AS AMBER LATVIJAS BALZAMS
ANNUAL REPORT 2024
prepared in accordance with
IFRS Accounting Standards as adopted by the EU
This version of financial statements is a translation from the original, which was prepared in Latvian.
All possible care has been taken to ensure that the translation is an accurate representation of the
original. However, in all matters of interpretation of information, the original language version of
financial statements takes precedence over this translation.
AS Amber Latvijas Balzams
Annual Report 2024
2
CONTENTS
COMPANY INFORMATION ..................................................................................................................... 3
MANAGEMENT REPORT........................................................................................................................ 5
Operating activities .......................................................................................................... 5
Company's operations in the reporting year .................................................................. 5
Financial performance ................................................................................................................. 5
Non-financial performance and activities for the reporting year ............................................ 7
Sustainability report ......................................................................................................... 8
Risk assessment and management ................................................................................ 9
Stock and fund market ................................................................................................... 10
Financial risk management ........................................................................................... 11
Events after the end of the reporting year .................................................................... 11
Future prospects of Company ....................................................................................... 12
REMUNERATION REPORT ..................................................................................................................13
STATEMENT OF MANAGEMENT RESPONSIBILITIES ......................................................................14
FINANCIAL STATEMENTS: ..................................................................................................................15
Statement of Profit or Loss ........................................................................................... 15
Statement of Comprehensive Income ........................................................................... 16
Statement of Financial Position .................................................................................... 17
Statement of Changes in Equity .................................................................................... 19
Statement of Cash Flow ................................................................................................. 20
Notes to the financial statement ................................................................................... 21
INDEPENDENT AUDITOR’S REPORT .................................................................................................57
AS Amber Latvijas Balzams
Annual Report 2024
3
COMPANY INFORMATION
Name of the Company AS Amber Latvijas Balzams
Legal status of the Company Joint-stock company
Registration number, place and date Registered in the Register of Enterprises
of the Republic of Latvia under single number 40003031873
on 2 October 1991 in Rīga,
with repeated re-registration
on 20 October 1998
Registered in the Commercial Register
on 19 June 2004 in Rīga
Address A. Čaka 160
Rīga, LV-1012
Latvia
Main business Production of alcoholic beverages
NACE2 11.01
Major shareholder Amber Beverage Group Holding S.à r.l. (89.99%)
Names, surnames, positions of the members of Valizhan Abidov – Chairman of the Council (from
the Council positions 18.10.2024)
Boriss Ņešatajevs – Deputy Chairman of the
Council (from 18.10.2024)
Velga Celmiņa – Member of the Council
Rolands Gulbis – Chairman of the Council (until
18.10.2024)
Valizhan Abidov – Deputy Chairman of the Council
(until 14.06.2024)
Boriss Ņešatajevs – Member of the Council (until
18.10.2024)
Guntars Reidzāns – Member of the Council (until
18.10.2024)
Names, surnames, positions held by Members of Andrejs Višņausks - Chairman of the Board (from
Board 18.09.2024)
Intars Geidāns – Chairman of the Board (until
14.06.2024)
Valizhan Abidov – Member of the Board (from
14.06.2024 to 18.09.2024)
Guntars Betlers – Member of the Board (until
14.06.2024)
Guntars Betlers – Chairman of the Board (from
14.06.2024 to 18.09.2024)
Guntars Betlers – Member of the Board (from
18.09.2024 to 18.10.2024)
AS Amber Latvijas Balzams
Annual Report 2024
4
COMPANY INFORMATION (continued)
Auditor and Responsible Certified Auditor Ernst & Young Baltic SIA
name and address Commercial Company Licence No. 17
Muitas iela 1A
Rīga, LV-1010
Latvia
Responsible Certified Auditor:
Diāna Krišjāne
Certified Auditor
Certificate No. 124
Corporate Governance Report https://amberlb.lv/en/corporate-governance/
AS Amber Latvijas Balzams
Annual Report 2024
5
MANAGEMENT REPORT
Operating activities
AS Amber Latvijas Balzams (hereinafter also “the Company”) is a leading producer of alcoholic
beverages in the Baltic states. The Company was founded in 1900 as Rīgas Valsts Degvīna Noliktava
Nr. 1 (State Alcohol Warehouse No. 1). From 1970 to 2022, it operated under the name AS Latvijas
Balzams, but 2022, it changed to AS Amber Latvijas Balzams. The Company’s major shareholder is
Amber Beverage Group Holding S.à r.l. (a company registered in Luxembourg, hereinafter also referred
to as the Parent Company or ABGH), which owns 89.99% of the Company shares.
The Company runs two alcoholic beverage production plants in Rīga, a spirits production plant and a
sparkling wine and light alcoholic beverage production plant. They make most types of alcoholic
beverages, such as sparkling wines, fortified wines, ciders, alcopops, vodka, liqueurs, brandy, spirits,
gin, etc. Some AS Amber Latvijas Balzams recipes are several centuries old with Rīgas Melnais
Balzams® origins going back to 1752.
Overall, the Company produces more than 100 brands of beverages. The Company’s products are sold
in almost all regions of the world through Amber Beverage Group and Stoli Group, as well as direct
export.
The Company works with the largest suppliers of raw materials and consumables in the European
Union. The most important resources are water and alcohol-containing raw materials. Water is taken
from artesian wells on the Company’s site. Ethyl alcohol for most of the products is supplied by the
Company's partners working in the European Union.
A small, but still significant, part of the Company’s business is the logistics services. The services are
mainly provided to related companies, but the volume of services to other companies in the alcoholic
beverage industry, such as transit services, customs warehousing services, logistics services, value-
added services, consolidation, etc., keeps going up. These activities enable more efficient use of
available resources.
AS Amber Latvijas Balzams successfully operates as a European logistics centre for the distribution of
the brands represented by the Group (Rooster Rojo Tequila, KAH Tequila, Bayou Rum, Arinzano,
Achaval Ferrer, Se Busca, Cenote and Kentucky Owl) in Europe, Scandinavia and other countries.
As a socially responsible and sustainable company, we publish the information required by law about
our sustainability and corporate social responsibility measures in accordance with the GRI (Global
Reporting Initiative) principles. This information is available in the Corporate Social Responsibility
section of the Company’s website.
The Company has drafted and adheres to the following procedures: Corporate Social Responsibility
Policy, Company Procurement Procedure, Collective Bargaining Agreement, Quality Management
Handbook, Ethical Marketing Communication Code, Anti-Corruption Policy, Data Protection Policy, Risk
Management Policy, Remote Work Policy and other internal documents. These documents, policies and
procedures are reviewed regularly, both internally in accordance with the Quality Management System
and as a part of external audits. The audit results and planned corrective measures are considered at
the Company’s management meetings.
The company is more diligent in ensuring information disclosure and the level of detail in this report has
been improved which has a positive impact on informing the parties involved and creating predictable
and stable long-term relationships.
Pursuant to the good corporate governance practice, the Company appointed one of the leading audit
service providers in the world as a new auditor of the 2024 annual report.
Company's operations in the reporting year
Financial performance
In 2024, the Company’s net turnover reached EUR 78.2 million, which is 20.1% less than in the same
period of 2023. In 2024, total sales (expressed in 9Lcs) were 19.1% lower than in the same period of
2023. The order volumes in 2024 were affected by strategic decisions regarding the development of the
Stoli brand made by Stoli Group as the largest customer with a share of 40% of the total volumes.
AS Amber Latvijas Balzams
Annual Report 2024
6
MANAGEMENT REPORT (continued)
01.01.2024-
31.12.2024
01.01.2023-
31.12.2023
9Lcs
9Lcs
Sales Volume, 9-Liter Cases
3 688 923
4 560 336
* for the retrospective correction of an error which has significantly affected the financial indicators, see
Note 30
Gross profit for the reporting period was EUR 16.3 million, which is EUR 1.9 million (+13.0%) more than
in the same period of 2023. The gross profit indicator was negatively affected by the drop in sales
volume, but it was fully offset by lower costs of the most important raw materials and consumables used
in the production (down by 25.8% in comparison with same period of 2023), which was mainly due to
procurement of raw materials at better prices.
In
2024, the operating profit was EUR 2.6 million, which is a loss of EUR 0.6 million in comparison with the
corresponding figure in 2023. The operating profit to turnover ratio in the 2024 reporting period was
3.4% (-0.6% in 2023).
The main reason behind the change in operating profit was the creation of additional provisions. The
total amount of provisions is EUR 16.9 million. Of these, EUR 0.9 million are attributable to 2024. The
2022 and 2023 comparative metrics have been corrected due to the retrospective correction (see
Note 30) from the additional provision, i.e. those are EUR 11.2 million in 2022 and EUR 4.7 million in
2023.
Sales and administrative costs, as well as other operating income and expenses have not changed
significantly in comparison with the previous period.
AS Amber Latvijas Balzams
Annual Report 2024
7
MANAGEMENT REPORT (continued)
In the reporting period, the Company’s net profit was EUR 4.1 million, which is an increase on same
period of 2023 (EUR 0.4 million).
The Company’s alternative performance metrics for the reporting year and the comparative figures
thereof for the preceding reporting periods are as follows:
The Company’s Return on Equity (ROE) and Return on Assets (ROA):
31.12.2024 *
31.12.2023 *
31.12.2022 *
ROA**
2.3%
0.2 %
-2.7 %
ROE***
3.3 %
0.3 %
-3.7 %
* for the retrospective correction of an error which has significantly affected the financial indicators, see
Note 30
** ROA = Net profit/average asset value x 100%
*** ROE = Net profit/average equity value x 100%
Average total assets = (total assets at the beginning of the period + total assets at the end of the
period) / 2
Average total equity = (total equity at the beginning of the period + total equity at the end of the
period) / 2
The Company's EBIT* and EBITDA**:
* for the retrospective correction of an error which has significantly affected the financial indicators, see
Note 30
* EBIT = Profit before corporate income tax, finance expenses, finance income
** EBITDA = Profit before corporate income tax, finance expenses, finance income, depreciation and
amortisation
The Company’s management uses the aforementioned alternative performance metrics for assessing
the financial performance for a specific financial period and decision-making.
AS Amber Latvijas Balzams is one of the largest taxpayers in the country. In the reporting period, the
Company paid EUR 73.9 million to the state budget in taxes, including EUR 57.4 million in excise duty.
Non-financial performance and activities for the reporting year
Similar to the turnover, in 2024, the production output also dropped by 20% in comparison with 2023.
2024 * 2023 * 2022 *
EUR 000 EUR 000 EUR 000
EBITDA** 5 496 1 840 (2 734)
EBIT *** 2 646 (581) (4 857)
AS Amber Latvijas Balzams
Annual Report 2024
8
MANAGEMENT REPORT (continued)
Considering the drop in the production volumes and overall profitability, the Company has taken a series
of measures to boost its production efficiency and cut costs:
• continued work to preserve and achieve even further improvements in the filling equipment
overall equipment effectiveness (OEE) indicator;
• re-negotiated energy resource purchase agreements which came into effect in the second half
of 2024 and created additional production cost savings;
• labour resources and other costs adjusted to match current production volumes by switching
to single shift work, which enabled significant workforce optimisation (-21% in comparison with
the same period of 2023).
Despite the drop in sales volumes, in 2024, the Company, following the Amber Group 2030 strategy and
taking a series of steps to boost efficiency, invested in the development of its production facilities
especially focusing on improving efficiency and adaptability, as well as maintaining the low cost base.
The most significant investment projects completed in the reporting year were:
• Purchase of vodka production equipment (for Green Mark);
• Purchase of glass bottle making equipment (250 ml, for alcopops);
• Replacement of the product cooling system in the liqueur department;
• Purchase of equipment for the new Moskovskaya labels;
• Washing unit control automation distribution upgrade
In addition to the financial indicators set out in the report, the Company uses the following comparative
metrics for its performance analysis: RFT (right first time) and OTIF (on time in full) & quality. RFT
measures the percentage of products manufactured correctly in the first run. In 2024, it reached 97.5%,
which shows an improvement in comparison with the same metric in 2023 (94.9%). The OTIF metric
represents the Company's ability to deliver customer orders on time, in full and with required quality. In
2024, it reached 95.5%, which is an improvement on 95% in 2023.
In 2024, the product range was expanded with new products Riga Black Balzam® Tropical, Bonaparte
Black, Cosmopolitan Diva® Mojito Fusion, new sizes were introduced for Riga® Prestige Cuvee
sparkling wine Semi Seco, Gradus Vodka, Moka, Grand Cavalier® brandy, Spartaks Premium, Žolynų,
and new designs were created for Irish Whiskey De Danann, Hektors, 3 graudu, Rīgas šampanietis®
for the holiday season. In 2024, Company also continued the rollout of the new Moskovskaya® Vodka
design on international markets.
Sustainability report
In 2024, Company’s Parent company Amber Beverage Group Holding S.à rl. (ABG Group) issued a
Sustainability Report in accordance with the GRI (Global Reporting Initiative) principles also including
the Company’s information in it. It allowed the Company not to publish a separate sustainability report.
The ABG Group Sustainability Report also includes information on environmentally sustainable
business activities in accordance with the European Union taxonomy requirements. The ABG
Sustainability Report is published alongside the ABG Group Annual Report and is available in the ESG
Reporting section of the ABG website.
Pursuant to European Commission (EC) Regulations No. 2020/852 and No. 2021/2178, the Company
discloses qualitative and quantitative information on taxonomy-eligible and taxonomy non-eligible
economic activities for each of the three indicators: turnover, capital expenditure, operating expenses.
According to the classification included in the EU Taxonomy Compass, all Company’s economic
activities are considered taxonomy non-eligible.
In line with the Amber Group Sustainability Strategy, the Company will also continue working to achieve
its sustainability objectives to enable it taking necessary steps in 2025 and 2026 to fully adopt the CSRD
and ESRS standards in the Company.
AS Amber Latvijas Balzams
Annual Report 2024
9
MANAGEMENT REPORT (continued)
Risk assessment and management
Within the Company’s product and risk management process, when evaluating the external and internal
environmental factors that may affect the Company’s operations, the following factors being the object
of special attention should be mentioned:
• Timely identification of and compliance with any changes in legal requirements, ensuring staff
briefing and awareness in a timely manner
• Ensuring production continuity by planning production capacity and workload in a timely
manner
In its operations, the Company strictly adheres to the laws of the Republic of Latvia. Considering its
business sector, the Company places extra emphasis on the assessment of transactions and their
compliance with laws.
The Company closed 2024 with a profit of EUR 4,088 thousand and as at 31 December 2024 its current
assets still exceeded its current liabilities by EUR 75 million, and the net asset amount after correction
of the preceding year's errors remained at 125 million.
However, the Company’s management acknowledged that a large portion of current assets of
EUR 73 million consists of receivables from related parties and other related companies of the group.
The increased operational, market and geopolitical risks associated with these financial assets include
loan recovery risks. Additional sales drop risks in the US and uncertainties around the extra tariffs on
exports to the US make the Company’s management wonder about the liquidity risk deterioration and,
consequently, collectability of these receivables during 2025 and in the foreseeable future.
The Company continues to provide guarantees and has pledged its tangible and intangible assets to
guarantee the loans received by the parent company. The Company’s management is aware that these
loans are subject to certain covenants. The parent company had not fulfilled individual covenants
actively informing its creditors and receiving refusals to use premature loan repayment. These
circumstances expose the Company to the risk that banks demand the realisation of guarantee
obligations and pledges from the Company, thus potentially significantly harming the Company’s liquidity
position.
Due to the decline in the volume of products sold in 2024, which subsequently required a series of
operational and financial actions to streamline the Company’s operations, in 2024 the Company faced
multiple challenges, which continue in 2025 and on which the Company plans to work actively in 2025
and 2026:
• Optimising both variable and fixed cost base;
• Implementing planned investment projects and launching new products timely and in full;
• Ensuring fulfilment of orders under conditions of increased demand, especially in the second
half of the year;
• Strengthening the Company’s liquidity, working capital turnover and profitability indicators to
ensure the planned cash flow forecast indicators in 2025 and 2026;
• In the second half of 2025, reviewing and, if necessary, restructuring the payment term
structure, as well as these related companies' debt payment conditions to related companies
in the Amber and Stoli Groups. The purpose of these actions and decisions is to ensure the
optimal and effective redistribution of costs and resulting credit and liquidity risks within the
Group for the benefit of both the Company and related parties;
• Improving inventory turnover ratios and primarily significantly reducing the balance of slow-
moving inventory items;
• The Company management will assess and regularly monitor the decisions of the US courts
regarding the impact of Chapter 11 on the conditions for the continuation of the activities of
the related group company in the US, so that the Company can take the necessary measures
in a timely manner to ensure sales volumes in the US market;
• Regularly assessing the impact of potential import tariffs imposed by the US government on
the Company’s sales figures, as well as monitoring their possible growth and dynamics.
AS Amber Latvijas Balzams
Annual Report 2024
10
MANAGEMENT REPORT (continued)
Assessing and planning the future liquidity items, the Company’s management has drawn up detailed
cash flow forecasts and estimated that the Company will have sufficient current asset resources
available in 2025 and 2026 to ensure stable liquidity in accordance with the Company’s cash flow
forecasts for the aforementioned forecast period. Therefore, the Company’s management believes
that the Company will be able to obtain sufficient and positive financing for its current liquidity
requirements and ensure the Company’s continued operations in the future.
On 25 August 2024, the Company experienced an external cyberattack on internal IT systems.
Following the Company’s IT security instructions, this incident was promptly identified and fended off.
The Company assessed the situation very seriously and subsequently took all the necessary actions
set forth in the instructions to mitigate the consequences, as well as informed the responsible data
protection and security authorities of the Republic of Latvia. As a result, a criminal case has been
initiated regarding the cyberattack and the Company’s management and responsible IT services are
fully cooperating with the responsible authorities.
Since the Company management takes the privacy of data and information resources and their
cybersecurity very seriously, following the incident, the Company has taken additional measures and
implemented additional automated control procedures to strengthen the Company's cybersecurity and
the related internal control system to protect the Company's internal and external process and IT
resources and data and their continuity of operations in the interests of the Company.
Stock and fund market
In 2024, the Company's share price fluctuated between EUR 8.30 and EUR 9.40 share (Nasdaq Baltic
ticker BAL1R; ISIN: LV0000100808).
Members of the Board and Council of the Company do not own AS Amber Latvijas Balzams shares.
AS Amber Latvijas Balzams
Annual Report 2024
11
MANAGEMENT REPORT (continued)
The share price trends in the previous three reporting periods are as follows:
Average price, EUR
Minimum price, EUR
Maximum price, EUR
2024
9.04
8.30
9.40
2023
9.58
8.80
10.20
2022
10.00
8.93
11.92
Financial risk management
The main business of AS Amber Latvijas Balzams is associated with exposure to several financial risks,
including credit risk, liquidity risk and interest rate risk. The Company management continuously
assesses financial risks in order to minimise their potential negative impact on the Company's financial
performance.
Financial assets which could potentially subject the Company to a certain degree of credit risk
concentration are mainly related party receivables and loans to related companies. The Company has
implemented and adheres to a credit policy to consider offering post-payment terms to customers with
a good credit history.
Although the Company's operational performance remains strong, the Company actively manages its
timing of incoming cash flow, particularly with respect to receivables.
In its international transactions, the Company also complies with the sanctions regime based on the
information published on the website of the Ministry of Foreign Affairs of the Republic of Latvia, as well
as on its internal procedures.
As at 31 December 2024, the Company’s current assets exceeded its current liabilities by
EUR 75 million (by EUR 79 million as at 31 December 2023). The Company can meet its current
liabilities as they fall due. The Company’s liquidity ratio (current ratio) and short-term liquidity ratio (quick
ratio) for the last three years are as follows:
2024 *
2023 *
2022 *
Current ratio**
2.53
2.34
2.70
Quick ratio***
2.03
1.67
2.08
* for the retrospective correction of an error which has significantly affected the financial indicators, see
Note 30
** Current ratio = Current assets / current liabilities.
*** Quick ratio = (trade receivables + related party receivables + cash and cash equivalents) / current
liabilities
Financial risk governance is further disclosed in Note 28.
Events after the end of the reporting year
In the period since the last day of the reporting year until the date when the financial report was signed,
there were no events that would have any significant effect on the financial position of the Company as
at 31 December 2024.
AS Amber Latvijas Balzams
Annual Report 2024
12
MANAGEMENT REPORT (continued)
Future prospects of Company
In 2025, AS Amber Latvijas Balzams will continue to focus on:
• Investments in its core brands to build international recognition;
• Brand and product portfolio optimisation;
• Enhancement of technological security and ensuring continuous production;
• Supply chain optimisation through boosting cost efficiency;
• Improving the quality of customer service;
• Production efficiency improvement programme.
The Company will continue boosting its production efficiency focusing on procurement, planning and
infrastructure improvements to achieve its goal: to deliver quality products at a competitive price. The
start of production of the Moskovskaya Vodka new design is planned.
Together with increased productivity, profitability and profit indicators, achieving this goal will enable
more efficient planning of production capacity and more flexible adaptation to the market needs and
demand.
To achieve this goal, the work on the following projects will continue in 2025:
• optimisation of production shift work organisation;
• optimisation of technical facilities and capex planning;
• introducing and implementing additional LEAN-based measures and practices;
• boosting the efficiency of logistics operations;
• reduction of losses at production stages;
• personnel training, boosting employee motivation.
On behalf of the Board:
________________________
Andrejs Višņausks
Chairman of the Board
THIS DOCUMENT IS ELECTRONICALLY SIGNED WITH A SECURE ELECTRONIC SIGNATURE
AND CONTAINS A TIME STAMP
AS Amber Latvijas Balzams
Annual Report 2024
13
REMUNERATION REPORT
The Remuneration Report is published in Latvian and English together with the audited Company’s
annual report as a separate part of the annual report in the For Investors section of the Company’s
website at www.amberlb.lv and Nasdaq Riga website at www.nasdaqbaltic.com.
AS Amber Latvijas Balzams
Annual Report 2024
14
STATEMENT OF MANAGEMENT RESPONSIBILITIES
The Company’s management is responsible for drawing up the Company’s financial statements in
accordance with the requirements of the IFRS accounting standards endorsed in the European Union.
The financial statements give a true and fair view of the financial position of the Company at the end of
the reporting year and its performance indicators and cash flow for the reporting year.
The Management confirms that the appropriate accounting and valuation policies have been used for
the financial statements on pages 15-56 and that the decisions and estimates made have been prudent
and reasonable. The Management confirms that the financial statements have been drawn up on a
going concern basis.
The Management is responsible for maintaining proper accounting system, safeguarding the Company’s
assets, as well as for detecting and preventing fraud and other irregularities occurring in the Company.
The Management is responsible for complying with statutory regulations of the Republic of Latvia.
On behalf of the Board:
________________________
Andrejs Višņausks
Chairman of the Board
THIS DOCUMENT IS ELECTRONICALLY SIGNED WITH A SECURE ELECTRONIC SIGNATURE
AND CONTAINS A TIME STAMP
AS Amber Latvijas Balzams
Annual Report 2024
15
FINANCIAL STATEMENTS:
Statement of Profit or Loss
*For additional information on adjustments, see Note 30.
The Notes on pages 21 to 56 are an integral part of this financial statement.
On behalf of the Board:
____________________
Andrejs Višņausks
Chairman of the Board
________________________
Ināra Kondratoviča
Chief Accountant, SIA Amber Beverage Group
THIS DOCUMENT IS ELECTRONICALLY SIGNED WITH A SECURE ELECTRONIC SIGNATURE
AND CONTAINS A TIME STAMP
AS Amber Latvijas Balzams
Annual Report 2024
16
Statement of Comprehensive Income
*For additional information on corrections, see Note 30.
The Notes on pages 21 to 56 are an integral part of this financial statement.
On behalf of the Board:
____________________
Andrejs Višņausks
Chairman of the Board
________________________
Ināra Kondratoviča
Chief Accountant, SIA Amber Beverage Group
THIS DOCUMENT IS ELECTRONICALLY SIGNED WITH A SECURE ELECTRONIC SIGNATURE
AND CONTAINS A TIME STAMP
AS Amber Latvijas Balzams
Annual Report 2024
17
Statement of Financial Position
*For additional information on adjustments, see Note 30.
The Notes on pages 21 to 56 are an integral part of this financial statement.
On behalf of the Board:
____________________
Andrejs Višņausks
Chairman of the Board
________________________
Ināra Kondratoviča
Chief Accountant, SIA Amber Beverage Group
THIS DOCUMENT IS ELECTRONICALLY SIGNED WITH A SECURE ELECTRONIC SIGNATURE
AND CONTAINS A TIME STAMP
AS Amber Latvijas Balzams
Annual Report 2024
18
*For additional information on adjustments, see Note 30.
The Notes on pages 21 to 56 are an integral part of this financial statement.
On behalf of the Board:
____________________
Andrejs Višņausks
Chairman of the Board
________________________
Ināra Kondratoviča
Chief Accountant, SIA Amber Beverage Group
THIS DOCUMENT IS ELECTRONICALLY SIGNED WITH A SECURE ELECTRONIC SIGNATURE AND
CONTAINS A TIME STAMP
AS Amber Latvijas Balzams
Annual Report 2024
19
Statement of Changes in Equity
*For additional information on adjustments, see Note 30.
The Notes on pages 21 to 56 are an integral part of this financial statement.
On behalf of the Board:
____________________
Andrejs Višņausks
Chairman of the Board
________________________
Ināra Kondratoviča
Chief Accountant, SIA Amber Beverage Group
THIS DOCUMENT IS ELECTRONICALLY SIGNED WITH A SECURE ELECTRONIC SIGNATURE AND
CONTAINS A TIME STAMP
AS Amber Latvijas Balzams
Annual Report 2024
20
Statement of Cash Flow
*For additional information on adjustments, see Note 30.
The Notes on pages 21 to 56 are an integral part of this financial statement.
On behalf of the Board:
____________________ ________________________
Andrejs Višņausk Ināra Kondratoviča
Chairman of the Board SIA Amber Beverage Group
Rīga, 30 April 2025 Chief Accountant
THIS DOCUMENT IS ELECTRONICALLY SIGNED WITH A SECURE ELECTRONIC SIGNATURE AND
CONTAINS A TIME STAMP
AS Amber Latvijas Balzams
Annual Report 2024
21
Notes to the financial statement
I. GENERAL INFORMATION
AS Amber Latvijas Balzams (hereinafter “the Company”) is the largest manufacturer of alcoholic
beverages in the Baltic states. Overall, the Company makes more than 100 different alcoholic
beverages. The Company’s major shareholder, which owns 89.99% of the Company shares as at
31 December 2024, is Amber Beverage Group Holding S.à r.l. (Company registered in Luxembourg).
The leading company of the Group is SPI Group Holding Limited (a company registered in Cyprus).
AS Amber Latvijas Balzams is a joint-stock Company established and having its registered office in
Latvia. The company was founded in 1900, but got its current name in 1970. The Company’s registered
office is A. Čaka 160, Rīga, LV-1012, Republic of Latvia. AS Amber Latvijas Balzams is listed on the
Nasdaq Rīga Second List.
The Company's financial reporting year is from 1 January 2024 to 31 December 2024.
The approval of the annual report of a Company at a shareholder’s meeting shall be postponed if the
postponement is requested by shareholders who represent at least one-tenth of the equity capital in the
event the correctness of individual positions in the annual report is disputed.
The Board of the Company signed the Company’s 2024 Annual Report on 30 April 2025.
II. ACCOUNTING POLICIES
(1) General principles
These financial statements have been drawn up in accordance with the IFRS accounting standarts
endorsed by the European Union (IFRS).
The information included in the financial statements is presented in accordance with IAS 1 Presentation
of Financial Statements. The Company has elected to present the Statement of Profit or Loss and the
Statement of Comprehensive Income as separate statements.
The financial statements are prepared on a historical cost basis. The Statement of Profit or Loss was
classified by function of expense.
For the comparison of the reported data, certain items of the 2023 Statement of Profit or Loss were
reclassified.
In the Statement of Cash Flow, the indirect method was used for cash flow from operating activities.
Preparation of the financial statements in accordance with IFRS requires substantial assumptions.
Moreover, preparing the financial statement, the Management has to make certain estimates and
judgements when applying the accounting policies elected by the Company. Significant assumptions
and judgments are disclosed in Note 17 of the Accounting Policies.
The financial statements have been drawn up on a going concern basis.
Going concern estimate
The Company closed 2024 with a profit of EUR 4,088 thousand and as at 31 December 2024, its current
assets exceeded its current liabilities by EUR 75 million, while the net asset amount after correction of
the preceding year's errors (Note 30) remained at 125 million EUR.
However, the Company’s management acknowledged that a large portion of current assets in the
amount of EUR 73 million consisted of receivables of related parties and other related companies of the
group (Note 23 (b)). The increased operational, market and geopolitical risks associated with these
financial assets include loan recovery risks. Additional sales drop risks in the US and uncertainties
around the extra tariffs on exports to the US make the Company’s management wonder about the
liquidity risk deterioration and, consequently, collectability of these receivables during 2025 and in the
foreseeable future. Consequently, such circumstances create significant uncertainty in terms of the
AS Amber Latvijas Balzams
Annual Report 2024
22
II. ACCOUNTING POLICIES (continued)
(1) General principles (continued)
Company's ability to continue its operations in the future under normal business conditions and,
therefore, to realise its assets and settle its liabilities in the ordinary course of business.
Assessing and planning the future liquidity items, the Company’s management has drawn up detailed
cash flow forecasts and estimated that the Company will have sufficient current asset resources
available in 2025 and 2026 to ensure stable liquidity in accordance with the Company’s cash flow
forecasts for the aforementioned forecast period.
As set out in Note 18 of this report, the Company's tax liabilities as at 31 December 2024 include
postponed tax liabilities of EUR 13,689 thousand. This practice regarding poestponed tax balances was
also implemented previously taking into account the rapid increase in turnover towards the end of the
year and is associated with slower settlements with certain cooperation partners, as a result of which
AS Amber Latvijas Balzams cannot make all tax payments as stipulated by law. In connection with these
circumstances, the Company is actively cooperating with the SRS and an agreement on the repayment
schedule has been reached. The Company plans to fully settle those by 31 January 2026.
The Company’s other current tax liabilities were and are being fully paid in accordance with the relevant
tax payment schedule set out in Latvian laws and the Company’s management still continues monitoring
the settlement of tax liabilities.
As set out in Note 26, the Company continues to provide guarantees and has pledged its tangible and
intangible assets to guarantee the loans received by the parent company. The Company’s management
is aware that these loans are subject to certain covenants. The parent company had not fulfilled
individual covenants actively informing its creditors and receiving refusals to use premature loan
repayment. These circumstances expose the Company to the risk that banks demand the realisation of
guarantee obligations and pledges from the Company, thus potentially significantly harming the
Company’s liquidity position.
For the purposes of reducing the above-mentioned risk, as regards those issued guarantees and
pledges, the Company’s management made sure that the parent company has received the covenant
waiver letters from all banks stating that the banks would not be accelerating those loans as at the date
of this statement.
Having assessed the credit risk associated with the issued guarantees and the aforementioned
mitigating factors, the Company’s management assessed and estimated its ability to continue as a going
concern for the foreseeable future.
To mitigate those risks, the Company’s management has reviewed the positive cash flow forecasts of
both the Company and the Group as a whole and estimated its positive balance for the next 12 months
in 2025 and 2026. The main measures to improve cash flow include increasing the volume of the
Company's products sold on the markets other than the US and improving turnover and quicker selling
of inventories, achieving an additional effect of EUR 5.3 million, internal reorganisation measures in the
Company and the Group amounting to EUR 3.2 million, as well as the sale of non-performing non-
current assets of both the Company and the Group worth EUR 6 million and other measures.
The Company’s management believes that the Company will be able to obtain sufficient and positive
financing for its current liquidity requirements and ensure the Company’s continued operations in the
future.
The above circumstances allow the Management to believe that the application of the going concern
basis of accounting in the preparation of the financial statements was justified.
AS Amber Latvijas Balzams
Annual Report 2024
23
II. ACCOUNTING POLICIES (continued)
(1) General principles (continued)
a) New standards, interpretations and amendments effective as of 1 January 2024
The following amendments apply to the period beginning on 1 January 2024:
• Supplier Finance Agreement (Amendments to IAS 7 and IFRS 7)
• Lease Liabilities in Sale and Leaseback Transactions (Amendments to IFRS 16);
• Classification of Liabilities as Current or Non-current (Amendments to IAS 1); and
• Non-current Liabilities with Covenants (Amendments to IAS 1).
These amendments to various IFRS accounting standards are mandatory for reporting periods
beginning on or after 1 January 2024.
Supplier Finance Agreement (Amendments to IAS 7 and IFRS 7)
On 25 May 2023, the IASB issued Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial
Instruments: Disclosures.
The amendments require companies to provide specific (both qualitative and quantitative) disclosures
about supplier financing arrangements. The amendments also clarify the guidelines regarding the
characteristics of supplier financing arrangements.
Lease Liabilities in Sale and Leaseback Transactions (Amendments to IFRS 16)
On 22 September 2022, the IASB issued Amendments to IFRS 16 Lease Liabilities in Sale and
Leaseback Transactions.
Before this amendment, IFRS 16 did not set forth specific requirements regarding measuring lease
liabilities if those include variable lease payments resulting from a sale and leaseback transaction. The
amendment requires that, when measuring lease liabilities in such transactions, the seller-lessee shall
determine ‘lease payments’ or ‘revised lease payments’ in a way that the seller-lessee would not
recognise any amount of the gain or loss that relates to the right of use retained by the seller-lessee.
The Company believes that the changes in these standards and interpretations do not have any
significant impact on the Company's financial statements.
Classification of Liabilities as Current or Non-current (Amendments to IAS 1)
In January 2020, the IASB issued amendments to IAS 1 Classification of Liabilities as Current or Non-
Current and later, in October 2022, amendment to IAS 1 Non-Current Liabilities with Covenants.
The amendments clarify the following aspects:
• An entity’s right to defer settlement of a liability for at least twelve months after the reporting
period must have substance and must exist at the end of the reporting period.
• If the entity’s right to defer settlement is subject to compliance with covenants, those covenants
affect whether that right exists only if the entity is required to comply with the covenant in the
reporting period.
• The classification of a liability as current or non-current does not depend on the probability that
the entity will exercise its right to defer settlement.
AS Amber Latvijas Balzams
Annual Report 2024
24
II. ACCOUNTING POLICIES (continued)
(1) General principles (continued)
• If the liability can be settled by handing over the entity's equity instruments, such settlement
conditions do not affect the classification of the liability as current or non-current, unless the
option is classified as an equity instrument.
These amendments do not affect the measurement of any items in the Company’s financial statements.
b) New standards, interpretations and amendments that have not yet come into effect
There are several amendments and interpretations to the IFRS accounting standards that have been
issued but are not yet effective in the current accounting periods. The Group/Company decided not to
apply them prematurely.
The following amendments will apply to the reporting period beginning on 1 January 2025:
• Lack of Exchangeability (Amendments to IAS 21 The Effects of Changes in Foreign Exchange
Rates)
The following amendments will apply to the reporting period beginning on 1 January 2026:
• Amendments to the Classification and Measurement of Financial Instruments (Amendments to
IFRS 9 Financial Instruments and IFRS 7)
• Contracts Referencing Nature-dependent Electricity (Amendments to IFRS 9 and IFRS 7)
The following standards and amendments will apply to the reporting period beginning on 1 January
2027:
• IFRS 18 Presentation and Disclosure in Financial Statements
• IFRS 19 Subsidiaries without Public Accountability: Disclosures
The Company is currently assessing the impact of these new accounting standards and amendments.
IFRS 18 Presentation and Disclosure in Financial Statements
This standard issued by the IASB in April 2024, supersedes IAS 1 and brings significant changes to
IFRS accounting standards, including IAS 8 Basis of Preparation of Financial Statements (previously
Accounting Policies, Changes in Accounting Estimates and Errors). Although IFRS 18 will not affect the
recognition and measurement of items in the Group’s consolidated financial statements/the Company’s
separate financial statements, it is expected to have a significant impact on the presentation and
disclosure of certain items. These changes include the introduction of categories and subtotals in the
statement of profit or loss, changes in the principles of aggregation/disaggregating and labelling
information, as well as the disclosure of performance indicators determined by the Management.
The Company has not adopted these standards and interpretations prematurely and believes that the
adoption of new or revised standards and interpretations will not have any substantial impact on the
Company’s financial statements.
AS Amber Latvijas Balzams
Annual Report 2024
25
II. ACCOUNTING POLICIES (continued)
(2) Revenue recognition
The main business of the Company is production of alcoholic beverages. Revenue from contracts with
customers is recognised when control of the goods is transferred to the customer at a value which the
Company expects as compensation for the transfer of such goods. The company acts as principal in the
context of the signed contracts, as it controls the goods before their transfer to the customer.
Revenue from the provision of services
Revenue from the provision of services (mainly logistics services) is recognised in the period in which
the services are provided.
Revenue from the sale of goods
Revenue from the sale of goods is recognised net of discounts, returns, value added tax, customs duties
and fees, and excise duty. The Company acts as an agent in collecting excise duty from customers and
then transfers it to the responsible tax collection authorities, so the revenue is recognised net of excise
duty collected from customers. Revenue from the sale of goods is recognised when control and
ownership of the goods are transferred to the customer in accordance with the terms of the contract.
The goods are sold on 30-90-day post-payment terms. In determining the selling price of goods, the
Company takes into account the impact of the variable consideration component.
Variable remuneration component
If, according to the contract, the customer is entitled to a variable consideration component, the
Company estimates the amount of such variable consideration component that could be granted the
client. The variable consideration component is determined at the transaction inception and is measured
throughout the contract until the circumstances arise under which the customer’s right to the variable
consideration component ends with a sufficiently high probability.
Financing component
The Company does not enter into contracts whereby the period between the agreed delivery time of
goods and customer’s payment is longer than one year. Accordingly, the Company does not adjust
transaction prices for the time value of money.
(3) Functional currency and revaluation
The Company’s functional and presentation currency is the official currency of the Republic of Latvia,
i.e. the euro (EUR).
All transactions in foreign currencies during the reporting year have been translated into euros by
applying the exchange rate determined at the beginning of the transaction date according to the
European Central Bank and other central bank systems, which is published on the website of the
European Central Bank.
On the last day of the reporting period, all monetary assets and liabilities in foreign currencies were
translated into euros at the official exchange rate set by the European Central Bank at the end of the
last day of the reporting year.
Net profit or losses resulting from fluctuations of foreign currency exchange rates are reflected in the
profit and loss calculation for the respective period.
31.12.2024
Average in
2024
31.12.2023
Average in
2023
EUR
EUR
EUR
EUR
1 USD
0.9626
0.9239
0.9050
0.9248
1 GBP
1.2060
1.1812
1.1507
1.1497
AS Amber Latvijas Balzams
Annual Report 2024
26
II. ACCOUNTING POLICIES (continued)
(4) Property, plant and equipment (PPE)
Property, plant, and equipment are recognised at cost less accumulated depreciation and impairment.
The cost includes expenditures that are directly related to the acquisition of the asset.
Subsequent costs are recognised in the assets’ carrying amount or as a separate asset only when it is
probable that future economic benefits associated with the item will flow to the Company and the cost
of the item can be measured reliably. Other costs of current PPE repairs and maintenance are included
in the statement of profit or loss for the period in which they have occurred.
Land is not subject to depreciation. Depreciation of other assets is calculated on a straight-line basis to
write off their cost to their residual value using the following useful lives:
Years
Buildings
10 - 71
Technological equipment
2 - 25
Other machinery and equipment
2 - 25
Construction in progress for production, supply or administrative purposes is carried at cost less any
recognised impairment losses. Depreciation of these assets, same as all other PPE, begins when the
asset is put into service.
The estimated residual values and useful lives of assets are reviewed and adjusted, where necessary,
at the end of each reporting year.
Gains or losses on disposal are determined and included in the statement of profit or loss for the relevant
period.
(5) Intangible investments
Intangible investments mainly consist of licences, software and related deployment costs.
Intangible investments are recognised at cost less accumulated amortisation and impairment.
Amortisation is calculated from the moment the assets are available for use. Amortisation for intangible
assets is calculated using the straight-line method to write off their cost over their useful life of three to
five years.
AS Amber Latvijas Balzams
Annual Report 2024
27
II. ACCOUNTING POLICIES (continued)
(6) Leases
At contract inception, the Company determines whether it is a lease or contains a lease. This is, if the
contract transfers the right to control the use of an asset for a specified period of time in exchange for
consideration.
Company as a lessee
The Company applies a single recognition and measurement approach for all leases, except for short-
term leases and leases of low-value assets. The Company recognises lease liabilities to make lease
payments and right-of-use assets representing the right to use the underlying assets.
Company as a lessor
Leases in which the Company does not substantially transfer all the risks and benefits of ownership of
the asset are classified as operating leases. Lease revenue is recognised on a straight-line basis over
the entire lease duration and is included as revenue in the statement of profit or loss taking into account
the nature of its operating activities.
Right-of-use assets
The Company recognises the right-of-use assets at the commencement date, i.e., the date the
underlying asset is available for use. The Company’s right-of-use assets consist of signed leases of real
estate and production equipment. Right-of-use assets are measured at cost less accumulated
depreciation and impairment, as well as adjusted by the result of recalculation of lease liabilities. The
cost includes the amount of the lease liability, direct costs associated with the lease agreement, lease
payments made up to the initial recognition of the right-of-use asset less any lease incentives received.
Except where the Company is sufficiently confident that the ownership of the leased assets will be
transferred at the end of the lease term, the recognised right-of-use assets are depreciated on a straight-
line basis over the lease term and the estimated useful lives of the assets, whichever is shorter (3 to 10
years). Right-of-use assets are subject to impairment testing.
Lease liabilities
At the inception of the lease, the Company recognises lease liabilities for real estate and process
equipment, measured at the current value of the payments arising from the lease agreement. Lease
liabilities consist of fixed payments in accordance with the signed lease agreements. For calculating the
liabilities, the Company uses its general borrowing rate at the lease commencement date, except where
the borrowing rate is determined separately. When calculating the initial recognition of lease liabilities
and recalculating them at the end of the reporting period, the Company applied a discount rate of 5.09%.
The carrying amount of lease liabilities is reviewed if there are any changes to the lease agreement, the
term of lease, the lease payment amount or an option to buy at the end of the period is considered.
Every lease payment is apportioned between lease liabilities and interest expenses thereon. Interest
paid on lease liabilities is recognised in the statement of profit or loss over the term of lease.
AS Amber Latvijas Balzams
Annual Report 2024
28
II. ACCOUNTING POLICIES (continued)
(6) Leases (continued)
Short-term leases and low-value asset leases
The Company applies the short-term lease recognition exemption to its short-term leases of other
property, plant, and equipment items (i.e., those leases that have a lease term less than 12 months from
the commencement date and do not contain the option to buy). This also applies to the low-value asset
recognition exemption for leases of office equipment that are considered to be low-value. Lease
payments on short-term leases and leases of low-value assets are recognised as expenses on a
straight-line basis over the lease term. All other PPE with cost of up to EUR 500 (five hundred euros),
regardless of their useful life, or with cost in excess of EUR 500 (five hundred euros), if their useful life
is up to one year, are recognised as low-value fixtures.
(7) Inventories
Inventories are stated at the lower of cost or net realisable value. Net realisable value is the selling price
of inventories determined in the ordinary course of business, less the costs of completion and sale of
the inventories. If the net realisable value of inventories is lower than their cost, provisions are created
to bring the value of the inventory down to its net realisable value.
The cost of inventories is determined using the FIFO method. The cost of purchase of raw materials is
formed by the purchase price and the overheads incurred in bringing the inventories to their existing
location and condition. The cost of finished goods includes an appropriate portion of production
overheads calculated based on normal production volumes.
(8) Financial instruments
Classification
Financial assets include receivables from lease transactions, trade payables from contracts with
customers, cash and cash equivalents, and loans granted.
The Company classifies its financial assets as measured at amortised cost. The Company does not
have any financial assets that are measured at fair value and reflected in the statement of profit or loss
or at fair value and reflected in other comprehensive income.
A financial asset is measured at amortised cost if both of the following conditions are met: (i) the financial
asset is held within a business model whose objective is to hold financial assets in order to collect
contractual cash flows, and (ii) the contractual terms of the financial asset provide for cash flows on
specified dates that are solely payments of principal and interest on the outstanding principal.
The Company recognises financial assets in its statement of financial position only and solely when it
becomes a party to an agreement in accordance with the relevant instrument agreement.
Recognition and derecognition
In the ordinary course of business, the acquisition and disposal of financial assets are recognised on
the trade date, i.e. the date on which the Company commits to purchase or dispose of the assets.
Financial assets are derecognised when the Company’s right to receive cash flows from the financial
assets have expired or have been transferred and the Company has transferred all the significant risks
and rewards of ownership of those assets.
Further measurement
Financial assets measured at amortised cost are subsequently measured using the effective interest
rate method and must be tested for impairment. Gains and losses are recognised in the statement of
profit of loss when the asset is derecognised, modified or impairment is established. The Company's
financial assets measured at amortised cost include trade payables (both current and non-current).
AS Amber Latvijas Balzams
Annual Report 2024
29
II. ACCOUNTING POLICIES (continued)
(8) Financial instruments (continued)
Debt instruments
The measurement of debt instruments after initial recognition depends on the Company’s business
model for managing such assets, as well as the cash flows arising from the contracts. Such instruments
are classified into one of two categories of debt instruments:
• Amortised cost: assets held to collect contractual cash flows (principal and interest) are
measured at amortised cost. Interest income from these financial assets is reported as finance
income using the effective interest method. Gains or losses from the disposal of such assets
are recognised in the statement of profit or loss as other revenue (or costs) together with gains
or losses from currency exchange fluctuations. Expected credit losses are presented as a
separate line item in the income statement.
• Recognition of changes in fair value through profit or loss: assets that do not fall into any of the
previous categories are measured at fair value with recognition of changes in the statement of
profit or loss. Gains or losses from changes in the fair value of such debt instruments are
reported at their net value as other revenue (or costs) when such gains or losses arise.
Impairment of financial assets – provisions for expected credit losses (ECL)
Expected credit losses for financial assets are recognised and measured using one of two approaches:
the general approach or the simplified approach.
The Company measures debt instruments (including loans) carried at amortised cost using ECL. The
Company determines ECL and establishes provisions for credit losses at each reporting date. The
principle of determining ECL reflects: (i) an objective and transaction-weighted amount determined by
evaluating a range of possible outcomes; (ii) the time value of money; (iii) all reasonable and
demonstrable information about past events, current conditions and forecasts of future conditions
available at the end of each reporting period without undue cost and effort.
The Company applies the simplified approach to trade receivables to determine expected credit losses
set out in IFRS 9 Financial Instruments, which provides for the creation of provisions for lifetime
expected credit losses for all trade receivables grouped based on common credit characteristics and
past due dates. The amount of expected credit losses depends on the number of days in arrears.
The Company applies the general approach of a three-step impairment model based on changes in
credit quality since initial recognition to all other financial assets subject to impairment under IFRS 9
Financial Instruments. A financial instrument that is not impaired at initial recognition is classified as a
Level 1 financial instrument. ECL measures a Level 1 financial asset is measured as an amount that
would be incurred in the event of default within the next 12 months or until contractual maturity,
whichever is shorter (12-month ECL). If the Company identifies a significant increase in credit risk
(SICR) since initial recognition, the relevant asset is transferred to Level 2 and its ECL is determined
using lifetime ECL, i.e. until the end of the contract term, but taking into account expected prepayments,
if any (lifetime ECL). If the Company determines that a financial asset is impaired, the relevant asset is
transferred to Level 3 and measured using the lifetime ECL.
Financial assets measured at amortised cost are presented in the statement of financial position net of
provisions for ECL.
The carrying amount of financial assets is reduced using provisions and the amount of the loss is
recognised in the statement of comprehensive income under Other operating expenses.
Financial liabilities
Financial liabilities are initially recognised at fair value plus directly attributable transaction costs and
subsequently measured at amortised cost using the effective interest rate. Financial liabilities include
trade payables, lease liabilities and other debts.
AS Amber Latvijas Balzams
Annual Report 2024
30
II. ACCOUNTING POLICIES (continued)
(9) Cash and cash equivalents
Cash and cash equivalents consist of bank current account balances and other short-term highly liquid
investments with original maturity of up to 90 days.
(10) Share capital
Ordinary shares are classified as share capital.
(11) Borrowings
Borrowings are initially recognised at fair value net of costs associated with obtaining the loans. In
subsequent periods, borrowings are reflected at amortised cost using the effective interest method. Any
difference between the proceeds (net of transaction costs) and the redemption value is recognised in
the income statement over the period of the borrowings using the effective interest method.
(12) Accrued unused annual leave costs
Accrued unused annual leave costs are calculated by multiplying the average daily earnings of
employees for the last six months of the reporting year by the number of leave days accrued but unused
at the end of the reporting year.
(13) Corporate income tax
Corporate income tax costs for the reporting year are included in the financial statements based on
Management’s calculations made in accordance with the tax laws and regulations of the Republic of
Latvia.
Corporate income tax is calculated on distributed profits (20/80 of the net amount payable to
shareholders). Corporate income tax on distributed profits is recognised when the Company’s
shareholders make a decision on the distribution of profits.
The Company also calculates and pays corporate income tax on the conditionally distributed profit
(20/80 of the calculated taxable base), including taxable items stipulated in the law, such as costs not
related to economic activities, accumulated amounts of bad debts and loans to related parties, if they
meet the criteria in the Corporate Income Tax Law, as well as other costs that exceed the statutory
deductible limits. Corporate income tax on the conditionally distributed profit is recognised in the
statement of profit or loss in the year in which it arises.
Pursuant to IAS 12 Income Taxes, when income tax is payable at a higher or lower rate, depending on
whether the profit is distributed, the postponed tax assets and liabilities are measured at the tax rate
applicable to undistributed profits. In Latvia, the rate applicable to retained earnings is 0%.
(14) Earnings per share
Earnings per share are determined by dividing the net gains or losses attributable to the Company’s
shareholders by the weighted average number of shares during the reporting year.
(15) Related parties
Related parties are defined as the Company shareholders who have a significant influence or control
over the Company, Members of the Board and the Council, their close relatives, and companies in which
they have control or significant influence.
AS Amber Latvijas Balzams
Annual Report 2024
31
II. ACCOUNTING POLICIES (continued)
(16) Employee benefits
Short-term employee benefits, including salary, mandatory state social insurance contributions and
bonuses, are included in the statement of profit and loss on an accrual basis.
The Company pays mandatory state social insurance contributions to the state pension insurance and
the state funded pension scheme in accordance with Latvian laws.
Pursuant to the regulations of the Cabinet of Ministers of the Republic of Latvia, 71.87% (2023: 71.87%)
of the social insurance contributions are used to finance the state pension system. The state-funded
pension scheme is a defined contribution pension plan under which the Company is required to make
payments in the amount stipulated by law and does not incur any additional legal or constructive
liabilities to make additional payments if the state pension insurance system or the state-funded pension
scheme cannot settle its liabilities to employees. Mandatory state social insurance contributions are
recognised as costs using the accrual principle in the period in which employees have provided their
services to the Company.
(17) Significant accounting estimates and assumptions
The preparation of financial statements in accordance with the IFRS requires the use of estimates and
assumptions that affect the amounts of assets and liabilities recognised in the financial statements, as
well as the disclosures and recognition of income and expenses for the reporting year. Actual results
may differ from such estimates. Assumptions may primarily affect areas such as determining the useful
life of long-term investments, as well as the recoverable amount of receivables, as described in the
relevant Notes.
a) Determining the useful life of property, plant, and equipment
When estimating the useful life of fixed assets, the Management relies on historical information,
technical surveys, assessment of the current condition of the asset and assessments by external
experts. During the reporting period and the preceding year, there were no factors that would indicate
the need to change the useful lives of the Company’s fixed assets.
b) Expected credit loss provisions
The Company applies the IFRS 9 allowed simplified method, which uses the recognition of possible
credit losses already at the initial recognition of assets, to measure the impairment of trade receivables.
To measure the expected credit loss consideration, receivables have been grouped based on the shared
credit risk characteristics and the days past due. The expected credit loss allowance rates are
determined taking into account payment trends for the 36 months before 31 December 2024. Historical
loss rates are adjusted to reflect the current and future information on macroeconomic factors that affect
customers’ ability to pay accounts receivable (see Note 28).
AS Amber Latvijas Balzams
Annual Report 2024
32
II. ACCOUNTING POLICIES (continued)
(18) Error correction
If a material error has occurred in the reporting years, it is corrected as follows:
1) to the extent possible, determines the impact of the error on the relevant item indicators in the
financial statements for the preceding years and its overall impact;
2) corrects the balances of assets, equity, provisions or creditor items in the balance sheet affected by
the error at the beginning of the reporting year;
3) to the extent possible, adjusts other comparable indicators at the beginning of the reporting year.
(19) Events after the end date of the reporting period
The amounts recognised in the financial statements are adjusted taking into account the events after
the end date of the reporting period which provide further information about the Company which existed
on the end date of the reporting period (adjusting events). Events after the end date of the reporting
period which are not considered adjusting are disclosed in a note to the financial statements, if those
are substantial.
AS Amber Latvijas Balzams
Annual Report 2024
33
III. OTHER NOTES
(1) Segment information and net turnover
(a) Operations and reporting segment
The Company’s main business is production of alcoholic beverages. AS Amber Latvijas Balzams
produces more than 100 different alcoholic beverages under its own and third-party brands using the
Company’s technologies, assets and resources, therefore the Company has only one reportable
operating segment.
(b) Net turnover types
(c) Geographic markets (by customer)
AS Amber Latvijas Balzams
Annual Report 2024
34
III. OTHER NOTES (continued)
(2) Production cost of goods sold
(3) Cost of sales
(4) Administration costs
AS Amber Latvijas Balzams
Annual Report 2024
35
III. OTHER NOTES (continued)
The management services received by the Company and related costs of EUR 3.252 thousand include
payments redistributed within the group to Amber and Stoli Group companies for the group's product
development, distribution and marketing services received by the Company, for centralised financial and
management accounting, production IT system maintenance services, as well as for other payments
redistributed within the group.
(5) Other operating income
Other revenue in 2024 included fines EUR 587 thousand imposed on the Company, revenue
of EUR 227 thousand from PPE lease, revenue of EUR 66 thousand from trademarks and other income
of EUR 21 thousand.
(6) Other operating expenses
*For additional information on adjustments, see Note 30.
Fines paid included the SRS tax late fees and other supplier penalties for overdue debts.
(7) Cost breakdown by type
AS Amber Latvijas Balzams
Annual Report 2024
36
III. OTHER NOTES (continued)
(8) Net finance income/expenses
Interest income to related parties includes payments from the Parent Company Amber Beverage Group
Holding S.à r.l. for the use of short-term current assets to support the operational activities of the Group
(cash pool), interest on loans to the Parent Company, and payments for guarantees granted (Note 26).
(9) Earnings per share
Since the Company has not signed any deals resulting in changes in the share capital which would
change the amount of earnings per share, the adjusted earnings per share are equivalent to the basic
earnings per share.
Earnings per share are calculated by dividing the net profit for the reporting year by the average number
of shares during the year. The 2023 earnings per share were adjusted due to error corrections. For
additional information, see Note 30.
AS Amber Latvijas Balzams
Annual Report 2024
37
III. OTHER NOTES (continued)
(10) Intangible investments
AS Amber Latvijas Balzams
Annual Report 2024
38
III. OTHER NOTES (continued)
(11) Property, plant and equipment (PPE)
The PPE include fully depreciated property, plant and equipment in operation with a total initial value of
EUR 11 988 010 (31.12.2023: EUR 10 073 641).
All of the Company’s PPE and most of real estate with a total value of EUR 11.9 million (EUR 5.0 million
in land, buildings and structures, EUR 6.9 million in equipment and machinery) are pledged under the
Mortgage and Commercial Pledge Agreements as collateral for loans in favour of credit institutions (see
Notes 17 and 26).
AS Amber Latvijas Balzams
Annual Report 2024
39
III. OTHER NOTES (continued)
(12) Inventories
Inventories are recognised at net value less provisions for possible impairment. The movement of
provisions is presented as follows:
All of the Company’s inventories are pledged under the Commercial Pledge Agreements as collateral
for loans from credit institutions (see Notes 17 and 26).
(13) Trade receivables
For additional information on trade receivables, see Note 28.
AS Amber Latvijas Balzams
Annual Report 2024
40
III. OTHER NOTES (continued)
(14) Other assets
As of 31 December 2023, the balance of other receivables was EUR 3,991 thousand included a debt
for the sale of a warehouse building in Rīga, Lapeņu Street. In 2024, the debt was fully repaid. As of
December 31, 2024, the balance of other receivables in the amount of EUR 6,397 thousand includes
advance payments to the Parent Company.
(15) Share capital
The registered and fully paid share capital as of 31 December 2024 and 31 December 2023 was
EUR 10 495 660. It consists of 7 496 900 ordinary shares with a nominal value of EUR 1.40 per share.
All shares give each shareholder equal rights to receive dividends and liquidation quotas and to vote at
the Shareholders’ Meeting. One share equals 1 vote at the Shareholders’ Meeting. The Company has
5 791 900 dematerialised shares. Shares are registered with the central securities depository Nasdaq
CSD SE. The Company does not have any shares held by the Company itself or by a third party on
behalf of the Company. Members of the Company Board and Council do not own shares. Shares are
not convertible and/or exchangeable and are not guaranteed.
The shares are publicly traded and listed on the Nasdaq CSD SE Baltic Secondary List. At the end of
the reporting year, there were 5 791 900 shares in public circulation. The shares are registered in the
Republic of Latvia. Their ISIN code is LV0000100808. The Company also has 1 705 000 dematerialised
shares with the ISIN code LV0000102150 The total number of shareholders of the Company exceeds
10 000.
All shares owned by the major shareholder Amber Beverage Group Holding S.à r.l., as well as any
shares that Amber Beverage Group Holding S.à r.l. may acquire in the future, are pledged under the
Commercial Pledge Agreement as security for loans in favour of lending banks (see Note 17).
AS Amber Latvijas Balzams
Annual Report 2024
41
III. OTHER NOTES (continued)
(16) Reserves
* In 2015, the Company acquired a real estate management company Daugavgrivas 7 SIA from an SPI
Group related party. After the acquisition, in order to reduce the administrative burden of governance of
two companies, the Company decided to merge with a subsidiary. As a result of the acquisition and
reorganisation of a subsidiary, a negative reorganisation reserve of EUR 3 164 419 was created for the
Company.
** On 8 September 2016, the Extraordinary Shareholders' Meeting of the Company adopted
amendments to the Company's Articles of Association, which provide for the establishment of a special
purpose fund reserve in the amount of EUR 5 311 774. The reserve is intended for the development of
real estate and reorganisation-related projects and for the mitigation of risks associated with these
projects. The special purpose reserve in the amount of EUR 5 311 774 was created with shareholders'
contributions and was included in the Company's equity.
(17) Borrowings and lease liabilities
AS Amber Latvijas Balzams
Annual Report 2024
42
III. OTHER NOTES (continued)
(18) Taxes and mandatory state social insurance contributions
Considering that the actual repayment terms from certain cooperation partners are slower (mainly due
to slower economic growth), AS Amber Latvijas Balzams cannot comply with all statutory tax deadlines,
but the Company is actively cooperating with the SRS, as a result of which an agreement has been
reached on the debt repayment schedule.
The Company’s tax liabilities as oat 31 December 2024 include postponed tax liabilities of
EUR 13.689 thousand (EUR 10.571 thousand in excise duty, EUR 3.118 thousand in other taxes),
which the Company has committed to repay in full by 31 January 2026. The Company’s other current
tax liabilities were and are being fully paid in accordance with the relevant tax payment schedule set out
in Latvian laws.
(19) Other liabilities
(20) Auditor’s fee
AS Amber Latvijas Balzams
Annual Report 2024
43
III. OTHER NOTES (continued)
(21) Average number of employees in the company
(22) Remuneration to the Management
(23) Transactions with related parties
As at 31 December 2024, the Company’s majority shareholder (Parent Company), which owns 89.99%
of the shares, is Amber Beverage Group Holding S.à r.l. (Company registered in Luxembourg). The
parent company of the Group is SPI Group Holding Ltd. (a company registered in Cyprus) with beneficial
owner Yuriy Shefler. The Company's related parties are shareholders who could control the Company
or who have significant influence over the Company in making economic decisions, the Company
management staff, including Members of the Council and close family members of any of the above-
mentioned persons, as well as legal entities in which these persons have control or significant influence.
For additional information on guarantees, see Note 26.
a) Related receivables
* For additional information on adjustments, see Note 30.
Related party receivables arise from the sale of goods and services provided. These receivables are
not interest-bearing under IFRS 9. The credit risk of related party receivables is essentially the same
as the credit risk of the Company. Therefore, the relevant probability of default indicators have been
applied in determining the Company’s expected credit losses (ECL) taking into account the financial
position of the related party and the expected settlement. The Management has assessed related party
receivables and concluded that the credit risk will not increase significantly. Accordingly, at the end of
the reporting period, the Company has created provisions of EUR 16,913 thousand.
AS Amber Latvijas Balzams
Annual Report 2024
44
As at 31 December, the Company has the following related party receivables:
b) Related payables
As at 31 December, the Company has current payables to the following related companies:
AS Amber Latvijas Balzams
Annual Report 2024
45
III. OTHER NOTES (continued)
(23) Transactions with related parties (continued)
c) Sales of goods and services to related companies
d) Purchase of goods and services from related companies
e) Non-current loans to related companies
The loan granted to the Parent Company Amber Beverage Group Holding S.à r.l. will mature on
31 December 2026. The loan currency is EUR with a fixed interest rate of 3%.
f) Current loans to related companies
Current loans to related companies include the positive balance of Amber Beverage Group Holding S.à
r.l. as the Group’s account holder in amount of EUR 38.9 million and received % from the loan in amount
of EUR 2.42 million.
In addition, an advance payment has been made to the Parent Company for goods and services, as
reflected in Note 14.
AS Amber Latvijas Balzams
Annual Report 2024
46
III. OTHER NOTES (continued)
(24) Right-of-use assets
For the breakdown of lease liabilities by repayment terms, see Note 17.
(25) Contingent liabilities
Contingent tax liabilities
When distributing profits earned after 1 January 2018, the Company will calculate the corporate income
tax at the rate of 20/80 of the net amount of dividends payable to the shareholders. The total contingent
tax liability as at 31 December 2024 is EUR 13.5 million (31.12.2023: EUR 12.2 million).
AS Amber Latvijas Balzams
Annual Report 2024
47
III. OTHER NOTES (continued)
(26) Guarantees and pledged assets
The Company, together with other Group companies, has provided security for liabilities of the Parent
company, Amber Beverage Group Holding S.à r.l., to AS Luminor Bank Latvian branch under an
overdraft agreement of 19 December 2018, with the maximum overdraft limit of EUR 22.7 million.
The Company, together with other Group companies, has provided security for the liabilities of the
Parent Company, Amber Beverage Group Holding S.à r.l., to AS Luminor Bank Latvian branch relating
financing of the purchase of Fabrica de Tequilas Finos S.A. de C.V. (since 28 April 2022 – Amber
Production Tequila S.A. de C.V.), which is a tequila manufacturing company in Mexico, which arises out
of a novation agreement signed on 19 December 2018. The maximum secured limit is EUR 9.2 million.
In January 2024, the loan was fully repaid and the Company’s collateral was fully redeemed.
Refinancing the Group’s liabilities, on 3 December 2019, the Company’s Parent Company Amber
Beverage Group Holding S.à r.l. signed a loan agreement for EUR 27 million with Credit Suisse AG.
The Company has five real estate properties pledged as collateral for this loan. The outstanding loan
amount as at 31 December 2024 is EUR 19 million.
On 11 April 2023, Amber Beverage Group Holding S.à r.l. signed a loan agreement for EUR 10 million
with AS Rietumu Banka with maturity date on 10 April 2028. To secure this loan, the Company, together
with other Amber Group companies, has pledged the use of trademarks in the Baltic States as security.
On 30 May 2023, the Company's Parent company, Amber Beverage Group Holding S.à r.l., in
cooperation with AS Signet Bank, issued four-year bonds worth EUR 30 million to raise funds for the
construction of the automated warehouse implemented by the related company, SIA ABG Real Estate,
and in which the Company plans to become the anchor tenant of the warehouse. The Company,
together with other Group companies, has issued a guarantee to secure the liabilities arising from the
bonds issued by Amber Beverage Group Holding S.à r.l.
To secure the above-mentioned credit liabilities of the Parent Company, the Company issued pledges
on movable property, trademarks, mortgages on most of the real estate and guarantees.
The Company receives compensation from the Parent Company for the collateral provided in the form
of a fixed percentage of the total value of the collateral. If a collateral is provided for one loan by several
companies at the same time, the interest rate is calculated proportionally, based on the value of the
guarantors’ balance sheet assets.
The Company’s management has assessed the fact that the above-mentioned loans to the Company's
parent company are subject to covenants regarding meeting certain financial indicators and certain
reporting dates. The Company’s management is aware that the parent company had not met individual
covenants as at 31.12.2024. However, as regards those issued guarantees and pledges, the Company’s
management made sure that the parent company has received the covenant waiver letters from all
banks stating that the banks would not be accelerating those loans as at the reporting date. Having
consistently assessed the credit risk associated with the issued guarantees and the aforementioned
mitigating circumstances, the Company does not create provisions for these guarantees.
For information on the carrying amount of pledged real estate and assets, see Notes 12, 13 and 24.
AS Amber Latvijas Balzams
Annual Report 2024
48
III. OTHER NOTES (continued)
(27) Financial assets and financial liabilities
This Note provides information about the Company's financial instruments, including a summary of all
financial instruments held by the Company, specific information about each financial instrument, and
information about the determining fair value of the instruments, including uncertainties in judgments and
estimates. The Company has the following financial instruments at its disposal:
The Company’s exposure to various risks associated with financial instruments is disclosed in Note 28.
AS Amber Latvijas Balzams
Annual Report 2024
49
III. OTHER NOTES (continued)
(28) Financial and capital risk management
Fair value of financial assets and financial liabilities
Due to the short-term nature of cash and cash equivalents, receivables, payables and other current
financial assets and liabilities, their carrying amounts largely approximate their fair values. The fair
values of non-current financial assets and liabilities do not differ significantly from their carrying amounts.
The fair value was calculated based on discounted cash flows using the current lending rate. The fair
value calculation corresponds to Level 3 hierarchy due to the inclusion of unobservable inputs in the
calculation, including counterparty credit risk amount.
Fair value hierarchy
The Company uses the following hierarchy for determining and disclosing the fair value of financial
instruments:
• Level 1: Quoted prices (unadjusted) in an active market for identical assets and liabilities
• Level 2: Other valuation techniques in which all inputs that significantly affect the calculation
can be obtained directly or indirectly based on market data
• Level 3: Methods where the valuation techniques involve inputs not based on observable data
and the unobservable inputs have a significant impact on the valuation of the instruments.
All Company’s financial assets and financial liabilities are classified as Level 3, except for cash and cash
equivalents, which are classified as Level 2.
AS Amber Latvijas Balzams
Annual Report 2024
50
III. OTHER NOTES (continued)
(28) Financial and capital risk management (continued)
Currency risk
The Company operates internationally and is exposed to foreign currency risk arising primarily from
purchases of raw materials and consumables and sales of goods in the United States.
The Company's significant open currency positions at the end of the reporting year are:
A sensitivity analysis of the impact of possible moderate exchange rate changes on existing financial
assets and liabilities in foreign currencies is provided below. With all the other factors which remain
constant, the impact on the Company’s profit before tax is as follows:
Interest rate risk
The Company is exposed to interest rate risk because most of its liabilities bear interest, which is
calculated at a variable interest rate.
A sensitivity analysis of the impact of possible moderate changes in interest rates on existing financial
assets and liabilities is provided below. The variable interest rate in the current contracts is three-month
EURIBOR. With all the other factors which remain constant, the impact on the Company’s profit before
tax is as follows:
AS Amber Latvijas Balzams
Annual Report 2024
51
III. OTHER NOTES (continued)
(28) Financial and capital risk management (continued)
Other price risk
Other price risk is the risk that the value of financial instruments will fluctuate depending on other market
factors. The Company’s management continuously monitors the market fluctuations and acts
accordingly, but does not engage in any hedging transactions.
Credit risk
Financial assets that potentially expose the Company to a certain degree of credit risk concentration are
mainly cash, trade receivables, related party receivables and current and non-current loans issued to
them.
The company’s internal policy ensures that goods are sold and services are provided to the customers
with an appropriate credit history. If an independent rating is not available, risk control assesses the
credit quality of the customer taking into account their financial position, past experience and other
factors.
Individual risk limits are determined based on the internal or external ratings in accordance with the
limits set by the Company. The Management regularly monitors customers’ compliance with the credit
limits. The Company’s partners in cash transactions are domestic and foreign financial institutions with
an appropriate credit rating.
Within the Credit Risk Management Policy, the Company regularly monitors transactions with related
companies and additionally assesses their overall financial position within the Group. Provisions for
expected credit losses on debts of related companies are being created by individually assessing the
financial position of each related company taking into account the overall position of their current and
non-current liabilities within the entire Group.
Maximum exposure to credit risk:
The Company’s credit risk concentration arises from the recivabled from related companies: As at
31 December 2024, 99% of total trade receivables is related to related companies (31.12.2024: 96%).
Trade receivables
To measure the expected credit losses (ECL), trade receivables were grouped based on their shared
credit risk characteristics and the days past due. The expected credit loss rates are based on the
payment trends and the historical credit losses before 31 December 2024. The historical loss rates were
adjusted to reflect the current and future macroeconomic factor data which affect the customers’ ability
to settle their accounts receivable. Based on that, the provisions for trade receivables as at 31 December
2024 and 31 December 2023 were determined as follows:
AS Amber Latvijas Balzams
Annual Report 2024
52
III. OTHER NOTES (continued)
(28) Financial and capital risk management (continued)
Trade receivables (continued)
The movement of the provisions for expected credit losses (ECL) at the end of the period against the
provisions for expected credit losses and the beginning of the period is shown in the table below:
Maturity analysis of the related companies’ trade receivables:
The movement of the provisions for expected credit losses (ECL) of related companies at the end of
the period against the provisions for expected credit losses and the beginning of the period is shown in
the table below
AS Amber Latvijas Balzams
Annual Report 2024
53
III. OTHER NOTES (continued)
(28) Financial and capital risk management (continued)
Liquidity risk
The Company regularly monitors its liquidity status to ensure a positive current asset position for
financing its main business activity, as well as using the lines of credit and loan resources granted to
the Group, while scheduling repayment of debts to suppliers, short-term and long-term future cash flows
are being developed and analysed. As at 31 December 2024, the Company’s current assets exceeded
its current liabilities by EUR 75 051 380 (31.12.2023: EUR 78 667 218).
A significant portion of this excess is secured by current assets of EUR 73 million from receivables from
related parties and other related companies of the group. The increased operational, market and
geopolitical risks associated with these financial assets include loan recovery risks. Additional sales
drop risks in the US and uncertainties around the extra tariffs on exports to the US make the Company’s
management additionally wonder about the liquidity risk deterioration and, consequently, collectability
of these receivables during 2025 and in the foreseeable future.
The Company’s management has drawn up detailed cash flow forecasts and estimated that the
Company will have sufficient current asset resources available in 2025 and 2026 to ensure stable
liquidity in accordance with the Company’s cash flow forecasts for the aforementioned forecast period.
The maturity structure of the financial liabilities of the Company based on non-discounted cash flow set
forth in the agreements is as follows:
AS Amber Latvijas Balzams
Annual Report 2024
54
III. OTHER NOTES (continued)
(28) Financial and capital risk management (continued)
Capital management
The Company’s management manages the capital structure on an ongoing basis. No changes were
made to the capital management tasks, policies or processes during the reporting period.
The Company’s management controls the external debt to equity ratio. In the reporting year, it was 2%
(in 2023: 2%), which indicates the stability of the Company’s capital management:
(29) Distribution of profit proposed by the Board
Distributable share of profit EUR 4 087 805
Proposed profit distribution:
- Retain EUR 4 087 805
AS Amber Latvijas Balzams
Annual Report 2024
55
(30) Error correction
Error due to IFRS 9 application for expected credit losses (ECL) for the receivables from related
companies.
During the reporting year, the Company identified an error in the calculation and recognition of the
expected credit losses (ECL) in relation to the receivables from a related company. In the preceding
reporting periods, the Company incorrectly assessed the recoverability of the aforementioned receivable
and did not recognise an ECL provision as required by IFRS 9 Financial Instruments. This receivable
was assessed as fully recoverable despite the elevated credit risk indicators.
As a result of this error, other receivables, as well as retained earnings items were reported at an
increased value in the compared periods. The error was subsequently corrected retrospectively, in
accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, and the
comparative information was adjusted accordingly.
Effect on the Company’s financial statements
As a result of the error correction, the provisions for the expected credit losses in the amount of
EUR 11 239 770 were recognised as of 1 January 2023 (in the opening balance sheet), and additional
provisions of EUR 4 743 199 were recognised as of 31 December 2023.
The tables below summarise the effect of this correction on the Company’s statement of financial
position and consolidated statement of profit or loss and comprehensive income for the relevant
reporting periods.
Statement of Financial Position
As at 31 December 2023
As previously
reported
Error correction
Corrected
Current assets
Related receivables
64 898 674
(15 981 969)
48 916 705
Total current assets
153 262 138
(15 981 969)
137 280 169
Equity
Retained earnings
128 375 717
(15 981 969)
112 393 748
Total equity
141 278 087
(15 981 969)
125 296 118
As at 1 January 2023 (opening
balance)
As previously
reported
Error correction
Corrected
Current assets
Related receivables
60 108 353
(11 239 770)
48 868 583
Total current assets
141 400 653
(11 239 770)
130 160 883
Equity
Retained earnings
127 708 909
(11 239 770)
116 469 139
Total equity
140 611 279
(11 239 770)
129 371 509
AS Amber Latvijas Balzams
Annual Report 2024
56
Statement of Profit or Loss and Statement of Comprehensive Income
For the year ended on 31 December 2023
As previously
reported
Error correction
Corrected
Other operating expense
(782 679)
(4 743 199)
(5 525 878)
Profit for the reporting year
5 164 949
(4 743 199)
421 750
The Company's financial statements on pages 15 to 56, were signed on 30 April 2025 by:
On behalf of the Board:
________________________
Andrejs Višņausks
Chairman of the Board
________________________
Ināra Kondratoviča
Chief Accountant, SIA Amber Beverage Group
THIS DOCUMENT IS ELECTRONICALLY SIGNED WITH A SECURE ELECTRONIC SIGNATURE AND
CONTAINS A TIME STAMP
AS Amber Latvijas Balzams
Annual Report 2024
57
INDEPENDENT AUDITOR’S REPORT
INDEPENDENT AUDITORS’ REPORT
DOCUMENT DATE IS THE TIME OF ITS ELECTRONIC SIGNATURE
To the Shareholders of Amber Latvijas balzams AS
Report on the audit of the financial statements
Qualified opinion
We have audited the accompanying financial statements of Amber Latvijas balzams AS (the Company) set out on pages 15
to 56 of the accompanying Annual Report, which comprise the statement of financial position as at 31 December 2024, and
the statement of profit or loss, statement of comprehensive income, statement of changes in equity and statement of cash
flows for the year then ended, and notes to the financial statements, including material accounting policy information.
In our opinion, except for the effects of matter described in Basis for qualified opinion section paragraph 1 and for the possible
effects of the matters described in Basis for qualified opinion section paragraphs 2, 3 and 4, the accompanying financial
statements of the Company give a true and fair view of the financial position of the Company as at 31 December 2024, and of
its financial performance and its cash flows for the year then ended in accordance with the IFRS Accounting Standards as
adopted by the European Union.
Basis for qualified opinion
As disclosed in Note 23 (a) to accompanying financial statements, the Company’s carrying value of trade receivables from
related parties amounted to EUR 49,3 million as at 31 December 2024. There are serious indications of Significant Increase
in Credit Risk (SICR), including substantial overdue receivables, liquidity issues and going concern risk with several related
parties. The management has carried out a high-level recoverability analysis of the Company’s trade receivables from related
parties as of 31 December 2024 and concluded that no additional Expected Credit Risk (ECL) allowances are required in this
respect. In our opinion, a significant part of the trade receivables from related parties are not recoverable and respective ECL
allowances must be recognised. Had the Company recognized additional ECL allowance as of 31 December 2024, trade
receivables from related parties, retained earnings and equity would be decreased by respective ECL amount. We, however,
cannot determine the amount of the ECL allowance to be recognised as at 31 December 2024.
As disclosed in Note 30 to accompanying financial statements, during 2024 the Company’s management identified an error in
previous periods amounting to EUR 16 million in the calculation and recognition of ECL allowance related to receivable from
one related counterparty and made a retrospective correction of the error. The management of the company has recognised
an additional ECL allowance and decreased related party receivables by EUR 16 million as at 31 December 2023, decreased
2023 profit by EUR 4,8 million and decreased retained earnings by EUR 11,2 million as at 31 December 2023. The financial
statements of the Company for the year ended 31 December 2023 were audited by another auditor who expressed unmodified
opinion on 30 April 2024. We could not obtain sufficient appropriate audit evidence regarding the periodization of the recognition
of ECL allowance related to receivables from related party recognized during 2024 and corrected retrospectively. As a result,
we were unable to determine
AS Amber Latvijas Balzams
Annual Report 2024
58
whether and to what extent the adjustments might have been necessary in respect of the periodization of the ECL allowance
recognized.
As disclosed in Note 26 to accompanying financial statements, the Company has issued guarantees in respect of the parent
entity’s financial liabilites. The management has carried out a high-level recoverability analysis and concluded that no ECL
allowances are required in this respect. During our audit we were unable to obtain sufficient and appropriate audit evidence
regarding the assumptions used in assessing the ECL allowances. As a result, we are unable to determine whether and to
what extent adjustments may have been necessary in respect of the ECL allowance for the guarantees issued.
As disclosed in Note 23 to accompanying financial statements, as of 31 December 2024, the Company’s carrying value of non-
current loan issued to the parent company EUR 35,3 million, advances paid to the parent company EUR 6,3 million, current
loans issued to the parent company through group’s cash pool EUR 38,9 million and other current related parties receivables
EUR 3,2 million. The management has carried out a high-level recoverability analysis of the of the Company’s loans and other
receivables from related parties as of 31 December 2024 and concluded that intercompany loans and other receivables are
fully recoverable, and no ECL allowance has been made in this respect. During our audit we were unable to obtain sufficient
and appropriate audit evidence regarding the assumptions used in assessing the recoverability and classification of the current
loans and other receivables from related parties to determine whether current loans from related parties will be settled within
the next 12 months and whether and to what extent the parent company will be able to repay the non-current loan by December
31, 2026. As a result, we are unable to determine whether and to what extent adjustments may have been necessary in respect
of the ECL allowance and the classification of the loans and other receivables from related parties between current and non-
current assets.
We conducted our audit in accordance with International Standards on Auditing adopted in the Republic of Latvia (ISAs). Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Statements section of our report. We are independent of the Company in accordance with the International Code of Ethics for
Professional Accountants (including International Independence Standards) (IESBA Code) together with the independence
requirements included in the Law on Audit Services of Republic of Latvia that are relevant to our audit of the financial statements
in the Republic of Latvia. We have fulfilled our other ethical responsibilities in accordance with the Law on Audit Services of
Republic of Latvia and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our qualified opinion.
Material Uncertainty Related to Going Concern
We draw attention to Note 1 in the financial statements, which indicates that the Company continues to provide guarantees
and has pledged its tangible and intangible assets to guarantee the loans received by the parent entity. The parent entity as
of 31 December 2024 has breached certain loan covenants. As stated in Note 1, these events or conditions, along with other
matters as set forth in Note 1, indicate that a material uncertainty exists that may cast significant doubt on the Company’s
ability to continue as a going concern. Our opinion is not further modified in respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial
statements of the current period. Except for the matters described in the Basis for qualified opinion section and Material
Uncertainty Related to Going Concern section, we have determined that there are no other key audit matters to communicate
in our report.
Reporting on other information
Management is responsible for the other information. The other information comprises:
• Company information as set out on pages 3 to 4 of the accompanying annual report;
• Management Report, as set out on pages 5 to 12 of the accompanying annual report;
• the Statement on Management Responsibilities, as set out on page 14 of the accompanying annual report;
• the Statement of Corporate Governance, as set out in a separate statement provided by the Company’s management
and available on the Company’s website http:// amberlb.lv/en/corporate-governance/ section Corporate Governance,
• the Remuneration Report, as set out in a separate statement provided by the Company’s management and available
on the Company’s website http:// amberlb.lv/en/ section For Investors,
Other information does not include the financial statements and our auditors report thereon.
AS Amber Latvijas Balzams
Annual Report 2024
59
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance
conclusion thereon, except as described in the Other reporting responsibilities in accordance with the legislation of the Republic
of Latvia section of our report.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated.
If, based on the work we have performed and in light of the knowledge and understanding of the Company and their
environment obtained in the course of our audit, we conclude that there is a material misstatement of this other information,
we are required to report that fact. Except for the effects of matter described in Basis for qualified opinion section paragraph 1
and for the possible effects of the matters described in Basis for qualified opinion section paragraphs 2, 3 and 4, we have
nothing to report in this regard.
Other reporting responsibilities in accordance with the legislation of the Republic of Latvia
We have other reporting responsibilities in accordance with the Law on Audit Services of the Republic of Latvia with respect
to the Management Report, the Statement of Corporate Governance and the Remuneration Report. These additional reporting
responsibilities are beyond those required under the ISAs.
Our responsibility is to consider whether the Management Report is prepared in accordance with the requirements of the Law
on the Annual Reports and Consolidated Annual Reports of the Republic of Latvia.
Based solely on the work undertaken in the course of our audit, in our opinion:
• the information given in the Management Report for the financial year for which the financial statements are
prepared is consistent with the financial statements; and
• the Management Report has been prepared in accordance with the requirements of the Law on Annual Reports
and Consolidated Annual Reports of the Republic of Latvia.
In accordance with the Law on Audit Services of the Republic of Latvia with respect to the Statement of Corporate Governance,
our responsibility is to consider whether the Statement of Corporate Governance includes the information required in Article
56
1
, paragraph one, clauses 3, 4, 6, 8 and 9 and Article 56
2
, paragraph two, clause 5 and paragraph three of the Financial
Instruments Market Law and if it includes the information stipulated in Article 56
.2
, paragraph two, clauses 1, 2, 3, 4, 7 and 8
of the Financial Instruments Market Law.
In our opinion, the Statement of Corporate Governance includes the information required in Article 56
1
, paragraph one, clauses
3, 4, 6, 8 and 9 and Article 56
2
, paragraph two, clause 5 and paragraph three of the Financial Instruments Market Law and it
includes the information stipulated in Article 56
2
, paragraph two, clauses 1, 2, 3, 4, 7 and 8 of the Financial Instruments Market
Law.
Furthermore, in accordance with the Law on Audit Services of the Republic of Latvia with respect to the Remuneration Report
our responsibility is to consider whether the Remuneration Report includes the information required in Article 59
4
of the
Financial Instruments Market Law.
In our opinion, the Remuneration Report includes the information required in Article 59
4
of the Financial Instruments Market
Law.
Responsibilities of management and those charged with governance for the financial statements
Management is responsible for the preparation of the financial statements that give a true and fair view in accordance with the
International Financial Reporting Standards as adopted by the European Union and for such internal control as management
determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether
due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless
management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting process.
Auditor’s responsibilities for the audit of the financial statements
AS Amber Latvijas Balzams
Annual Report 2024
60
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial
statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism
throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud
is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Company’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we
are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue
as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and
whether the financial statements represent the underlying transactions and events in a manner that achieves fair
presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or
safeguards applied.
From the matters communicated with those charged with governance, we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the key audit
matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated
in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public
interest benefits of such communication.
Other reporting responsibilities and confirmations required by the legislation of the Republic of Latvia and European
Union when providing audit services to public interest entities
We were first appointed as auditors of the Company on 19
th
July 2024 by shareholders decision. This is first year when we
have been appointed as auditors for the Company.
We confirm that:
• our audit opinion is consistent with the additional report presented to the Audit Committee of the Company;
• as stipulated in paragraph 37
6
of the Law on Audit Services of the Republic of Latvia we have not provided to the
Company the prohibited non-audit services (NASs) referred to in EU Regulation (EU) No 537/2014. We also
remained independent of the audited entity in conducting the audit.
Report on the compliance of the presentation of financial statements with the requirements of the European Single
Electronic Format (“ESEF”)
AS Amber Latvijas Balzams
Annual Report 2024
61
The electronic reporting format of the financial statements has been applied by the management of the Company to comply
with the requirements of art. 3 of the Commission Delegated Regulation (EU) 2019/815 of 17 December 2018 supplementing
Directive 2004/109/EC of the European Parliament and of the Council with regard to regulatory technical standards on the
specification of a single electronic reporting format (the “ESEF Regulation''). Based on these requirements the financial
statements have to be presented in XHTML format. We confirm that the electronic reporting format of the financial statements
for the year ended 31 December 2023 complies with the ESEF Regulation in this respect.
The responsible certified auditor on the audit resulting in this independent auditors’ report is Diāna Krišjāne.
ERNST & YOUNG BALTIC SIA
License No. 17
Diāna Krišjāne
Chairperson of the Board
Latvian Certified Auditor
Certificate No. 124
Riga,
THIS DOCUMENT IS SIGNED ELECTRONICALLY WITH A SAFE ELECTRONIC SIGNATURE AND CONTAINS A TIME
STAMP
