PUBLIC INVESTMENT DEVELOPMENT AGENCY (VIPA) Company …admin.vipa.lt/www/UserFiles/Independent_auditor_s_report.pdf · Lukiškių St. 2, Vilnius, Lithuania Independent auditor's report

1

PUBLIC INVESTMENT DEVELOPMENT

AGENCY (VIPA)

Company code 303039520

Lukiškių St. 2, Vilnius, Lithuania

Independent auditor's report

Set of the financial statements

and the Annual report for the year ended 31

December 2015

2

CONTENTS

INDEPENDENT AUDITOR'S REPORT 3

ANNUAL REPORT 5

31 DECEMBER 2015, BALANCE SHEET 18

31 DECEMBER 2015, INCOME STATEMENT 22

31 DECEMBER 2015, CASH FLOW STATEMENT 23

31 DECEMBER 2015, STATEMENT OF CHANGES IN EQUITY 26

NOTES TO THE SET OF FINANCIAL STATEMENTS 30

3

INDEPENDENT AUDITOR'S REPORT

PUBLIC INVESTMENT DEVELOPMENT AGENCY (VIPA)

To: shareholders

Conclusion on financial statements

We have audited the set of financial statements VIPA, which comprise the balance sheet as at 31

December 2015, and the income statement for the year then ended, cash flow statement, statement of

changes in equity and related notes (hereinafter – the financial statements).

Management's responsibility for the financial statements

The Management is responsible for the preparation and fair presentation of these financial statements

in accordance with effective legal acts of the Republic of Lithuania governing financial accounting

and the drawing of financial statements, and the Business Accounting Standards while implementing

the internal control that in the opinion of the management is relevant for the preparation of financial

statements that are free from material misstatements, whether due to fraud or error.

Auditor's responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We

conducted our audit in accordance with the International Standards on Auditing. Those standards

require that we comply with ethical requirements and plan and perform the audit to obtain reasonable

assurance whether the financial statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures

in the financial statements. The procedures selected depend on the auditor’s judgement, including the

assessment of the risks of material misstatement in the financial statement whether due to fraud or

error. In making those risk assessments, the auditor considers internal control relevant to the entity’s

preparation and fair presentation of the financial statements in order to design audit procedures that

are appropriate in the circumstances, but not for the purpose of expressing an opinion on the

effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of

accounting policies used and the reasonableness of accounting estimates, made by management, as

well as evaluating the overall presentation of the financial statement.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis

for the auditor’s opinion.

Opinion

In our opinion the financial statements present fairly, in all material respects, the financial position of

VIPA as of 31 December 2015 and its financial performance results for the year then ended in

accordance with Lithuanian legal acts governing financial accounting and the preparation of financial

statements and the Business Accounting Standards.

4

Conclusion regarding legal and regulatory requirements

Furthermore, we have read the accompanying Annual Report of VIPA for 2015 and have not noted any

material inconsistencies between financial information included in it and the financial statements for

2015 of VIPA.

The audit was completed on 29 April 2016.

UAB Jungtinė auditorių kontora

Audit company certificate No. 001244

Auditor

Auditor certificate No. 000171 Ilona Matusevičienė

29 April 2016

Vilnius, Republic of Lithuania


COMPANY CODE 303039520, LUKIŠKIŲ ST. 2, VILNIUS

ANNUAL REPORT

FOR THE YEAR ENDED 31 DECEMBER 2015

5

APPROVED

_______________ 2016

Minutes No.

ANNUAL REPORT

GENERAL INFORMATION

A private company Public Investment Development Agency (hereinafter – VIPA) was

registered in the Register of Legal Entities on 11 April 2013 (updated on 14 July 2015). The Annual

Report was drawn up for the period of January – December 2015.

Principal legal acts regulating the activities of the Company: Law on Companies, the Law on

Financial Institutions, the Law on Public Procurement, the Description of the guidelines for

transparency of State-managed entities, the Law on Accounting, as well as other legal acts regulating

calculation and payment of taxes.

KEY DATA

Name Public Investment Development Agency

Registration address: Lukiškių St. 2, Vilnius

Registered office address: Gedimino pr. 18/Jogailos St. 2, Vilnius

Tel. (8 5) 203 4977

E-mail [email protected]

Authorised capital 101 360

Legal form Private legal entity with limited liability.

Operation period Unlimited

Company code 303039520

VAT payer code The Company is not a VAT payer

Manager of the Register of Legal Entities State Enterprise Centre of Registers

VIPA does not have any branches or representative offices.

The Company does not carry any research or development activities.

AUTHORISED CAPITAL SHARES

VIPA’S share capital is equal to EUR 101,360. The share capital of VIPA consists of 3,500

ordinary registered shares of EUR 28.96 (twenty-eight euro and ninety-six cents) in nominal value. All

shares of the Company are of one class only – ordinary registered shares.

The amount of and the procedure for the payment of dividends are established by the general

meeting of shareholders. The owner of all shares of VIPA is the State. When implementing at the

Company the rights carried out by the shares owned by the State, the State is represented by the

Ministry of Finance of the RL.

In relation to the profit (loss) distribution for 2014, EUR 16,492 were allocated as dividends.



ANNUAL REPORT


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MISSION, VISION, OBJECTIVES AND VALUES

MISSION

Plan, create and efficiently manage financial instruments intended for public infrastructure and

needs of the State.

VISION

The public investment development agency seeks to become a recognised expert in public

infrastructure financing.

STRATEGIC OBJECTIVES

Administer financing programmes and increase their volumes.

Enhance the performance efficiency.

Strategic objectives and their measurement indicators

Objective Task Evaluation criterion

Plan 2015 Actual 2015

Administer

financing

programmes

and increase

their volumes

Development of

the programmes of

the public

infrastructure

projects

Total programmes

implemented by VIPA,

units

≥ 2 4

Successful

administration of

the programmes

being implemented

Change in the share of the

funds disbursed for the

implementation of projects,

and the value of concluded

agreements, %

≥ 2 3.82 %

Application evaluation

duration, days ≤ 20 32.6

Enhance the

performance

efficiency

Financial stability

of the Company

Income and cost ratio ≥ 1 164 %

Equity and authorised

capital ratio, % ≥ 50 882 %

Improvement of

the internal

processes of the

Company

Regulation of the operation

processes of the Company,

% 100 100

SERVICES PROVIDED BY VIPA

According to its Articles of Association VIPA provides financial services, the Company

implements and administers a range of financial instruments designed for public sector investment for

the purpose of implementation of public infrastructure and public services.



ANNUAL REPORT


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When carrying out its activities the Company performs the following key functions:

1. implements financial engineering instruments (during the 2007–2013 European Union

structural funds financing period) and/or the financial instruments (during the 2014–2020 European

Union structural funds financing period), the instruments funded from other financial sources (jointly

– financial instruments), by participating in the instruments as the manager of the holding fund (during

the 2007–2013 European Union structural funds financing period), and /or the manager of the fund

offunds (during the 2014–2020 European Union structural funds financing period) (hereinafter jointly

– the funds), as a financial intermediary and/or other forms;

2. administers or implements the financial services financed by the funds, i.e. grants loans,

provides financial surety services, and financial guarantees to the implementers of urban development,

public infrastructure and energy efficiency enhancement projects;

3. carries out evaluations, selection and oversight of implementation of the projects funded

by the relevant financial instruments;

4. while implementing the relevant financial instruments attracts private sector investment

to the public sector;

5. promotes financial instruments, provides technical and methodological assistance in

developing financial instruments-based projects, initiates and implements projects related to the

activities of the Company;

6. provides information or proposals for drawing up and improving legal acts governing

financial instruments;

7. carries out the functions of an intermediary institution for Structural and Cohesion funds

of the European Union in the manner specified by legal acts;

8. performs other functions prescribed for the Company by legal acts.

HIGHLIGHTS OF 2015

1. Funding of multi apartment building modernization projects JESSICA Holding

Fund (JESSICA) and the Multi Apartment Buildings Modernization Fund (DNMF)

In 2015, VIPA successfully implemented the Multi apartment building renewal

(modernization) programme according to two contracts:

1. JESSICA Holding Fund (managed by the European Investment Bank);

2. Multi Apartment Buildings Modernisation Fund (managed by VIPA).

1.1. JESSICA

While implementing the Conditional Loan Agreement concluded on 19 August 2013 by VIPA

jointly with the CPVA with the European Investment Bank regarding the renovation (modernization)

of multi apartment buildings through the implementation of activities of the JESSICA, by 31 December

2015 VIPA had concluded 120 loan agreements regarding the renovation (modernization) of multi

apartment buildings for a total value of EUR 31.8 million:

In 2015, 21 loan agreements were concluded for EUR 6.7 million;





ANNUAL REPORT


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0,00

5.000.000,00

10.000.000,00

15.000.000,00

20.000.000,00

25.000.000,00

30.000.000,00

35.000.000,00

2013 2014 2015 Totally

Value of signed contracts, EUR Disbursed loans, EUR

0

20

40

60

80

2013 2014 2015

2013 2014 2015

0

5

10

15

20

25

30

35

40

45

50

Vilnius Kaunas Panevėžys Mažeikiai Šilalė Tauragė Jonava Other places

Signed contracts, units

This decline in the number of agreements concludes was caused by insufficient financial

resources, however, in 2015 there was an increase in the disbursement of credits according to signed

credit agreements. During 2015, total EUR 18.8 million were disbursed under loan arrangements. Total

in 2014–2015, EUR 27.7 million were disbursed for the renovation (modernization) projects of multi

apartment buildings.

Following the concluded loan agreements as of the end of 2015, total 115 projects were in

progress, of which 78 projects had been started in 2014. Part of the projects (59) were completed in

2015. In 2014, only one project was completed.

Most loan agreements were signed in Jonava, Mažeikiai, Šilalė and Vilnius cities and regions.



ANNUAL REPORT


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0,00

10.000.000,00

20.000.000,00

30.000.000,00

40.000.000,00

50.000.000,00

60.000.000,00

70.000.000,00

80.000.000,00

Q1, 2015 Q2, 2015 Q3, 2015 Q4, 2015 Totally


During 2015, EUR 5.2 million in State support were allocated to energy efficiency

enhancement measures as part of the projects completed during the accounting period. Out of the total

amount EUR 2 million were written-off from the loan amounts, and EUR 3.2 million were received

from the Climate Change special programme.

1.2. DNMF

On 27 March 2015, VIPA concluded a tripartite agreement on the establishment and funding

of the Multi Apartment Buildings Modernization Fund (DNMF) with the Ministry of Finance of the

RL and the Ministry of Environment of the RL. VIPA was appointed to act as the manager of DNMF.

The purpose of the DNMF is to promote the enhancement of energy efficiency by investing in the

modernization of multi apartment buildings. The funds of the DNMF are channelled to fund the

financial instrument by funding the multi apartment buildings modernization projects. For the purpose

of the implementation of DNMF total EUR 30 million were invested from the EU structural funds for

2014–2020.

Minutes No. D4-141 of 27 August 2015 of the meeting of the Supervisory Committee of

DNMF held on 12 August 2015 confirmed the decision of the Supervisory Committee to approve the

increase of the contribution to DNMF up to EUR 74 million, by additionally allocating EUR 44

million, and approve the decision to obligate VIPA to use the funds that have and/or will return to the

DNMF for the same purposes following the relevant legal acts. Accordingly, amendment No. 1S-

58/BSS-2015-79/2015/19-22 to the DNMF contract was signed on 14 September 2015.

By 31 December 2015, there were total 221 contracts of EUR 71.6 million in value were

signed for renovation (modernization) of multi apartment buildings. During 2015, total EUR 33.9

million were disbursed under the loan agreements.

At the end of 2015, total 174 projects were implemented according to the concluded loan

agreements. Part of the projects (total 27 projects) were completed. By the end of the year 20 projects

have not yet been started.

Most loan agreements were signed in Vilnius, Kaunas, Jonava and Klaipėda cities and

regions.

101 units

59 units 61 units

221 units



ANNUAL REPORT


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0

5

10

15

2013 2014 2015

Signed contracts, units

0,00

2.000.000,00

4.000.000,00

6.000.000,00

8.000.000,00

10.000.000,00

12.000.000,00

2013 2014 2015


0

10

20

30

40

50

60

Vilnius Kaunas Klaipėda Mažeikiai Šilutė Telšiai Jonava Other places

Signed contracts, units.

During 2015, EUR 1.1 million in State support were allocated to energy efficiency

enhancement measures as part of the projects completed during the accounting period. Out of the total

amount EUR 0.5 million were written-off from the loan amounts, and EUR 0.6 million were received

from the Climate Change special programme.

2. Funding of the programme for the renovation (modernization) of dormitories of

higher schools and vocational training institutions JESSICA Holding fund (JESSICA)

While implementing the Conditional Loan Agreement concluded on 18 July 2013 by VIPA

jointly with the CPVA with the European Investment Bank regarding the renovation (modernization)

of dormitories of higher schools and vocational training institutions, by 31 December 2015 VIPA had

concluded 16 loan agreements; 4 such agreements were concluded in 2013, 12 agreements were in

2014, and no new loan agreements were concluded in 2015.

Following the concluded loan agreements as of the end of 2015, total 16 projects were in

progress, of which 78 projects had been started in 2014. Furthermore, during 2015 one project was

completed.



ANNUAL REPORT


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No new loan agreements were signed in 2015, and the total value of the contracts did not

change since 2014 and was reported at EUR 12.4 million. During 2015, total EUR 8 million were

disbursed. Total in 2014–2015, EUR 8.2 million were disbursed as loans for the projects on renovation

(modernization) of dormitories of higher schools and vocational training institutions.

3. Energy Efficiency Fund (ENEF)

On 18 February 2015, VIPA concluded a tripartite agreement on the establishment and

funding of the Energy Efficiency Fund (ENEF) with the Ministry of Finance of the RL and the Ministry

of Energy of the RL. The ENEF was established as a fund of funds that is on a trust basis managed and

administered by VIPA. The purpose of the Fund is to increase of energy efficiency by investing into

the public infrastructure.

The funds of ENEF are used to implement two financial instruments:

loans for financing renovation of central government buildings;

guarantee financial instrument intended for the street lighting modernisation

projects.

The total contribution of ENEF is EUR 79.65 million. EUR 14.49 million were allocated to

provide guarantees for street lighting modernisation projects, and EUR 65.16 million were allocated

as loans for the modernisation of central government buildings.

During 2015, VIPA created both financial products (loans and guarantees) and published calls

to submit proposals under the instruments. Several proposals were received in 2015 according to the

ENEF financial instruments:

VIPA received and approved one proposal for a street lighting modernisation project;

Total 22 proposals were received, of which four proposals were approved as eligible

for granting loans for the modernisation of public buildings of the central

government.

No payments have been yet made from the Fund.

With a view to contributing to a successful implementation of ENEF VIPA is at the same time

implementing a technical assistance project designed to promote the development of the ESCO market

in Lithuania. On 3 December 2014, the European Bank of Reconstruction and Development

(hereinafter - EBRD) and VIPA signed an agreement for consultancy services project ‘Supporting the

Development of the ESCO Market in Lithuania: Preparation of standardized typical documents and

tenders for ESCO energy efficiency projects in Lithuania’.

The project is implemented in cooperation with the experts of the international audit and tax

consultation company KPMG (together with the partners from a law firm Glimstedt, and a company

Ekotermija). A model procurement documentation for the selection of an energy saving services

provider was drawn up in 2015, and approved by Order No. 1-221 of the Minister for Energy of 23

September 2015. The documentation prepared constituted the basis for drawing up of the technical

procurement specification of three pilot projects (Police Commissariats of Kaišiadorys, Pakruojis and

Rokiškis).

4. Ex ante evaluations

http://www.vipa.lt/puslapis/garantijos

http://www.vipa.lt/puslapis/garantijos



ANNUAL REPORT


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During 2015, VIPA continued being an active part in the development of ex ante evaluations

designed for the development of financial instruments:

7 September 2015 – Approval of the Report on the ex ante evaluation of energy

efficiency in public buildings of Municipalities;

7 September 2015 – Approval of Part I of the Report on the ex ante evaluation of the

public infrastructure;

24 November 2015 – Completion of the Reports on the ex ante evaluation of water

management and road infrastructure and culture heritage. Comments and feedbacks

were still received following the approval of the Reports, therefore, the final versions

of the Reports will be approved in 2016, having taken into account the changes in the

situation and the regulatory requirements.

5. Repayable subsidy

The accomplishments during 2015 included specifications to the description of the conditions

on funding the projects under the measure, specification to the VIPA Manual on the procedures of the

repayable subsidy having regard to the comments submitted by the Management and Control System

Supervisory Division of the Ministry of Finance of the RL, and the preparation of complete information

required for the accreditation of VIPA with respect to the Management and Control System.

6. Securitization (substitution by securities)

During 2015, VIPA was considering a possibility to apply to energy efficiency projects and

implement securitization, or substitution by securities – one of the most popular financial instrument

on the global financial markets. The securitization project was then discussed with our potential

investors, also the national institutions and authorities, such as the Bank of Lithuania, the Ministry of

Finance of the RL.

Late in 2015, VIPA established cooperation relations and launched intensive negotiations and

discussions with the strategic partner for the implementation of the securitization project, i.e. EBRD.

7. Increase in the authorised capital of VIPA

By its Resolution No. 1380 of 23 December 2015 the Government of the RL decided to transfer

the financial (cash) assets owned by the State – EUR 1 899 776 (one million eight hundred ninety nine

thousand and seven hundred seventy six euro) for the purpose of increasing the authorised capital of

VIPA as an additional contribution on the part of the State. The Resolution further confirmed the

agreement to the decision of the Ministry of Finance of the RL, as the manager of the Company's

shares owned by the State, to increase the authorised capital of the Company by a contribution of EUR

1 899 776 (one million eight hundred ninety nine thousand seven hundred seventy six euro) by issuing



ANNUAL REPORT


13

65 600 dematerialised ordinary registered shares. On 31 December 2015, EUR 1 899 776 (one million

eight hundred ninety nine thousand seven hundred seventy six euro) were transferred to VIPA1.

The authorised capital was increased with a view to ensuring the adequacy of the capital having

regard to the scope of the programmes being implemented, in order to strengthen the financial

indicators of VIPA, and thus creating realistic possibilities for VIPA to conduct negotiations with

international finance institutions in order to attract private resources to support the programmes and

financial instruments implemented by VIPA.

MANAGEMENT AND STRUCTURE

The bodies of management of the Company are the General Meeting of Shareholders, the

Supervisory Board, the Board and the Managing Director. General Meeting of Shareholders of the

Company is its supreme body of management. Decisions passed in writing by the Ministry of Finance

of the Republic of Lithuania are considered to be equal to the decisions of the General Meeting of

Shareholders. The Supervisory Board that consists of three members is a collegial body of government

overseeing the operations of the Company, and submitting proposals to the General Meeting of

Shareholders. The Board of the Company is a collegial body of governance consisting of five members

elected for a term of office of four years. Members of the Board are elected by the Supervisory Board.

The Chairman of the Board is elected by the Board from among its members.

Members of the Supervisory Board (31-12-2015)

Full name Working place Beginning of the

terms of office

Aloyzas Vitkauskas

(Chairman) Vice-Minister for Finance of the RL 21-12-2012

Audrius Zabotka2 Managing Director of UAB Investicijų and verslo

garantijos 21-12-2012

Živilė Turevičienė Head of the Division of the Institution Activities of the

Ministry of Finance of the RL 21-12-2012

Members of the Board (31-12-2015)


terms of office

Aušra Vičkačkienė

(Chairperson of the

Board)

Director of the Assets Management

Department of the Ministry of Finance of the

RL

08-02-2013

Audrius Želionis (Deputy

Chairman of the Board)

Director of the State Treasury Department of

the Ministry of Finance of the RL 08-02-2013

Daiva Pipirienė Head of Economy Department of the

Ministry of Finance of the RL 08-02-2013

1 Having regard to the requirements applicable to the procedures of an increase of the authorised capital, the increase of the authorised capital was registered on 22 April 2016. 2 On 23 October 2014, VIPA received an application of Audrius Zabotka to resign from the position of a Member of the Supervisory Board of VIPA, however, in the absence of the relevant decision of the General Meeting of Shareholders, Audrius Zabotka is officially considered to be a member of the Supervisory Board of VIPA.



ANNUAL REPORT


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terms of office

Lina Frejutė

Deputy Head of the Division of the

Institution Activities of the Ministry of

Finance of the RL

08-02-2013

Jūratė Lepardinienė Deputy Director of the PI Central Project

Management Agency 08-02-2013

The Board elects and removes from office the Managing Director of the Company, fixes his

salary and sets other terms of the employment contract, approves his job description, provides

incentives for and imposes penalties upon him. The Managing Director is the manager of the Company.

The manager of the Company is a single-person body of management of the Company responsible for

organising daily operations of the Company within the limits of his authorisation. As of 2 May 2013,

Gvidas Dargužas has been working in the position of the Managing Director of the Company.

No remuneration, bonuses or other benefits was computed or paid to members of the

Supervisory Board or of the Board in 2015.

As of 31 December 2015, the Company has 30 staff members, and the average number of the

employees in the Company was 20.

2013 2014 2015

Total employees at the end of the

reporting period 8 14 30

Average number of employees 6 12 20

Average monthly wages (EUR) 1 153 1 336 1 745

2013 2014 2015

Expenses for qualification

enhancement 4 269 5 883 30 581

Business travel costs 1 595 14 094 20 667

In 2015, the employees of VIPA were attending the meetings and training sessions hosted by

the European Commission on managing the EU structural funds, application of State aid, or structuring

and modelling of securitization (substitution by securities) transactions.

VIPA loan committee

Order of the Managing Director of 23 September 2013 set up a separate body in charge of

examining loan applications, assessing the credit risk and submitting proposals to the Managing

Director of VIPA regarding granting loans or changing the terms attached to it, interest rates,

improvement in loan administration or risk management procedures; such body shall also perform

other functions set forth in the Rules of Procedure of the Loan Committee.

The VIPA Loan Committee is made up of three VIPA and two CPVA representatives.

VIPA Loan and guarantee committee

Order of the Managing Director of 17 December 2015 set up a separate body in charge of

examining guarantee and loan applications, assessing the credit and guarantee risk, and submitting

proposals to the Managing Director of VIPA regarding granting loans and guarantees, or changing the

terms attached to them, interest rates, improvement in loan or guarantee administration or risk



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management procedures; such body shall also perform other functions set forth in the Rules of

Procedure of the Loan and Guarantee Committee.

The Loan and Guarantee Committee of VIPA consists of five representatives of VIPA.

Structure of VIPA

Share holders

Supervisory Board

Board

Managing Director Deputy DirectorInternal Auditor

Finance and Organizational

Division

Financial Instruments Division

Funds Management Division

Assistance programmes Division

Risk Assessment and Investment Division

Head of Division – Chief Financial Officer

Financial Officers Bureau

Administrator

Head of Division Experts

Head of Division Expert Project Managers

Head of Division Experts Project Managers

Head of Division Project Managers



ANNUAL REPORT


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KEY INDICATORS FOR 2015 AND THEIR DEVELOPMENT

20133 2014 2015

Revenues, EUR 13 248 474 011 1 681 521

Net profit (loss), EUR -10 525 170 568 653 999

Equity and liabilities, EUR 5 811 673 30 178 055 41 100 165

Equity 17 031 235 596 873 173

Profit (loss) per share, EUR -3 49 187

Number of shares 3 500 3 500 3 500

Investment, EUR 43 381 69 341 92 958

Total employees at the end of the period

(persons) 8

14 30

INVESTMENT

In 2015, the Company’s non-current tangible and intangible assets were worth EUR 92 958.

The Company acquired a remuneration accounting system Stekas, accounting software Rivilė

(additional works), laptops, data repository, completed the VIPA information system development

operations, and developed additional functionalities at the VIPA internet website in order to improve

and expand its interactive part; the website will operate as a platform for VIPA clients to efficiently

submit their applications, payment requests and administer projects.

REVENUES

During 2015, VIPA earned EUR 1 681 521 in revenues. The income of VIPA consists of the

management fee received for:

performance of the functions of a financial intermediary for the purpose of the programme

for the renovation (modernization) of dormitories of higher schools and vocational

training institutions, and multi apartment buildings;

performance of the functions of the manager of the Multi Apartment Buildings

Modernization Fund;

Performance of the functions of the manager of the Energy Efficiency Fund.

OPERATING EXPENSES

During 2015, VIPA’s operating expenses amounted to EUR 1 027 530, including the costs

compensated by the funds from the technical support of the European Union. A major part of operating

expenses was the expenses related to employment relations, and the fee to CPVA for the assistance in

the implementation of multi apartment buildings renovation (modernization), and the renovation

(modernization) of dormitories of higher schools and vocational training institutions. The other costs

3 October-December 2013



ANNUAL REPORT


17

are expenses related to lease of premises, utility services, communication services, business trips, legal

services, currency conversion and similar costs.

On 8 October 2013, VIPA concluded a contract with the Ministry of Finance of the RL, and

the Central Project Management Agency regarding the project ‘ Implementation of the functions of

the preparedness of VIPA to implement a programme that during the next programming period will

replace the EU structural assistance use strategy for 2007–2013, and the implementing action

programmes’; the funds of the project are used to compensate part of the institution maintaining

expenses, related to the preparedness for the administration of the operational programmes of the EU

investment funds for 2014–2020, and the projects funded by way of repayable subsidies. Total EUR

208 201 were used to compensate the costs concerned.

Managing Director Gvidas Dargužas (position of the Manager) (signature) (name, surname)



FINANCIAL STATEMENTS


18

Public Investment Development Agency

Company code 303039520, Lukiškių St. 2, Vilnius

APPROVED

_______________2016

Minutes No.

31 December 2015, BALANCE SHEET 29 April 2016, No. 1

01-01-2015–31-12-2015 EUR

(reporting period) (currency of the financial

statements and the level of

accuracy)

ASSETS Note

No.

Financial

year

Previous

financial year

A. NON-CURRENT ASSETS 1 -3 29 183 667 8 947 033

I. INTANGIBLE ASSETS 1 60 059 36 375

I.1. Development works - -

I.2. Goodwill - -

I.3. Patents, licences 1 6 797 4 728

I.4. Software 1 53 262 31 647

I.5. Other intangible assets - -

II. TANGIBLE ASSETS 2 76 222 56 270

II.1 Land - -

II.2. Buildings and infrastructure - -

II.3. Machinery and equipment 2 570 787 II.4. Vehicles - -

II.5. Other fixtures, fittings, tools and

equipment 2 71 699 50 423

II.6. Construction works in progress - -

II.7. Other tangible assets 2 3 953 5 060

II.8. Investment assets - -

II.8.1. Land - -

II.8.2. Buildings - -

III. FINANCIAL ASSETS 3 29 047 386 8 854 388

III.1 Investment into subsidiaries and associates - -

III.2. Loans to associates and subsidiaries - -

III.3. Amounts receivable after one year - 37 846

III.4. Other financial assets 3 29 047 386 8 816 542

IV. OTHER NON-CURRENT ASSETS - -

IV.1. Deferred income tax assets - -

IV.2. Other non-current assets - -

B. CURRENT ASSETS 4 -7 11 916 498 21 231 022

I. INVENTORIES, PREPAYMENTS AND

CONTRACTS IN PROGRESS

4 -5 9 665 2 481

I.1. Inventories 4 14 25 I.1.1. Raw materials and components 4 14 25 I.1.2. Work in progress - -

I.1.3. Finished products - -

I.1.4. Goods purchased for resale - -

I.1.5 Non-current tangible assets for sale - -

I.2. Prepayments 5 9 651 2 456





19

I.3. Contracts in progress - -

II. AMOUNTS RECEIVABLE WITHIN

ONE YEAR

6 -7 7 820 778 355 663

II.1. Trade debtors - -

II.2. Debts of subsidiaries and associates - -

II.3. Other amounts receivable 6 7 820 778 355 663

III. OTHER CURRENT ASSETS - -

III.1. Short-term investment - -

III.2. Term deposits - -

III.3. Other current assets - -

IV. CASH AND CASH EQUIVALENTS 7 4 086 055 20 872 878

TOTAL ASSETS: 41 100 165 30 178 055

OFF-BALANCE SHEET ASSETS

Assets of the Multi Apartment Building

Modernization Fund transferred for

administration

Assets of the Energy Efficiency Fund

transferred for administration

ASSETS TRANSFERRED FOR

ADMINISTRATION TOTAL

12

12

33 240 032

19 006 308

52 246 340

-

-

-





20

EQUITY Note

No.

Financial

Year

Previous

financial year

C. EQUITY 873 096 235 596

I. CAPITAL 8 101 360 101 367

I.1. Authorised (subscribed) 8 101 360 101 367

I.2. Subscribed and unpaid capital (-) - -

I.3. Share premium - -

I.4. Own shares (-) - -

II. REVALUATION RESERVE (RESULTS) - -

III. RESERVES 9 10 137 -

III.1. Legal reserve 9 10 137 -

III.2. For acquiring own shares - -

III.3. Other reserves - -

IV. RETAINED EARNINGS (LOSS) 761 599 134 229

IV.1. Profit (loss) for the reporting year 10 653 999 170 568

IV.2. Profit (loss) for the previous year 107 600 (36 339)

D. GRANTS AND SUBSIDIES - -

E. ACCOUNTS PAYABLE AND

LIABILITIES

40 227 069 29 942 459

I. AMOUNTS PAYABLE AFTER ONE

YEAR AND NON-CURRENT

LIABILITIES

11 37 344 538 29 753 546

I.1. Financial debts 11 37 344 538 29 753 546

I.1.1. Leasing (financial lease) and similar

liabilities

- -

I.1.2. To credit institutions - -

I.1.3. Other financial debts 11 37 344 538 29 753 546

I.2. Trade payables - -

I.3. Received prepayments - -

I.4. Provisions - -

I.4.1. For covering liabilities and claims - -

I.4.2. Pensions and similar liabilities - -

I.4.3. Other provisions - -

I.5. Deferred income tax liabilities - -

I.6. Other amounts payable and non-current

liabilities

- -

II. AMOUNTS PAYABLE WITHIN ONE

YEAR AND CURRENT LIABILITIES 11 2 882 531 188 913

II.1. Current portion of long-term debts - -

II.2. Financial debts 11 634 094 38 732

II.2.1. To credit institutions 11 634 094 38 732

II.2.2. Other debts - -

II.3. Trade payables 11 48 733 39 227

II.4. Received prepayments 11 2 023 533 --

II.5. Income tax liabilities 11 116 893 27 400

II.6. Liabilities related to employment relations 11 27 393 21 451

II.7. Provisions 11 16 291 16 311





21

II.8. Other amounts payable and current

liabilities

11 15 594 45 792

TOTAL EQUITY AND LIABILITIES

OFF-BALANCE LIABILITIES

Liabilities related to the assets of the Multi

apartment building modernization fund

transferred for administration

Liabilities related to the assets of the

Energy efficiency fund transferred for

administration

LIABILITIES RELATED TO THE

ASSETS TRANSFERRED FOR

ADMINISTRATION TOTAL

12

12

41 100 165

33 240 032

19 006 308

52 246 340

30 178 055

-

-

-

Director General Gvidas Dargužas (position of the Manager) (signature) (name, surname)

Chief Financial Officer Ieva Šileikaitė (position of the accountant of the

Company)

(signature) (name, surname)





22



APPROVED

_______________2016

Minutes No.

31 December 2015, INCOME STATEMENT

29 April 2016, No. 1

01-01-2015–31-12-2015 Eur (reporting period) (currency of the financial statements and

the level of accuracy)

No. ITEMS Note

No.

Financial year Previous

financial year

I. SALES REVENUE 10 1 681 521 474 011

II. COST OF SALES 10 568 473 119 149

III. GROSS PROFIT (LOSS) 1 113 048 354 862

IV. OPERATING EXPENSES 342 039 112 484

IV.1. Sales - -

IV.2. General and administrative 10 342 039 112 484

V. OPERATING PROFIT (LOSS) 771 009 242 378

VI. OTHER ACTIVITIES - -

VI.1. Revenues - -

VI.2. Costs - -

VII. FINANCING AND INVESTMENT

ACTIVITIES

(169) (38 188)

VII.1. Revenues 10 595 371 38 731

VII.2. Costs 10 595 540 76 919

VIII. PROFIT (LOSS) FROM ORDINARY

ACTIVITIES

770 840 204 190

IX. EXTRAORDINARY GAINS - -

X. EXTRAORDINARY LOSS - -

XI. PROFIT (LOSS) BEFORE TAX 770 840 204 190

XII. INCOME TAX 10 116 841 33 622

XII.1. DEFERRED INCOME TAX ASSETS - -

XIII. NET PROFIT (LOSS) 653 999 170 568

Director General Gvidas Dargužas (position of the Manager) (signature) (name, surname)


Company)






23



APPROVED

_______________2016

Minutes No.

31 December 2015, CASH FLOW STATEMENT

29 April 2016, No. 1

01-01-2015–31-12-2015 EUR

(reporting period) (currency of the financial

statements and the level of

accuracy)

No. Items Note

No.


financial year

I. Cash flows from operating activities

I.1. Net profit (loss) 10 653 999 170 568

I.2. Depreciation and amortization expenses 10 49 322 16 524

I.3. Increase (decrease) of amounts receivable

after one year 3

(20 192 998) (8 854 388)

I.4. Decrease (increase) in inventories 4 11 865 I.5. Decrease (increase) in prepayments 5 (7 195) 6 282

I.6. Decrease (increase) in the contracts in

progress

- -

I.7. Decrease (increase) in trade receivables - -

I.8. Decrease (increase) in indebtedness of

subsidiaries and associated companies

- -

I.9. Decrease (increase) in other amounts

receivable 6

(7 465 115) (352 558)

I.10. Decrease (increase) in other current assets - -

I.11. Increase (decrease) in long-term debts to

suppliers and prepayments received 11

9 613 333 --

I.12. Increase (decrease) in short-term debts to

suppliers and prepayments received 11

565 164 32 943

I.13. Increase (decrease) in income tax liabilities 11 89 493 33 622

I.14. Increase (decrease) in liabilities related to

labour relations 11

5 942 12 962

I.15. Increase (decrease) in provisions 11 (20) 16 311

I.16. Increase (decrease) in other amounts

payable and liabilities 11

10 698 9 845 104

I.17. Elimination of the results of the transfer of

non-current intangible and tangible assets

- -

I.18. Elimination of results of financial and

investment activities

(7) -

I.19. Elimination of other non-monetary items - -

Net cash flows from operating activities (16 677 373) 928 235

II. Cash flows from investment activities

II.1. Acquisition of non-current assets (except

investment)

1;2 (92 958) (69 341)





24

II.2. Disposal of non-current assets (except

investment)

- -

II.3. Acquisition of long-term investment - -

II.4. Disposal of long-term investment - -

II.5. Granting of loans - -

II.6. Redemption of loans - -

II.7. Dividends and interest received - -

II.8. Other increases in cash flows from


- -

II.9. Other decreases in cash flows from


- -

Net cash flows from investment activities (92 958) (69 341)





25

Items Note

No.


financial year

III. Cash flows from financial activities

III.1. Cash flows related to owners of the entity 10 (16 492) -

III.1.1. Issue of shares - -

III.1.2. Contributions of the owners to cover losses - -

III.1.3. Redemption of own shares - -

III.1.4. Payment of dividends 10 (16 492) -

III.2. Cash flows related to other sources of

financing

- -

III.2.1. Increase in financial debts - -

III.2.1.

1.

Loans received - -

III.2.1.

2.

Issue of bonds - -

III.2.2. Decrease in financial debts - -

III.2.2.

1.

Repayment of loans - -

III.2.2.

2.

Redemption of bonds - -

III.2.2.

3.

Interest paid - -

III.2.2.

4.

Payments of leasing (financial lease)

premiums

- -

III.2.3. Increase in other liabilities of the entity - -

III.2.4. Decrease in other liabilities of the entity - -

III.2.5. Other increases in cash flows from financial

activities

- -

III.2.6. Other decreases in cash flows from

financial activities

- -

Net cash flows from financial activities (16 492) -

IV. Effect of changes in exchange rates on

the balance of cash and cash equivalents

- -

V. Net increase (decrease) in cash flows (16 786 823) 858 894

VI. Cash and cash equivalents at the

beginning of the period

20 872 878 20 013 984

VII. Cash and cash equivalents at the end of

the period

4 086 055 20 872 878

General Manager Gvidas Dargužas (position of the Manager) (signature) (name, surname)


Company)






26



APPROVED

_______________2016

Minutes No.

31 December 2015, STATEMENT OF CHANGES IN EQUITY

29 April 2016, No. 1

01-01-2015–31-12-2015 EUR

(reporting period) (currency of the financial statements

and the level of accuracy)

Paid up

authoris

ed

capital

Share

premi

um

Own

shares (-

)

Revaluation

reserve (results)

Legal reserves Other

reserves

Retained

earnings

(loss)

Total

Non-

current

tangible

assets

Financi

al assets

Legal

reserve

For

acquirin

g own

shares

1. Balance at the end of the

reporting period before

previous

101 367 - - - - - - - - (36 339) 65 028

2. Result of the change in the

accounting policy - - - - - - - - - - -

3. Result of correction of material

errors - - - - - - - - - - -

4. Recomputed balance at the

end of the reporting period

before previous

101 367 - - - - - - - - (36 339) 65 028

5. Increase (decrease) in the value

of the non-current tangible assets - - - - - - - - - - -





27

6. Increase (decrease) in the value

of the financial assets - - - - - - - - - - -

7. Acquisition (disposal) of own

shares - - - - - - - - - - -

8. Profit /loss not recognised in

the income statement - - - - - - - - - - -

9. Net profit /loss of the reporting

period - - - - - - - - - 170 568 170 568

10. Dividends - - - - - - - - - - -





28

Paid up

authoris

ed

capital

Share

premi

um

Own

shares (-)

Revaluation

reserve (results)

Legal reserves Other

reserves

Retained

earnings

(loss)

Total

Non-

current

tangible

assets

Financi

al assets

Legal

reserve

For

acquirin

g own

shares

11. Other payments - - - - - - - - - - -

12. Reserves formed - - - - - - - - - - -

13. Used reserves - - - - - - - - - - -

14. Increase (decrease) of the

authorised capital - - - - - - - - - - -

15. Contributions to cover losses - - - - - - - - - - -


previous financial year 101 367 - - - - - - - - 134 229 235 596

17. Increase (decrease) in the

value of the non-current tangible

assets

- - - - - - - - - - -

18. Increase (decrease) in the

value of the financial assets - - - - - - - - - - -

19. Disposal (acquisition) of own

shares - - - - - - - - - - -

20. Profit /loss not recognised in

the income statement (7) - - - - - - - - (7) -

21. Net profit /loss of the

reporting period - - - - - - - - - 653 999 653 999

22. Dividends - - - - - - - - - (16 492) (16 492)

23. Other payments - - - - - - - - - - -

24. Bonuses - - - - - - - - - - -

25. Reserves formed - - - - - 10 137 - - - (10 137) -

26. Used (cancelled) reserves - - - - - - - - - - -





29

27. Increase (decrease) of the

authorised capital - - - - - - - - - - -

28. Contributions to cover losses - - - - - - - - - - -


reporting financial year 101 360 - - - - 10 137 - - - 761 599 873 096

Managing Director Gvidas Dargužas (position of the Manager) (signature) (name, surname)

Chief Financial Officer Ieva Šileikaitė (position of the accountant of the Company) (signature) (name, surname)



NOTES TO THE FINANCIAL STATEMENTS


30

NOTES TO THE SET OF FINANCIAL STATEMENTS

GENERAL PART

Private company Public Investment Development Agency (hereinafter – VIPA) is a limited civil

liability legal person, registered in the Register of Legal Entities on 11 April 2015 (the entry updated on

14 July 2015), company code 303039520, registered office address – Lukiškių St. 2, Vilnius, Lithuania,

place of operation – Gedimino Av. 18 / Jogailos St. 2, Vilnius.

The Company is engaged in the following economic activities: provision of financial services,

administration and implementation of financial instruments intended for the modernization of the public

infrastructure and public services.

For the purpose of its activities VIPA implements a number of financial instruments by

participating in them as a financial intermediary, administers the financial services provided using the

funds, i.e. grants loans to the implementers of urban public infrastructure and energy efficiency

enhancement projects, carries out evaluations, selection and the implementation oversight of the public

sector projects funded by financial instruments, submits information and proposals for drafting or

improving legal acts governing financial instruments, by implementing financial instruments, also

attracts private sector investment to the public sector; promotes financial instruments, provides technical

and methodological support in developing financial instrument projects, provides information and

proposals in relation to drawing up and/or improving legal acts governing financial instruments, in

addition to the other activities provided in the Company's Articles of Association.

Head of Administration of VIPA is his Managing Director Gvidas Dargužas, working in the

position since 2 May 2013.

As of 31 December 2015, the Company has 30 staff members, and the average number of the

employees in the Company was 20.

The balance sheet, the income statements, cash flow statement and the statement on changes in

equity, as well as the notes to the financial statements presents the data in summary numbers rounded to

euro.

VIPA does not have any branches or representative offices.

The Company does not carry any research or development activities.

LEGAL BASIS

The legal basis of the activities of VIPA is defined in Order No. 1K-059 of8 February 2013 of

the Minister of Finance approving the Articles of Association of the private company Viešųjų investicijų

plėtros agentūra (together with the amendment of Order No. 1K-180 of 20 May 2015 of the Minister of

Finance of the RL).

The authorised capital of VIPA is equal to EUR 101 360, and is made up of 3 500 ordinary

registered shares, each of EUR 28.96 in nominal value. As of 31 December 2015, all shares of the

Company are fully paid-up. As of 31 December 2015, the Company had not acquired any own shares.

100 % Of VIPA's shares are owned by the State whose owner’s property rights are implemented by the

Ministry of Finance of the RL.

The objective of the operations of the Company as defined in the Articles of Association is

pursuit of profit, by implementing and managing financial instruments intended for public sector

investment for the modernization of the public infrastructure and public services, and by providing

financial services related to such financial instruments.



EXPLANATORY NOTES


31

ACCOUNTING POLICY

SIGNIFICANT ACCOUNTING PRINCIPLES

VIPA accounts are kept following the provisions of the Law on Accounting of the RL, Business

Accounting Standards and other legal acts governing accounting in the Republic of Lithuania. The

accounts of the Company are kept following the principles of accrual, prudence, comparability, going

concern and substance over form principle.

The Company’s financial year coincides with a calendar year.

The accounts of the Company are kept and the financial statements are drawn up and presented

in euro.

When recalculating the values expressed as of 31 December 2014 in litas into the values in euros,

and recording the values in the accounts, the Company was following the recommendations of BAS 40

Adoption of the euro.

NON-CURRENT TANGIBLE AND INTANGIBLE ASSETS

Tangible and intangible assets whose acquisition cost is below EUR 290, irrespective of it usage

time, are expensed having started to use such assets. The minimum acquisition cost is common for all

groups of intangible assets.

The intangible assets of VIPA consist of software and licences. Following the initial recognition,

the intangible assets are accounted for at acquisition value less the accrued amortisation and the

impairment loss, if any. The intangible assets are amortised within their useful life, applying the linear

amortization calculation method; the useful life of intangible assets is three years.

The expenses related to maintaining the economic benefit of intangible assets are recognised as

costs of the period in which the repair or maintenance services are provided.

The tangible assets of VIPA as of the date of drawing up the financial statements consist of

hardware and office equipment, and furniture whose acquisition cost is above EUR 290. Following the

initial recognition, the tangible assets are accounted for at acquisition value less the accrued amortisation

and the impairment loss, if any. Non-current tangible assets are depreciated throughout the useful life of

the assets, by applying linear depreciation method. The useful life (in years) for different tangible assets

groups is established in accordance with the provisions of the Law on Income Tax of the Republic of

Lithuania of 20 December 2001, and approved by Order of the Managing Director of the private

company Viešųjų investicijų plėtros agentūros. The useful life of computer hardware and

communications equipment is three years, vehicles and equipment – 5 years, furniture – 6 years.

INVENTORIES ACCOUNTING

The acquired inventories are recorded in the accounting at acquisition cost. The inventories cost

consists of the purchase price, transportation expenses and other expenses directly related to the

acquisition of the inventories. In the Company's accounting the inventories are assessed in FIFO method.

ACCOUNTING OF RECEIVABLES

Amounts receivable are carried at fair value. The amounts receivable are recognised to be current

assets except the amounts receivable whose repayment term is longer than 12 months from the balance

sheet date. Amounts receivable are assigned to non-current financial assets.

At initial recognition any acquired non-current financial assets are carried at acquisition cost.

CASH AND CASH EQUIVALENTS



EXPLANATORY NOTES


32

VIPA's cash assets are represented by cash held in the Company's bank accounts. The cash flow

statement is compiled in an indirect method when the net profit (loss) of the reporting period is

recalculated into the amount of cash received or expended in relation to the operating activities of the

Company during the reporting period.

The cash held in the bank accounts of VIPA and used thereby for the purpose of implementing

the multi apartment building renovation (modernization) programmes, and the programmes for the

renovation (modernization) of dormitories of higher schools and vocational training institutions, funded

by the JESSICA holding fund, is not the property of VIPA. Within the accounting of VIPA the funds

are accounted for by applying to them a separate accounting code.

AUTHORISED CAPITAL AND RESERVES

The authorised capital and reserves are carried at nominal value.

According to legal acts of the Republic of Lithuania every year the Company must transfer to

the legal reserve no less than 5 percent of the net profit, until the reserve accounts for 10 percent of the

authorised capital. The legal reserve may be used only to cover the loss of the Company.

Following the distribution of profit (loss) for 2014, as of 15 June 2015, the Company's legal

reserve accounted for EUR 10 137.

ACCOUNTING OF LIABILITIES

Liabilities are registered in the accounting when liabilities arise in the context of operations. The

liabilities also include the liabilities of unused holidays to the employees.

Considering that in 2007–2013 the funds of the EU technical assistance are designed for actions

related to the administration of a specific EU structural action programme in 2007–2013, rather than a

targeted support to the Company, therefore the other liabilities also include the amounts received for the

acquisition of non-current assets in relation to the project ‘Implementation of the functions of the

preparedness of VIPA to implement a programme that during the next programming period will replace

the EU structural assistance use strategy for 2007–2013, and the implementing action programmes’ to

the extent that the acquired non-current assets is not yet depreciated, and provided during the reporting

period some appropriations were received to compensate the paid deferred charges.

TAXES

VIPA calculates taxes and other payments to the State budget and funds, and pays the funds due

in the manner set forth in the Law on Tax Administration and other laws of the Republic of Lithuania.

In 2015, with respect to its operations VIPA was obliged to pay a contribution to the guarantee

fund (0.2 % of the estimated wage for employees), the social insurance contributions payable by the

employer (30.98% of the estimated wage for employees), deduct and pay the income tax of residents

(15 % of the estimated wage for employees less the tax free income), deduct and pay the mandatory

pension and health insurance contributions (9 %/10 % of the estimated wage).

INCOME TAX

Acting in accordance with the Law on Income Tax of the Republic of Lithuania, the taxable

profit of the Company is subject to a 15% rate income tax.

The deferred income tax assets are the assets that are expected to be recovered in the future

periods. The deferred income tax assets are in the future periods netted with the income tax liabilities.

CONTINGENCIES

Contingent liabilities are not recorded in the financial statements, however, they are disclosed,

except for the cases when their impact upon financial results is insignificant.



EXPLANATORY NOTES


33

Contingent assets are not recorded in the financial statements, however, it is disclosed in the

notes to the financial statements, in case the entity expects to generate economic benefit from such assets.

ACCOUNTING OF REVENUES

Revenues in the Company are recognised according to the accrual principle, i.e., recorded in the

accounting when earned regardless of the receipt of the money.

Sales revenues are represented by the fair value of the remuneration received or receivable for

the services provided by the Company as part of its operational activities. The sales revenues are

recognised when the amount of money may be reliably measured.

ACCOUNTING OF COSTS

Costs are recognised on the basis of the accrual and comparability principles in the reporting

period during which the related income is earned, regardless of the time of spending the cash.

Costs of the Company are broken down into sales revenues and operating expenses. The sale

costs include the different costs related to the company’s operations: wages of responsible employees,

services and goods costs required for the operations, and that can be clearly separated and identified.

The operating costs include the general and the administrative costs required for ensuring proper

operations of the Company.

The costs incurred by the Company for the purpose of implementing the project ‘Implementation

of the functions of the preparedness of VIPA to implement a programme that during the next

programming period will replace the EU structural assistance use strategy for 2007–2013, and the

implementing action programmes’ are compensated from the funds of the EU technical assistance for

2007–2013.

SUBSEQUENT EVENTS

All the subsequent events (adjusting events) are measured in the financial statements, if such

events are related to the reporting period and has a significant impact upon the financial statements.

NOTES TO THE FINANCIAL STATEMENTS

Note 1 Intangible assets (EUR)

Item Licences Software Total

Acquisition value

At the beginning of the reporting period 7 389 34 056 41 445

Acquired assets 4 821 40 413 45 234

At the end of the reporting period 12 210 74 469 86 679

Accrued amortisation


Estimated amortisation 2 751 18 798 21 549


Residual value



VIPA does not have any intangible assets (intended to be) acquired under leasing contracts

Note 2 Non-current tangible assets (EUR)



EXPLANATORY NOTES


34

Item Machinery and

equipment Other equipment

Other non-

current assets Total

Acquisition value

At the beginning

of the reporting

period

1 083 64 072 6 121 71 276

Acquired assets 0 47 724 0 47 724

At the end of the

reporting period 1 083 111 796 6 121 119 000

Accrued amortisation

At the beginning

of the reporting

period 296 13 649 1 061 15 006

Estimated

amortisation 217 26 448 1 107 27 772

At the end of the

reporting period 513 40 097 2 168 42 778

Residual value

At the beginning

of the reporting

period 787 50 423 5 060 56 270

At the end of the

reporting period 570 71 699 3 953 76 222

VIPA does not have any assets (intended to be) acquired under leasing contracts

Note 3 Financial assets (EUR)

Article 10 At the end of the reporting period

– Loans granted for the renovation

(modernization) of multi apartment buildings 21 241 840

– Loans granted for the renovation

(modernization) of dormitories of higher

schools and vocational training institutions

7 805 546

Total 29 047 386

The Items of the non-current financial assets records the value of the loans granted in relation to

the implementation of the multi apartment building renovation (modernization) programmes, and the

programmes for the renovation (modernization) of dormitories of higher schools and vocational training

institutions, funded by the JESSICA holding fund.

The amounts receivable are not considered to be the property of VIPA. VIPA as a financial

intermediary performing the functions related to the administration of loans. VIPA is obliged to transfer

the amounts receivable to the European Investment Bank, following the conditions and the requirements

of the Conditional Loan Agreements of 18 July and 19 August 2013.

Note 4 Inventories (EUR)



EXPLANATORY NOTES


35

Article 10 Last day of the

reporting period

Last day of the previous reporting

period

Balance at the beginning of the

reporting period 25 891

Acquisitions during the

reporting period 2 635 2 997

Write-offs during the reporting

period 2 646 3 863

Residual value 14 25

Note 5 Prepayments and deferred costs (EUR)

Article 10 Last day of the

reporting period Last day of the previous reporting period

Prepayments to suppliers 1 733 654 Deferred costs 7 918 1 802

Total 9 651 2 456

Prepayments

Last day

of the

reporting

period

Last day of the previous reporting

period

– for subscription services 21 – for goods supply services 106 212

– for managed printing services 154

– for professional development services 402

- for the lease of vehicle parking lots 1 050 442

Total 1 733 654

Deferred costs

Last day

of the

reporting

period

Last day of the previous

reporting period

– subscription 251 200

– vehicle insurance 429 469

– warranty maintenance of printers 496 809

– business trip costs 2 714 270

– professional development costs 2 900

– related to employment relations 1 128 54

Total 7 918 1 802

Note 6 Amounts receivable (EUR)

Amounts receivable

Last day of the

reporting

period


reporting period

Related to a project implemented by VIPA 19 537 16 746

Management fee receivable 807 295 273 311



EXPLANATORY NOTES


36

Total 826 832 290 057

Amounts receivable related to the

administration of the funds of JESSICA

holding fund

Last day of the

reporting

period

Funds of the programme for the renovation

(modernization) of multi apartment buildings 2 169 397

– funds of the programme for the renovation

(modernization) of dormitories of higher schools

and vocational training institutions

3 657 626

Interest received for granted loans 492 611

Current portion of long-term debts 674 312

Total 6 993 946

Note 7 Cash at bank (EUR)

Last day of the

reporting

period (31-12-

2015)


reporting period (31-12-

2014)

VIPA funds 2 058 813 594 Funds of the programme for the renovation

(modernization) of multi apartment buildings 736 104 19 840 934

Funds of the programme for the renovation

(modernization) of dormitories 1 291 138 1 031 350

Total 4 086 055 20 872 878

With a view to avoiding risk, settlement and payments may also be carried out by bank transfers.

The funds of the programme for the renovation (modernization) of multi apartment buildings

may be used exceptionally for the renovation (modernization) of multi apartment buildings, i.e. fund

transfers to contractors, payment of the VIPA management fee, repayments to the European Investment

Bank.

The funds of the programme for the renovation (modernization) of dormitories may be used

exceptionally for the renovation (modernization) of dormitories, i.e. fund transfers to contractors,

payment of the VIPA management fee, repayments to the European Investment Bank.

Note 8 Owner's equity

Shareholder

Total ordinary

shares (units)

Value of the

ordinary shares

(EUR)

%

31-12-2015 31-12-2015 31-12-2015

Ministry of Finance of

the Republic of

Lithuania

3 500 101 360 100

Total 3 500 101 360 100



EXPLANATORY NOTES


37

Earnings (loss) per shares was computed by dividing the net profit (net loss) of the Company for

the reporting period by the number of shares.

Note 9 Legal reserve (EUR)

Article 10 Last day of the reporting period

Legal reserve 10 137

The legal reserve was formed following the distribution of profit (loss), acting in accordance

with Order No. 1K-197 of 15 June 2015 of the Minister of Finance of the Republic of Lithuania.

Note 10 Retained earnings (loss)(EUR)

The income of VIPA consists of the management fee received for:

- performance of the functions of a financial intermediary for the purpose of the multi

apartment building renovation (modernization) programme;

- performance of the functions of a financial intermediary for the purpose of the programme

for the renovation (modernization) of dormitories of higher schools and vocational training institutions;

- performance of the functions of the manager of the Multi Apartment Buildings

Modernization Fund;

- Performance of the functions of the manager of the Energy Efficiency Fund.

Article 10 Total income

Performance of financial

intermediary functions 1 446 192

Performance of the fund

manager function 235 329

Total 1 681 521

The balance sheet and the income statement of VIPA include the income from interests for

granted loans funded from the JESSCA holding fund resources, and which must be transferred to the

European Investment Bank as the manager of the JESSICA holding fund.

Article Interest income

Interest income from the loans granted for the

modernization of multi apartment buildings 526 352

Interest income from the loans granted for the

renovation (modernization) of dormitories of

higher schools and vocational training

institutions

69 010

Total 595 362

Article 10 Costs of the

reporting period

Compensation

of the costs

for 2015

Costs

Salaries and social insurance costs 563 709 123 699 440 010

Depreciation and amortisation 49 322 16 884 32 438

Premises rent costs 56 623 17 531 39 092

Utility services 22 054 5 672 16 382



EXPLANATORY NOTES


38

Article 10 Costs of the

reporting period

Compensation

of the costs

for 2015

Costs

Vehicle operation costs 9 309 757 8 552

Communication services costs 4 413 1 452 2 961

Business travel costs 20 668 5 919 14 749

Professional development costs 30 581 12 973 17 608

Consulting and legal services 152 497 8 212 144 285

Non-current assets maintenance services 8 984 1 797 7 187

Costs related to the payments to partners 114 028 114 028

Other costs 86 702 13 305 73 397

Income tax costs 116 841 116 841

Total 1 235 731 208 201 1 027 530

VIPA is implementing a project ‘Implementation of the functions of the preparedness of VIPA

to implement a programme that during the next programming period will replace the EU structural

assistance use strategy for 2007–2013, and the implementing action programmes’; the costs incurred in

relation to the implementation of this project are compensated from the funds of the EU technical

assistance for 2007–2013.

Note 11 Amounts payable and liabilities (EUR)

Creditors

Debts payable

within one year After one year

Last day of the

reporting period

(31-12-2015)

Last day of the

previous reporting

period (31-12-

2014)

Last day of the

reporting period

(31-12-2015)

Last day of the

previous reporting

period (31-12-

2014)

To suppliers 48 733 39 227

Liabilities

related to

employment

relations

893 9456

Holidays

accruals 26 500 11 996

Accrued

expenses 15 594 7 587

Received

prepayments 2 023 533 37 344 538 29 753 546

Other amounts

payable and

liabilities

634 094 76 937

Income tax

liabilities 116 816 27 400

Provisions 16 291 16 311

Total 2 882 454 188 914 37 344 538 29 753 546



EXPLANATORY NOTES


39

As of 31 December 2015, the holiday reserve was computed having regard to the average wages

expenses, and the accrued unused days of holidays until the end of the reporting period.

The prepayment item includes:

- EUR 1 899 776, that the Ministry of Finance of the RL, as the institution implementing the

rights and the obligations of the rights of VIPA, transferred on 30 December 2015 for the

purpose of increase of the authorised capital, acting in accordance with Resolution No. 1380

of 23 December 2015 of the Government of the RL;

- EUR 86 052 transferred to VIPA by borrowers, repaying the loan, and which must be

transferred to the Multi Apartment Building Modernization Fund;

- The Other prepayments Item contains an amount of EUR 33 796, as an obligation to use the

funds generated within the framework of the project ‘‘Implementation of the functions of the

preparedness of VIPA to implement a programme that during the next programming period

will replace the EU structural assistance use strategy for 2007–2013, and the implementing

action programmes’ for the purpose of the programme only, and the appropriations received

in the course of 2015, but not yet used by the financial statements date, as well as the

management fee prepaid by the European Investment Bank.

- EUR 3 889 were the loan contributions in advance transferred by loan recipients;

- EUR 20 – obligations to the European Investment Bank to cover part of the obligations of

insolvent borrowers, according to the Conditional Loan Agreement signed on 19 August

2013 regarding the renovation (modernization) of multi apartment buildings.

The long-term liabilities section carries the following liabilities to the European Investment

Bank:

- according to the Conditional Loan Agreement of 18 July 2013 regarding the renovation

(modernization) of dormitories;

- according to the Conditional Loan Agreement of 19 August 2013 regarding the renovation

(modernization) of multi apartment dormitories.

Note 12 Off-balance sheet assets and liabilities (EUR)

On 31 December 2015, the Company’s off-balance sheet (transferred for administration) assets

and liabilities consisted of the assets and liabilities of the Multi Apartment Buildings Modernization

Fund, and the assets and liabilities of the Energy Efficiency Fund.

The assets and liabilities of the Multi Apartment Buildings Modernization Fund do not belong

to VIPA, and VIPA may dispose of the assets only to the extent defined in the Tripartite agreement on

the establishment and funding of the Multi Apartment Buildings Modernization Fund of 27 March 2015.

No. Article 10 Financial year Previous financial year

A. Non-current assets 32 956 203 -

III Non-current financial assets 32 956 203 -

C. Current assets 283 829 -

C.II Amounts receivable within one year 86 052

C.V. Cash and cash equivalents 197 777 -

Total assets 33 240 032 -

D Funding amounts 32 812 601 -



EXPLANATORY NOTES


40

D.III From the EU, foreign States and

international organisations 32 812 601 -

E. Liabilities 427 431 -

E.II. Short-term liabilities 427 431 -

E.II.6.2 Other payables to the budget 427 431 -

E.II.12 Other current liabilities 427 431 -

Total funding amounts, liabilities 33 240 032 -

The non-current assets of the Fund consist of low-interest loans intended for the renovation

(modernization) of multi apartment buildings.

The current assets of the Fund also include liabilities of the management fee to the Fund manager.

The management fee computed for 2015 accounted for EUR 191 320. Actual Fund

administration costs – EUR 206 971.

The assets and liabilities of the Energy Efficiency Fund do not belong to VIPA, and VIPA may

dispose of the assets only to the extent defined in the Tripartite agreement on the establishment and

funding of the Energy Efficiency Fund.

No. Item Financial year Previous financial year

C. Current assets 19 006 308 -

C.V. Cash and cash equivalents 19 006 308 -

Total assets 19 006 308 -

D Funding amounts 18 962 305 -

D.III From the EU, foreign States and

international organisations 18 962 305 -

E. Liabilities 44 003 -

E.II. Short-term liabilities 44 003 -

E.II.12 Other current liabilities 44 003 -

Total funding amounts, liabilities 19 006 308 -

The current assets measure the funds of the Fund transferred to the Fund administration account.

The current liabilities item includes liabilities of the management fee to the Fund manager.

The management fee computed for 2015 accounted for EUR 44 009. Actual Fund administration

costs – EUR 109 475.

Note 13 Contingent liabilities

Item 28 of Business Accounting Standard 18 Financial Assets and Financial Liabilities provides

that financial liabilities shall recognised in accounting when, and only when, an entity assumes an

obligation to deliver cash or another financial asset. Forecast transactions and originated financial

guarantees that are not yet due are not recognised as the entity's liabilities as long as they do not meet

the definition of a financial liability’. The financial statements for the period ended 31 December 2015

do not include the data on the obligation assumed by VIPA to repay 11 % insolvent loans (overdue for

more than 60 days) related to the renovation (modernization) of multi apartment buildings according to

Conditional Loan Agreement No. 2013-0376 with the European Investment Bank of 19 August 2013.

Note 14 Other relevant information



EXPLANATORY NOTES


41


jointly with the CPVA with the European Investment Bank regarding the renovation (modernization) of

multi apartment buildings through the implementation of activities of the JESSICA, by 31 December

2015 VIPA had concluded 120 loan agreements regarding the renovation (modernization) of multi

apartment buildings for a total value of EUR 31.8 million.


jointly with the CPVA with the European Investment Bank regarding the renovation (modernization) of

dormitories of higher schools and vocational training institutions, by 31 December 2015 VIPA had

concluded 16 loan agreements. The total value of concluded contracts is EUR 11.7 million. As of 31

December 2015, the value of the actually granted loans was EUR 8 million.

On 18 February 2015, VIPA concluded a tripartite agreement on the establishment and funding

of the Energy Efficiency Fund (ENEF) with the Ministry of Finance of the RL and the Ministry of

Energy of the RL. The ENEF was established as a fund of funds that is on a trust basis managed and

administered by VIPA. The purpose of the Fund is an increase of energy efficiency by investing into the

public infrastructure. The total contribution of ENEF is EUR 79,65 million.

On 27 March 2015, VIPA concluded a tripartite agreement on the establishment and funding of

the Multi Apartment Buildings Modernization Fund (DNMF) with the Ministry of Finance of the RL

and the Ministry of Environment of the RL. The purpose of the DNMF is to promote the enhancement

of energy efficiency by investing in the modernization of multi apartment buildings. On 17 September

2015, the DNMF contract was amended increasing the total contribution of DNMF by EUR 74 million.

The ENEF was established as a financial instrument that is on a trust basis managed and administered

by VIPA. By 31 December 2015, there were total 221 contracts of EUR 71.6 million in value signed for

renovation (modernization) of multi apartment buildings. As of 31 December 2015, the value of the

loans actually disbursed was EUR 33.9 million.

Note 15 Financial relations with the managers of the Company and other related persons

Indicators 31-12-2015 31-12-2014

Balance at the

end of the

financial year

A. Amounts related to employment relations

for the year: 59 123 54 369

To managers 59 123 54 369

To other related persons 0 -

B. Loans granted by the Company: 0 -

To managers

To other related persons 0

C. Loans received by the Company: 0 -

From managers

From other related persons 0

D. Donated assets and gifts 0 -

X To managers


E. Different guarantees granted on behalf of the

Company: 0 -

To managers




EXPLANATORY NOTES


42

Indicators 31-12-2015 31-12-2014

Balance at the

end of the

financial year

F. Other material amounts computed in the

year: 0 -

To managers


G. Other material liabilities to the Company: 0 -

From the Managers

From other related persons 0

H. Assets sold: 0 -

X To managers

To other related persons

Average number of managers in the year 2 2 X

Director General

Gvidas Dargužas (position of the Manager) (signature) (name, surname)


Company)


Documents

PUBLIC INVESTMENT DEVELOPMENT AGENCY (VIPA) Company …admin.vipa.lt/www/UserFiles/Independent_auditor_s_report.pdf · Lukiškių St. 2, Vilnius, Lithuania Independent auditor's report