Kauno Energija

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Kauno Energija AB KAUNO ENERGIJA SET OF CONSOLIDATED AND PARENT COMPANY’S FINANCIAL STATEMENTS FOR THE YEAR, ENDED 31 DECEMBER 2018, PREPARED ACCORDING TO INTERNATIONAL FINANCIAL REPORTING STANDARDS, AS ADOPTED BY THE EUROPEAN UNION, PRESENTED TOGETHER WITH CONSOLIDATED ANNUAL REPORT AND INDEPENDENT AUDITOR’S REPORT AB KAUNO ENERGIJA, Company code 235014830, Raudondvario rd. 84, Kaunas, Lithuania CONSOLIDATED AND PARENT COMPANY’S FINANCIAL STATEMENTS FOR THE YEAR 2018 (all amounts are in EUR thousand unless otherwise stated) Translation note This set of Consolidated and Parent Company’s Financial Statements presented together with Consolidated Annual Report and Independent Auditor’s Report has been prepared in Lithuanian language and in English language. In all matters of interpretations of information, views or opinions, the Lithuanian language version of these documents takes precedence over the English version. Page INDEPENDENT AUDITOR’S REPORT…………………………………………….. 3 – 9 Management's approval of the financial statements…………………………………… 10 SET OF CONSOLIDATED AND PARENT COMPANY’S FINANCIAL STATEMENTS FOR THE YEAR 2018....................................................................... 11 – 65 Statements of Financial Position.................................................................................... 11 – 12 Statements of Profit (loss) and Other Comprehensive Income........................................ 13 – 14 Statements of Changes in Equity................................................................................... 15 Statements of Cash flows............................................................................................... 16 – 17 Notes to the Financial Statements.................................................................................. 18 – 65 CONSOLIDATED ANNUAL REPORT………………………………………………. 66 – 169 2 l(PMG Baltics, LJAB Phone: +370 46 4B 00 12 Klaipéclos filialas Fax: +370 46 48 00 '13 Liepq st. 4 E-ma¡l: klalpeda@kpmg. tt -92114l(laipeda LT Website: www,kpmg.lt Lithuania lndeOendent Auditor's Report To the Shareholders of AB Kauno energija Report on the Audit of the separate and the consolidated Financial statements Opinion We have audited the separate financial statements of AB Kauno energija ("the Company',) and the consolidated financial statements AB Kauno energija and its subsiãiaries (,,the Group,,). The separate financial statements of the Company and the consolidated financial statements of the Group comprise: ' the separate statement of financial position of the Company and the consolidated statement of flnancial position of the Group as at 31 December 2018, o the separate statements of profit (loss) and other comprehensive income of the Company and the consolidated statements of profit floss) and other comprehensive income the Group for the year then ended, . the separate statement of changes in equity of the Company and the consolidated statement of changes in equity of the Group for the year then ended, ' the separate statement of cash flows of the Company and the consolidated statement of cash flows of the Group for the year then ended, and o the notes to the separate and consolidated financial statements of the Company and the Group, comprising signif icant accounting policies and other explanatory information. ln our opinion, the accompanying separate and consolidated frnancial statements give a true and fair view of the unconsolidated financial position of the Company and the consolidated f inancial position of the Group as at 31 December 2018, respectively, and of their respective unconsolidated and consolidated financial performance and their non-consolidated and consolidated cash f lows for the year then ended in accordance with lnternational Financial Reporting Standards, as adopted by the European Union. Basis for Opinion We conducted our audit in accordance with lnternational Standards on Auditing (lSAs). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Separate and Consolidated Financial Statements section of our report. We are independent of the Company and the Group in accordance with the lnternational Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with the Law on Audit of Financial Statements of the Republic of Lithuania and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion, @2019 I(PMG Ballics, UAB, a Llthuan¡ân linritod liabiiily conrpany an(t a Conìpany code: 1 l1616158 rì€nìber fiïr of lhe I(PMG nelvþrk of indepenclent ntert)or 1¡¡ìs affiliâl€d VAT code:11114949716 with l(PNIG l¡ìtenìationâl Cooperal¡ve ( KPl\4c lntort.tìonal ), a Swiss ê¡t¡ty. All r\Jhls rêservod. Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the separate and consolidated financial statements of the current period. These matters were addressed in the context of our audit of the separate ,and consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Each audit matter and our respective response are described below. We refer to the financial statements: Significant accounting policies - .. Property, plant and equipment", ,.Use of estimates in the preparation of financial statements", Note 4 .. Property, plant and equipment" The carrying amount of property, plant and equipment as at 31 December 2018: EUR 125.277 thousand in the consolidated statement of financial position and EUR 120.165 thousand in the separate statement of financial position; depreciation and amortization expenses in 2018: EUR 6.972 thousand recognized in the consolidated statements of profit (loss) and other comprehensive income and EUR 6.390 thousand recognized in the separate statements of profit (loss) and other comprehensive income. The key audit matter How the matter was addressed in our audit Management's assessment of Property, Our audit procedures included among others: plant and equipment involves significant • considering the appropriateness of the estimation, primarily relating to their useful Company's and Group's accounting policy relating life. The key assumptions applied by to determination of useful life of property, plant management are further described in Note and equipment and assessing compliance of the 2.8 Property plant and equipment. policies with the applicable accounting standards; The subjectivity of the principal • assessing the appropriateness of the controls assumptions required an application of a implemented by the Company with respect to significant amount of management's determination and subsequent revision of useful judgment and effort. Changes to these life of items of property, plant and equipment; assumptions could result in a material • performing retrospective review of accuracy of change in the depreciation charge and result management's estimate with respect to useful for the year. life of significant items of property, plant and Accordingly, we consider this area to be our equipment by comparing actual useful life of fully key audit matter. depreciated assets that were still in use to the initial estimate of useful life including subsequent revisions thereof. • comparing useful life of significant items of property, plant and equipment applied by the Company and the Group to useful life applied by other companies in the same industry; • inquiring the management as to their plans to dispose and/or replace significant items of property, plant and equipment whose useful life is scheduled to end in the following financial year and assessing consistency of these plans with the management's estimate of useful life of such assets; • considering the adequacy of the Company's and Group's disclosures (Note 2.8 and Note 4) in respect of Property, plant and equipment. @2019 l<PMG Bflltics, UA9, a Lllhm111ia11 U1niled liablllly company and c1 111e111be1 firm of tlrn l<PMG 11elwo1k of i11depenclent mamber firms afrilialed wilh KPMG 1nloma1101rn1 Coope.alive (-KPMG 11,lorirnlional''), a Swiss entity AU tiglits rese1ved. lmpairment assessment of investments ín subsídíaries (separate financial statements only) See Note 1 and Note 5 to the f inancial statements, The carrying amount of investments in subsidiaries in the separate f inancial statements as at 31 December 2018: EUR 2.064 thousand. Reversal of impairmenilosses recognized in 201g: EUR 1b6 thousand. The key audit matter How the matter was addressed in our audit The investments in subsidiaries are carried at Our audit procedures included, among others: cost in the separate financial statements of . involving our the Company. As disclosed in the note 1 to own valuation specialists who the financial statements both subsidiaries assisted us in: have generated losses in 2018 which o assessing the appropriateness of the indicates that the investments might be valuation methodologies applied by impaired. the Company by comparing them to As a result, the Company performed methodologies commonly used in impairment tests for both investments as at valuations of similar assets and the 31 December 2018. The investments are requirements of the relevant individually assessed for impairment. accounting standards; For the assessment of recoverability of o challenging the key assumptions used investment in subsidiary UAB Petraðiunq
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