the original transaction price and take into account the relevant
developments since the acquisition of the investments and other factors pertinent to the valuation of the investments, with
reference to such rights in connection with realization, recent third-party transactions of comparable types of instruments, and
reliable indicative offers from potential buyers. In determining fair value, the Company may rely on the financial data of investee
portfolio companies and on estimates by the management of the investee portfolio companies as to the effect of future
developments. Although the external qualified valuer uses its best judgement, and cross- references results of primary valuation
models against secondary models in estimating the fair value of investments, there are inherent limitations in any estimation
techniques. Whilst the fair value estimates presented herein attempt to present the amount the Company could realize in a
current transaction, the final realization may be different as future events will also affect the current estimates of fair value. The
effect of such events on the estimates of fair value, including the ultimate liquidation of investments, could be material to the
financial statements.
Where portfolio investments are held through subsidiary holding companies, the net assets of the holding company are added
to the value of the portfolio investment being assessed to produce the fair value of the holding company held by the Company.
INVL TECHNOLOGY UTIB
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR thousands unless otherwise stated)
12
2 Basis of preparation and material
2.5 Financial assets
Financial assets within the scope of IFRS 9 are classified as:
- financial assets at fair value through profit or loss,
- financial assets at fair value, recognizing the change in fair value as other comprehensive income,
- or financial assets measured at amortized cost.
The classification depends on the ent
cash flows.
The Company classifies its investments in equity securities as financial assets measured at fair value through profit or loss.
Gains or losses arising from changes in the fair value of financial assets at fair value through profit or loss are recognized in the
statement under "Dividend income" when the right to pay dividends is established. Assets in this category are classified as
current assets if the payment is settled within 12 months; otherwise, it is recorded as non-current assets.
loans granted and bonds are held to collect contractual cash flows and they are solely
payments of principal and interest, the Company classifies these financial assets as measured at amortized cost. This category
also includes other receivables and cash and cash equivalents. The Company reclassifies debt instruments when and only when
its business model for managing those assets changes.
The value of financial assets at amortized cost at the balance sheet date is determined using the effective interest method, less
impairment.
Financial assets are recognized at fair value when the Company becomes party to the contractual provisions of the instrument.
2.6 Impairment of financial assets
The Company assesses on a forward-looking basis the expected credit losses associated with its financial assets carried at
amortized cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk.
Loans granted and bonds purchased are considered to be low credit risk when they have a low risk of default, and the borrower
has a strong capacity to meet its contractual cash flow obligations in the near term.
The financial assets are considered as credit-impaired, if objective evidence of impairment exists at the reporting date. Evidence
of impairment may include indications that the debtors or a group of debtors are experiencing significant financial difficulty,
default or delinquency in payments, the probability that they will enter bankruptcy or other financial reorganization.
Financial assets are written off, in whole or in part, when there is no reasonable expectation of recovery. Indicators that there is
no reasonable expectation of recovery include, among others, the probability of insolvency or significant financial difficulties of
the debtor. Impaired debts are derecognized when they are assessed as uncollectible.
2.7 Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and short-term deposits with an original maturity of three months or less.
2.8 Success fee and Management fee
The Management Fee is the remuneration paid to the Management Company for management of the assets of the Company,
which is payable for each quarter of a calendar year and is 0,5 percent of the weighted average capitalization of the Company,
calculated according to the Articles of Association. The Management Fee during Investment Period for a full quarter is 0,625
percent (Investment Period is five years after obtaining a license for the Company (Note 11)). The Management Fee for the
Investment Period is disbursed according to the following rules:
80 percent of the Management Fee is paid not later than 5 Business Day after the last day of the quarter of a calendar
year;
20 percent of the Management Fee (total amount cannot exceed EUR 750 thousand) is disbursed with the first
disbursement of Success Fee; if Success Fee is not disbursed, this portion of Management Fee is not payable.
INVL TECHNOLOGY UTIB
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR thousands unless otherwise stated)
13
2 Basis of preparation and material
2.8 Success fee and Management fee
The Success Fee depends on the return earned by the Company, which shall be calculated for the whole Company but not for
an individual shareholder and is based on an internal rate of return. The Success Fee is disbursed after annual internal rate of
return of disbursements reaches annual rate of 8 percent during lifetime of the Company. The basis of calculation of annual
internal rate of return is initial net assets value of the Company as of 13 July 2016 and is equal to EUR 23,906,150.
After internal rate of return reaches 8 percent, excess return earned is allocated as the Success Fee until total return on
investment is distributed according to the proportion of 80/20 (20 percent of the return is the Success Fee payable to the
Management Company). Any amounts exceeding before mentioned return are disbursed to the shareholders after 20 percent
deduction as the Success Fee payable to the Management Company.
The Success Fee shall be disbursed to the Management Company only after the Shareholders are paid their initial investment
with average annual return of 8 percent. Until then, the Success Fee shall be accumulated and reflected in financial statements
as a liability to the Management Company according to the accounting policy. The Success Fee shall be disbursed to the
Management Company each time when funds are disbursed to Shareholders if the condition provided above is satisfied.
2.9 Financial liabilities
The Company recognizes financial liability when it first becomes a party to the contractual rights and obligations in the contract.
All financial liabilities are initially recognized at fair value, minus (in the case of a financial liability that is not at fair value through
profit or loss) transaction costs that are directly attributable to issuing the financial liability. Financial liabilities are measured at
amortized cost using the effective interest method. A financial liability is derecognized when the obligation under the liability is
discharged or cancelled or expires.
Management fee
Determined Management Fee is payable quarterly is recorded as a financial liability and is measured at amortized cost.
Success fee
The Success Fee is accounted as a provision on a quarterly basis until the conditions, as described in note 2.8, for the payment
of the Performance Fee are satisfied, when payable part of the Success Fee is recorded as financial liability and is further
accounted for at amortized cost.
2.10 Revenue recognition
Profit from investment transfer
Investment gains / losses are recognized when the significant portion of the risks and rewards of ownership of the investment is
transferred to the buyer. Gains / losses on investments are disclosed in conjunction with changes in the fair value of investments.
Interest Income
Interest income is recognized on an accrual basis using the effective interest rate that is used to discount accurately the
estimated future cash inflows over the expected useful life of the financial instruments to their net carrying amount.
Dividend income
Dividend income is recognized in the period in which the Company's right to receive payment is established.
2.11 Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are
recognized in equity as a deduction, net of tax, from share premium.
The financial instrument (shares of the Company) includes legal obligation for the issuing entity to deliver pro rata share of its
net assets upon liquidation, which is certain to occur as the Company has finite life (Note 1). However, the shares of the Company
meet the following conditions, thus shares of the Company are treated as equity:
net
assets are those assets that remain after deducting all other claims on its asset;
The instrument is in the class of instruments that is subordinate to all other classes of instruments.
INVL TECHNOLOGY UTIB
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR thousands unless otherwise stated)
14
2 Basis of preparation and material
2.12 Share-based payments
As at 31 December 2023 two types of share-based payment schemes for the
According to both of these programs part of employee remuneration is settled in equity.
In case of the first share-based payment scheme grant date is the date at which the Company, Subsidiary and the employee
agree to a share-based payment arrangement, and requires that the Company, Subsidiary and the employee have a shared
understanding of the terms and conditions of the arrangement. If the employee services are rendered before grant date, the
Company estimating the fair value of the equity instruments is by assuming that grant date is at the reporting date. Once grant
date has been established, the Company revises the earlier estimates so that the amounts recognized for services received are
based on the grant-date fair value of the equity instruments. Options under this program will vest notwithstanding any other
conditions and is a non-optional part of remuneration. The option holder acquires the ownership right to the option shares after
the agreed period (3 years). Under certain conditions ownership rights could be exercised earlier.
The fair values of options granted in 2023 and in 2022 according to the first scheme were determined using weighted average
of the last full month prior to pricing. All options granted during 2023 and 2022 was for the renumeration related to 2022 and
2021 respectively and are fully vested.
In total, EUR 163 thousand (EUR 58 thousand in 2023, EUR 30 thousand in 2022 and EUR 75 thousand in 2021) of employee
remuneration levied by the Company to its subsidiaries has been paid by the Subsidiaries and included in reserve for share-
based payments. When the options are exercised, the Company sells own shares. During 2023 the Company has sold its own
shares for EUR 14 thousand (EUR 2 thousand in 2022).
In its separate financial statements, the grant by the Company of options over its equity instruments to the employees of
subsidiary undertakings is treated as a reserve for share-based payments. The fair value of employee services received,
measured by reference to the grant date fair value is recognized as a change in the investment in the subsidiary by adjusting for
the change in the value of the investment.
During 2023 the Company started to apply the second type of the share-based payment scheme, where grant date is the date
at which the Company and the employee of Subsidiary agree to a share-based agreement without any compensations from
Subsidiary to the Company. Options under this program will vest in case the service condition (valid both the option agreement
ant the employment contract at the end of Companies activity) and the performance market condition (the annual return of the
Company exceeds hurdle rate of 8%) are met. As this type of option is considered as equity-settled share-based transaction,
the fair value of the options granted shall be calculated at the grant date and shall be recognized during the vesting period.
The fair values of options granted in 2023 according to the second scheme amounting to EUR 117 thousand were determined
using the Black-Scholes model (BSM). The amount of EUR 28 thousand was recognized in 2023 and treated as the wage and
salary expenses and the reserve for share-based payments.
2.13 Current and deferred income tax
Following the provisions of the Lithuanian Law on Corporate Income Tax, investment income of closed-end investment
companies operating in accordance with the Lithuanian Law on Collective Investment Undertakings shall not be subject to
income tax.
2.14 Provisions
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate
can be made of the amount of the obligation. The expense relating to any provision is presented in the profit or loss. If the effect
of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate,
the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized
as a finance cost.
Provisions for success fee and part of management fee
The Company is obliged to pay success fee and part of the management fee to the management company under certain
circumstances (note 2.8).
As management services are provided during the period, provision for success and part of management fee should be
recognized when the Company has a present obligation (legal or constructive) as a result of a past event (the annual return of
the Company exceeds hurdle rate of 8%). The amount to be recognized equals the best estimate of economic resources needed
to cover the obligation.
INVL TECHNOLOGY UTIB
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR thousands unless otherwise stated)
15
3 Accounting estimates and judgements
3.1 Judgements
most significant effect on the amounts recognized in these financial statements:
Investment entity status
The management periodically reviews whether the Company meets all the definition criteria of an investment entity. In addition,
1), investment strategy, origin of income and fair value
valuation techniques. According to the management, the Company met all the definition criteria of an investment entity
throughout all the periods presented in these financial statements.
3.2 Accounting estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year,
are described below. The Company based its assumptions and estimates on parameters available when the financial statements
were prepared. Existing circumstances and assumptions about future developments, however, may change due to market
changes or circumstances arising beyond the control of the Company. Such changes are reflected in the assumptions when
they occur.
The significant areas of estimation used in the preparation of these financial statements are discussed below.
Fair value of investments that are not traded in an active market
Fair values of investments in subsidiaries that are not traded in an active market are determined by using valuation techniques,
primarily discounted cash flows, income multipliers and last comparable transactions. The valuation techniques used to
determine fair values are periodically reviewed and compared against historical results to ensure their reliability. Details of the
inputs and valuation models used to determine Level 3 fair value are provided in Note 4.
Provision for success fee and accrued part of management fee
As described in Notes 2.9 and 2.14, if the conditions provided for in the Company's Articles of Association are met, the Company
has an obligation to pay a success fee and a cumulative part of the management fee to the Management Company. Since the
Company's estimated return as at 31 December 2023 exceeded the minimum return barrier over the entire Company's period,
i.e. a binding past event occurred, the Company calculated a provision for success and accrued management fees.
The Company's estimated return as at 31 December 2022 did not exceed the minimum return barrier over the entire Company's
period, i.e. a binding past event did not occur, the Company did not calculate a provision for success and accrued management
fees.
The Company estimates that the best estimate of the provision for the performance fee and the accrued management fee is the
excess of the actual earnings as at 31 December 2023 over the minimum return barrier that would have been paid to the
Management Company if the Company had sold all its investments at the balance sheet date at the fair value of the investments
determined in the balance sheet. This method of calculation is based on the assumption that the fair value of the investment
presented in the balance sheet is the best estimate of the possible selling price of the investment at the balance sheet date. If
the actual selling price of the investment were 5 % higher, the amount of the provision would increase by EUR 449 thousand,
and if the selling price were 5% lower, provision would decrease by EUR 869 thousand.
INVL TECHNOLOGY UTIB
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR thousands unless otherwise stated)
16
4 Financial assets at fair value through profit or loss
The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation
technique:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities;
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable,
either directly or indirectly;
Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on
observable market data.
ierarchy.
The Company has no Level 1 or Level 2 instruments.
The table below presents the Co 31 December
2023:
Name
Country of
incorporation
Shares (voting rights)
held directly/indirectly
by the Company, (%) Profile of activities
Novian UAB Lithuania 100 Investing in IT companies
Novian Technologies UAB* Lithuania 100 Information technology solutions
Novian Esti OU* Estonia 100 Information technology solutions
Andmevara SRL* Moldova 100 Information technology solutions
Zissor AS* Norway 100 Information technology solutions
Novian Systems UAB* Lithuania 100 Information technology solutions
Novian PRO UAB* ** Lithuania 100 Information technology solutions
Andmevara AS* *** Estonia
100 Information technology solutions
NRD Companies AS Norway 100 Information technology solutions
NRD Systems UAB* Lithuania 95.91 Information technology solutions
Etronika UAB* Lithuania 94 Information technology solutions
Norway Registers Development AS
(with NRD AS Lithuania) * Norway 100 Information technology solutions
Norway Registers Development
Rwanda Ltd* Rwanda 100 Information technology solutions
Infobank Uganda Ltd* Uganda 30 Information technology solutions
NRD CS UAB Lithuania 100 Information technology solutions
NRD Bangladesh Ltd* Bangladesh 100 Information technology solutions
FINtime UAB Lithuania 100 Business process outsourcing
* These entities were indirectly controlled by the Company as at 31
December
2023.
** As of 11 December 2023, Elsis PRO UAB has changed their name to Novian PRO UAB.
***
By court order of 18 August 2023 was declared insolvent (in bankruptcy).
INVL TECHNOLOGY UTIB
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR thousands unless otherwise stated)
17
4 Financial assets at fair value through profit or loss (
31 December
2022:
Name
Country of
incorporation
Shares (voting rights)
held directly/indirectly
by the Company, (%) Profile of activities
Novian UAB Lithuania 100 Investing in IT companies
Novian Technologies UAB* Lithuania 100 Information technology solutions
Novian Esti OU* ** Estonia 100 Information technology solutions
Andmevara SRL* Moldova 100 Information technology solutions
Zissor AS* Norway 100 Information technology solutions
Novian Systems UAB* Lithuania 100 Information technology solutions
Elsis PRO UAB* Lithuania 100 Information technology solutions
Andmevara AS* Estonia 100 Information technology solutions
NRD Companies AS Norway 100 Information technology solutions
NRD Systems UAB* Lithuania 95.91 Information technology solutions
Etronika UAB* Lithuania 90 Information technology solutions
Norway Registers Development AS
(with NRD AS Lithuania) * Norway 100 Information technology solutions
Norway Registers Development
Rwanda Ltd* Rwanda 100 Information technology solutions
Infobank Uganda Ltd* Uganda 30 Information technology solutions
NRD CS UAB Lithuania 100 Information technology solutions
NRD Bangladesh Ltd* Bangladesh 100 Information technology solutions
FINtime UAB Lithuania 100 Business process outsourcing
* These entities were indirectly controlled by the Company as at 31
December
2022.
** As of 7 June 2022, Admevara Services OU has changed their name to Novian Esti OU.
The Company conducts an independent valuation of its investments in subsidiaries when preparing the annual financial
statements. As at 31 December 2023 and 31 December 2022, the valuation was carried out by Deloitte Verslo Konsultacijos UAB
using the income approach, except for the valuation of FINtime UAB, the net asset value method was used for the full valuation
of the company which was considered the most suitable for the company. In the opinion of the management, the fair value of
investments was determined appropriately using the inputs and ratios properly selected and reasonably reflecting the
investments. The fair value of investments was determined in compliance with the International Valuation Standards approved
by the International Valuation Standards Council. For the income approach, the discounted cash flow method was used. It was
based on free cash flow forecasts made by management for the period of 5 years.
:
Name
At 31 December
2023
At
31 December 2022
Novian UAB Group*
19,679
17,618
NRD Group**
10,986
7,289
NRD CS UAB***
14,104
9,876
FINtime UAB
121
158
Total
44,890
34,941
*Novian UAB group consisted of Novian UAB together with the entities controlled by it Novian technologies UAB, Novian Esti OU, Andmevara
AS, Andmevara SRL, Zissor AS, Norway Registers Development Rwanda Ltd, Novian systems UAB, Novian Pro UAB.
**Includes all NRD Group companies NRS Systems UAB, Etronika UAB, Norway Registers Development AS (with NRD AS Lithuania),
Infobank Uganda Ltd.
***Includes NRD CS UAB and NRD Bangladesh Ltd.
The subsidiaries of the Company as at 31 December 2023 did not have any significant restrictions on the repayment of dividends
to the Company from non-consolidated subsidiaries or the Company's loans to unconsolidated subsidiaries with the exception
of Novian UAB subordination agreement which has been signed between the Company, Novian UAB and Citadele Bank
regarding the loan agreement that was signed on 18 October 2021. The repayment term of Citadele bank credit is 31 May 2024
whereas the loan repayment to The Company is 31 October 2025.
INVL TECHNOLOGY UTIB
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR thousands unless otherwise stated)
18
4 Financial assets at
Due to changes in the fair value of subsidiaries of the Company, the Company may incur losses.
Information about dividends is presented in Note 12.
The table below presents movements in Level 3 financial instruments during 2023:
Opening balance at 1 January 2023 34,941
Unrealized gains and losses for the reporting period recognized in the income statement for assets
managed at the
end of the reporting period
9,949
Closing balance at 31 December 2023 44,890
The table below shows the fair value (Level 3) valuation methods of the investments in subsidiaries, the input data used and the
sensitivity analysis for changes in input data:
Name
Fair value,
Valuation
technique
Inputs Input value
Reasonable
possible shift -
/+
Change in
valuation
+/-
Novian Group 19,679
Discounted cash
flow
Weighted average cost of capital
8.5%
-/+ 1%
4,056/(2,966
)
Long-term growth rate 2.0%
-/+ 0.5%
(1,154)/1,347
Free cash flows -
-/+ 10%
(2,114)/2,114
Discount for lack of marketability 12.9%
-/+ 2%
443/(443
)
5y revenue growth rate -
-/+ 0.5%
(539)/546
NRD Group 10,986
Discounted cash
flow
Weighted average cost of capital
9.7%
-/+ 1%
1,433/(1,105
)
Long-term growth rate 2.0%
-/+ 0.5%
(434)/495
Free cash flows -
-/+ 10%
(963)/963
Discount for lack of marketability 11.7%
-/+ 2%
253/(253
)
5y revenue growth rate -
-/+ 0.5%
(204)/207
NRD CS UAB 14,104
Discounted cash
flow
Weighted average cost of capital
9.8%
-/+ 1%
1,965/(1,515
)
Long-term growth rate 2.0%
-/+ 0.5%
(617)/701
Free cash flows -
-/+ 10%
(1,306)/1,306
Discount for lack of marketability 14.5%
-/+ 2%
330/(330
)
5y revenue growth rate -
-/+ 0.5%
(231)/234
FINtime UAB 121 Net assets value
N/A N/A
N/A
N/A
Total:
44,890
The fair value was based on discounted cash flow method, which was selected by the external valuator as the best representation
of the company specific development potential, except for FINtime UAB where net assets value method was used. Different
method was selected as at the current moment the entity is not expected to generate significant free cash flows. Due to the
limited number of comparable companies and transactions, lack of reliability of the market data and limited comparability of
peers, the results of the guideline public companies and transaction methods were used as a supplementary analysis and were
provided only for illustrative purposes in valuation report.
Cash flow projections made by Company management for the period of 5 years (2024-2028) were used as a basis in the
income method. Free cash flows were calculated as net profit plus depreciation/amortization of property, plant and equipment
and intangible assets, plus or minus changes in working capital and minus capital expenditure. The resulting value was adjusted
by discount for lack of marketability and the amount of surplus assets/liabilities. As part of the valuation process, valuator had
analyzed items presented on the balance sheet of each company and had identified assets and liabilities, which can be treated
as surplus assets (e.g. net working capital above normalized level, non-operating cash balances, loans to related parties) and
debt/debt-like items; all of which were adjusted when arriving at equity value of the company.
In order to discount the free cash flows back to the valuation date, the external valuator had used the weighted average cost of
capital (WACC) as an appropriate discount rate. Calculation of WACC involves various components such as the cost of equity,
cost of debt, market value of equity and debt. Neither the approach for determining indicators used for cost of equity calculation
nor the external data sources have changed compared to the previous reporting period, however, WACC level in 2023 has
decreased with the significant impact on the fair value of the
INVL TECHNOLOGY UTIB
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR thousands unless otherwise stated)
19
4 Financial assets at fair value
The main reasons which caused 2023 WACC level change compared to 2022 were: (1) decrease in the risk free rate 2.3% in
2023 compared to 2.6% in 2022; (2) decrease in the country risk premium Novian Group from 2.9% to 1.6%, Novian
Technologies Group from 3.1% to 1.7%, Novian Systems from 2.8% to 1.4%, Novian PRO from 2.8% to 1.4%, NRD Group from
1.9% to 0.9%, NRD CS from 2.8% to 1.4%; (3) decrease in the equity risk premium 5.3% in 2023 compared to 5.8% in 2022.
Another cause for the significant increase in fair value of the
adjusted upwards in NRD CS and NRD Group companies compared to 2022. The adjustments are based on higher actual cash
flow results in 2023 than forecasted in 2022, contracted and planned projects and other key assumptions like sales growth,
expenses and profitability levels and spending on capital expenditures for the compan development in 2025-2028.
The table below presents movements in Level 3 financial instruments during 2022:
Opening balance at 1 January 2022 35,365
Increase the authorized capital of portfolio companies in cash -
Increase of the authorized capital of portfolio companies by contributing directly managed portfolio companies -
Sale of directly managed portfolio companies to other portfolio companies -
Transfer of directly managed portfolio companies to other portfolio companies by increasing their share capital -
Unrealized gains and losses for the reporting period recognized in the income statement for assets managed at the
end of the reporting period
(424)
Closing balance at 31 December 2022 34,941
The table below shows the fair value (Level 3) valuation methods of the investments in subsidiaries, the input data used and the
sensitivity analysis for changes in input data:
Name
Fair value,
Valuation
technique
Inputs Input value
Reasonable
possible shift -
/+
Change in
valuation +/-
Novian Group 17,618
Discounted cash
flow
Weighted average cost of capital
9.8%
-/+ 0.5%
1,165/(1,023)
Long-term growth rate 2.0%
-/+ 0.5%
(693)/788
Free cash flows -
-/+ 10%
(1,587)/1,587
Discount for lack of marketability 12.8%
-/+ 2%
322/(322)
5y revenue growth rate -
-/+ 0.5%
(397)/403
NRD Group 7,289
Discounted cash
flow
Weighted average cost of capital
10.7%
-/+ 0.5%
433/(386)
Long-term growth rate 2.0%
-/+ 0.5%
(270)/302
Free cash flows -
-/+ 10%
(674)/674
Discount for lack of marketability 14.0%
-/+ 2%
171/(171)
5y revenue growth rate -
-/+ 0.5%
(135)/137
NRD CS UAB 9,876
Discounted cash
flow
Weighted average cost of capital
10.8%
-/+ 0.5%
530/(473)
Long-term growth rate 2.0%
-/+ 0.5%
(346)/388
Free cash flows -
-/+ 10%
(869)/869
Discount for lack of marketability 14.1%
-/+ 2%
230/(230)
5y revenue growth rate -
-/+ 0.5%
(153)/155
FINtime UAB 158 Net assets value
N/A N/D
N/D
N/D
Total: 34,941
The fair value was based on discounted cash flow method, which was selected by the external valuator as the best representation
of the company specific development potential, except for FINtime UAB where net assets value method was used. Different
method was selected as at the current moment the entity is not expected to generate significant free cash flows. Due to the
limited number of comparable companies and transactions, lack of reliability of the market data and limited comparability of
peers, the results of the guideline public companies and transaction methods were used as a supplementary analysis and were
provided only for illustrative purposes in valuation report.
Cash flow projections made by Company management for the period of 5 years (2023-2027) were used as a basis in the income
method. Free cash flows were calculated as operating profit after tax plus depreciation/amortization of property, plant and
equipment and intangible assets, plus or minus changes in working capital and minus capital expenditure. The resulting value
was adjusted by discount for lack of marketability and the amount of surplus assets/liabilities. As part of the valuation process,
valuator had analyzed items presented on the balance sheet of each company and had identified assets and liabilities, which
can be treated as surplus assets (e.g. net working capital above normalized level, non-operating cash balances, loans to related
parties) and debt/debt-like items; all of which were adjusted when arriving at equity value of the company.
INVL TECHNOLOGY UTIB
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR thousands unless otherwise stated)
20
5 Cash and cash equivalents
At 31 December 2023
At 31 December 2022
Cash in bank accounts 749
733
Total cash and cash equivalents
749
733
All Company's cash and cash equivalents comprised funds in the bank's current accounts, all cash is held in euros and no
restrictions are put on cash balance as at 31 December 2023 and 2022.
6 Loans
As at 31 December 2023 and 2022, the expected credit loss was estimated not to be material and was, therefore, not recognized
in these financial statements.
Loans
At 31 December 2023
At 31 December 2022
Classified as non - current asset
1,895
1,895
Loans
1,895
1,895
Accrued interest
-
-
Classified as current asset 1,354
878
Loans
1,250
750
Accrued interest
104
128
Total value of loans 3,249
2,773
As at 31 December 2023, the Company has granted a long-term loan of EUR 1,895 thousand to Novian UAB. Loan is accounted
for at amortized cost as it is considered to be held for cash flow interest payments and principal repayments only. The loan shall
be repaid in full no later than 31 October 2025. Interest for using the loan is paid at the end of each year. The first interest
payment deadline was 31 December 2023.
As at 31 December 2023, the Company has granted short-term loans to Novian EUR 1,250 thousand. The loans and accrued
interests shall be repaid in full no later than 30 April 2024.
As at 31 December 2022, the Company has granted a long-term loan of EUR 1,895 thousand to Novian UAB. Loan is accounted
for at amortized cost as it is considered to be held for cash flow interest payments and principal repayments only. The loan shall
be repaid in full no later than 31 October 2025. Interest for using the loan is paid at the end of each year.
As at 31 December 2022, the Company has granted short-term loans to Novian UAB and NRD Systems UAB, EUR 550 thousand
and EUR 200 thousand respectively. The deadlines for the payments of loans and accrued interests were 31 July 2023 and 30
April 2023 respectively.
As at 31 December 2023 and 2022, the expected credit loss was estimated not to be material and was, therefore, not recognized
in these financial statements.
7 Reserves
As at 31 December 2023
9,800 thousand, share based payment reserve amounting to EUR 183 thousand, and legal reserve amounting to EUR 354
thousand (EUR 9,800 thousand, EUR 103 thousand, and EUR 354 thousand as at 31 December 2022, respectively). The
reserves were formed upon appropriation of the in the past, except for share based payment reserve which
was formed according to share options agreements.
Legal reserve
Legal reserve is a compulsory reserve under Lithuanian legislation. Annual transfers of not less than 5 % of net profit, calculated
in accordance with the statutory financial statements, are compulsory until the reserve reaches 10 % of the share capital. The
reserve can be used only to cover the accumulated losses. As at 31 December 2023 and 2022 legal reserve was fully formed.
Reserve for acquisition of own shares
Reserve for acquisition of own shares is formed from profit for appropriation. The reserve cannot be used to increase the share
capital. The reserve is reduced upon annulment of own shares. During the ordinary general meeting of shareholders, the
shareholder
management did not have a formally approved program for buy-up of its own shares as at the reporting date.
INVL TECHNOLOGY UTIB
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR thousands unless otherwise stated)
21
7
Share-based payments reserve
In June 2023 and June 2022, the Company entered into agreements according to the first share-based payment scheme with
three of its subsidiaries to grant share options to its employees for the consideration paid by the appropriate subsidiary. As at
31 December 2023 and 31 December 2022 all payments for the reserved shares have been received by the Company.
The value of share-based payments in 2023 and 2022 by investment committee decision was calculated as weighted average
of the last full month prior to. The historical value of the share price volatility is taken to calculate the value.
Share options and exercise prices are as follows for the reporting periods presented:
Number of shares
Exercise price per share
Outstanding at 31 December 2021 27,340
2.74
Granted 11,667
2.69
Forfeited (from 2021 stream) (436)
2.74
Forfeited (from 2022 stream) (221)
2.69
Exercised (from 2021 stream) (637)
2.74
Exercised (from 2022 stream) (250)
2.69
Outstanding at 31 December 2022 37,463
-
Granted 27,500
2.05
Forfeited (from 2021 stream) (1,262
)
2.74
Forfeited (from 2022 stream) (664
)
2.69
Forfeited (from 2023 stream)
(1,863)
2.05
Exercised (from 2021 stream) (1,849
)
2.74
Exercised (from 2022 stream) (969
)
2.69
Exercised (from 2023 stream)
(2,729)
2.05
Outstanding at 31 December 2023 55,627
-
Weighted exercise price per share for share options outstanding as at 31 December 2023 is 2.05 (as at 31 December 2022
2.69).
In March 2023 the Company entered into an agreement according to the second share-based payment scheme. None of the
options were exercised according to this scheme during 2023.
8 Provisions
As at 31 December 2023, the Company's estimated return exceed the minimum return barrier over the entire Company's period,
the Company calculated a provision for success and accrued management fees. Since the Company's estimated return as at
31 December 2022 did not exceed the minimum return barrier over the entire Company's period, the Company did not calculate
a provision for success and accrued management fees:
At 31 December 2023
At 31 December 2022
Success fee 4,372
-
Accrued management fee 534
-
4,906
-
Movements of success fee and accrued management fee were recorded during the year.
Opening balance at 1 January 2023 -
Increase of success fee 4,372
Increase of accrued management fee 534
Closing balance at 31 December 2023 4,906
INVL TECHNOLOGY UTIB
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR thousands unless otherwise stated)
22
9 Borrowings
As at 31 December 2023, the Company has received a short-term loan of EUR 300 thousand from NRD CS UAB and accrued
interest of EUR 7 thousand. The loan with the interest shall be repaid in full no later than 30 April 2024.
As at 31 December 2022, the Company has not received any loans.
10 Other current liabilities
At 31 December 2023
At 31 December 2022
Management fee 113
131
Accrued audit expenses 12
14
Payable depository fee 9
11
Trade payables 8
21
Other current liabilities 11
-
Total other current liabilities 153
177
11 Net Asset Value (a non-IFRS measure)
At 31 December 2023
At 31 December 2022
Net asset value, total, EUR 43,528,832
38,270,309
Net asset value per share, EUR 3.6052
3.1711
12 Dividends and interest income
2023 2022
Interest income 292
138
Dividend income 500
800
Total 792
938
13 Other expenses (including remuneration for statutory audit)
2023 2022
Professional services
56
62
Depository fees
37
42
Stock exchange and
securities fees 25
25
14
12
3
2
Wage and salary expenses
45
-
Other expenses
2
5
Other expenses (total)
182
148
From 2015 In 2023 and 2022 UAB
PricewaterhouseCoopers did not provide any non-audit services (including other assurance services and tax advisory services).
In 2023 the Company recognized wage and salary expenses of EUR 45 thousand in relation with the share-based payment
schemes, out of which EUR 17 thousand as difference between the price of during 2023 granted options comparing to the price
the Company purchased its own shares (first share-based payment scheme) and EUR 28 thousand as the fair value of options
granted attributable to 2023 (the second share-based payment scheme).
14 Income tax
Since 2017 according to the provisions of the Lithuanian Law on Corporate Income Tax, investment income of a closed-ended
investment companies operating in accordance with the Lithuanian Law on Collective Investment Undertakings are not subject
to income tax. From 1 January 2018 all income of Collective Investment Undertakings are not subject to income tax.
INVL TECHNOLOGY UTIB
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR thousands unless otherwise stated)
23
15 Earnings per share
Basic earnings per share are calculated by dividing net profit for the year attributable to equity holders of the parent entity by the
weighted average number of ordinary shares outstanding during the year.
The weighted average number of shares for 12 months of reporting period was as follows:
Calculation of weighted average for
the year
2023
Number of shares
(thousand)*
Par value
(EUR)
Issued/365
(days)
Weighted
average
(thousand)*
Shares outstanding as at 31 December 2022
12,069
0.29
365/365
12,069
Own shares sold as at 11 April 2023
-
0.29
264/365
-
Own shares sold as at 25 October 2023
4
0.29
67/365
1
Own shares sold as at 26 October 2023
1
0.29
66/365
-
Shares outstanding as at 31 December 2023
12,074
0.29
-
12,070
*The company sold a total of 5,547 units. own shares in 2023
The weighted average number of shares for 12 months of 2022 was as follows:
Calculation of weighted average for
the year
2022
Number of shares
(thousand)*
Par value
(EUR)
Issued/365
(days)
Weighted
average
(thousand)*
Shares outstanding as at 31 December 2021
12,067
0.29
365/365
12,067
Own shares sold as at 6 January 2022
-
0.29
359/365
-
Own shares sold as at 4 March 2022
-
0.29
302/365
-
Own shares sold as at 28 April 2022
-
0.29
247/365
-
Own shares sold as at 12 August 2022
-
0.29
186/365
-
Own shares sold as at 27 September 2022
-
0.29
141/365
-
Own shares sold as at 31 December 2022
-
0.29
95/365
-
Shares outstanding as at 31 December 2022
12,068
0.29
-
12,068
*The company sold a total of 887 units. own shares in 2022
The following table reflects data on profit and shares used in the basic earnings per share computations:
2023 2022
5,165
2,115
Weighted average number of ordinary shares (thousand) 12,070
12,068
Basic
and diluted
earnings per share (EUR)
0.43
0.18
INVL TECHNOLOGY UTIB
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR thousands unless otherwise stated)
24
16 Related-party transactions
The related parties of the Company were directly and indirectly managed subsidiaries (note 4) and management company.
3 and outstanding balances as at 31 December 2023 were as
follows:
Revenue and income
from related parties
Purchases
from related
parties
Receivables from
related parties
Payables to related
parties
subsidiaries
Loans -
-
3,145
300
Interest on loans 292
7
104
7
Dividends 500
Success fee -
4,906
-
4,906
Management fee -
481
-
113
792
5,394
3,249
5,326
2022 and outstanding balances as at 31 December 2022 were as
follows:
Revenue and income
from related parties
Purchases
from related
parties
Receivables from
related parties
Payables to relate
d
parties
subsidiaries
Loans -
-
2,645
-
Interest on loans 138
-
128
-
Success fee -
(2,339)
-
-
Management fee -
590
-
131
138
(
1,
7
49)
2
,
773
131
Changes in loans and bonds granted to subsidiaries:
2023 2022
Outstanding as at 1 January
2,773
1,189
Interest charged 292
138
Interest received (316
)
(24)
Loans granted 1,150
2,070
Loans repaid (650
)
(600)
Outstanding as at 31 December 3,249
2,773
All transactions with related parties are subject to the same terms and conditions that are applicable to third parties.
INVL TECHNOLOGY UTIB
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR thousands unless otherwise stated)
25
17 Segment reporting
The Company has defined its operating segments in a manner consistent with the internal reporting provided to the Investment
committee of the Management company that is responsible for making strategic decisions.
The Investment committee
operating segment. The Investment committe
ormance is prepared
on a consistent basis with the measurement and recognition principles of IFRS.
The Company has its headquarters in Lithuania. The Company's dividend income is disclosed in Note 12. The Company has no
significant fixed assets.
18 Financial instruments by category
instruments in Level 1 and 2.
At amortized
cost
At fair value through
profit or loss
Total
At 31 December 2023
Financial assets as per statement of financial position
Financial assets at fair value through profit or loss
-
44,890
44,890
Loans 3,249
-
3,249
Cash and cash equivalents 749
-
749
Total 3,998
44,890
48,888
At amortized
cost
At f
air value through
profit or loss
Total
At 31 December
2022
Financial a
ssets as per statement of financial position
Financial assets at fair value through profit or loss
-
34,941
34,941
Loans
2,773
-
2,773
Cash and cash equivalents
733
-
733
Total
3,506
34,941
38,447
At amortized cost
At 31 December 202
3
Financial liabilities as per statement of financial position
Borrowings 300
Trade payables 8
Other current liabilities 145
Total
453
At amortized cost
At
31 December
202
2
Financial liabilities as per statement of financial position
Trade payables 21
Other current liabilities 156
Total
1
7
7
INVL TECHNOLOGY UTIB
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR thousands unless otherwise stated)
26
19 Financial risk management
19.1 Financial risk factors
The risk management function within the Company is carried out by the Management Company in respect of financial risks
(credit, liquidity, market, foreign exchange and interest rate risks), operational risk and legal risk. The primary objective of the
financial risk management function is to establish the risk limits, and then make sure that exposure to risks stays within these
limits. The operational and legal risk management functions are intended to ensure proper functioning of the internal policies
and procedures necessary to mitigate the operational and legal risks.
and other payables. The Company has various categories of financial assets;
however, the major items of its financial assets were financial assets at fair value through profit loss (consisting of the investments
in unconsolidated subsidiaries) and cash and cash equivalents.
The Company is being managed in a way that its portfolio companies are operating independently from each other. This helps
to diversify the operational risk and to create conditions for selling any controlled business without exposing the Company to any
risks.
-term return on investments in carefully selected unlisted private
companies operating in information technology sector.
The main risks arising from the financial instruments are market risk (including foreign exchange risk, interest rate risk and price
risk), liquidity risk, concentration risk and credit risk. The risks are described below.
Market risk
Foreign exchange risk
The Company has no material exposures or transactions in currencies other than euro, therefore it is not exposed to foreign
currency risk.
Interest rate risk
The Company is exposed to the risk of changes in market interest rates primarily due to assets with variable interest rates.
The following table reveals the sensitivity of the Company's pre-tax profit to reasonably expected changes in floating interest
rates (EURIBOR), all other variables being constant (assessing the impact of granted loans with floating interest rates). There
is no impact on the company's assets, except for the impact on the current year's profit.
Increase, in basis points
Company
2023
EUR +100
(31)
-100 31
2022
EUR +50
(13)
In 2023 the Company had loans in total EUR 3,145 thousand. Loan interest rates are variable, the interest rate for long-term
loan is base interest rate and 3-month EURIBOR, short-term loans are base interest rate and 6-month EURIBOR and are
calculated on the last day of each month.
In 2022 the Company had loans in total EUR 2,645 thousand. Loan interest rates are variable, the interest rate for long-term
loans is base interest rate and 3-month EURIBOR, short-term loans are base interest rate and 6-month EURIBOR and are
calculated on the last day of each month.
Price risk
t
are not traded in an active market. To manage the price risk, the Investment committee reviews the performance of the portfolio
companies on a quarterly basis and keep regular contact with the management of the portfolio companies for business
development and day-to-day operation matters.
The information technology business and the information technology market are changing rapidly. Therefore, there is a risk that
unforeseen market changes may reduce the value of the Company's investments or the investment return of the Company's
investment objects. The realization price of the Company's investments may be higher or lower than the value of the assets
determined by the property appraiser (refer to Note 4 for more details).
As at 31 December 2023 sed to price risk was EUR 44,890 thousand (31
December 2022: EUR 34,941 thousand).
INVL TECHNOLOGY UTIB
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR thousands unless otherwise stated)
27
19 Financial risk management ( )
19.1
Liquidity risk
equivalents or have available funding through an adequate amount
of committed credit facilities to meet its commitments at a given date in accordance with the strategic plans.
Liquidity risk of the Company is managed by the Management company. The liquidity risk management is divided into long-term
and short-term risk management.
The aim of the short-term liquidity risk management is to meet the day-to-day needs for funds. Each subsidiary is independently
planning its internal cash flows. Short-term liquidity of the Company is managed through monthly monitoring of the liquidity status
at the Company.
Long-term liquidity risk is managed by analyzing the cash flow projections by taking into account the potential sources of
financing. Before approving a new investment project, the Company evaluates the possibilities to attract the required funding.
Based on monthly reports, the Company makes projections of monetary income and expenses over the next one year, thereby
2023 and 2022 was approximately
4.6 and 9.1, respectively.
As at 31 December 2023 the current assets of the Company were higher than current liabilities by EUR 1,650 thousand. The
management of the Company forecasted the cash flows of the Company for 2024 and indicates that the Company will have
sufficient funds to cover liabilities, which fall due in 2024.
The Company's financial liabilities based on undiscounted contractual payments consisted of:
Up to 3 months
4 - 12 months 2 to 5 years Over 5 years Total
Borrowings
318
-
-
318
Other current liabilities
153
-
-
-
153
At 31 December 2023
153
318
-
-
471
Up to 3 months
4
-
12 months
2 to 5 years
Over 5 years
Total
Other current liabilities
177
-
-
-
177
At 31 December 2022 177
-
-
-
177
The company has no liquidity problems and there are no expectations that they will arise in the foreseeable future.
Concentration risk
Through investment diversification and risk management the Company seeks to reduce the risk and prevent potential reduction
in the value of investments and create value by selecting investment objects and relying on the experience of other market
participants.
diversification:
- investments into Operational Companies which are registered or carry out their activities in the European Union (European
Economic Area) Member States, in the Organization for Economic Cooperation and Development (OECD) member
countries and Israel.
- at least 70 per cent of the Net Asset Value is invested directly or through a SPV into the stakes of Operational Companies
in order to control or to make a significant impact on such companies.
- the total amount of investments into transferable securities issued by a single person, money market instruments, deposits
and liabilities arising out of financial derivatives transactions with that person may not exceed 30 per cent of the Net Asset
Value.
- no more than 30 per cent of the Net Asset Value can be invested in:
o deposits for a term no longer than 12 months which can be collected upon demand in a credit institution, domiciled in
an EU Member State or in another state where risk limiting supervision is no less strict than in the European Union
o financial derivatives which are admitted to trading on the multi-lateral trading facility but not admitted to trading on
regulated markets and in which the counterparty in the transactions concluded beyond these markets conform to the
criteria established by the Supervisory Authority and is subject to risk limiting supervision and which can be checked
and reliably and accurately assessed on a daily basis and sold or otherwise realized for a consideration at any time at
their fair value.
INVL TECHNOLOGY UTIB
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR thousands unless otherwise stated)
28
19
19.1 Financial risk factors
Concentration risk (
Upon the establishment of the Company, its investment portfolio may not meet the set diversification requirements for 4 years
after the date on which the Supervisory Authority issued a permit to approve its incorporation documents and to choose the
Depository. In the event that, upon the expiration of the set term, the investment requirements shall be violated due to the
reasons beyond the control of the Management Company, such non-conformity must be eliminated as soon as possible but no
later than within 1 year from the date on which the Management Company became aware of this situation.
If the diversification requirements are not complied with due to reasons beyond the control of the management company, the
requirement must be reinstated within 1 year. In exceptional cases, the time limit may be extended, provided that the supervisory
authority is duly informed. In July 2021, the supervisory authority (the Bank of Lithuania) extended this deadline until 2024. As
of the day these reports are issued, the diversification requirements have not been reinstaded. The company is in touch with the
supervisory authority regarding this question.
Credit risk
Credit risk arises from cash and cash equivalents, outstanding balances of trade and other receivables, and outstanding
balances of loans granted.
With respect to trade and other receivables neither past due nor impaired, there were no indications as at the reporting date that
the debtors will fail to fulfil their liabilities in due time, since the Company constantly reviews the balances of receivables. The
Company has no significant transactions in a country other than the countries of domicile of the subsidiaries and their
investments. All material receivables of the Company are from subsidiaries, and their settlement terms are set by the Company
itself with no history of uncollected accounts.
With respect to credit risk arising from other financial assets of the Company (consisting of cash and cash equivalents and loans
granted
was equal to the carrying amount of these instruments:
Assets with no credit rating assigned
At 31 December
202
3
At
31 December 2022
Loans
3,249
2,773
Cash and cash equivalents
749
733
Total assets with no credit rating assigned
3,998
3,506
The Company accepts the services from the banks and the financial institutions which (or the controlling financial institutions of
which) have been assigned a high credit rating by an independent rating agency. As at 31 December 2023 and 2022 the
he
- The credit risk of loans granted
is described in more details in Note 6.
19.2 Fair value estimation
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. The Company carries investments in subsidiaries at fair value (please refer to
Note 4 for more details).
ash
and cash equivalents, loans granted to portfolio companies, as well as trade and other payables.
The carrying amount of the cash and cash of the Company as at 31 December 2023 and 2022 approximated their fair value
because they are short-term and the impact of discounting is immaterial.
In the opinion, the interest rate of short-term and long-term loans corresponds to market conditions, therefore it
is considered that their value in 2023 and 2022 was close to their fair value.
INVL TECHNOLOGY UTIB
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR thousands unless otherwise stated)
29
19
19.3 Capital management
The primary objective when managing capital is to safeguard that the Company will be able to maintain a strong
credit health and healthy capital ratios in order to support its business and maximize returns for shareholders
capital management is conducted through supervision of activities of individual subsidiaries to ensure that their capital is
sufficient to continue as a going concern. Management of entities oversees to ensure that the subsidiaries are in compliance
with the capital requirements defined in relevant legal acts and loan contracts, and that they provide the management
with the necessary information.
. The Company manages its
capital structure and makes adjustments to it in light of changes in economic conditions and risks specific to its activity. To
maintain or adjust the capital structure, the Company may issue new shares, reduce share capital, and adjust the dividend
payment to shareholders.
During 2023, no changes were introduced in the objectives of capital management, policies or processes.
The Company is obliged to keep its equity ratio at not less than 50 % of its share capital, as imposed by the Lithuanian Law on
Companies. As at 31 December 2023 and 2022 the Company complied with this requirement.
20 Events after the reporting period
There were no events since the end of the financial year.
SPECIAL CLOSED-ENDED TYPE
PRIVATE CAPITAL INVESTMENT COMPANY‘S
INVL Technology
ANNUAL REPORT FOR 2023
ANNUAL REPORT FOR 2023
31
Contents
FOREWORD OF THE MANAGING PARTNER OF INVL TECHNOLOGY
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
33
I. GENERAL INFORMATION
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
34
1. Reporting period for which the report is prepared
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
34
2. General information about the Issuer and other companies comprising the Issuer‘s group
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
34
2.1. Information about the issuer
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
34
2.2. Information on company’s goals, philosophy and strategy
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
34
2.3. Information about the Issuer’s group of companies
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
35
2.3.1. Structure of the portfolio companies of INVL Technology
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
36
2.3.2. Geography of INVL Technology’s portfolio companies
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
37
II.
INFORMATION ABOUT THE ISSUER’S AND ITS GROUP COMPANIES’ ACTIVITY
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
38
3. Key figures of INVL Technology
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
38
3.1. Net Asset Value, EUR
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
38
3.2. Key figures of INVL Technology, thous. EUR
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
38
3.3. Financial assets, thous. EUR
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
39
3.4. Dynamics of the value of financial assets, thous. EUR
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
39
3.5. Change in fair value of financial assets, thous. EUR
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
39
3.6. Key figures of INVL Technology portfolio companies
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
40
3.7. Performance indicators for INVL Technology in Indexes 2021 - 2023
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
41
4. Significant Issuer’s events during the reporting period, effect on the financial statement
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
42
5. Significant events of portfolio companies during reporting period
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
44
5.1. GovTech and FinTech companies
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
44
5.2. Software development, IT infrastructure, managed IT services and digitization companies
. . . . . . . . . . . . . . . . . . . . . . . . .
50
5.3. Cybersecurity company
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
60
6. Assessment of objectives achieved in 2023
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
65
III. INFORMATION ABOUT SECURITIES
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
66
7. The order of amendment of Issueer’s Articles of Association
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
66
8. Structure of the authorized capital
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
66
9. Trading in Issuer’s securities as well as securities, which are deemed to be a significant financial investment to the Issuer on a
regulated market
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
66
10. Dividends
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
69
11. Shareholders
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
70
11.1. Information about shareholders of the Company
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
70
11.2. Rights and obligations carried by the shares
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
71
11.2.1. Rights of the shareholders
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
71
11.2.2. Obligations of the shareholders
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
72
IV. ISSUER’S MANAGEMENT BODIES
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
73
12. Structure, authorities, the procedure for appointment and replacement
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
73
12.1. General Shareholders’ Meeting
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
74
Translation note:
This version of the Annual Report for the year of 2023 is a translation from the original, which was prepared in Lithuanian
language. All possible care has been taken to ensure that the translation is an accurate representation of the original. However, in
all matters of interpretation of information, views or opinions, the original language version takes precedence over this translation.
ANNUAL REPORT FOR 2023
32
12.1.1. Powers of the general shareholders’ Meeting
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
74
12.1.2. Convocation of the general shareholders’ Meeting of INVL Technology
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
74
12.2. The Management Company, Invetment Committee and Supervisory board
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
76
13. Information about members of the Board of the Management Company, general manager, members of the Investment Com-
mittee and member of the Supervisory Board of the Company
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
78
14. Information about the Audit Committee of the company
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
84
14.1. Procedure of work of the Audit Committee
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
84
14.2. Structure of the Audit Committee
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
85
15. Information on the Issuer’s payable management fee, the amount calculated by the Issuer, other assets transferred and gua-
rantees granted to the Company’s bodies and company providing accounting services
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
86
V. OTHER INFORMATION
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
87
16. References to and additional explanations of the data presented in the annual financial statements
. . . . . . . . . . . . . . . . . . . . . .
87
17. Membership in associations
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
87
18. Agreements with intermediaries on public trading in securities
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
87
19. Information on Issuer’s branches and representative offices
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
87
20. Information about agreements of the Company and its managing bodies, members of the formed committees, or the emplo-
yees’ agreements providing for compensation in case of the resignation or in case they are dismissed without a due reason or
their employment is terminated in view of the change of the control (official offering) of the Company.
. . . . . . . . . . . . . . . . . . .
87
21. Description of principle advantages, risks and uncertainties
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
87
22. The main indicators about internal control and risk management systems related to the preparation of financial statements
. .
92
23. Description of principal investments made during the reporting period
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
93
24. Information about significant agreements to which the issuer is a party, which would come into force, be amended or ce-
ase to be valid if there was a change in issuer’s controlling shareholder, and their effect, unless, the nature of the arran-
gements and their disclosure would cause serious harm to the issuer
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
93
25. Information about any control systems in the employee share plan that are not exercised directly by employees
. . . . . . . . . .
93
26. Information on the related parties’ transaction
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
93
27. Information on harmful transactions in which the issuer is a party
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
93
28. Company’s non-financial results. Information related to social responsibility, environment, including climate action, employe-
es, anti-corruption, and anti-bribery issues, including bribery of foreign officials when concluding international business tran-
sactions
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
93
28.1. Responsible business actions in the Company
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
93
28.2. Employees
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
93
28.3. Environmental protection and actions regarding climate change
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
93
28.4. Information about activities of the Company in the field of research and development
. . . . . . . . . . . . . . . . . . . . . . . . . . . .
93
28.5. Implementation of international sanctions
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
94
28.6. Fight against corruption and bribery
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
94
28.7. Additional non-financial information, the disclosure of sustainability-related information
. . . . . . . . . . . . . . . . . . . . . . . . . .
94
29. Data on the publicly disclosed information
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
94
30. Information about the audit company
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
96
APPENDIX 1. INFORMATION ABOUT INVL TECHNOLOGY PORTFOLIO COMPANIES, THEIR CONTACT
DETAILS
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
97
APPENDIX 2. CORPORATE GOVERNANCE REPORTING FORM
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
99
APPENDIX 3.COMPANY’S MANAGEMENT REPORT
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
117
APPENDIX 4.COMPANY’S OPERATING AND FINANCIAL INDICATOR FORMULAS AND DEFINITIONS
.
119
APPENDIX 5.REMUNERATION REPORT
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
121
ANNUAL REPORT FOR 2023
33
FOREWORD OF THE MANAGING PARTNER OF INVL TECHNOLOGY
INVL Technology’s net asset value
rose to EUR 43.53 million
The equity and the net asset value of INVL Technology, a company that invests in IT businesses, amounted to EUR 43.53 million
at the end of 2023, or EUR 3.6052 per share, and grew 13.7% during the year.
Last year’s results were positively impacted by a EUR 9.95 million increase in the value of portfolio companies. Provisions for
performance and accrued management fees reduced the result for 2023 by EUR 4.91 million.
The value of INVL Technology’s portfolio companies rose from EUR 34.9 million to EUR 44.9 million during 2023. INVL Technology
owns the cybersecurity company NRD Cyber Security, the GovTech and FinTech company NRD Companies, and the Baltic IT
company Novian.
NRD Cyber Security had an average internal rate of return (IRR) of 38.2% from the end of 2016 to the end of 2023. That of NRD
Companies was 21.1%. The Novian software services and IT infrastructure group had an IRR of 9.8% for the period, including an
IRR of 16.5% for technology and digitalization services and 5.6% for the software services area.
In 2024 INVL Technology is starting the sale of portfolio companies. NRD Cyber Security, Novian and NRD Companies employ
implementation. These businesses serve important international clients and are leaders in their niches, having developed distinctive
technologies and know-how. Talented and successful companies are being sought all over the world, and INVL Technology looks
forward to expressions of interest from international and regional investors.
Performance of business holdings
INVL Technology’s portfolio companies had aggregated revenues of EUR 62.57 million in 2023, or 24.6% more than in 2022. Their
Last year INVL Technologies portfolio companies conducted activities in 63 countries of the world, including Brazil among new
markets. Revenue from operations abroad grew 40.2% in the year to EUR 23.39 million and accounted for 37% of total revenue
(4 percentage-points more than the previous year). On the Lithuanian market, the portfolio companies had revenue of EUR 39.18
million, which was 16.8% more than in 2022 and made up 63% of total revenue.
of EUR 137,000. The Novian group’s EBITDA last year decreased 18.4% to EUR 1.242 million. The group consists of Novian in
Lithuania with the technology-area businesses Novian Technologies, Novian Eesti in Estonia, Zissor in Norway, Andmevara in
Moldova, and Norway Registers Development Rwanda in Rwanda, and the software services businesses Novian Systems and Elsis
PRO in Lithuania.
NRD Companies had consolidated revenue of EUR 10.985 million last year, 36% more than in 2022, and a consolidated operating
Norway, with a branch in Lithuania, and NRD Systems and Etronika in Lithuania.
NRD Cyber Security, which also owns NRD Bangladesh, had consolidated revenue of EUR 7.411 million in 2023, an increase of
Managing Partner at INVL Technology
ANNUAL REPORT FOR 2023
34
I. General Information
1. Reporting period for which the report is prepared
This Annual Report of public joint-stock special closed-ended type private capital investment company “INVL Technology”
(hereinafter – “the Company”, “INVL Technology” or “the Issuer”) is prepared for the period from 1 January 2023 until 31
December 2023. The report also includes important events of the company and group occurring after the end of the reporting
period. The report was reviewed by the auditor.
2. General information about the Issuer and other companies comprising the Issuer‘s group
2.1. Information about the issuer
Name of the Issuer Special closed-ended type private capital investment company INVL Technology
Code 300893533
Address
Telephone +370 5 279 0601
E-mail info@invltechnology.lt
Website www.invltechnology.lt
LEI code 5299006UHD9X339RUR46
Legal form Public joint-stock company
Type of the company Closed-ended type investment company
Date and place of registration 27 June 2007; Register of Legal Entities
Date on which the supervisory
authority approved the
documents on the formation
of the collective investment
undertaking
14 July 2016
Period of activity of the Company Till 14 July 2026 (+2 years)
Register in which data about the
Company are accumulated and
stored
Register of Legal Entities
Management company
The depository SEB Bank, AB, code 112021238, bank licence No. 2
2.2. Information on company’s goals, philosophy and strategy
INVL Technology is a specialized company which invests in IT businesses. With investment and development of information
technology businesses, INVL Technology contributes to innovations in countries, sectors and companies, as well as advancement
of the society.
INVL Technology is managed by the company INVL Asset Management which adheres to the Principles for Responsible Investment.
The PRI, founded in 2006 and supported by the UN, aims to assess the investment implications of environmental, social and
governance (ESG) factors.
A strategy of INVL Technology is to invest in national-level European IT businesses with high globalization potential and grow
them into global players by utilizing the sales channels and intellectual capital of the managed companies.
INVL Technology‘s management aims to reduce constraints on the value growth of the managed companies by lowering entry
barriers to new markets, accelerating product development, and shortening the learning curve.
considers companies‘ products, experience, research and development projects, project companies’ knowledge, expertise in fast
Intellectual capital is the property of the managed companies. Its commercialization is a principal part of the companies‘
transformation strategy.
However, managed companies have priority access to each other’s know-how and experience.
ANNUAL REPORT FOR 2023
35
2.3. Information about the Issuer’s group of companies
INVL Technology is structured into three company groups:
NRD Companies: a global GovTech player. NRD Companies is a global group of
GovTech and FinTech companies specializing in the design, development/build and
Lithuania and over 100 employees, the company has delivered projects in more than 50
countries.
NRD Companies is a parent company for the following subsidiary corporations: ETRONIKA,
Norway Registers Development AS, NRD Systems, Infobank Uganda. More information:
www.nrdcompanies.com.
Novian: a leading Baltic IT company. Novian is leading Baltic software development,
countries and its HQ in Vilnius, it employs more than 250 people and has delivered
projects in almost 50 countries.
Companies:
•
Novian UAB;
•
In the technologies area: Novian Technologies UAB, Novian Eesti OÜ, Andmevara
SLR and Norway Registers Development Rwanda Ltd, Zissor AS;
•
In the software development services area: Novian Systems UAB and Novian Pro
UAB.
NRD Cyber Security: a cybersecurity company. NRD Cyber Security is a company
Vilnius, it employs more than 40 people and has delivered projects in over 40 countries.
Companies:
•
NRD CS UAB (NRD Cyber Security);
•
NRD Bangladesh.
Also:
The group also owns the business process outsourcing company FINtime UAB,
ANNUAL REPORT FOR 2023
36
2.3.1. Structure of the portfolio companies of INVL Technology
Structure of the portfolio companies of INVL Technology