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Annual Report 2023
Photon Energy N.V.
Photon Energy N.V.
Annual Report 2023
Contact Details:
Photon Energy N.V.
Barbara Strozzilaan 201, 1083 HN, Amsterdam, The Netherlands
Legal form: Joint-stock company (Naamloze Vennootschap)
Registration: Dutch Chamber of Commerce (Kamer van Koophandel)
Company No.: 51447126
Tax No.: NL850020827B01
Web: photonenergy.com
E-mail: info@photonenergy.com
This report is available online at photonenergy.com
For questions contact our Investor Relations Department at ir@photonenergy.com
Clean energy and water.
The fundamentals of life.
127.3 MWp
proprietary portfolio
650+ MWp
O&M portfolio
340+
employees
1.2 GWp
PV projects in development
Active in
15+ countries
Founded
in
2008
58,286 tonnes
of CO
2
e
emissions avoided in 2023
139.8 GWh
of clean
energy produced in 2023
Shares traded in
Poland,
Germany
and
the Czech Republic
3
Table of Contents
Facts and Figures.
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Letter from the Management
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Who We Are
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Our Companies .
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Leadership .
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Our Team .
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Our Markets
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Our Competitive Strengths .
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Our History .
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2023 in Review .
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Selected Projects .
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Our Media Presence
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Directors’ Report
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Financial Results 2023 .
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Strategy Execution .
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Corporate Highlights.
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Operational Highlights
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Subsequent Events .
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Research & Development .
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Human Resources
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Risk Management & Internal Control
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Sustainability
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Shares & Bonds
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Going Concern
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Board of Directors’ Statement
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Corporate Governance Report.
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Supervisory Board Report .
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Remuneration Report
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Financial Statements
for the Year Ended 31 December 2023
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Consolidated Financial Statements
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Notes to the Consolidated Financial Statements
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Standalone Financial Statements
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Notes to the Company Financial Statements
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Other Information
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Independent Auditor’s Report
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Management Report
Introduction
Company Profile
Financials
5
Teiuș, Romania
Introduction
Facts and Figures
EBITDA
(In thousands of EUR)
Total Assets
(In thousands of EUR)
Total Revenues
(In thousands of EUR)
IPP Portfolio
(In MWp)
Energy Generation
(In GWh)
Total Comprehensive Income
(In thousands of EUR)
2020
2020
2020
2020
2020
2020
2021
2021
2021
2021
2021
2021
2022
2022
2022
2022
2022
2022
2023
2023
2023
2023
2023
2023
28,258
74.7
36,359
90.5
95,136
91.9
9,957
-459
70,649
127.3
277,424
3,706
139.8
2,084
2,095
196,618
253,694
8,440
70.0
9,584
103.3
24,309
121.6
158,905
Operational & Financial
8
Nationalities
GHG emissions avoided
(In tonnes of CO
2
e)
Scope 1 & 2 emissions
(In tonnes of CO
2
e)
Number of Employees
2020
2020
2020
2020
2021
2021
2021
2021
2022
2022
2022
2022
2023
2023
2023
2023
136
29,799
144
43,867
283
49,013
348
58,286
26
670.8
21
286.6
18
344.8
22
409.6
Environment, Social Conduct & Governance
37%
33%
37%
37%
Female representation
9
Where Are We Heading?
According to the International Energy Agency (IEA), in 2023,
solar PV alone accounted for three-quarters of renewable
capacity additions worldwide. The IEA estimates that thanks to
low generation costs compared to fossil and non-fossil alterna-
tives in most countries, PV and wind power will continue to be
major drivers of capacity expansion in the next five years. Solar
PV and wind additions are forecasted to more than double by
2028 compared with 2022, according to the IEA. Our goal is to
keep up with this pace, and by growing our business, contribute
to global sustainability goals in the face of climate change.
A Year of Challenges
2023 was a challenging year, with a turbulent macroeconomic
and geopolitical situation, high inflation and high interest rates.
On the energy market, we observed falling energy prices and
fierce competition in PV component trading. Our operational
results were negatively impacted by delays in the commission-
ing of our new power plants in Romania, lower production
yields, and unfavourable weather conditions. In addition, the
integration of Lerta presented challenges, and filling the vacant
CFO position took longer than anticipated.
Major Milestones
Despite these adversities, we managed to achieve the largest
increase in generation capacity in the history of Photon Energy
Group, with a total capacity of 35.4 MWp commissioned within
the year. An additional total capacity of 16.2 MWp was techni-
cally constructed and in the commissioning process at the start
of 2024.
Another major achievement in 2023 was securing capacities
for Demand Side Response (DSR) in Poland, positioning us to
deliver 389 MW of contracted DSR services, with contracted rev-
enues of approximately EUR 26 million in 2024. DSR contracts
will contribute positively to our bottom line and become the
second largest revenue pillar within the Group.
Our EPC business for commercial and industrial (C&I) clients
also expanded last year, with revenues nearly doubling those
of 2022. Significant ongoing contract negotiations for 2024
continue, mainly in Australia, the Czech Republic and Romania.
In January 2024, we signed our first 20-year on-site Power Pur
-
chase Agreement (PPA) with FORVIA Clarion Hungary for the
construction of a 658 kWp PV power plant. We expect behind-
the-meter contracts such as this to become another significant
growth driver going forward.
Letter from the Management
Co-founder and CEO Georg Hotar (L) with co-founder and CTO Michael Gartner (R)
As we continue to witness a steady rise in the deployment of PV installations, our company remains
steadfast in its commitment to sustainability. For over fifteen years, we have been actively contributing to
this crucial journey towards a greener future. Our dedication to this ambitious goal remains unwavering.
10
Our O&M segment, which has historically increased by low-
double digits annually, flourished in 2023, expanding its con
-
tractual portfolio by nearly 300 MWp, 77.3% year-on-year.
Last but not least, in the segment of PFAS remediation we have
seen positive developments as well.
Our pilot trial with the
Australian Department of Defence demonstrated a reduction
in PFAS concentration of up to 80–100% from initial levels. This
proves the efficacy of our proprietary in-situ nano-remediation
technology in addressing PFAS contamination and we intend to
accelerate our commercialisation efforts in 2024.
Financial Results
Our 2023 results were not what we wished for, nor what we
promised at the beginning of the year.
In 2023, we recorded
consolidated revenues of 70.649 million EUR (-25.7% YoY) com-
pared to 95.136 million EUR the previous year. Revenues from
electricity generation amounted to 21.407 million EUR, marking
a decrease of -39.3% YoY, mainly due to the factors outlined
above. Other revenues declined -17.8% to EUR 49.242 million,
as revenues from our New Energy division (DSR, energy trading
and balancing) as well as EPC and O&M contracts compensated
significantly for the contraction of our PV technology trading
business, although not fully due to a very high base.
Consolidated EBITDA for 2023 decreased to 3.706 million EUR
compared to 24.309 million EUR the previous year, marking a
decrease of -84.8% YoY. EBIT dropped from 16.985 million EUR
in 2022 to -5.196 million EUR in the period under review.
At the net income level in 2023, the Group recorded a loss of
-15.750 million EUR compared to a profit of 6.262 million EUR
the previous year. In addition to the decline in revenues and
the deterioration in profitability, this was affected by higher
financial costs resulting from increased levels of bank financing.
Looking Ahead
We expect 2024 to bring a financial turnaround from the top
down to the bottom line. In order to stabilise generation rev-
enues and mitigate the risks of further energy price fluctua
-
tions, we have taken a decision to return to feed-in tariffs in the
Czech Republic and Hungary. Revenues from DSR services will
triple year-on-year resulting in our New Energy division becom-
ing profitable this year. EPC revenues from C&I clients will
increase further compared to the level achieved in 2023 thanks
to a backlog of contracts already signed or under negotiations.
Growth of revenues from the O&M segment will be driven by
our recent capacity expansion, while the bottom line for this
segment might finally turn green for the first time in our history.
We also expect to monetise our project development efforts
and finalise the sale of PV projects in Romania and Poland.
In other segments which include water, we can realistically
expect our first commercial projects related to PFAS to be con
-
cluded in Australia and Europe during the course of 2024. As
a result of the promising outcomes of our recent projects and
the growth potential in this sector, we will be launching a new
brand in 2024 dedicated to this segment: Photon Remediation.
The environmental remediation solutions delivered by Photon
Remediation will continue to be run by our current Photon
Water team, but we believe that this addition will provide a
cost-effective opportunity for us to publicise our patented tech
-
nology and allow us to present a unique brand with a concen-
trated focus in this rapidly evolving area.
We are working towards becoming a self-sustaining business
based on what we sell and deliver to our external clients in
a recurring manner, with the spirit that has turned Photon
Energy Group and its business lines into respected brands in
the markets where we operate. We aim to expand recurring
stream of revenues through the combination of high-perfor-
mance PV generation and storage assets, combined with the
enhanced ability to access the full revenue stack available to
grid-connected energy storage assets.
We would not be here today without
our stakeholders
At the foundation of our success are Photon Energy Group’s
team of employees. It is their commitment and goal-oriented
attitude that enables us to deliver value to our clients. On this
note, we would like to thank them for their contributions and
for their tremendous efforts and patience during the challenges
of 2023. We believe that our strong commitment to our values
and principles, and to building a strong, diverse team, enable
us to recruit and retain some of the most talented people in the
industries we operate in.
We are also dedicated to building long-term relationships with
our clients and our business and financial partners. These are
not empty words, but the essence of why many organisations,
large and small, do business with us. We possess strong brand
equity, and this is key to bringing our company back on track
within the upcoming years. We would like to thank all our stake-
holders for their contributions to our growth and the sustain-
ability of our business during the past year.
It took a tremendous effort to keep the helm of this ship steady
last year. Nevertheless, we know that we have now safely
crossed to the other shore, and what we managed to achieve
in 2023 will have tangible results this year. We look forward to
delivering on our commitments for 2024.
Sincerely,
Amsterdam, 30 April 2024
Michael Gartner, Director
Georg Hotar, Director
11
Valley Lake, Mount Gambier, Australia
Company Profile
Delivering the
fundamentals of life.
Photon Energy Group is a group of companies
with a shared mission: making clean energy, clean
water and clean environments accessible to eve-
ryone. We deploy technology to provide these
fundamentals and help build a thriving, sustain-
able world.
Photon Energy and Lerta provide comprehensive
renewable energy solutions, including solar power
and energy flexibility. Photon Water offers water
treatment and management solutions, as well as
environmental remediation to remove PFAS and
other contaminants from water and soil.
Headquartered in Amsterdam, we operate in over
15 countries across two continents, allowing us
to combine a global outlook with localised exper-
tise. Since our founding in 2008, we’ve expanded
to a team of more than 340 employees around the
world.
Photon Energy N.V., the holding company for
Photon Energy Group, is listed in Warsaw, Prague,
Frankfurt and on Xetra.
Who We Are
Făget, Romania
14
Our Values
Innovation
Sustainability
Integrity
Performance
Safety
Community
We think creatively to
deliver solutions and
actualise our vision.
We understand the
importance of foresight
and long-term thinking.
We operate with honesty
and respect, and we never
compromise our values.
We focus on solutions
and deliver on our
commitments.
We prioritise the health
and well-being of everyone
impacted by our work.
We believe it is our
responsibility to enrich every
community we are a part of.
15
Photon Energy offers comprehensive renewable energy solu
-
tions to help everyone benefit from the green transition. With
over 15 years of industry experience, our work in the solar
power sector covers the complete lifecycle of photovoltaic
systems. We are also an independent power producer with a
growing portfolio of PV power plants around the world.
As a licensed energy trader in six countries, we offer energy
offtake and supply through our Virtual Power Plant, and our
energy flexibility solutions help consumers integrate clean
energy into their businesses while helping to keep the electric-
ity grid balanced and stable.
Our Companies
O&M for Photovoltaics
A full range of operations and
maintenance solutions for solar PV
systems, including monitoring and
inverter maintenance.
Wholesale PV
Technology
World-class components for PV
installers across Europe through
our dedicated eShop.
On-site Solar Power
and Energy Storage
Behind-the-meter PV power and
energy storage systems for energy
consumers.
Utility-scale
Solar Power
Comprehensive solutions covering
the full lifecycle of utility-scale
PV installations, from project
development to EPC, O&M and
energy offtake.
Energy Trading
Energy offtake and supply from
renewable sources including solar,
wind and biogas.
Energy Flexibility
Localised Demand Side Response
programs and other flexibility
solutions to optimise energy use
and support grid stability.
Powering the Future
Helping consumers
access
renewable energy
and keep
the grid balanced.
Ensuring the sustainable
generation of clean energy.
16
Photon Water delivers purpose-designed clean water and envi-
ronmental remediation solutions that are efficient, sustainable
and safe. Our work is built on a foundation of groundbreaking
research and technological innovation.
In addition to state-of-the-art water treatment and resource
management, our environmental remediation solutions include
a patented technology for the in-situ removal of PFAS and other
contaminants from surface water, groundwater and soil.
Acquired by Photon Energy Group in 2022, Lerta’s Virtual
Power Plant, energy trading and flexibility services have been
integrated into Photon Energy’s comprehensive suite of clean
energy solutions.
In 2023, Lerta remained Photon Energy’s local provider of
energy supply and flexibility solutions to energy consumers
in Poland, where it is the third largest demand side response
aggregator on the market.
Environmental
Remediation
Safe, effective elimination of PFAS
and other contaminants from surface
water, groundwater and soil.
Water Treatment
and Recycling
Comprehensive range of solutions,
from pool water recycling and
seawater desalination to the
treatment of industrial wastewater.
Lake Management
Purpose-designed solutions to
develop, optimise and enhance the
quality of water in recreational and
industrial water bodies.
Wells and Resources
We provide complete services for
wells and water resources, from
design to maintenance.
Clean Water for a Healthy World
Enabling access to
clean water
and
clean environments.
Energy Is Here
17
Leadership
Georg Hotar
CEO and Co-founder
Georg co-founded Photon Energy in 2008 and was the company’s CFO until 2011.
Since then he has spearheaded the group’s expansion in Europe and overseas as
CEO. Georg has extensive knowledge of the solar energy industry as well as in inter-
national finance. Before Photon Energy, Georg established a finance and strategy
advisory boutique focused on the CEE region and previously held various positions
in financial services in London, Zurich and Prague.
Michael Gartner
CTO and Co-founder
Michael developed one of the first large PV installations in the Czech Republic before
co-founding Photon Energy in 2008. Michael was CEO of Photon Energy until rolling
out the company’s business in Australia. Michael is instrumental in driving Photon
Energy’s off-grid and solar-hybrid power solutions. Before Photon Energy, Michael
ran an investment boutique and was an analyst and head of fixed income sales at
ING and Commerzbank Securities in Prague.
David Forth
CFO
David is a British national who has gained extensive experience in top managerial
positions with multinational companies including British Petroleum, BAT, Schneider
Electric, Adecco and Costa Coffee. Prior to joining Photon Energy Group, he was
Interim CFO of Cake Box plc and then Eurowag (W.A.G. Payment Solutions plc). David
is a British Chartered Accountant (FCA), after qualifying with KPMG in London, and
has an LLB (Hons) Degree in Law from Queen Mary University of London.
Ricky D’Ambrosca
COO
Ricky is responsible for the day-to-day administration of Photon Energy Group and
its operational functions as a business. He joined the company in 2022 in order to
strengthen our management team during this period of growth. Previously, Ricky
worked at ADP Employer Services as senior client services director for the EMEA
region. He has led 450+ associates spanning twenty countries providing services for
250 clients for 100 large corporate entities.
18
Marek Skreta
Marek is the chairman of the Photon Energy Group supervisory board and a member of the
audit committee. He is the co-founder and CEO of P4 Wealth Management in Zurich and
serves as a member of the board and head advisor at R2G in Prague, a private investment
platform which he helped to establish. Prior to this, he was a managing director at UBS
Switzerland AG and a director at Credit Suisse in Zurich. His earlier professional experience
included providing advisory services to family offices and private equity funds on invest
-
ments in the CEE region and M&A transactions.
Bogusława Skowroński
Bogusława is an independent Supervisory Board member as defined by the Dutch Cor
-
porate Governance Code. She is an entrepreneur, technology start-up ecosystem builder,
VC and angel investor. She has gained financial experience in organizations such as Union
Bank of Switzerland, European Bank for Reconstruction and Development and Capital
Solutions proAlfa, a company which she founded. She is an active member of the Polish
capital market and has advised many companies on their strategies and transactions. She
co-founded MIT Enterprise Forum CEE, an equity-free startup acceleration program.
Ariel Sergio Davidoff
Ariel is a member of the Photon Energy Group supervisory board and chairman of the audit
committee. He is a partner at Lindemannlaw, an international law firm based in Zurich. The
law firm focuses on UHNW entrepreneurs and regulated clients, such as banks, external
asset managers and mutual funds. Prior to joining Lindemannlaw, Ariel held various posi-
tions in the banking industry in Switzerland and Lichtenstein, including the position of CEO.
In addition, he recently co-funded several companies in the Swiss financial sector.
Supervisory Board
and Audit Committee
19
19
“Accessible safe water and clean soil are
crucial for a healthy ecosystem. I am happy
to be part of a team that works hard to make
this difference for a better world.”
“I relish the daily challenges of this
fast-evolving industry where we aim to
consistently outpace our competitors.”
“The best part of my job is witnessing the
team’s achievements and the continuous
learning opportunities.”
“A workplace that values and actively seeks
your inputs and suggestions makes you feel
respected as an employee and creates a
sense of belonging.”
Dr Namuun Ganbat
Technical Specialist, Photon Water
Petr Šterc
Technical Manager, Photon Energy
Magdalena Węglewska
Back Office Team Leader
Paul-Daniel Balan
Accountant
Our Team
20
All-staff Meeting
Prague, Czech Republic
CSR Day
Bubovice, Czech Republic
Off-site Meeting at Q Station
Sydney, Australia
21
HQ
Our Markets
Power Plants Owned by Photon Energy Group
Australia
O&M Services for Power Plants
Photon Water Services
Inverter Maintenance Services
Energy Trading Licence
Photon Energy Group Office
22
2023 PV Market Overview
Evolution of Global Annual and Cumulative Installed Capacity, 2012–2023
Worldwide
Europe
The photovoltaic industry added about 444 gigawatts of new
capacity in 2023, a 71% growth from 2022 according to Bloom-
bergNEF. Yet again, forecasts for solar build have proven too
conservative. China alone added 216.9 GW (AC) or 268 GW (DC)
in 2023, 60% of the world market.
According to IEA Renewables 2023 Report, in 2023 solar PV
accounted for three-quarters of renewable capacity additions
worldwide. Renewable power capacity additions will continue
to increase in the next five years, with solar PV and wind
accounting for a record 96% of additions, as their generation
costs are lower than both fossil and non-fossil alternatives in
most countries, and policies continue to support them.
The current manufacturing capacity under construction indi-
cates that the global supply of solar PV will reach 1,100 GW at
the end of 2024, with potential output expected to be three
times the current forecast for demand. Solar PV additions
through 2028 are expected to more than double in the United
States, the European Union, India and Brazil compared with the
last five years. In the European Union and Brazil, growth in roof
-
top PV is expected to outpace large-scale plants as residential
and commercial consumers seek to reduce their electricity bills
amidst increasing energy costs.
In Australia, one of our key markets, the total installed PV capac-
ity increased to 34.2 GWp compared to 31.0 GWp the year earlier.
Solar Power Europe’s new European Market Outlook for Solar
Power 2023–2027 revealed a record 56 GW of solar installations
in Europe in 2023. This marks the third year of annual growth
rates of at least 40%.
Germany has returned to the number one position in Europe’s
solar ranking, installing 14.1 GW in 2023. Germany is followed
by Spain (8.2 GW), Italy (4.8 GW), Poland (4.6 GW), and the Neth
-
erlands (4.1 GW).
2023 also brought a new era for solar in Central and Eastern
Europe, with three newcomers reaching the threshold of at least
1 GW of solar a year: the Czech Republic, Bulgaria, and Romania.
When comparing the total PV capacity in our key European
countries with the previous year, we observed a notable
increase across the board: from 2.5 to 3.5 GWp in the Czech
Republic, from 5.7 to 5.9 GWp in Slovakia, from 3.9 to 5.6 GWp
in Hungary, from 1.8 to 2.8 GWp in Romania and from 12.5 to
17.1 GWp in Poland.
Cumulative installed capacity (GWp)
Annual installations (GWp)
2014
2018
2012
2016
2020
2015
2019
2013
2017
2021
2022
2023
77
38
118
98
39
135
30
104
50
191
260
304
139
624
402
178
759
100
506
227
950
1,210
444
1,654
23
Our Key Markets
According to the Australian Photovoltaics Institute, as of 31 December 2023 there
were over 3.69 million PV installations in Australia, with a total capacity of over
34.2 GW. Data released by the Clean Energy Regulator has revealed Australians
are turning to rooftop solar in unprecedented numbers, with a record 813 MW of
rooftop solar PV installed in Q3 2023 and the average system size also growing.
According to the Czech Solar Association, in 2023 a total of 82,799 solar power
plants were connected to the grid, with a total capacity of 970 MWp. This rep-
resents a 145% increase in the number of new PV power plants from 2022. In
terms of output, the solar market in the Czech Republic grew by 681 MWp (236%)
compared to 2022.
In Slovakia, new PV power plants with a total capacity of 220 MW were built in
2023. By far the largest portion of the total capacity was installed in residential
homes and in small and medium-sized enterprises. The growth of the PV market
in Slovakia by 220 MW is very dynamic compared to previous years.
Australia
Czech Republic
Slovakia
2023 Market Overview
2023 Market Overview
2023 Market Overview
Photon Energy
in Australia
Photon Energy
in the Czech Republic
Photon Energy
in Slovakia
Total PV capacity
at the end of 2023:
Total PV capacity
at the end of 2023:
Total PV capacity
at the end of 2023:
Total PV energy
generation in 2023:
Total PV energy
generation in 2023:
Total PV energy
generation in 2023:
34.2
GWp
3.5
GWp
5.9
GWp
47.6
TWh
2.2
TWh
0.6
TWh
IPP Portfolio
14.7
MWp
IPP Portfolio
15.0
MWp
IPP Portfolio
10.5
MWp
PV Generation
27.7
GWh
PV Generation
16.0
GWh
PV Generation
10.6
GWh
O&M Services
17.0
MWp
O&M Services
98.4
MWp
O&M Services
15.3
MWp
As of 31 December 2023
24
According to a report by the Polish Institute for Energy and Climate Studies, it
is projected that Poland’s installed capacity of photovoltaic systems will double
again from 2023 by the end of 2025.
The specific predictions indicate an addition of 5.981 MW in 2023, 4.392 MW in
2024, and 3.996 MW in 2025. By 2025, Poland’s cumulative installed PV capacity
is expected to reach 26.791 MW.
The total solar capacity installed in Romania in 2023 exceeded 1 GW, in both
distributed generation and utility-scale installations. This marks a 308% increase
compared to 2022 and a new record high since the solar PV boom of the early
2010. The total PV capacity in Romania reached 2.85 GW in 2023, generating more
than 2.5 TWh, which accounts for some 5% of the overall power output in the
country, according to data from the Romanian Photovoltaic Industry Association.
According to Enerdata, during 2023 Hungary’s installed solar capacity increased
by 1.6 GW, achieving a record total of over 5.6 GW, more than 1.5 times the
capacity added in 2022. According to preliminary figures from the Hungarian
transmission system manager MAVIR, a total solar capacity of 5.6 GW is now
connected to the Hungarian grid. 3.3 GW of the total comes from industrial solar
power plants, and 2.3 GW from residential installations.
Poland
Romania
Hungary
2023 Market Overview
2023 Market Overview
2023 Market Overview
Photon Energy
in Poland
Photon Energy
in Romania
Photon Energy
in Hungary
Total PV capacity
at the end of 2023:
Total PV capacity
at the end of 2023:
Total PV capacity
at the end of 2023:
Total PV energy
generation in 2023:
Total PV energy
generation in 2023:
Total PV energy
generation in 2023:
17.1
GWp
2.8
GWp
5.6
GWp
12.0
TWh
2.5
TWh
6.5
TWh
IPP Portfolio
35.4
MWp
IPP Portfolio
51.8
MWp
PV Generation
21.1
GWh
PV Generation
64.4
GWh
O&M Services
270.8
MWp
O&M Services
44.8
MWp
O&M Services
182.8
MWp
25
Our Competitive Strengths
Industry Experience
Customised Solutions
Vertical Integration
Sustainable Energy Source
Focus on Innovation
Global Outlook, Local Expertise
Over fifteen years of experience in the development, engineering, construction
and operation of PV systems.
A holistic approach allows us to offer comprehensive solutions to our clients to
meet their unique needs.
In-house teams for each stage of PV projects, providing us with easy access to
technology and direct partnerships with key industry players.
As an Independent Power Producer we generate renewable energy ourselves,
allowing a unique insight into the needs of our clients.
We combine localised market insights with the experience and resources of an
international organisation.
Cutting-edge technology and solutions including RayGen’s hydrothermal solar
power and our patented environmental remediation technology.
26
2009
We construct our first PV projects, including
our first proprietary power plant in the
Czech Republic.
2015
We hit the 150 MWp mark for O&M services
provided in Europe and Australia.
2013
We place our first corporate bond on the
Frankfurt Stock Exchange.
2019
We complete the roll-out of rooftop solar
systems across 30 ALDI locations and
build 20 power plants in Hungary.
2021
Our shares are listed on the regulated markets
of Warsaw and Prague, and on the Quotation
Board of the Frankfurt Stock Exchange.
2011
We construct new power plants in Germany,
Italy and Slovakia.
2017
We establish our office in Hungary and expand
our vision to include clean water solutions
through Photon Water.
2008
Photon Energy is founded. We are listed
on the NewConnect market of the Warsaw
Stock Exchange.
2014
We install our first solar storage battery system
in Australia and add five countries to our O&M
portfolio.
2010
We construct plants with a combined capacity
of 32 MWp in the Czech Republic and Slovakia.
2016
We commission four power plants in Australia.
Our shares are listed in Prague, along with a
corporate bond.
2022
Lerta joins Photon Energy Group, expanding
our comprehensive clean energy solutions
even further.
2012
We establish our office in Australia and our new
corporate HQ in the Netherlands.
2018
Our first Hungarian power plants are connected
to the grid.
2020
Our proprietary portfolio reaches 74.7 MWp, and
we commission two utility-scale power plants.
Our History
27
2023 in Review
35.4 MWp
added to our
IPP portfolio (+38.5%)
58,286 tonnes
of CO
2
e
emissions avoided (+19.0%)
139.8 GWh
of clean
energy produced (+15.0%)
JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY
Lerta Acquisition
We successfully conclude
our acquistion of Lerta.
DSR Capacity in Poland
Secured
We secure DSR capacity of
375 MW in the additional
Polish TSO auction for
2024, on top of the previ-
ously contracted capacity of
14 MW for the same year.
Over 100 MWp
in IPP Portfolio
We complete and grid-
connect another PV
power plant near Calafat,
Romania (6.0 MWp) and
exceed 100 MWp in our
IPP portfolio.
‘Very Good’ Rating
imug rating assesses the
Company’s sustainability
performance as ‘very good’
with 77 out of 100 points in
the areas of sustainability
management, products and
services and controversies.
Aiud and Teius Connected
We complete and grid-
connect two power plants
with a generation capacity
of 4.73 MWp (Aiud) and
4.73 MWp (Teiuș), both
located in Alba County,
Romania.
Golden Partner of Dyness
We become a key partner
of Dyness on the European
market. In the Czech
Republic alone we supply
Dyness batteries for more
than 8,000 photovoltaic
installations.
First Romanian Power Plant
We complete and grid-
connect our first Romanian
utility-scale PV power plant
with a generation capacity
of 5.7 MWp near Șiria.
Financing for Romanian
Projects Secured
We secure EUR 21.9 million
financing for eight solar PV
power plants in Romania
with a combined capacity of
31.5 MWp.
28
AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER
Development in Romania
We complete and grid-
connect an additional power
plant with a generation
capacity of 3.9 MWp
near Făget, Timiș County,
rounding up our Romanian
portfolio expansion to nine
power plants in 2023.
We Repay Our 6.00%
Corporate Bond
We repay the outstanding
nominal value of EUR
3.1 million of our 6.00%
CZK corporate bond
2016/2023.
Progress in Romania
We complete and grid-
connect two power plants
with a combined generation
capacity of 10.3 MWp near
Făget and Săhăteni in
Romania.
54 MWp Building Permit
We achieve the building
permit for a 54 MWp PV
project in Romania – the
largest utility scale solar
project in Photon Energy’s
history of development in
the CEE region.
Joining RayGen
We join RayGen and open world-leading solar
and storage plant in Australia. The power
plant in Carwarp, Victoria, adds 4 MW of
high-efficiency PV solar and 2.8 MW / 50 MWh
(17 hours) of long-duration thermal storage to
the West Murray grid.
New 100 MWp O&M Contract
We sign a new O&M contract for 100.19 MWp
installed PV generation capacity with OX2
Construction AB – one of Europe’s leading
developers of renewable energy sources.
29
Selected Projects
RayGen Carwarp
PV Solar Capacity
The opening of RayGen’s solar-plus-storage plant marked an
important milestone in the energy transition in Australia and
beyond. RayGen technology tackles head-on the intermittency
of solar energy, exporting electricity day and night and charging
from solar and from the grid.
We entered a strategic partnership and announced our initial
investment in RayGen in April 2020, joined by investors such as
AGL Energy, Equinor Ventures, Chevron Technology Ventures,
SLB and Australian Renewable Energy Agency (ARENA).
This state-of-the-art technology has the potential to be deployed
at a greater scale and in addition to the Carwarp installation,
we are progressing our efforts to develop a solar-plus-storage
power plant in Yadnarie, South Australia.
4.0
MWp
2.8
MW
/
50
MWh
(
17 h
)
Thermal Storage Capacity
Australia
Carwarp
30
Făget 1 and Săhăteni
Combined Capacity
After commissioning six power plants earlier in 2023, the suc-
cessful commissioning of the installations in Făget and Săhăteni
stands as a pivotal achievement for Photon Energy within the
Romanian renewable energy market. We expanded our portfo-
lio of Romanian solar assets by an additional 10.3 MWp in 2023,
with more to come in 2024.
Equipped with high-efficiency bifacial photovoltaic modules
mounted on single-axis trackers, the total annual production of
the Făget and Săhăteni power plants is expected to be around
4.7 GWh and 10.9 GWh, respectively.
10.3
MWp
approx.
15.6
GWh
Total Expected Annual Production
Romania
Săhăteni
Făget
Făget 1
Săhăteni
31
The Bond at Norwest Business Park
Installed Capacity
In Australia, we achieved a top-three ranking at the 2023 Clean
Energy Council Solar Design and Installation Awards for this
rooftop PV installation. We partnered with Buildcorp to develop
a mounting structure for solar panels, purpose-built for the
Bond’s rooftop.
Constructed from engineered timber, The Bond is a seven-sto-
rey commercial building built to represent the future of sustain-
able, biophilic office design associated with improved physical
and mental wellbeing.
86
kWp
Australia
Sydney
32
LIFEPOPWAT:
Wetland+ Pilot Project
The old landfill near the city of Jaworzno in Poland stores
195,000 tonnes of toxic waste, including over 37,000 tonnes
of toxic lindane (HCH), a carcinogenic insecticide used in 1960s
to control insects on fruit, vegetables but also to treat lice and
scabies in pharmaceutical industry.
In Hájek, Czech Republic, there is similarly between 3,000 and
5,000 tonnes deposited in the landfill, mostly in paper drums,
without further security.
In 2023 Photon Water and partners Technical University of
Liberec, Główny Instytut Górnictwa, DIAMO, SERPOL and Aarhus
University successfully finished the pilot operation of the Wet
-
land+ technology treating the contaminated water. Photon
Water played a crucial role as a LIFEPOPWAT research and
carry-out partner while the project was co-financed by the EU.
Wetland+ Efficiency
The Wetland+ technology is an innovative treatment system
that adds other bespoke technological stages in addition to
classical wetland systems. The system of reactive and sorp-
tion fields now purifies water with an efficiency of up to 97% in
Hájek and 85% in Jaworzno where we expect the same figures
over time.
Timewise, we are now two growing seasons into the system,
and the system’s population is still on the rise. There is a growth
in wetland plants and algae and a shift in their representation.
We anticipate that the system’s efficiency will increase in future
years due to vegetation development, even during periods of
high flows.
Jaworzno
Hájek
33
Our Media Presence
At Photon Energy Group, we have always seen it as our duty to
be a trusted media partner. In 2023, we actively expanded upon
our ongoing partnerships with journalists covering energy,
finance and sustainability-related topics, with Romania being a
new addition to our target media markets.
Our stories were covered by a wide range of European and Aus-
tralian media outlets, from specialised energy news websites to
popular daily newspapers. Additionally, we worked closely with
industry associations and NGOs to promote solar energy as a
future-proof energy source and to share our industry know-
how with our customers and partners.
We continued to operate with honesty and in full transparency,
with our CEO Georg Hotar giving several interviews about our
ongoing projects and future plans, and our representatives
sharing their expertise in response to media enquiries through-
out the year.
To read our past articles and press releases, please visit
ir.photonenergy.com/news
.
Follow us on
LinkedIn
and
X (formerly Twitter)
.
13 April 2023
20 March 2023
9 May 2023
21 March 2023
Photon Energy Group sichert
21,9 Millionen Euro Finanzierung
für rumänische Projekte
Photon Energy zakontraktował
na 2024 umowy mocowe
w Polsce dla 389 MW
Photon Energy baut mit
drei neuen PV-Kraftwerken
IPP-Portfolio aus
Photon Energy connects
9.5 MWp Romanian projects
to the grid
34
8 November 2023
30 November 2023
17 August 2023
10 September 2023
30 May 2023
14 June 2023
Photon Energy ma nowy
kontrakt na obsługę
fotowoltaiki o mocy 100 MWp
INTERVIEW – Photon Energy
navigates red tape for growth
in Romania’s PV market
Lauru Badita: Leveraging
Competitive Advantages and
Improving Business Quality
Skupině Photon Energy
stouply tržby. Letos dosahují
necelé miliardy korun
Photon Energy a RayGen
zprovoznili v Austrálii unikátní
koncentrovanou solární
elektrárnu
Photon Energy se împrumută la
BERD pentru proiecte fotovol-
taice de 30 MW în România
35
Bocșa, Romania
Management Report
38
Directors’ Report
The directors present their report together with the annual fi-
nancial statements of Photon Energy N.V. (the ‘Company’) for
the year ended 31 December 2023.
The non-financial information, in the Annual Report comprises
the Introduction, Company Profile and the Management’s Re-
port, complies with the Dutch Disclosure of Non-Financial Infor-
mation.
Photon Energy N.V. is a joint-stock company incorporated un-
der the laws of the Netherlands on 9 December 2010. The stat-
utory seat of the Company is Barbara Strozzilaan 201, 1083HN
Amsterdam. The consolidated financial statements of the Com-
pany for the year ended 31 December 2023 comprise the Com-
pany and its subsidiaries (together referred to as the ‘Group’
and individually as ‘Group entities’) and the Group’s jointly con-
trolled entities.
Financial Results 2023
In thousands
EUR
2023
2022 Restated
Revenue
70,649
95,136
Earnings before interest, taxes, depreciation & amortisation (EBITDA)
3,706
24,309
Results from operating activities (EBIT)
-5,196
16,985
Profit / loss before taxation (EBT)
-16,302
8,725
Profit / loss
-15,750
6,262
Other comprehensive income
15,291
3,695
Total comprehensive income
-459
9,957
Non-current assets
225,003
189,147
Current assets
52,421
64,547
Of which Liquid assets
12,978
21,358
Total assets
277,424
253,694
Total equity
69,504
70,475
Non-current liabilities
178,348
149,680
Current liabilities
29,572
33,539
Operating cash flow
7,214
2,847
Investment cash flow
-26,709
-33,430
Financial cash flow
14,062
9,348
Net change in cash
-5,434
-21,235
Note:
For simplicity, the following separators were used throughout this report: point “.” for decimals, comma “,” for thousand and million.
39
“This is a pivotal time for Photon Energy Group. I have been witnessing this for
only a very short
time
, however I can already see the lessons that need to be learnt from the last year’s experi-
ence
. I am very impressed with the talent, energy and enthusiasm of the founders and staff at
all levels of
Photon Energy Group. There is still lots to do, and I believe that we do have the skills
and opportunity to
succeed. This business deserves to do well, and that is why I have joined it
and will work towards that goal.”
David Forth, CFO
2023 Highlights
►
Clean energy generation of 139.8 GWh, up by 15.0% YoY
►
IPP portfolio of PV power plants increased by 35.4 MWp, +38.5% YoY, to a total of 127.3 MWp YE 2023
►
Additional 16.2 MWp technically constructed and in the commissioning process in 2024
►
Repayment of the outstanding EUR 3.1 million, 6.0% CZK Bond 2016/2023
►
Negotiating a financing facility of up to EUR 15 million with EBRD
►
375 MW secured in DSR capacity auction, with total DSR revenues of EUR 26 million in 2024
►
Nearly 300 MWp of O&M contracts added, +77.3% YoY
►
First 20-year on-site PPA signed for 630 kWp PV power plant
Income Statement
In 2023, the Company’s consolidated revenues amounted to
EUR 70.649 million, compared to EUR 95.136 million a year ear-
lier, down by -25.7% YoY. Revenues from electricity generation
of EUR 21.407 million contracted by -39.3% YoY, mainly due to
deteriorating conditions on the energy markets. Revenues from
electricity generation based on FIT amounted to EUR 11.605
million (54.2%) compared to EUR 13.363 million in 2022, while
the remaining EUR 9.802 million were derived from selling elec-
tricity on the energy market (45.8%); these decreased from EUR
23.286 million in 2022 (-57.9% YoY) due to declining electricity
prices. Electricity generation increased by 15.0% YoY to 139.8
GWh but was still not sufficient to compensate for the declining
energy prices.
Other revenues also shrunk from EUR 59.897 million in 2022 to
EUR 49.242 million in the reporting period, down by -17.8% YoY,
mainly due to lower volumes in our PV technology trading busi-
ness. Other segments performed better than a year ago, with
new revenues from capacity market contracts, trading and bal-
ancing business of the New Energy division, as well as an in-
crease in EPC business for commercial and industrial clients.
EBITDA dropped -84.8% YoY to EUR 3.706 million compared to
EUR 24.309 million a year earlier. EBIT swung from a positive of
EUR 16,985 million in 2022 to a negative EUR -5.196 million in
the reporting period.
The Group’s operating profitability, apart from the contraction
of margins in the energy generation segment, was also nega-
tively impacted by deterioration of margins in PV component
trading. Personnel costs increased significantly due to higher
headcount of 348 employees compared to 220 at the end of
2022, mainly as a result of the integration of Lerta into the
Group.
Depreciation increased 23.4% YoY to EUR 11.044 million in 2023
compared to EUR 8.949 million a year earlier. This increase is
related to two factors: firstly, the addition of 35.4 MW power
plants in Romania and secondly the depreciation of DSR con-
tracts of EUR 1.325 million, included in intangible assets.
The bottom line was negatively impacted by higher interest ex-
pense, amounting to EUR 11.434 million in 2023, up by 20.9%
YoY, related mainly to increased project financing of new power
plants in Romania, a Green Bond tap of EUR 2.5 million, in-
creased leasing liabilities and revolving credit lines. The Group
recorded net loss of EUR -15.750 million, compared to a profit
of EUR 6.262 million in 2022.
Revenues by type, 2022–2023
(In thousands of EUR):
Profitability by type, 2022–2023
(In thousands of EUR):
18,831
21,407
7,642
9,070
7,955
5,745
50,786
35,239
0
5,389
0
3,722
0
20,000
40,000
60,000
Sales of goods and…
Sale of electricity
Capacity contracts
EPC contracts
Electricity trading and…
Rendering of services
2022
2023
24,309
16,985
6,262
9,957
3,706
-5,196
-15,750
-459
-30,000
-15,000
0
15,000
30,000
EBITDA
EBIT
Net profit/loss
TCI
2023
2022
40
Other comprehensive income was positively impacted by the
revaluation of newly connected Romanian power plants in the
amount of EUR 8.351 million and partially due to the revaluation
of Hungarian power plants in the amount of EUR 5.983 million,
upon changing the pricing model from merchant to FIT. The in-
crease in value of the RayGen shares resulted in a revaluation
of other investments in the amount of EUR 5.203 million.
Against this, there was a negative foreign currency translation
of EUR -0.430 million and negative revaluation of hedging deriv-
atives related to the interest rate swaps on Czech, Slovak, Ro-
manian and Hungarian SPVs and FX options related to the
Czech SPVs of EUR -3.996 million.
Total comprehensive income was negative: EUR -0.459 million.
Cash Flow
The Group posted a positive operating cash flow in 2023 in the
amount of EUR 7.214 million, compared to EUR 2.847 million in
2022, mainly thanks to positive working capital developments
i.e. decrease of inventories, trade and other receivables.
Investment cash flow equalled to EUR -26.709 million in 2023
compared to EUR -33.430 million in 2022, mainly related to
work in progress for our proprietary portfolio in Romania.
Financial cash flow of EUR 14.062 million in 2023, compared to
EUR 9.348 million in 2022, increased thanks to long-term pro-
ject financing and revolving credit line of EUR 28.0 million re-
lated to the Romanian power plants, a tap of EUR 2.5 million of
EUR Green bond 2021/27 and drawing of revolving credit of EUR
5.0 million for technology segment. It decreased due to the re-
payment of CZK Bond 2016/23 in the amount of EUR 3.1 million
and other scheduled loan repayments.
Overall, the cash position decreased to EUR 5.838 million at the
end of 2023 compared to EUR 11.271 million at the end of 2022.
Financial Position
At the end of 2023, total non-current assets amounted to EUR
225.003
million, representing an absolute increase of EUR
35.856 million and a change of 19.0% YoY, compared to the level
of EUR 189.147 million at the end of 2022. This was primarily
driven by the growing value of our proprietary portfolio related
to the commissioning of new PV plants with a total capacity of
35.4 MWp in Romania. The total PPE balance has increased by
a net amount of EUR 26.962 million. An increase of EUR 9.205
million in other non-current financial assets is primarily related
to combined impact of derivatives and our equity revaluation
related to RayGen of EUR 9.173 million (more details in Note 23:
Other Financial Investments.
Current assets decreased by -18.8% YoY, to a total of EUR
52.421 million, down by EUR 12.126 million compared to the
end of 2022. This decrease was mainly caused by lower
inventories, trade receivables and liquid assets but was partially
offset by higher other receivables, related to VAT receivables.
Assets
(In thousands of EUR):
Non-current liabilities increased by EUR 28.668 million, 19.2%
YoY, to EUR 178.348 million compared to the end of 2022. This
increase is primarily related to the increase in bank financing
related to the refinancing of our Romanian and Hungarian
power plants, the increased amount of the outstanding Green
Bond, and higher lease liabilities. For details please see Note 32
Loans and Borrowings.
Current liabilities amounted to EUR 29.572
million and de-
creased by EUR 3.967 million compared to the end of 2022, as
a result of repayment of CZK 2016/2023 bond, lower trade and
other payables as well as tax liabilities.
Equity and liabilities
(In thousands of EUR):
Financing Activity
In March 2023 the Group signed a financing agreement in the
amount of EUR 21.9 million with Austrian Raiffeisen Bank Inter-
national (RBI). This was a non-recourse project financing for the
portfolio of PV power plants in Romania with a total installed
capacity of 31.5 MWp.
Also in March 2023, the Group successfully increased its 6.50%
Photon Energy Green EUR Bond 2021/27 (ISIN: DE000A3KWKY4)
(the ‘Bond’) to a total amount of EUR 80.0 million. The additional
nominal amount of EUR 2.5 million was placed through a pri-
vate placement to institutional investors in the UK, Switzerland,
Germany, and Austria. In Q3 2023 the Company repurchased
from the market its Green EUR Bond in the nominal value of
EUR 0.615 million.
Since November 2023 the Management Board has been in dis-
cussions with the European Bank for Reconstruction and Devel-
opment (EBRD) about a possible EUR 15 million financing facility
to ‘close the funding gap’, allowing for both the timely comple-
tion of the second batch of Romanian power plants and the
commencement of construction works on new ready-to-build
projects in Romania. Other objectives of this financing facility
21,358
12,978
43,189
39,443
189,147
225,003
0
50,000
100,000
150,000
200,000
250,000
300,000
2022
2023
Cash & liquid assets
Other current assets
Non-current assets
33,539
29,572
149,680
178,348
70,475
69,504
0
50,000
100,000
150,000
200,000
250,000
300,000
2022
2023
Current liabilities
Non-current liabilities
Equity
Cash
31.12.2022
Cash
31.12.2023
11.3 M
7.2 M
-26.7 M
14.1 M
Operating
cash flow
Investment
cash flow
Financial
cash flow
5.8 M
41
relate to research and development costs for Photon Energy’s
Virtual Power Plant software platform and working capital re-
lated to the capacity market. On 24 January 2024, EBRD ap-
proved the loan and the final agreement is currently under
negotiations.
On 12 December 2023 the Group repaid the outstanding
amount of EUR 3.146 million of its 6.00% CZK corporate bond
2016/2023 (ISIN: CZ0000000815) in accordance with its terms
and conditions. This bond with a nominal value of CZK 30,000
each, had been issued on 12 December 2016 for a seven-year
term, with a 6.00% annual interest and monthly coupon pay-
ments and had been traded on the trading facility of the Prague
Stock Exchange in the Free Market segment. The repayment of
the Czech 2026/2023 bond was made together with the final
coupon payment to the bondholders.
The Group’s total loans and borrowings as of the reporting date
can be found in Note 32: Loans and Borrowings of the Financial
Statements.
Capital Management
The Group manages its capital to ensure that entities in the
Group will be able to continue as a going concern while max-
imising the return to stakeholders through the optimisation of
the debt and equity balance.
The Group’s net debt to adjusted equity ratios at the end of the
reporting periods were as follows:
In thousands of EUR
2023
2022
Total liabilities
207,920
183,219
Less: Liquid assets
12,978
21,358
Net debt
194,942
161,861
Total equity
69, 767
70,672
Net debt to equity ratio
2.79
2.29
Equity ratios:
2023
2022
Full Equity ratio
25.1%
27.8%
Adjusted Equity ratio
(for bond governance)
28.0%
32.0%
There were no changes in the Group’s approach to capital man-
agement during the year.
As of 31 December 2023 the Group was substantially in compli-
ance with all financial covenants set by lenders except for debt
service cover ratio with one of the lenders in Hungary.
Selected Debt and Liquidity Indicators
Debt to Assets Ratio
(Total Liabilities / Total Assets)
Debt to Equity Ratio
(Total Liabilities / Shareholders’ Equity)
Current Ratio
(Current Assets / Current Liabilities)
Solvency Ratio
(Net Income + Depreciation /
Current and Non-current Liabilities)
0.74
0.72
0.75
0.70
0.71
0.72
0.73
0.74
0.75
0.76
2021
2022
2023
2.81
2.60
2.99
1.00
1.50
2.00
2.50
3.00
3.50
2021
2022
2023
1.59
1.92
1.77
0.00
0.50
1.00
1.50
2.00
2.50
2021
2022
2023
2.92%
8.30%
-2.26%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
2021
2022
2023
42
Strategy Execution
Strategic Goals
Execution in 2023
Investments:
increase the pro-
duction of clean energy by ex-
panding
electricity
generation
capacity of our proprietary PV
power plants.
Our proprietary portfolio of PV power plants increased from 91.9 MWp to 127.3 MWp, i.e. by
35.4 MWp, up by 38.5% YoY. This represents the largest annual increase in generation capacity
in the Company’s history. After the reporting period, an additional 5.5 MWp was commissioned
and a further 10.7 MWp is technically completed and in the final stage of the commissioning
process. As a result, clean electricity generation increased from 121.6 GWh in 2022 to 139.8
GWh in 2023, up by 15.0% YoY, clearly in line with our key strategic goal.
In 2023, the Management Board revised its previously announced target of 600 MWp of PV
power plants in the Group’s proprietary portfolio by year-end 2024 down to 200 MWp. The
severity of this reduction was driven primarily by recent developments on the energy markets,
which, in combination with other PV market-specific factors, made it very challenging to gener-
ate returns above our cost of capital through investments in pure utility PV assets. This resulted
in the revision of our project pipeline, which is described below.
Investments:
expand PV project
pipeline, including both projects
developed in-house and co-de-
velopments, to drive further gen-
eration capacity growth.
The project pipeline increased by nearly 300 MWp to a total of 1.2 GWp in 2023. In August, a
significant milestone was achieved in Australia, where the Group’s investee RayGen successfully
commissioned its first utility-scale power plant in Carwarp, Victoria, with 4 MWp of solar gener-
ation capacity, a 2.8 MW AC grid connection and 50 MWh of storage. This has accelerated the
development of our project pipeline based on RayGen technology, including the flagship project
in Yadnarie, Australia, which is currently in an advanced stage of development.
On the other hand, due to declining achievable rates of ROI on pure PV assets, the management
decided to pivot its strategy in such a manner that only a part of the project pipeline will be
completed in its current form as pure utility PV assets; part will be sold to third parties or con-
verted to utility PV-hybrid projects or pure utility energy storage projects. In 2023, the Group
has advanced works on the completion of projects in Poland and Romania and initiated the sale
negotiations for approximately 30 MWp in Poland and 50 MWp in Romania. At the same time,
the Group has started developing pure energy storage projects and hybrid PV projects.
New
Energy:
increase
con-
tracted
DSR capacities by 100
MWp p.a. up to 700 MW in 2027.
In 2023, Photon Energy secured 134 MW of DSR capacity contracts (up from 52 MW in 2022)
and realised revenues of EUR 7.6 million. In March 2023, Photon Energy succeeded in the addi-
tional 2024 Polish capacity auction with 375 MW of DSR contracts, which together with the pre-
viously contracted DSR capacity of 14 MW, will increase contracted capacities in 2024 to 389
MW with revenues of PLN 116.8 million (EUR 26 million) in total DSR revenues for 2024.
Engineering:
grow EPC business
by leveraging existing experience
and know-
how into offering of
EPC services for commercial and
industrial clients, behind-the-me-
ter PV solutions and PPA agree-
ments in Australia and Europe.
The EPC business flourished in 2023, with external revenues nearly doubling YoY, driven pri-
marily by Australian EPC contracts (4.6 MWp) for commercial and industrial clients (C&I) includ-
ing such notable names as SCentre Group and Bunnings. The share of C&I projects in the Czech
and Slovak markets has also been growing over the past several months and is expected to
continue based on the recently started subsidy program in the Czech Republic. In Hungary, we
have signed our first 20-year PPA to develop, build, own and operate a 658 kWp solar PV power
installation. Early in 2024 we signed EPC contracts for a total installed capacity of 21 MWp in
Australia and overall backlog of EPC contracts for 2024 looks healthy.
O&M:
provide O&M services that
allow PV power plants to achieve
high generation results and reve-
nues PV power plants
O&M contracts increased by almost 300 MWp in 2023, bringing us closer to our strategic goal
of 1 GWp in 2024. The strongest expansion was recorded in Poland, with more than 200 MWp
added, followed by Hungary and Romania. The growth should continue in 2024 in all CEE mar-
kets.
Technology:
procure and trade
PV components through cooper-
ation with PV technology manu-
facturers.
2023 was difficult for the PV sector across the CEE region amidst significant oversupply and the
resulting drop in prices for PV components. Our technology business line was not immune to
these developments and holds increased level of batteries in its inventory. The expected pick-
up of EPC business in the Czech Republic should increase the demand for batteries, which
should help our technology segment. We have also increased marketing and sales activities
outside the Czech market, mostly in Slovakia, Poland and Romania, where PV + storage projects
are starting to receive subsidies. Overall, we expect the technology segment to pick up once
again in 2024.
Water:
deploy remediation solu-
tions for groundwater contami-
nation, with a
focus on PFAS
remediation.
Our pilot trial with the Australian Department of Defence demonstrated a reduction in PFAS
concentration of up to 80-100% from initial levels and was extended till April 2024, to review
the trial conclusions and identify opportunities for further application of the PFAS remediation
technology. Additionally, we began laboratory trials with the University of Technology in Sydney
on the in-situ remediation of PFAS in contaminated soil.
43
Corporate Highlights
Share Issue Related to the Acquisition of Lerta
Based on a General Meeting authorisation from 31 May 2021,
the Management Board of the Company resolved on 1 February
2023 to issue 1,238,521 new shares with a nominal value of EUR
0.01 each. This resolution was in line with the investment agree-
ment signed on 20 December 2022 with the founders of Lerta
S.A. Pursuant to the issuance of the new shares on 1 February
2023, the share capital of the Company has increased from EUR
600,000.00 to EUR 612,385.21. The new shares were issued
against a contribution in-kind consisting of 2,477,042 shares in
Lerta S.A., in line with the above-mentioned investment agree-
ment. With this step the acquisition process of Lerta S.A. was
completed and Photon Energy N.V. has become holder of 100%
of the share capital of Lerta S.A. Newly issued shares were in-
cluded in the collective deposit as mentioned in Section 12 of
the Dutch Giro Securities Act, and registered with the Czech and
Polish depositaries acting as secondary depositaries for the
Company’s shares. Newly issued shares were admitted to trad-
ing on the Prague and Warsaw Stock Exchanges as of 13 and 14
February 2023, respectively and the Quotation Board of the
Frankfurt Stock Exchange.
Resignation of Clemens Wohlmuth and Andrej
Horansky from the Position of CFO
On 7 March 2023, the Company announced the resignation of
Mr. Clemens Wohlmuth as the Group’s Chief Financial Officer.
Mr. Wohlmuth has been the Group’s CFO since 2012.
On 8 March 2023, the Management Board appointed Mr. Andrej
Horansky as the new CFO. Due to personal reasons, Mr. Horan-
sky resigned from his position as of 12 May 2023. The Group’s
CEO Georg Hotar assumed CFO responsibilities on an interim
basis until the appointment of new Group CFO, Mr. David Forth
on 1 February 2024 and is described in the Subsequent Events
section on page 46 of this report.
Completion of the Share Buyback Programme and
the Acquisition of 250,000 Shares
In June 2023, the Company completed the share buyback pro-
gramme announced on 16 December 2022, as the total number
of shares to be purchased under the programme had been
reached. Within the period from 19 December 2022 to 7 June
2023, the Company purchased 250,000 shares in the share cap-
ital of the Company for the total value of PLN 3.204 million (EUR
0.720 million), with an average price of PLN 12.82 per share.
Shares purchased under the programme constitute approx.
0.41% of the share capital and were acquired to meet the obli-
gations arising from the share purchase programme for the em-
ployees of the Photon Energy Group’s entities.
ESG Rating of ‘Very Good’ Renewed
In May 2023, the Company received a ‘very good’ sustainability
rating for its ESG practices and business model from imug rat-
ing, an independent institution that assessed the Company’s
policies and activities in the area of sustainability. imug rating
renewed its rating of ‘very good’ two years after an initial evalu-
ation, conducted in May 2021.
General Shareholders Meeting
On 21 June 2023, the General Meeting of Shareholders was held
at the Company’s premises in Amsterdam. Apart from the ap-
proval of 2022 annual financial statements and granting dis-
charge to the Management Board and Supervisory Board
members, the Annual General Meeting additionally: (a) granted
authorisation to the Board of Directors to acquire shares in the
share capital of the Company; (b) adopted a
Remuneration Re-
port and a Management Incentive Plan to Mr. Krzysztof Drozyn-
ski; (c) granted authorisation to the
Management Board to
issue shares and limit/exclude pre-emption rights to newly is-
sued shares. For more information, please see the Corporate
Governance section of this Management Report.
Repurchases of EUR Green Bond 2021/2027
In August 2023 the Company decided to take advantage of the
declining market prices of the EUR Green Bond 2021/2027 and
bought back on the market the nominal value of EUR 0.615 mil-
lion recording a capital gain of EUR 0.278 million realised on this
transaction.
Guidance Revision During Year 2023
On 17 August 2023 the Management Board revised its full-year
guidance, announced on 15 February 2023, and decreased es-
timations of consolidated revenues for 2023 from EUR 150 mil-
lion to EUR 110.0 million. At the same time, EBITDA guidance
was lowered from EUR 29.0 million to EUR 10 million.
Following the publication of the results for Q3 2023, on 13 No-
vember 2023 the Management revised its full-year guidance for
the second time and announced that due to the declining trad-
ing volumes of PV component trading, which continued in Q3
and afterwards, revenues were expected to be within the range
of EUR 75-80 million. At the same time, the Management Board
announced that EBITDA guidance of EUR 10 million was condi-
tional on the conclusion of ongoing sales negotiations for the
Group’s portfolio of PV projects under development.
The consolidated revenues for the year 2023 of EUR 70.649 mil-
lion came -5.8% below the lower threshold of the guided range.
EBITDA of EUR 3.706 million came -62.9% below the guidance;
this, however, was conditional on the completion of sales nego-
tiations for Polish PV project rights, which had not yet material-
ised,
and
resulted
in
the
shortfall
against
guidance.
Negotiations for the sale of the remaining portfolio are contin-
uing and are expected to be concluded by mid-2024.
Repayment of CZK Bond 2016/2023 with 6% coupon
In December 2023, the Company repaid the outstanding princi-
pal amount of the CZK Bond 2016/2023 with a 6.00% annual
coupon and monthly payments in the Czech Republic. This
bond (ISIN CZ0000000815) had a nominal value of CZK 30,000
and was traded on the Free Market of the Prague Stock Ex-
change. The outstanding amount due was CZK 76.2 million (EUR
3.1 million) and was repaid on 13 December 2023 in line with
the terms and conditions of the bond.
44
Operational Highlights
The Biggest Capacity Expansion in the History of Photon Energy Group
Proprietary IPP Portfolio
(MWp)
2023
2022
Czech PP
15.0
15.0
Slovak PP
10.4
10.4
Hungarian PP
51.8
51.8
Australian PP
14.7
14.7
Romanian PP
35.4
0
Total Proprietary Portfolio
127.3
91.9
Strong Electricity Generation up by 14.6% YoY Thanks to New Capacities Added in Romania
Electricity Generation
(MWh)
2023
2022
Generation Czech PP
15,989
16,671
Generation Slovak PP
10,558
11,353
Generation Hungarian PP
64,447
68,783
Generation Australian PP
27,742
24,800
Generation Romanian PP
21,069
0
Total Generation in the Period
139,805
121,607
Electricity Prices Continued to Decline, Hence the Decision to Return to FIT in 2024
Realised Electricity Prices
(EUR/MWh)
2023
2022
Czech PP
636
817
Slovak PP
263
263
Hungarian PP
90
235
Australian PP
61
111
Romanian PP
97
-
Total Proprietary Portfolio
161
292
Strongest Growth of O&M Contracts in the History of Photon Energy Group
O&M per Country
(MWp)
2023
2022
Czech Republic
98
95
Slovakia
15
15
Hungary
183
132
Australia
17
15
Romania
45
13
Poland
271
63
Inverter Cardio / Europe
51
50
Total
680
383
0
15,000
30,000
45,000
60,000
75,000
CZ
SK
HU
AU
RO
2022
2023
0
200
400
600
800
1,000
CZ
SK
HU
AU
RO
2022
2023
0
20
40
60
80
100
120
140
2022
2023
CZ
SK
HU
AU
RO
0
50
100
150
200
250
300
CZ
SK
HU
AU
RO
PL
Cardio
2022
2023
45
Operational Highlights
In the Management’s view, the most important events which in-
fluenced the Group’s operations and consolidated financial re-
sults in year 2023 include:
35.4 MWp Added to IPP Portfolio
Between February and September 2023, the Group completed
and grid-connected its first batch of Romanian PV power plants
with a total capacity of 31.5 MWp, located in Siria, Aiud, Calafat,
Teius, Faget and Sahateni. An additional 3.9 MWp, located in
Faget, was commissioned in December 2023, bringing the total
capacity of the proprietary portfolio to 127.3 MWp as of the end
of 2023. Due to impediments related to the commissioning and
DSO contracting processes, new power plants in Romania were
commissioned significantly behind the assumed schedule.
Completion of Construction Works on 20.1 MWp in
Romania.
In mid-2023, Photon Energy commenced construction on the
second batch of new power plants in Romania, with a total ca-
pacity of 20.1 MWp. The construction works were technically
completed by the end of 2023, but only one power plant, with
the capacity of 3.9 MWp (Faget 2), was commissioned in the re-
porting period. The remaining 16.2 MWp were technically com-
pleted, in the connection process, and are described in the
Subsequent Events section on page 46 of this report.
Electricity Generation of 139.8 MWp, up 15.0% YoY
The generation results of the proprietary portfolio in 2023 came
in at 139.8 GWh, up by 15.0% YoY, compared to 121.6 GWh in
2022. This was possible thanks to additional new capacities
added in Romania. This expansion came 16.2% below the en-
ergy forecasts, due to delays in the commissioning process of
the first batch of 31.5 MWp power plants in Romania and a
lower annual specific yield.
Declining Electricity Prices Resulted in Lower Reve-
nues from Electricity Generation
Electricity prices on the day-ahead market declined on all mar-
kets where the Group was selling electricity on a merchant basis
it is from 82%-87% of its IPP portfolio between Jan and Dec
2023.
Average Energy Market Prices
(EUR/MWh)
In Hungary the average energy prices in 2023 of 107 EUR /MWh
declined by -60.7% YoY from the average of 272 EUR/MWh. Sim-
ilar trend was observed in Romania where prices went down
from 265 EUR/MWh in 2022 to 104 EUR/MWh in 2023, -60.9%
YoY. In the Czech Republic, the average energy prices amounted
to 101 EUR/MWh in 2023 compared to 248 EUR/MWh in 2022,
-59.3% YoY. In Australia, the situation was slightly different, with
the first quarter still recording positive price development
trends when the Australian power plants generated the most
energy due to the summer season. Since April 2023, the situa-
tion has changed and prices have started declining resulting in
an average prices of 98 AUD/MWh (61 EUR/MWh) in 2023 com-
pared to 184 AUD/MWh (EUR 114/MWh in 2022), lower by -47%
YoY.
This resulted in revenues from sale of electricity and certificates
in 2023 of EUR 21.407 million compared to EUR 34.897 million
in 2022, down by -38.7% YoY.
DSR Capacity of 375 MW Secured for 2024
On 16 March 2023, the Group’s subsidiaries Lerta JRM Sp. z o.o.
and Lerta S.A. (part of the Company’s New Energy division) have
succeeded in the additional 2024 Polish capacity auction with
375 MW of Demand Side Response (DSR). With the previously
contracted capacity of 14 MW for 2024, the Company’s total DSR
capacity of 389 MW will lock-in PLN 116.8 million (EUR 26 mil-
lion) in total DSR revenues for 2024.
EUR 21.9 Million Financing for Romanian Power
Plants
On 17 March 2023, the Group closed a nonrecourse project re-
financing agreement in the amount of EUR 21.9 million with
Austrian Raiffeisen Bank International (RBI) for its portfolio of
PV power plants with a total installed capacity of 31.5 MWp. De-
tails on terms and repayment schedule can be found in Note
31: Loans and Borrowings of Financial Statements.
Tap of EUR 2.5 Million Green Bond 2021/2027
In March 2023 the Company increased its 6.50% Green EUR
Bond 2021/27 (ISIN: DE000A3KWKY4) to a total amount of EUR
80.0 million. The additional nominal amount of EUR 2.5 million
was placed through a private placement to institutional inves-
tors in the UK, Switzerland, Germany, and Austria. More details
on this bond can be found in Note 32: Loans and Borrowings.
RayGen’s Solar PV Project Has Officially Opened
On 31 August, the RayGen Power Plant in Carwarp, Victoria
(near Mildura), with 4 MWp of solar generation capacity, a 2.8
MW AC grid connection and 50 MWh of storage was officially
opened. This is the world’s highest efficiency solar generation
power plant and contracted its output to one of Australia’s larg-
est utilities, AGL Energy. With the successful commissioning of
Carwarp power plant, RayGen focused on the next round of fi-
nancing, which was completed and resulted in the revaluation
of share option and equity stake that the Company holds in Ray-
Gen. For more details on the revaluation impact please see
Note 23: Other Financial Investments.
O&M Contracts of Nearly 300 MWp Signed
During 2023, Photon Energy signed new contracts for O&M ser-
vices, including full O&M and inverter maintenance solutions,
for a total capacity of approximately 296 MWp. New clients were
acquired primarily in Poland (208 MWp) and Hungary (51 MWp).
In Romania additions result mainly from new capacities added
of 35.4 MWp. Small capacities were added also in the Czech Re-
public, Slovakia and Australia.
272
247
265
113
107
101
104
60
0
100
200
300
HU
CZ
RO
AU (NSW)
2023
2022
46
Subsequent Events
Return to Feed-in-tariffs in the Czech Republic and
Hungary
Towards the end of 2023, the Management Board took the de-
cision to switch the Czech portfolio from the green bonus sys-
tem back to the feed-in-tariff (FIT) for the year 2024. The same
decision has been taken regarding our Hungarian portfolio. This
decision, amidst declining electricity prices in 2023, indicates a
strategic approach to mitigate the risk of low energy prices and
its impact on the Group's profitability.
As a result of this decision, since 1 January 2024 all power plants
in the Czech Republic have returned to the FIT system out
of which 795 kWp are entitled to a FIT in the amount
of 684 EUR/MWh while the remaining 14.2 MWp will receive a
FIT of 637 EUR/MWh throughout 2024.
As of 1 April 2024, Hungarian power plants with the capacity of
35.0 MWp were also switched to FIT entitled to receive HUF
47,040 (EUR 119.25) per MWh, until the end of 2024 and subject
to indexation in future years.
Remaining 11.2 MWp in Hungary will remain in the merchant
model selling electricity on energy markets. The decision to re-
turn to the FIT system was possible thanks to Government De-
cree No 787/2021 (XII.27.), published on 27 December 2021,
which came into effect on 1 January 2022, and which allows PV
power plants to temporarily exit the support schemes and then
return to the respective support schemes at any time after a 12-
month period. In the case of Photon Energy Group’s assets, the
12-month period passed on 1 April 2023.
As a result of both decisions, as of 1 April 2024 Photon Energy
Group’s total proprietary portfolio of 132.8 MWp has been re-
balanced with 66.2 MWp of installed capacity under Feed-in-
Tariffs and 66.6 MWp remaining in the merchant model, which
results in an almost even split between FIT and merchant. The
Management Board of Photon Energy N.V. is convinced that
based on current electricity prices in Hungary and the Czech Re-
public, and the remaining market outlook for this year, the re-
turn to the support mechanism in Hungary, as well as the Czech
Republic, was a justified decision. The rebalancing of the reve-
nue model of the IPP portfolio provides the best risk-adjusted
value solution for the Group.
Appointment of David Forth as the New Group CFO
As of 1 February 2024, the Board of Directors appointed David
Forth as Group Chief Financial Officer, effective 1 February
2024.
Mr. Forth will report directly to the Board of Directors of
Photon Energy Group. To learn more about Mr. Forth’s resume
please see ESPI 3 / 2024
here
.
First 20-Year On-site PPA Agreement With FORVIA
On 30 January 2024 a Hungarian subsidiary Photon New Energy
Alfa Kft. signed a 20-year on-site power purchase agreement
with FORVIA Clarion Hungary, a subsidiary of the global auto-
motive industry leader FORVIA, for the construction and opera-
tion of an on-site solar PV power plant with an approximate
capacity of 658 kWp. As we are seeing increasing demand from
corporate sector for turn-key off-balance sheet solutions tai-
lored to their renewable energy needs and we intend to provide
more of such solutions based on our 15-year experience in the
solar industry and our energy market capabilities.
Photon Energy Australia Secured a 20.8 MWp EPC
Contract
In February 2024 Photon Energy Australia signed an contract for
a 20.8 MWp solar project. Photon Energy was also selected to
provide ongoing O&M services for the project moving forward.
Financing facility of up to EUR 15 Million with EBRD
On 24 January, the European Bank for Reconstruction and De-
velopment (EBDR) approved the financing facility of up to EUR
15 million.
The funds will be used for the completion of power
plants which are currently under construction, as well as the
commencement of construction works on new ready-to-build
projects in Romania. Other objectives of this financing facility
relate to research and development costs for Photon Energy’s
Virtual Power Plant software platform and working capital re-
lated to capacity market collaterals. The EBRD loan is part of the
funding provided by the European Union. The loan agreement
is currently under negotiation.
Polish Capacity Market Contract for 316 MW in 2025
In March 2024, Photon Energy succeeded in the additional 2025
Polish capacity auction with a contracted Demand Side Re-
sponse capacity of 315 MW. With the previously contracted ca-
pacity of 10 MW for 2025, the Company’s total capacity
obligation of 326 MW will ensure PLN 56.1 million (EUR 13 mil-
lion) in Capacity Market revenues for 2025.
5.5 MWp Connected in Romania
As of the date of this report, new power plants with a total ca-
pacity of 5.5 MWp, were connected to the grid in Romania.
These installations include Bocsa (3.8 MWp) and Magureni (1.7
MWp). As of the date of this report, Photon Energy’s total IPP
portfolio amounts to 132.8 MWp.
Research and Development
In 2023 Photon Energy Group invested approximately EUR 2.8
million into R&D to address the strategic needs of our business.
The main areas of R&D include:
1)
Developing new functionalities for our Virtual Power Plant
(VPP) platform – a digital technology to aggregate energy
from renewable sources including solar, wind and biogas,
energy storage facilities, grid operators and consumers.
Our VPP platform, which was acquired through the acqui-
sition of Lerta, required upgrading to significantly extend
and scale its capacity to aggregate customer generation
assets. New functionalities aim to expand primarily our
Demand Side Response and energy services and allow us
to extend our market access in this segment and provided
more flexibility to the energy system and the grid. The to-
tal R&D expenses related to VPP amounted to EUR 2.57
million in 2023.
2)
Our continued R&D of our proprietary In-situ nanoreme-
diation technology is showing very encouraging results in
removing per and polyfluoroalkyl substances (PFAS) from
groundwater and soil, and we are now concentrating our
efforts on commercialisation. In 2023 we expensed in to-
tal about 0.25 million euro on the following R&D projects:
47
a)
Enhanced In Situ Bioremediation for Contaminated
Land Remediation (EiCLaR) – a European/Chinese
consortium with the aim of developing scientific and
technical innovations for in-situ bioremediation
technologies.
b)
LifePopWat – a European project promoting techno-
logical innovations based on constructed wetlands
for the treatment of pesticide-contaminated waters.
c)
LIFE4ZOO – water resources management in visitor
attractions – a system which meets the challenges
of both suboptimal water-use and low resilience to
water shortages that are faced by zoos. This project
demonstrates a structured and integrated ap-
proach to water management that supports local
water re-use, decreases wastewater treatment de-
mand, avoids surface water risks, and buffers water
in engineered wetlands.
Human Resources
We are proud to have very diversified, skilled and dedicated
employees who are driven by the values and vision of Photon
Energy Group. Part of our success derives from our
commitment to create equal employment opportunities, foster
diversity, inclusion, and a sense of belonging. We are proud to
report that in 2023 our adjusted Gender Pay Gap ratio
amounted to 0.3%, which means that on average women in
Photon Energy Group earned only 0.3% less than their male
counterparts. This is an excellent result confirming our
commitment to equality and inclusion. We strive to ensure
supportive and productive work environment where employees
feel respected and recognised for their efforts. In 2023 we
implemented a self-evaluation Performance and Development
tool, which is directly linked to the Group’s values and strategic
goals and is designed to motivate our employees to deliver on
those goals.
Overall remuneration of employees is a combination of a fixed
salary and variable bonus related to their performance.
Additional benefits such as gym cards, meal vouchers, medical
care are offered in line with the local market practises. Some of
our employees participate in the Employee Share Purchase
Programme, which gives them a right to receive an additional
10% bonus of the gross salary net of taxes, paid out in the
Company’s shares. More information on our commitments
related to our human resources can be found in ESG section of
this Management report.
As of 31 December 2023, Photon Energy Group employed 348
employees compared to 220 employees as of the end of 2022,
translating into 338 FTE, compared to 212 FTE as of the end of
2022. This increase of the total number of employees YoY is
mainly attributable to the addition of Lerta’s employees but also
the organic expansion of Photon Energy Group.
Total Number of Employees and FTE Employees
Full-time equivalent (FTE)
of 1.0 means that the person is equivalent to a
full-time employee, while an FTE of 0.5 signals that the employee is only half-
time.
Sponsorship & Donations
In line with the Warsaw Stock Exchange Best Practices 2021, Photon Energy Group discloses the following amounts which were donated
to various public institutions, sport clubs and other organisations in 2023.
No
Type of donation
Organisation
Amount
1
Sport
Football club Svatoslav
€ 836
2
Public institutions
City of Zdice
€ 12,637
3
Public institutions
SH CMS – Fire Brigade Svatoslav
€ 836
4
Other
Miscellaneous
€ 1,500
Total
€ 15,810
Amsterdam, 30 April 2024
David Forth, CFO of Photon Energy Group since 1 February 2024
212
338
220
348
0
100
200
300
400
2022
2023
FTE
Number of employees
48
Risk Management & Internal Control Systems
Internal Risk Management Systems
Risk management is an essential part of the business manage-
ment systems, providing basis for the decision-making pro-
cesses and optimizing the probability and the impact of risks
that the Group is exposed to. The Group’s risk management sys-
tems were established to identify and analyse risks faced by the
Group, to set appropriate risk limits and control systems, and
to monitor risks and adherence to those limits. The main focus
is placed on the principal risks which could materially impact
operational and financial results. The Group focuses on risks
with a high impact on the business and/or high probability of
occurrence, taking into consideration the Group’s risk appetite.
Our risk appetite refers to the nature and extent of risks we are
willing to incur to achieve our strategic objectives, taking into
account the current financial standing of the Group. Among
others, the risk appetite considers possible revenue growth,
earnings sustainability, capital management, environmental
impact, employee well-being and safety, and value creation for
all stakeholders. Proper identification of risks significantly re-
duces but does not eliminate the possibility that other risks can
occur. Other events, facts or circumstances not presently
known to the Group, or that the Group currently deems to be
immaterial may, individually or cumulatively, prove to be im-
portant and may have a negative impact on the Group’s busi-
ness, financial condition, results of operations and prospects.
The Board of Directors is ultimately responsible for establish-
ing, controlling and enhancing risk management and internal
control systems. Day-to-day management of principal risks is
performed by the risk manager, who reports directly to the
Chief Executive Officer.
Main areas of risk management sys-
tems include analysis of company risks, development and im-
plementation of risks strategies, on-going risks assessment of
customers and vendors in line with KYC and KYS policies, estab-
lishing VAR limits settings and real time monitoring in relation
to energy markets, currency and interest rates. Other areas of
risk monitoring systems include operational risks related to the
group structure and tax systems.
In 2023, the Audit Committee performed a thorough review of
the internal risk management systems, controlling and legal
compliance policies, throughout the year and during its onsite
visits. The assessment included the evaluation of the existing
processes in place, human resources, its competences, and re-
sponsibilities as well as the reporting structure within the or-
ganization. The chairman of the Audit Committee performed
the analysis through the consultations with the responsible per-
sonnel (the management, head of risk, the head of accounting
and consolidation, head of legal, head of compliance). He re-
viewed the procedures and evaluated whether adequate re-
sources are in place and discussed relevant topics with external
auditors. The results of this analysis were discussed with the
Management Board. It was concluded that given the size of the
Company, the current measures with respect to internal risk
management and control systems are appropriate and satisfac-
tory.
Last not least, the Group aims to develop a disciplined and con-
structive control environment in which all employees under-
stand their roles and obligations and adhere to internal policies.
Internal Control Systems in Connection with Finan-
cial Reporting
With respect to financial reporting, the Company’s general ob-
jective is to have reliable reporting and ensure that transactions
are recorded and reported completely and correctly.
Key elements of the internal control system include budgeting,
defining operational key performance indicators (KPIs) and fi-
nancial goals set for each business segment on annual basis.
Budgeting and forecasting processes are performed primarily
by the controlling department with close cooperation with the
individual business representatives and with support of project
financing, asset management and consolidation and reporting
departments. Potential deviation between budget actuals is dis-
cussed and analysed by stakeholders and responsible manag-
ers and corrections are incorporated into the updated versions
of forecasts/budgets. The management monitors the progress
on achieving KPIs and the actual results of the Group’s operat-
ing activities. The business reviews are performed on quarterly
basis. Our financial reporting procedures and internal control
systems are continuously improved, to ensure reliable and
transparent presentation of the financial results.
The Board of Directors reviews the Group’s financial perfor-
mance and assesses whether adequate processes are in place
to evaluate the risks and effectiveness of control measures re-
lated to the financial reporting process at all levels of the organ-
ization. The Audit Committee oversees the Company’s finances,
financial reporting as well as the Internal Audit functions, as
part of the Company’s corporate governance procedures.
In 2023, the management identified deviations from expected
results and communicated those revised expectations on
17 August and 13 November, i.e. upon publication of the quar-
terly results.
During preparation of the Annual Report and Accounts for
2023, the management identified the errors in Q4 2023 report
published on 19 February 2024 and published the correction to
Q4 2023 results in form of ad-hoc report on 18 March 2024. The
errors result from accrued income from certain intercompany
transactions being incorrectly identified as third-party reve-
nues. The impact on EBITDA follows directly from the reduction
in revenues but with some mitigations. The Group has taken
steps to immediately warn the market of possible deviations
from the expected results published on 19 February 2024 and
to improve its internal control procedures related to intercom-
pany transactions to avoid such errors occurring in the future.
The risks related to the internal control systems in financial re-
porting has been clearly identified and certain measures were
taken to mitigate those risks to the highest possible extent by
our top management within their relevant function.
Compliance Management
The Group has a very low risk acceptance level with regards to
risks relating to compliance with legislation and regulations.
The Group’s Code of Ethics and Anti-bribery and Anti-corruption
Policy act as control measures against bribery and corruption,
alongside the Misconduct Reporting Policy.
Tax policies are formulated by both the Group and individual
companies. The Group follows the rules to tax profits in the
countries it provides its services. The Group does not engage in
any aggressive tax planning or structuring activities. There is no
formalised tax policy, however certain procedures are in place:
49
1)
The Group engages certified tax advisors in each country
in which it operates to comply with local tax require-
ments.
2)
The Group regularly monitors developments in taxation
and related areas and continually evaluates their impact
on the Group. Identified tax risks are regularly monitored
and evaluated.
3)
The Group undertakes analysis of tax risks before enter-
ing new markets.
Principal Risks Related to the Group’s Business and the Industry in Which It Operates
Risk of Dependence on Support of Photovoltaics
The Group is dependent on the economic development of the
photovoltaic market. In the majority of countries worldwide the
photovoltaic sector is not yet competitive without state subsidy
programs, especially in comparison with the use of conven-
tional energy sources (e.g. nuclear power, coal, and natural and
shale gas). Therefore, the commercial operations of the Group
are influenced by the continuation of state-managed subsidy
programs for photovoltaics.
In July 2021, the Slovak Republic decided to prolong and reduce
the feed-in tariff for PV power plants connected in 2010 and
2011. The value of Company’s Slovak portfolio is not impacted
by any of the measures adopted by the Slovak government. In
the Czech Republic, a price cap of EUR 180 per MWh has been
introduced from 1 December 2022 to 31 December 2023 for PV
installations with an installed capacity exceeding 1 MWp. Above
the cap price a 90% tax applied. However as of 1 January 2024
the Group has switched its Czech power plants from merchant
model back to feed-in-tariffs (FIT). Out of 15.0 MWp portfolio
currently 0.8 MWp is entitled to a FIT in the amount
of 684 EUR/MWh while the remaining 14.2 MWp will receive a
FIT of 637 EUR/MWh throughout 2024.
In June 2022 the Hungarian government issued a decree intro-
ducing a 65% tax on the excess revenues (that is above the feed-
in-tariff/contract-for-difference price of EUR 85 per MWh) gen-
erated by solar PV power plants which had either exited one of
the support schemes or had been awarded a METÁR license in
auction but did not execute the contract-for-difference with the
designated Hungarian state entity for the financial years 2022
and 2023, excluding power plants with built-in capacity under
0.5 MW. As of 1 April 2024, some of the Group’s Hungarian
power plants with capacity 35 MWp were switched from mer-
chant model to FIT and shall receive FIT of 47,040 (EUR 119.25)
per MWh. The remaining 11.2 MWp of power plants will con-
tinue selling electricity on the energy market.
The Romanian government has introduced a price cap of RON
450 per MWh of solar PV generated electricity from 1 Septem-
ber 2022 until 31 March 2025. Above the price cap an 80% soli-
darity tax applies. However, in March 2022 Law 27/2022 has
been passed which explicitly exempts all new electricity gener-
ation capacity commissioned after 1 September 2022 from any
price caps. Based on the status quo the Company’s power
plants in Romania will not be subject to the price cap.
Based on the status quo of price caps and windfall taxes
adopted by the governments in the Group’s core markets in the
CEE region the Management Board of the Company does not
expect any negative impact on the prices and revenues ex-
pected in the Czech Republic, Slovakia and Hungary. In Romania
all power plants sell electricity on the merchant basis hence do
not rely on any form of state support.
The Group assesses the probability of this risk as medium. If the
risk occurs, the impact on the Group’s operations and financial
results would be moderate.
Risk Associated with the Valuation of Special Pur-
pose Vehicles
In its Consolidated Financial Statements, the Group is using for
revaluation of the special purpose vehicles (SPVs) and its prop-
erty the Discounted Cash Flow (DCF) method based on IAS 16
rules. In the financial statements, the updated value is higher
than the purchase price, and consequently also above the ac-
quisition costs. There is a risk that the assumptions and foun-
dations of the evaluation will prove to be incorrect or overly
favourable and that extraordinary impairment in the balance
sheet of the company will be necessary. Extraordinary impair-
ment of this kind could harm or burden the balance sheet as
well as the results of the Group’s operating activities. The Group
assesses the probability of this risk as medium, with a poten-
tially moderate impact on the Group’s operations and financial
results.
Risk Associated with Projects in the Pipeline
In addition to the continued monetisation of its current portfo-
lio of photovoltaic installations in operation, the Group also in-
tends to develop and either sell or operate additional PV
projects, including both projects developed by the Group and
those acquired from third parties. Development and/or acqui-
sition of a project is always based on an economic calculation
which involves certain assumptions, such as the development
of market interest, feed-in tariff, electricity prices or the price of
green certificates. If these assumptions should prove to be in-
correct, or if certain factors develop differently to what was
planned, this could have an adverse effect on the profitability
of a PV installation. All of the aforementioned factors could have
a material adverse effect on the Group’s business, results of op-
erations or prospects. The Group assesses the probability of
this risk as medium, with a potentially moderate impact on the
Group’s operations and financial results.
Regulatory Risk
In the countries where the Group operates, the market for solar
projects, solar power products and solar electricity is heavily in-
fluenced by national, state and local government regulations
and policies concerning the electricity utility industry, as well as
policies disseminated by electric utilities. These regulations and
policies often relate to electricity pricing. It is the Group’s inten-
tion to integrate PV power plants that are not supported by the
state into its portfolio. However, in these cases there is the risk
of reduced income from the integrated power plants due to fall-
ing electricity prices. In the worst-case scenario, there could be
low or no positive operational cash flow generated, which in
turn would lead to a situation where there can be no pay-outs
to the Group. The Group intends to actively manage the reve-
nues from merchant power plants using electricity market
hedging instruments (where available) and/or by entering into
PPA agreements with various durations and volumes. In 2023,
the management took a decision to return to FIT in the Czech
Republic and Hungary, which was effective as of 1 January and
1 April, respectively, hence reducing its exposure to the energy
50
prices fluctuations but increasing this regulatory risk. Depend-
ing on the scope, any of these circumstances could have a po-
tentially adverse influence on the Group’s financial situation,
status and results. The Group assesses the probability of risk as
medium, with a potentially moderate impact on the Group’s op-
erations and financial results, mitigated by the Group’s geo-
graphical diversification.
Risk Associated with Cybersecurity
Increased threats of potential cyber risks and related require-
ments that will have to be implemented because of the NIS 2
Directive (energy industry considered as the essential infra-
structure) has placed IT and cybersecurity high on the strategic
agenda. The NIS 2 Directive entered into force in January 2023
and requires Member States to translate the Directive into na-
tional legislation by October 2024. The directive sets out cyber-
security risk-management measures and reporting obligations.
NIS2 contains stronger requirements for a broader scope of ac-
tors, including a broader set of mandatory cybersecurity risk-
management measures and new incident notification require-
ments. For organizations in scope of this directive, new cyber-
security requirements will be imposed. With the translation into
national legislation yet to be developed, there is still some un-
clarity on what to expect regarding the new requirements.
The Company carried out an ISO/IEC 27001 audit. The audit
aimed to ensure the confidentiality, integrity, and availability of
information assets within the organization. Based on the as-
sessment, security status within the Company is considered on
low level. Most of the controls are not formalized, monitored,
and tracked. We devised an action plan based on the audit find-
ings, which is already being implemented. A Policy on Use of IT
assets have been developed as a first step. The policy objective
is to contribute to the protection of the Company assets, train,
and guide employees, provide clear outline and information on
how to prevent cyber-attacks and prevent the release of confi-
dential information. The goal is to implement secure processes
and effective controls and create a safe culture and environ-
ment.
The Group has several cyber security systems in place and is
permanently updating them. Document storage is cloud only
with backup to a different cloud. Servers hosting business criti-
cal applications are deployed in cloud environment, all commu-
nication with these servers is secured with encryption. These
cloud servers are backed up to our on-site server. Communica-
tion concerning applications operated by Photon Energy Group
takes place using secure and encrypted protocols. Every em-
ployee is acquainted with the cybersecurity rules during the
onboarding process and documents with these rules are avail-
able on the intranet. User login is secured with MFA (multi-fac-
tor authentication) to protect against credential leaks. We have
also implemented SSO (single-sign-on) where possible to re-
duce password usage / possibility to compromise the password.
An IT helpdesk is also accessible to report any issues encoun-
tered in this area. The Group assesses the probability of this risk
as relatively low with a potentially moderate impact on the
Group’s operations and financial results.
Principal Financial Risks
The Group has exposure to the following financial risks:
►
Sovereign
►
Operational
►
Currency
►
Credit
►
Liquidity
►
Interest Rate
►
Inflation
►
Force Majeure
In the notes to the Consolidated Financial Statements, infor-
mation is included about the Group’s exposure to each of the
above risks, the Group’s objectives, policies and processes for
measuring and managing risk, and the Group’s management of
capital. Please refer to Note 6. Financial Risk Management for
the detailed description on those risks.
Climate Change-related Risks
Climate change represents both strategic and operational risks
to our business. These can be grouped as physical risks and
transitional risks. Physical risks include greater severity of flood-
ing, droughts or other extreme weather events which could dis-
rupt our operations and supply chain. Transitional risks range
from regulatory frameworks and the rising price of carbon to
the
viability
and
customer
acceptance
of
emerging
technologies. Another transitional risk is our ability to set and
meet Paris-aligned targets.
Our actions related to climate change mitigation are detailed in
the Group’s Sustainability reports. Our 2023 Sustainability Re-
port does not represent a part of this Annual Report 2023.
Please refer to our 2023 Sustainability Report which is available
on our website in section
sustainability
.
Physical Risks
Risk of Natural Disasters
The Group’s business could be materially and adversely af-
fected by natural disasters or other catastrophes, such as earth-
quakes, fires, floods, hail, windstorms, severe weather
conditions and environmental accidents, which could poten-
tially cause power loss, communication failures, explosions or
similar events. As a result of any damages to the Group’s facili-
ties, the Group could have to temporarily suspend part or all of
its facilities’ operations. Furthermore, authorities could impose
restrictions on transportation and implement other preventive
measures in affected regions to deal with a catastrophe or
emergency, which could lead to the temporary closure of the
Group’s facilities and declining economic activity at large. More-
over, if a natural disaster results in the damage of any of the
Group’s PV power plants, the Group’s ability to fulfil its liabilities
may be considerably impaired, particularly if the damage is not
covered by insurance. All of the aforementioned circumstances
51
would have a significantly adverse effect on the Group’s finan-
cial situation, status and results. The Group assesses the prob-
ability of risk as low, with low potential impact on the Group's
operations and financial results thanks to the geographic diver-
sification of the Group’s business.
Meteorological Risk
The performance and therefore the earning potential of the
companies within the Group are often dependent upon mete-
orological conditions. Certain revenues for a generated kWh of
energy are admittedly guaranteed on the basis of the state sub-
sidy programs; however, the volume of energy generated de-
pends on the period of sunshine and the sun’s radiance. The
Company’s subsidiaries have used certain historically based as-
sumptions in cash flow planning. It is, however possible that cli-
matic conditions could change in the future and that
predictions regarding weather patterns and hours of sunshine
could prove incorrect. In cases such as these, electricity gener-
ation at PV power plants would be below the expected level,
adversely affecting the asset, financial and earnings positions of
the respective project companies and on the Group as a whole.
The earnings from PV power plants are subject to seasonal fluc-
tuations in the weather. As such, earnings are higher in the
summer months and fall off significantly in winter. The compa-
nies within the Group try to adapt their payment obligations,
especially with regard to interest and loans, to incoming pay-
ments. However, it cannot be ruled out that such adaptations
may not always be possible, which could result in an adverse
effect on the asset, financial and earnings position of the Group.
With the realisation of investment projects in Australia, the
overall financial liquidity of the Group will become less seasonal
due to the diversification of locations in the northern and south-
ern hemispheres. Additionally expansion of the business
model, upon acquisition of Lerta and addition of new revenues
streams from the capacity market and electricity trading, which
is negatively correlated to the generation of power plants, could
mitigate this risk further. The Group assesses the probability of
risk as low, with low potential impact on the Group’s operations
and financial results.
Transitional Risks
Environmental Risk
In environmental matters, the Group must comply with laws,
regulations and directives valid in the location of each PV power
plant; these laws regulate such things as airborne emissions,
sewage, the protection of soil and groundwater as well as
health and safety. Transgressions against these environmental
provisions can be pursued according to civil, criminal and public
law. In particular, temporary provisions could encourage a third
party to begin a legal process or to demand costly measures to
control and remove environmental pollution or to upgrade
technical facilities. The properties necessary for PV power
plants are partially owned by the respective SPV. It cannot be
ruled out that sites may be contaminated. The respective SPV is
responsible for the removal of any pollution, regardless of the
cause. This could result in liability risks and costs related to ad-
ministrative orders or requirements. All of these circumstances
could have a negative impact on the financial situation, status
and results of the Group. The Group assesses the probability of
this risk as low, with low potential impact on the Group’s oper-
ations and financial results.
Climate Governance
A key element of the Group’s increasing focus on sustainability
is the development of strong ESG practices. In adopting a stra-
tegic approach to sustainability, the Group addresses material
external risks, to become more resilient and adaptable in the
face of challenges such as climate change and creating a space
for new ideas and creative responses. In 2020, we laid the foun-
dations for strategic management, controlling and reporting
practices that are fully geared toward sustainability. A sustain-
ability department works closely with the management board
and representatives from several business units within the
Group. The objective of the department is to monitor the stra-
tegic coordination of the Company’s sustainability plans. Be-
yond the Company’s work developing solar energy and clean
water solutions, various policies are in place to ensure that our
dedication to environmental causes is also reflected in our in-
ternal practices:
►
All of our field operations are subject to local environ-
mental regulations, which we strictly adhere to.
►
When disposing of waste, all recyclable materials such
as metal, wood, plastic, glass and paper are sorted and
recycled.
►
We generally do not use chemical fertilisers or pesti-
cides for landscape management.
►
For the cleaning of PV panels, we use only demineral-
ised water, no chemical agents.
►
When clearing land to construct new power plants, we
conduct in-depth biodiversity studies and implement
measures to ensure that any unavoidable impact is min-
imised or reversed.
►
We follow all local guidelines and regulations regarding
community involvement and consultation.
►
When working with subcontractors, we prioritise local
suppliers to have a positive impact on the local econ-
omy through job creation.
Our actions related to climate change mitigation are detailed in
the Group’s Sustainability reports. Our 2023 Sustainability Re-
port does not represent a part of this Annual Report 2023.
Please refer to our 2023 Sustainability Report which is available
on our website in section sustainability.
The complete list of our ESG commitments can be found in
2023 Sustainability Report which is available on our website in
section
sustainability
.
52
Sustainability
2023 Highlights
For further details, read our 2023 sustainability report at
ir.photonenergy.com/sustainability
.
Please note that sustainability report is not a part of the Annual Report for the year 2023.
Environmental Data
2023
2022
2021
Percentage of revenues connected to activities which
create sustainable value
100%
100%
100%
Clean energy generated by our Proprietary portfolio
of PV power plants
139.8 GWh
121.6 GWh
103.3 GWh
Assessment of our carbon footprint across scope
1 and 2 emissions (CO
2
e tonnes)
670.8
409.6
342.8
CO
2
e
58,286 tonnes
(+19.0%)
49,013 tonnes
(+11.7%)
43,867 tonnes
(+47.8%)
Social Data
Number of full-
time staff / number of employees
338 / 348
(94%)
212 / 220
(96%)
141 / 144
(98%)
Percentage of female employees
37%
37%
37%
Number of employees who completed training
courses
230 / 348 (66%)
145 / 220 (66%)
64 / 144 (44%)
Turnover ratio
35%
23%
36%
Adjusted Gender Pay Gap between male and female
employees (as a % of male gross salary)
* analysis performed based on comparable job positions
0.3%
2.3%
na
Lost time injuries
0
0
0
Governance Data
Contributions to political parties as percentage of
total revenues
0%
0%
0%
Claims against the Company ruled by a court as a
percentage of total revenues
0%
0%
0%
Gender equality Board of Directors (female/male)
0%
0%
0%
Gender equality Supervisory Board (female/male)
33%
33%
50%
Responsible procurement, subjected to due diligence
100% of our
technology purchases
100% of our
technology purchases
95% of our
technology purchases
Tracking our
CO
2
e footprint
across
Scope 1, 2 emissions, and some elements
of Scope 3 emissions.
Employee engagement
and
ESG survey,
Gender Pay Gap ratio of 0.3%.
CSR Day program
as part of our
donation policy enhancing our
engagement with local communities.
Ensuring the quality and sustainability of
our operation and maintenance through
ISO recertification.
Stakeholder Engagement Policy
to reinforce a constructive dialogue
with stakeholders.
Third-party Conduct Principles to
improve our
due diligence process on
human rights in our supply chain.
53
Sustainability Rating
Our ESG performance was reconfirmed in May 2023 as 'very
good', scoring 77/100 from imug | rating, a leading German sus-
tainability rating agency. Independent sustainability rating en-
sures that we hold ourselves to the highest standards and
provide stakeholders with confidence in our genuine commit-
ment to a sustainable business model.
imug | rating has over 20 years of experi-
ence in sustainable finance and socially re-
sponsible investment (SRI), making it one of
the leading sustainability rating agencies in
Germany and a specialist in customised
ESG research.
Environment
Environmental stewardship is integral to our operations at Pho-
ton Energy Group. We adhere strictly to local environmental
regulations, ensuring compliance and accountability in all our
field operations. From waste management to landscape
maintenance, we prioritise sustainable practices to minimise
our ecological footprint and uphold our commitment to envi-
ronmental preservation.
►
Monitoring Environmental Impact
The potential negative environmental impact of our
projects is identified during the project development
stage, and corresponding investigations are carried out
for small-scale projects. For larger projects, mainly in
Australia, environmental impact assessments (EIS) are
carried out. During such assessments, a large amount
of information on the environmental impact of each
project is documented and then published as part of the
approval process. We take great care assessing, manag-
ing, and monitoring any possible impacts on local com-
munities.
We are committed to minimising our impact on the en-
vironment, and to ensure the health and safety of com-
munities impacted by our work, by complying with
relevant state and local environmental policies as well
as industry-specific legislation. During the construction,
operation, and maintenance of our PV power plants, we
have not encountered any incidents or injuries impact-
ing the communities neighbouring our sites.
►
Comprehensive Waste Management
We have implemented an Extended Producer Responsi-
bility (EPR) system for on-site construction waste man-
agement. This proactive approach ensures proper
disposal and recycling of waste generated during the
construction of our PV power plants. During the con-
struction phase of Faget, Calafat, Magureni, Auid, Teius,
Siria and Sahateni PV power plants in Romania, 47.9
tonnes of waste were collected and either reused or re-
cycled. Through partnerships with certified waste man-
agement facilities, we strive to divert as much waste as
possible from landfills.
►
Chemical-Free Landscape Management
For the cleaning of PV panels, we use only demineral-
ised water, no chemical agents.
►
Mitigation of Impact on Biodiversity
When clearing land to construct new power plants, we
conduct in-depth biodiversity studies and implement
measures to ensure that any unavoidable impact is min-
imized or reversed. We prioritise sensitive methods to
minimise disruption to fauna. This includes directional
clearing and avoiding clearance during bird nesting sea-
son. Additionally, we take measures during construc-
tion and operation phases such as fencing off storage
areas and minimizing lighting to reduce disturbance to
wildlife.
Photon Water is participating in various initiatives such
as construction of wetlands for treatment of pesticide
contaminated waters, aiming to reduce levels of Hexa-
chlorocyclohexane (HCH), a persistent organic pollu-
tant, in stream water.
Biodiversity projects are in progress at four of our
power plants in the Czech Republic, as part of an agree-
ment with the Department of Ecology of the Czech Uni-
versity of Life Sciences in Prague. Currently underway is
the initial phase of this long-term endeavour, which in-
volves studying biodiversity characteristics unique to
each location. Experts in insect and crop sciences are
actively involved in identifying suitable crops for cultiva-
tion around the PV panels. By thoughtfully selecting
plant species and nurturing diverse ecosystems around
our power plants, we contribute to the preservation and
restoration of natural habitats.
►
Minimising Our Carbon Footprint
Our solar power plants generated 139.8 GWh of clean
electricity in 2023, contributing to the avoidance of
58,286 tonnes of CO
2
e emissions compared to conven-
tional electricity production. In 2023, total scope 1 and
2 emissions amounted to 670.8 tonnes of CO
2
e, repre-
senting a 64% increase from 2022. This increase is re-
lated to our business growth and the acquisition of
Lerta, which nearly doubled our headcount and added
new offices in Poland. At the same time, we intensified
our efforts to reduce CO
2
e consumption. These efforts
included increasing our electric car fleet and choosing
trains instead of heavy trucks in our freight related to
technology trading business.
In 2023 we started collecting data on scope 3. This data
collection represents a significant step enabling us to
set up and improve carbon reduction targets. Moving
into subsequent phases of our carbon emissions re-
porting program, data will encapsulate complete
scope 3 emission or indirect emissions not included in
scope 2.
►
Clean Water Solutions
Through Photon Water in the Czech Republic, we partic-
ipated in several projects which aimed to improve water
quality and management systems. In Jablonec nad
Nisou we implemented measures to improve water
quality in the Mšeno Reservoir using floating vegetation
islands and an ultrasound technology to eliminate cya-
nobacteria growth. Our technology does not require the
use of chemicals or additives and does not create any
harmful by-products. At
Bubenec pond in Řeporyje
-
Praha our goal was to revitalise the pond from its poor
structural and technical condition, desilt the pond, and
54
reconstruct the reservoir’s fortifications and functional
objects. In Dubnice, Northern Bohemia we were re-
sponsible for the construction of a system of pools to
retain water, create new habitats and provide a relaxa-
tion area for village residents and visitors. In the city of
Tábor we continuously automated the chemical precip-
itation of nutrients in the Košínský potok stream in or-
der to improve the quality of bathing water in the Velký
Jordán reservoir. In water source areas of Poděbrady
-
Kluk and Písty, we have performed repair works and
regeneration of existing water wells, construction of
new wells, overall hydrogeological service of two large
water source areas. In both the Czech Republic and Aus-
tralia Photon Water begin the PFAS_Tech project, which
aims to advance and validate technologies designed to
remove PFAS contamination from the environment.
Specifically, the project concentrates on two critical as-
pects: the treatment of drinking water and the in-situ re-
mediation of PFAS in groundwater.
Social Conduct
Commitments Related to Human Resources
We are proud to have built a dynamic, diverse team of col-
leagues, comprising 26 nationalities. This vibrant community is
one of our greatest strengths and we are dedicated to its con-
tinued enrichment. Our key social commitments and initiatives
related to our human resources include:
►
Stringent health and safety policies and procedures en-
suring compliance with applicable laws and regulations.
►
Equal employment opportunities, regardless to gender,
race, religion, disability, sexual orientation, or age. Em-
bracing diversity and inclusive work environment is
clearly visible in a diversified cultural profile of our em-
ployees. In 2023 our Group adjusted Gender Pay Gap
(GPG) ratio calculated according to the formula = (aver-
age gross male earning – average gross female earning)/
average gross male earning * 100% amounted to 0.3%.
This value means that on average woman in Photon En-
ergy Group earns only 0.3% less than her male counter-
part, which we view as an excellent result.
Group
adjusted GPG is calculated using eleven comparable po-
sitions across four countries, including eighteen women
and seventeen men.
►
Self-evaluation through an online Performance and De-
velopment platform. This is designed to help our em-
ployees and managers to define operational goals and
objectively measure performance, aligned with a merit-
based remuneration policy, including performance-re-
lated bonuses, individual bonuses, a long-term incen-
tive plan, and project-based special pay-outs.
►
Family-friendly regulations to achieve optimal work-life
balance. This entails offering flexible job arrangements,
including remote work options and digitised work-
places. Our home office policy, coupled with trust-
based, flexible working hours, allows employees to
work remotely, accommodating their individual needs
and preferences.
►
Improving our intranet to enable international working
groups, networking, and connection. Regular business
updates via our internal newsletter, and regular all-staff
meetings and Q&A sessions with our CEO to maintain
strong corporate culture.
►
An internal ESG survey showed that 98% of our employ-
ees agreed or strongly agreed that working in a green
company has been motivating. Around 95% of employ-
ees agreed that equal opportunities and respectful
treatment are valued in Photon Energy Group. Last but
not least, 92% of employees agreed or strongly agreed
that equal opportunities for women exist in pay, promo-
tions, and leadership roles.
Commitments Related to Communities
We recognise the profound impact that our operations might
have on local communities. As a responsible company, we pri-
oritise fostering positive relationships with the communities in
which we operate. Our social commitments include:
►
Engaging in preliminary discussion with local authorities
as a mean of ensuring each project’s compatibility with
territorial and community policies.
►
Safeguarding the privacy of our customers, suppliers,
and employees’ data. We have policies and procedures
in place to ensure that sensitive data is protected, in-
cluding electronic data stored in our systems.
►
We follow all local guidelines and regulations regarding
community involvement and consultation.
►
When working with subcontractors, we prioritise local
suppliers to have a positive impact on the local econ-
omy through job creation.
Other initiatives which prove our commitments to give back to
local communities included:
►
A new CSR Day program launched in January 2023
which enables employees to donate one working day to
a charity of their choice, within the scope of our Dona-
tion Policy. Such volunteer work allows employees to
make a positive impact, connect with people in local
communities and improve our environment.
►
In 2023, We have fortified our supply chain due dili-
gence process for third-parties to integrate human
rights considerations into our evaluation process effec-
tively. Additionally, we initiated the implementation of
new procedures for Know your Customer (KYC) and
Know Your Supplier (KYS) to further ensure ethical and
responsible business practices.
More details on our social and environmental initiatives can be
found in our 2023 Sustainability Report, which is available on
our website our website in section sustainability. Our 2023 Sus-
tainability Report does not represent a part of this Annual Re-
port 2023. For more details on corporate governance, see the
Corporate Governance section of this report.
55
Shares & Bonds
Share Capital
The company’s issues share capital is EUR 612,385 divided into
61,238,521 shares with a nominal value of EUR 0.01 each. Each
share has one vote at the General Meeting of Shareholders,
with the exception of the treasury shares held by the Company.
The Company’s share capital is described in the Corporate Gov-
ernance section and Note 4.3.5 Share Capital and Note 29. Cap-
ital and Reserves.
There is no limitation on transfer of the Company’s shares with
the exception of the restriction imposed on employees who
participate in the Company’s Employee Share Purchase Pro-
gramme (ESPP). According to the ESPP, employees are not
allowed to sell their shares for the period of three years from
the moment the shares were deposited on their account.
In addition, certain restrictions are imposed on the Company to
acquire and hold its own shares. Under Article 9.1, the Company
may only acquire fully paid-up shares in its own share capital
for no consideration or provided that the Company's equity mi-
nus the acquisition price is not less than the aggregate amount
of the issued share capital and the reserves which must be
maintained pursuant to the law. No acquisition pursuant to Ar-
ticle 9.1 shall be permitted if a period of six months following
the end of a financial year has expired without the annual ac-
counts for such year having been adopted.
Shareholding Structure
Solar Future and Solar Power to the People are controlled by the co-founders and Board of Directors members
of Photon Energy N.V. For details please see Corporate Governance section of this Management Report.
Share Trading Details (ISIN: NL 0010391108
)
Trading of the Company’s shares on the regulated markets of
the Warsaw Stock Exchange (WSE) (Giełda Papierów Wartościo-
wych w Warszawie) and Prague Stock Exchange (PSE) (Burza
cenných papírů Praha) commenced on 5 January 2021.
Prior to that date, the Company’s shares were traded in the al-
ternative system of trading i.e. on NewConnect organized by
the Warsaw Stock Exchange and on the Free Market of the Pra-
gue Stock Exchange.
Market:
GPW Parallel Market, Warsaw, Poland
Ticker:
PEN
Web address:
www.gpw.pl
Market:
Standard Market, Prague, Czech Republic
Ticker:
PEN
Web address:
https://www.pse.cz/en/
Market Maker in Poland
Dom Maklerski PKO Bank Polski
Address:
ul.
Puławska 15, 02
-515 Warszawa, Poland
Web address:
www.dm.pkobp.pl
The admission to listing and trading of the Company’s shares
on the Quotation Board of the Frankfurt Stock Exchange fol-
lowed on 11 January 2021.
The Company’s shares have been listed on the electronic trad-
ing platform XETRA (provided by the German Stock Exchange)
since 7 December 2022.
Market:
Quotation Board of the Frankfurt Stock Exchange,
Germany
WKN:
A1T9KW
Web address:
https://www.boerse-frankfurt.de/
Market:
Xetra
WKN:
A1T9KW
Web address:
https://www.boerse-frankfurt.de/
Dividend Policy
The Company’s strategy is to create value for its shareholders
through strong expansion in the globalising photovoltaic indus-
try. For as long as value-creating growth and investment oppor-
tunities exist, the Board of Directors does not intend to propose
to distribute dividends to shareholders.
Solar Future
35.55%
Solar Power to the People
32.75%
Free-float
25.56%
Tomala Investments ASI
3.74%
The Company
2.40%
56
Employee Share Purchase Programme
The management of the Company recognises the significant
contribution of the team members to the future development
of the Group. Therefore, it operates an Employee Share Pur-
chase Programme as a part of its motivation system. Under the
terms of the programme, the Group periodically purchases
shares for participating employees equal to 10% of their gross
compensation net of taxes. Starting from 1 January 2023,
participants of the Employee Share Purchase Programme have
the right to dispose their shares after three-yar period of hold-
ing them.
During the reporting period, the Company transferred in total
67,675 shares to its employees eligible for the share bonus in
line with the Employee Share Purchase Programme.
Share Performance in 2023
Main Market of the Warsaw Stock Exchange
Selected Share Information
PLN
Opening price (2 January 2023)
13.10
52-week max (16 February 2023)
13.88
52-week min (28 December 2023)
7.94
Closing price (29 December 2023)
8.12
Source:
www.gpw.pl
The trading volume in 2023 amounted to 3,419,137 shares com-
pared to 5,290,368 shares in 2022.
Main Market of the Prague Stock Exchange
Selected Share Information
CZK
Opening price (2 January 2023)
67.60
52-week max (19 June 2023)
70.40
52-week min (27 December 2023)
44.80
Closing price (29 December 2023)
45.90
Source:
http://www.pse.cz
The Company reports a yearly trading volume of 3,076,521
shares in 2023, compared to 4,903,269
shares traded in 2022.
Xetra
Selected Share Information
PLN
Opening price (2 January 2023)
2.77
52-week max (1 June 2023)
2.945
52-week min (27 December 2023)
1.79
Closing price (29 December 2023)
1.83
Source:
www.gpw.pl
The trading volume in 2023 amounted to 622,570 shares. There
is no comparable data for year 2022.
Quotation Board of the Frankfurt Stock Exchange
Selected Share Information
EUR
Opening price (2 January 2023)
2.745
52-week max (12 June 2023)
2.925
52-week min (29 December 2023)
1.776
Closing price (29 December 2023)
1.776
Source:
https://www.boerse-frankfurt.de/
The trading volume in 2023 amounted to
152,396
compared to
491,280 shares in 2022.
Our Bonds
As of the reporting date, the Company has one outstanding
6.50% Green EUR Bond 2021/2027 (ISIN: DE000A3KWKY4)
which was initially placed in the amount of EUR 55 million in
November 2021. During year 2022 the Company successfully in-
creased its Green EUR Bond 2021/27 to a total amount of EUR
77.5 million. In March 2023 the Company successfully tapped
its bond by additional amount of EUR 2.5 million to the total of
EUR 80.0 million.
In August 2023 the Company repurchased EUR 0.615 million of
nominal value. As of the reporting date the total outstanding
amount of Green EUR Bond was EUR 79.4 million
The Company intends to use the net proceeds of the green
bond placement to finance or refinance, in part or in whole, new
and/or existing eligible assets, as well as financial instruments
that were used to finance such projects or assets, in accordance
with the Company’s Green Finance Framework, enabling Pho-
ton Energy Group to make a significant contribution to an envi-
ronmentally friendly future.
Green EUR Bond 2021/2027 was confirmed by imug | rating
with regard to its sustainability in a Second Party Opinion, and
can be traded on the Open Market of the Frankfurt Stock Ex-
change.
On 13 December 2023 the Company repaid the outstanding
amount of CZK 76.2 million (EUR 3.1 million) of its CZK 7-year
corporate bond with a 6% annual coupon and monthly pay-
ments in the Czech Republic.
57
Bonds Performance in 2023
CZK Bond Trading Performance in Prague
Our Czech 2016/2023 CZ Bond was not traded during year 2023
and was paid back on 12 December 2023.
Green EUR Bond 2021/27 Trading Performance in
Frankfurt
In the trading period from 1 January 2023 until 31 December
2023, the trading volume amounted to EUR 5.113 million (nom-
inal value, in Frankfurt) with an opening price of 101.69 and a
closing price of 69.00 in Frankfurt, compared to EUR 3.544 mil-
lion (nominal value, in Frankfurt) with an opening price of
102.00 and a closing price of 102.40 in year 2022.
Communication with Investors
Communication with investors has always been more than a
mere legal requirement to Photon Energy Group. We believe it
is a means to build trust in our business practices and an op-
portunity to be transparent about our financial health and busi-
ness achievements. During the reporting period, the following
actions have been taken:
►
The Company’s website continued to be developed to
ensure it remains a principal source of information on
the Group and its activities. An
Investor Relations
news service
allows investors to stay up-to-date on
company announcements, reports and other ad hoc in-
formation.
►
The Company hosted live webcasts to present its quar-
terly results. Presentations and video recordings of the
events are available in the Investor Relations section of
our website.
►
The Company participated in the German Spring Con-
ference held in Frankfurt in May 2023
►
The Company participated in the Wallstreet Conference
in Karpacz in May 2023.
►
The Company participated in the AlsterResearch Re-
newables Conference held online in May 2023
►
The Company participated in the Deutsches Eigen-
kapitalforum held in Frankfurt in November 2023
Going Concern
Management Statement
During 2023, Company encountered difficult market conditions
that resulted in overall worsening financial results at the level
of EBITDA and total negative net loss.
While assessing the going concern for the Company, Manage-
ment considered several critical scenarios including the follow-
ing going concern risk triggers, such as:
►
Results presented in the most recent financial state-
ments;
►
Industry conditions;
►
Belated payments of non-core business-related liabili-
ties;
►
Inability to comply with the terms of loan agreements;
►
Specific forecast events.
In order to diminish the negative 2023 results, the impacts of
the above listed triggers, and to improve the Company’s finan-
cial position in 2024 and onwards, management of the Com-
pany took following decisions:
►
Change from merchant scheme to Feed in Tariff scheme
in Hungary, ensuring the guaranteed electricity reve-
nues with no adverse impacts of the volatile market de-
velopments. This measurement will also strengthen the
financial stability of the entities and thus ability of meet-
ing the covenants as required by the financing banks.
►
Change from merchant scheme to Feed in Tariff scheme
in Czech Republic, ensuring the guaranteed electricity
revenues with no adverse impacts of the volatile market
developments.
►
Investments in innovations to improve lines of services
at Lerta and extending of service portfolio as an addi-
tional source of the revenues
►
Planned rebalancing of our asset portfolio
►
Focus on 3
rd
party EPC business with high margins and
realization within the one-year period with regular cash
inflow
►
New refinancing agreements
Scenarios based on the supporting cashflow forecasts take into
account internal and external developments relevant in the as-
sessment of the ability of the Company to continue as a going
concern, including but not limited to market developments,
change in electricity prices/schemes, new EPC projects pipe-
lines, sale of assets in non-core areas and new refinancing
agreements.
The consolidated financial statements have been prepared on
a going concern basis, resulting from the Management’s assess-
ment of the Company’s ability to continue its operations for the
foreseeable future.
58
Board of Directors Statement
The Board of Directors has assessed the effectiveness of the de-
sign and operation of the internal control and risk management
systems.
On the basis of this report, and in accordance with:
►
best practice 1.4.3 of the Dutch Corporate Governance
Code of December 2016, and Article 5:25c of the Finan-
cial Supervision Act,
►
the aforementioned assessment, the current state of af-
fairs,
and to its best knowledge, the Board of Directors declares that:
►
The report gives sufficient insight into any shortcomings
in the operation of the internal risk management and
control systems.
►
The aforementioned systems provide a reasonable de-
gree of assurance that the financial reporting does not
contain any material misstatement.
►
Drawing up the financial reporting on a going concern
basis is justified based on the current state of affairs.
►
The Director’s report states any material risks and un-
certainties that are relevant with regards to the expec-
tation of continuity of the Company for a period of 12
months after drawing up the report.
It should be noted that the above does not imply that these sys-
tems and procedures provide absolute assurance as to the re-
alisation of operational and strategic business objectives, or
that they can prevent all misstatements, inaccuracies, errors,
fraud and non-compliances with legislation, rules and regula-
tions.
In view of the above, the Board of Directors declares that to the
best of its knowledge:
►
The annual accounts give a true and fair view of the as-
sets, liabilities, financial position and results of the Com-
pany
and
the
subsidiaries
included
in
their
consolidation.
►
The Directors’ Report gives a true and fair view of the
situation as of 31 December 2023 and of the state of af-
fairs of the company and its consolidated subsidiaries
in the 2023 financial year, the details of which are in-
cluded in its annual accounts, and that the Directors’ Re-
port describes the main risks faced by the company.
Amsterdam, 30 April 2024
The Board of Directors:
Georg Hotar, Director
Michael Gartner, Director
59
Corporate Governance Report
Strong corporate governance, transparency and accountability
are essential for Photon Energy Group and fit in line with our
core values such as integrity, sustainability and responsibility to
enrich every community we are part of.
We believe that strong corporate governance structure and pol-
icies create a framework that defines healthy relationship be-
tween shareholders, the Board of Directors and our other key
stakeholders. Good corporate governance fosters a culture of
integrity, transparency and leads to a positive performing and
sustainable business. Last but not least, through effective cor-
porate governance practises we intend to promote long-term
sustainable value creation for all our stakeholders. We also en-
gage in the dialogue with our stakeholders to make sure that
their interests are respected and we build trust within commu-
nities which we impact. We are in the process of preparing a
Stakeholder Engagement Policy that will detail ways of dialogue
with individual stakeholders. Corporate governance policies
which we are implementing are enforced and applied consist-
ently.
Decree Article 10 EU Takeover Directive
According to the Decree Article 10 EU Takeover Directive, Pho-
ton Energy N.V. is required to report on, among other things,
our capital structure; restrictions on voting rights and the trans-
fer of securities; significant shareholdings in Photon Energy
N.V.; the rules governing the appointment and dismissal of
members of the Board of Directors and the Supervisory Board
and the amendment of the Articles of Association; the powers
of the Board of Directors (in particular the power to issue shares
or to repurchase shares); significant agreements to which Pho-
ton Energy N.V. is a party and which are put into effect, changed
or dissolved upon a change of control of the Company following
a takeover bid; and any agreements between Photon Energy
N.V. and the members of the Board of Directors or associates
providing for compensation if their employment ceases be-
cause of a takeover bid. The information required by the Decree
Article 10 EU Takeover Directive is included in this Corporate
Governance Report and in the Directors’ Report, as well as in
the notes referred to, in these sections.
Shareholders Meetings
The Annual General Meeting is held within six months of the
end of the financial year. The agenda for the Annual General
Meeting shall in any case include the following items: (a) the
consideration of the directors’ report; (b) the adoption of the
annual accounts and the allocation of the profits; (c) the grant-
ing of discharge to the managing directors for their manage-
ment and the supervisory directors for their supervision during
the past financial year.
Voting at General Meeting
Each share confers one vote, except for the shares in the own-
ership of the Company (the treasury shares) which are re-
stricted from voting. Unless the law or the Company’s articles of
association require a larger majority, all resolutions shall be
adopted by an absolute majority of votes cast. A resolution of
the General Meeting to limit or exclude pre-emption rights or to
designate Board of Directors competent to limit or exclude pre-
emption rights shall require a majority of at least eighty percent
(80%) of the votes cast. Such special majority is also required
for the amendment of this provision in the Articles of Associa-
tion.
Annual General Meeting 2023
In the financial year 2023, the Annual General Meeting was held
on June 21, 2023. In addition to the items relating to the adop-
tion of the annual accounts mentioned above, the Annual Gen-
eral Meeting adopted the following resolutions: (a) It granted
authorization to the Board of Directors to acquire shares in the
share capital of the Company for a period of 18 months, ending
on 21st December, 2024; (b) It adopted a
Remuneration Report
and a Management Incentive Plan to Mr. Krzysztof Drozynski (in
connection with the acquisition of Lerta S.A, shares); (c) It
granted authorization to the
Board of Directors, ending on 21
June 2028,
to issue shares and to grant rights to subscribe for
shares with respect to a maximum of
880,277 ordinary regis-
tered shares in the share capital of the Company
(in addition to
the existing authorization from 2022 with respect to a maxi-
mum of 10 million shares; (d) It granted authorization to the
Board of Directors to limit/exclude pre-emption rights of share-
holders with respect to the issuance of shares described under
letter (c) in the previous sentence. For more information please
visit our website, section Investor Relations / Corporate Govern-
ance /General Meetings.
Composition & Functioning of the Statutory Bodies
The Company has a two-tier corporate structure. The managing body of the Company is the Board of Directors comprising of Managing
Directors, and the supervising body of the Company is the Supervisory Board comprising of Supervisory Directors.
Board of Directors
The Board of Directors is the statutory executive body (
raad van
bestuur
) and managing directors are collectively responsible for
the Company’s management and the general affairs of the
Company. The Board of Directors is responsible for the day-to-
day operations of the Company. In fulfilling their duties the
Managing Directors shall serve the interest of the Company and
the business enterprise which it operates. Resolutions of the
Board of Directors with regard to an important change in the
identity or character of the Company or the business enterprise
are subject to the approval of the General Meeting, including in
any case: (a) transfer of the business enterprise to a third party;
(b) entry into or termination of a long-term cooperation
with
60
another entity as a fully liable partner in a limited or general
partnership, if such cooperation or termination thereof is of far-
reaching significance to the Company; (c) acquisition or disposal
by the Company of participating interest with a value of at least
one third of the amount of the Company’s assets.
Managing Directors are appointed by the General Meeting and
the Board of Directors consists of such number of Managing Di-
rectors as the General Meeting may determine. Currently, the
Board of Directors consists of two Managing Directors. In
accordance with the Company’s Articles of Association, a mem-
ber of the Board of Directors shall be appointed by the General
Meeting for a maximum period of four years and his term of
office shall lapse on the day of the Annual General Meeting to
be held in the fourth year after the year of his appointment. A
Board member may always be re-appointed for another maxi-
mum period of four years. The General Meeting may at any time
suspend and dismiss a Board member. The supervisory board
is not authorised to suspend a Managing Director.
Representation
The Board of Directors is entitled to represent the Company. The power to represent the Company is also vested in each Managing
Director individually.
Composition of the Board of Directors
Name
Position
Date of Birth
Start of Function
Term of Office Expires
Georg Hotar
Director
(Bestuurder)
21.04.1975
4 December 2020*
2024
Michael Gartner
Director
(Bestuurder)
29.06.1968
4 December 2020*
2024
* Mr Hotar and Mr Gartner have been the Company’s managing directors since 9 December 2010, however, due to the changes in the Company’s corporate
structure, new term of their office (previously unlimited and currently term of four years) started on 4 December 2020 and shall expire in 2024.
Georg Hotar
Georg Hotar co-founded the Company in 2010 and was the
Company’s Chief Financial Officer until 2011. Since then he has
spearheaded the Group’s expansion in Europe and overseas as
the Chief Executive Officer. Mr Hotar started his professional
career in 1995 as an equity sales trader with IB Austria Securi-
ties in Prague. In 1996, he joined Carnegie AB in London as an
equity analyst and later that year he moved to ICE Securities
Ltd. in London as an equity analyst for the TMT sectors in the
CEE region. In 1999, he joined FFC Fincoord Finance Coordina-
tors Ltd. in Zurich as an investor relations specialist. In 2000, he
founded Central European Capital, a financial advisory bou-
tique headquartered in Prague. In 1999, he graduated from the
London School of Economics with a BSc Accounting and Finance
degree. In 2001, he completed and obtained a Master in Fi-
nance degree in finance from the London Business School.
Michael Gartner
Michael Gartner co-founded the Company in 2010 and was the
Company’s Chief Executive Officer until 2011. Since then he has
held the position of Chief Technology Officer and until last year
held a position of the Managing Director of Photon Energy Aus-
tralia. Mr Gartner has an extensive experience in the photovol-
taic business and is instrumental in driving the Company’s
utility-scale project development, EPC, commercial solar and
off-grid and solar-hybrid power solutions. Between 2011 and
end of 2022, his focus was on developing Group’s projects in
Australia. In 2007 he developed one of the first large PV instal-
lations in the Czech Republic. Between 1994 and 2004, he was
an equity and debt analyst and head of fixed income sales in
ING and Commerzbank Securities in Prague. From 2005 to
2007, he ran an investment boutique specializing in medium-
term notes in the Eurobond market and M&A. In 1991, he com-
pleted and obtained a bachelor’s degree in economics from
University of Newcastle in Australia. He holds MBA title from the
US Business School in Prague obtained in 1994.
Supervisory Board
The Supervisory Board is a supervisory body (
raad van toezicht)
and supervisory directors are collectively responsible for super-
vising the policies of the Board of Directors and the general af-
fairs of the Company. The Company shall have two or more
Supervisory Directors. A Supervisory Director shall be ap-
pointed for a maximum period of four (4) years and his term of
office shall lapse on the day of the Annual General Meeting to
be held in the fourth year after the year of his appointment. A
Supervisory Director may only be reappointed for another max-
imum period of four (4) years, after which he/she may only be
re-appointed once for a maximum period of two (2) years,
which term may only be extended once for a maximum period
of two (2) years.
The duty of the Supervisory Board is to supervise the policies of
the Board of Directors and the general course of affairs of the
Company and its affiliated business.
The supervision of the
Board of Directors shall include the following areas: (a) the
achievement of the Company’s objectives; (b) the corporate
strategy and risks; (c) the financial reporting process; (iv) com-
pliance with legislation and regulation, (e) functioning and ef-
fectiveness of the internal risk management and control
systems; (g) the Company/shareholder relationship; (h) compli-
ance with and maintaining of the Company‘s corporate govern-
ance structure; (i) preparation of the annual accounts.
61
Composition of Supervisory Board
Name
Age
Gender
Nationality
Date of Initial
Appointment
Term of
Office
Function
Independence
Status
Marek Skreta
57
male
Swiss
4.12.2020
2024
Chairman of the
Supervisory Board
Independent
Boguslawa
Skowronski
67
female
Polish, Swiss,
U.S.
4.12.2020
2024
Member of the
Supervisory Board
Independent
Ariel Sergio Davidoff
56
male
Swiss
31.5.2022
2026
Chairman of the
Audit Committee
Independent
The Supervisory Board and Audit Committee is comprised of
three members, Boguslawa Skowronski, Marek Skreta and Ariel
Sergio Davidoff, appointed to a four-year term of office. Ms.
Skowronski’s and Mr. Skreta’s terms expire in 2024 and are
nominated for re-election by the 2024 Annual General Meeting.
All three members are independent within the meaning of the
Dutch Corporate Code. To our best knowledge, there were no
transactions in the course of the year 2023, in which a conflict
of interest with the members of the Supervisory Board oc-
curred.
Audit Committee
The Supervisory Board has the right to create various commit-
tees, such as Audit, Remuneration or Selection and Appoint-
ment committee. Due to a small size of the Company’s
Supervisory Board (3 members), only an Audit Committee is for-
mally set up by the Supervisory Board and the role of the other
committees is performed by the Supervisory Board as a whole.
Audit Committee’s role is to facilitate Supervisory Board‘s deci-
sion-making regarding the supervision of the integrity and qual-
ity of the Company‘s financial reporting and the effectiveness of
the Company‘s internal risk management and control systems.
It monitors the Board of Directors with regards to: (a) relations
with external auditors; (b) tax policy of the Company; (c) financ-
ing of the Company; (d) application of IT, including the risk re-
lated to cybersecurity.
The role of the Supervisory Board and Audit Committee is being
reviewed to be in line with the requirements of the new Dutch
Corporate Governance Code.
The Company does not have a formally set up internal audit
unit. As of the date of this report the function of internal audit
unit is performed by one senior employee (“audit specialist”)
with competence and knowledge of accounting and auditing
procedures who is tasked with the role by the Board of Direc-
tors. There is no formal procedure and the tasks are performed
informally. The Risk Manager who reports directly to the Board
of Directors also supports Internal Audit function. The Supervi-
sory Board performed an annual assessment of internal audit
procedures and included its conclusions with regards to the ex-
isting alternative measures, along with the resulting recom-
mendations, in the report of the Supervisory Board.
Diversity and Succession of the Boards
The desired composition of the Supervisory Board is such that
the combined expertise, experience, diversity and independ-
ence of the Supervisory Board members enables the Supervi-
sory Board to best carry out the variety of its responsibilities
and duties with regard to the Company and all stakeholders in-
volved including its shareholders, consistent with applicable law
and regulations. Pursuant to the Supervisory Board’s Profile,
adopted by the Supervisory Board in 2022 and published on the
Company’s website, the Supervisory Board strives for a mixed
composition in respect of gender, age, nationality and back-
ground. Its aim is to have a composition consisting of at least
one third (1/3) female members and at least one third (1/3)
male members. The Supervisory Board complies with this re-
quirement and also other criteria of diversity of expertise and
experience.
Due to the size of the Board of Directors, which consists of two
members who founded the Company and are its major share-
holders, the target minimum participation of the minority
group of at least 30% was not achieved. The Diversity Policy for
the Board of Directors, adopted by the Supervisory Board in Oc-
tober 2022, assumes that in case of an enlargement of the
Board of Directors from its current size, the Supervisory Board
shall make best efforts to nominate a person in order to reflect
the following ratio: at least 30% of female representation in the
Board of Directors and at least 30% of male representation in
the Board of Directors. The targets are considered appropriate.
The Company takes notice of the Dutch Diversity Act and the
requirements it sets on the large companies. The Company has
reached the criteria for the large company only recently and is
taking steps with regard to the applicable obligations with re-
spect to policies and reporting, defined by the Diversity Act.
The Supervisory Board has also adopted a rotation schedule
and succession policy to provide continuity and avoid extended
vacancies in the positions of the Supervisory Board / Audit Com-
mittee. Photon Energy’s succession plan is designed to ensure
that the proper function and necessary fulfilment of the Super-
visory Board is met in case of vacancy due to retirement, resig-
nation, death or pursuing new business opportunities.
In the event of an emergency departure, resignation or other
vacancy in the Supervisory Board, the Chairman of the Supervi-
sory Board, if unavailable, the Chairman of the Audit Commit-
tee, if unavailable, any other member of the Supervisory Board
shall convene an extraordinary meeting of the Supervisory
Board within latest one month from the day of such vacancy to
discuss the functioning of the Supervisory Board and a new dis-
tribution of tasks within the Supervisory Board/Audit Commit-
tee.
62
Share Capital
The Company’s share capital is EUR 612,385.21 divided into
61,238,521 shares with a nominal value of EUR 0.01 each. The
share capital is fully paid-up. Each share has one vote at the
General Meeting, with the exception of the treasury shares held
by the Company (see below). There is no limitation on transfer
of the Company’s shares with the exception of the restriction
imposed on employees who hold shares based on the Com-
pany’s Employee Share Purchase Programme (ESPP) which is
part of a remuneration plan for employees. According to the
ESPP, employees are not allowed to sell their shares acquired
through the ESPP for three years after the shares were depos-
ited on their account.
In addition, certain restrictions are imposed on the Company to
acquire its own shares (treasury shares). Under Article 9.1 of the
Articles of Association, the Company may only acquire fully
paid-up shares in its own share capital for no consideration or
provided that the Company's equity minus the acquisition price
is not less than the aggregate amount of the issued share capi-
tal and the reserves which must be maintained pursuant to the
law. No acquisition pursuant to Article 9.1 shall be permitted if
a period of six months following the end of a financial year has
expired without the annual accounts for such year having been
adopted. The Company is not allowed to vote the treasury
shares and when determining to what extent the voting rights
are represented at the general meeting, they will not be taken
into account.
Increase of Share Capital in 2023
On 1 February 2023, the share capital was increased from EUR
600,000 to 612,385.21. Based on a General Meeting authoriza-
tion from 31 May 2022, the Board of Directors of the Company
decided to issue 1,238,521 new shares with a nominal value of
EUR 0.01 each. The new shares were issued against an in-kind
contribution consisting of 2,477,042 shares in Lerta S.A. The
new Company’s shares were distributed to Mr. Krzysztof Dro-
zynski as a portion of the purchase price
as agreed at the ac-
quisition of Lerta S.A.
Share Buyback
During the financial year of 2023, the Company had performed
a share buyback which was completed on 9 June, 2023. The
share buyback program was implemented on the basis of the
General Meeting resolution, which granted an authorization to
the Board of Directors to acquire shares in the share capital of
the Company, for consideration. Under this program, within the
period from 19 December 2022 to 7 June 2023, the Company
purchased the total number of 250,000 shares in the share cap-
ital of the Company, for the total price of PLN 3,204,053.76 with
an average unit share price of PLN 12.82. These shares consti-
tute approximately 0.41% of the share capital of the Company
and entitle to 250,000 votes at the General Meeting of the Com-
pany. The buyback was executed by the brokerage house of
Santander Bank Polska S.A – Santander Biuro Maklerskie with a
seat in Warsaw, Poland.
Shareholding Structure
As of 31 December 2023, to the knowledge of the management, the shareholder structure was as follows:
Shareholdership as of 31.12.2023
No. of Shares
% of Capital
No. of V
otes at the
Shareholders Meeting
% of V
otes at the
Shareholders Meeting
Solar Future Cooperatief U.A.
21,769,075
35.55%
21,769,075
36.44%
Solar Power to the People Cooperatief U.A.
20,057,485
32.75%
20,057,485
33.57%
Tomala Investments ASI Sp. z o.o.
2,288,537
3.74%
2,288,537
3.83%
Photon Energy N.V.
1,491,781
2.44%
0
0.00%
Free float
15,631,643
25.52%
15,631,643
26.16%
Total
61,238,521
100.00%
59,746,740
100.00%
The ultimate beneficial owner of Solar Future Cooperatief U.A.
is Michael Gartner, the ultimate beneficial owner of Solar Power
to the People Cooperatief U.A. is Georg Hotar and the ultimate
beneficial owner of Tomala Investments ASI Sp. z o.o. is Borys
Tomala. In addition, Mr. Gartner owns 23,202 shares in the
Company (0.038% of share capital) directly, Mr. Hotar owns
77,510 shares in the Company (0.127% of share capital) directly
and Mr. Tomala owns 3,051 shares in the Company (0.005% of
share capital) directly.
Solely by virtue of the voting power they hold, Solar Future Co-
operatief U. A. and Solar Power to the People Cooperatief U.A.
(and Messrs. Gartner and Hotar indirectly) are controlling
shareholders of the Company. Based on representations of the
members of the Board of Directors, there are no arrangements,
known to the Company, the operation of which may at a subse-
quent date result in a change in control of the Company.
63
Articles of Association
Our Articles of Association outline certain of the Company’s
basic principles relating to corporate governance and organiza-
tion. The current text of the Articles of Association is available
at the Trade Register of the Chamber of Commerce and on our
website in section Investor Relation / Corporate governance /
Corporate Documents
Amendment of Articles of Association
The resolution to amend the Articles of Association may only be
adopted by the General Meeting on the proposal of the Board
of Directors and it is adopted with a simple majority of votes
cast. Notwithstanding the aforementioned, a resolution to
amend Article 7.3 of the Articles of Association involving a
change of the provision relating to the Qualified majority to limit
or exclude pre-emption rights or to designate the Board of Di-
rectors competent to limit or exclude pre-emption rights, re-
quires a majority of at least eighty percent (80%) of the votes
cast by the General Meeting. A proposal to amend the Articles
of Association shall always be mentioned in the notice of the
General Meeting. Furthermore, a resolution to reduce the is-
sued share capital shall require a majority of at least two thirds
of the votes cast, if less than half of the issued share capital is
represented at the meeting.
The Articles of Association regulate the role, powers, and deci-
sion-making process of the Company bodies; the procedure for
share subscription and issue, increase and decrease of share
capital, share buy back and ownership of treasury shares. Some
of the procedures have been described above.
Issue of Shares
The General Meeting is authorized to issue shares unless it
transfers this authority to the Board of Directors (one authori-
zation can be for a maximum of 5 years). Upon issue of shares,
each shareholder shall have a pre-emption right in proportion
to the aggregate nominal value of his shares. The pre-emption
right can be restricted or excluded by a resolution of the Gen-
eral Meeting (or resolution of Board of Directors if it is author-
ized to do so by the General Meeting).
The General Meeting may resolve to reduce the issued share
capital by cancelling shares or by reducing the nominal value of
shares by an amendment of the articles of association. This res-
olution shall specify the shares to which the resolution applies
and shall describe how such a resolution shall be implemented.
The amount of the issued share capital may not fall below the
minimum share capital as required by law in effect at the time
of the resolution. A resolution to reduce the issued share capital
shall require a majority of at least two thirds of the votes cast,
if less than half of the issued share capital is represented at the
meeting.
Related Party Transactions
Material Related Party Transactions (RPT) require a special pro-
cedure under Dutch Civil Code and Company’s internal bylaws.
A transaction is material if (a) information about this transaction
is inside information (as set out in article 7(1) of the Market
Abuse Regulation) and (b) it is a transaction between the Com-
pany and a related party. Related parties Managing Directors,
Supervisory Directors, shareholders representing (alone or to-
gether) at least 10% of the issued share capital, and auditors.
If the material RPT is not in the ordinary course of business or
not concluded on normal market terms, the RPT must be:
(a)
submitted for approval
by the Supervisory Board; and
(b)
pub-
licly announced at the latest at the conclusion of the
transaction. If following the MAR the information should be
published at an earlier stage, that requirement prevails.
Where the material RPT involves a managing or supervisory di-
rector or a shareholder, that director or shareholder may not
take part in the decision-making to approve the RPT. If a sub-
sidiary of a company enters into a material RPT with a related
party, the material RPT must also be publicly announced, but
no approval by the Supervisory Board is required.
The following loans have been granted to the Managing Direc-
tors. The Supervisory Board approval for the transactions listed
below was not formally documented.
64
Loans provided directly to Managing Directors
Name
Amount in EUR
Interest Rate
Term
Georg Hotar
728,359
3%
due on 31.12.2024
Michael Gartner
93,719
3%
due on 31.12.2024
Loans provided indirectly to companies controlled by the Managing Directors
Name
Amount in EUR
Interest Rate
Term
Solar Power to the People Cooperatief U.A. *
650,474
EURIBOR + 3%
due on 31.12.2024
Solar Age Investments B.V. **
1,342,756
EURIBOR + 3%
due on 31.12.2024
* Entity 100% owned by Georg Hotar
** Entity owned by Michael Gartner (51.67%) and by Georg Hotar (48.33%)
Culture and Core Values
Good corporate governance is essential to creating an atmos-
phere of trust and building solid, lasting relationships with
stakeholders, from suppliers to employees and investors, in ac-
cordance with Group values. We strive to have open culture and
integrity, and to act transparently towards investors and other
stakeholders. We promote focus on sustainability (renewable
energy and water management is the Company’s business fun-
damentals). We are committed to make positive contribution in
the society.
We focus on innovation and think creatively when devising a so-
lution. We prioritize health and safety and wellbeing of every-
one impacted by our work. Our focus is also on community –
we believe it is our responsibility to enrich the community we
are part of.
We take decisions based on careful consideration and we take
responsibility for them. We value honesty and act respectfully
towards colleagues, customers, engaged communities and
other stakeholders. An open and transparent culture within the
organization, coupled with the capacity to reflect and be self-
critical, makes identifying risks in a timely manner possible. The
Company aims to have open culture where employees are rec-
ognized, and therefore, great value is placed on integrity of em-
ployees’ conduct and professional attitude in which managers
lead by example. Mutual respect is the basis for making well-
considered decisions. Balanced relationship in the Company’s
senior management and balance in terms of personalities, ex-
pertise and skills are an important principle. There is zero toler-
ance to discrimination, harassment, corruption practises, fraud.
The Board of Directors and most senior management maintains
direct contact with employees in all parts of the Group which
includes taking part in informal gatherings.
It’s also important to measure and evaluate employment prac-
tises. We have carried out employee engagement surveys in col-
laboration with a third party to ensure anonymity. We
encourage employees to participate in these surveys because
they provide important information on employees’ satisfaction,
motivation and expectation.
Employee engagement is a con-
cept that describes the level of enthusiasm and dedication an
employee feels toward their job. Engaged employees care
about their work and about the performance of the Company,
and feel that their efforts make a difference. An engaged
employee is in it for more than a paycheck and may consider
their well-being linked to their performance, and thus instru-
mental to their company's success. Our engagement surveys
measure a level of an employee satisfaction and commitment
both internally and externally to the organization, expressed as
a percentage or score. The average level of engagement of this
year’s survey is 80%. In the future we would like to encourage a
higher level of participation among employees.
The Company values are directly or indirectly reflected in the
Group policies which are applicable and binding on all employ-
ees. The below is a summary of these policies.
Ethical Conduct
The Company has adopted Code of Ethics binding to its employ-
ees. It contains a set of principles which the Company adheres
to relating to human rights, good working conditions, prohibi-
tion of forced and child labour, and prohibition of corruptive,
fraudulent, collusive practises. It also contains a section with
specific rules of conduct for the area of purchasing and pro-
curement. Each employee has to get acquainted with it and sign
it upon commencement of employment as well as upon any
changes.
The document was updated several times,
inter alia
to integrate
principles regarding the gender-based violence and harass-
ment (GBVH) and to specify more in detail the commitment to
upholding the human rights, including no forced or child labour,
through our supply chain. A training course related to the Code
of Ethics was organized for all employees in 2023. Two of the
three highest scoring questions in the Company’s engagement
survey related to the employees’ reflection of ethical conduct
within the Company where more than 95% participants were
confident that the Company would take appropriate action to
respond to bribery and harassment.
Third Party Conduct Principles
After implementing the Code of Ethics defining the Company
values, we started to require from our partners and suppliers
to follow these rules as well. The Company has therefore estab-
lished Third Party Conduct Principles reflecting the Group’s core
values and the basic principles laid out in the Group’s Code of
65
Ethics which are relevant for each partner and supplier (or
‘Third Party’) that works with the Group. These are for example
rules preventing corruption, zero tolerance to forced and child
labour, rules ensuring decent working conditions, occupational
health and safety and other workers’ rights and rules aiming to
preserve natural environment. The counterparties are required
to sign, acknowledge and commit to adhere to and comply with
these principles.
Antibribery Policy and Whistleblowing
The purpose of Antibribery Policy is to outline measures taken
by Photon Energy Group against specific unethical or illegal con-
duct which may be considered corruption. It provides infor-
mation and guidance on how to identify and proceed in
situations which may lead to or may constitute bribery and cor-
ruption.
The Company also set up a misconduct whistleblowing portal
(SpeakUp Line) through which concerns about ethical and other
misconduct that can be considered a violation of law or the
Code of Ethics (such as for example, discrimination, bribery,
harrasment) can be reported by all stakeholders (both internal
and external). The hotline is independently operated, confiden-
tial and anonymous and is available in all areas and languages
where the Company operates. The Whistleblowing Policy cre-
ates a detailed procedure for processing a complaint and en-
suring objectivity and independence. All reports are assessed
by the compliance team (privacy officer) and then addressed on
a case by-case basis. The compliance department and the
Board of Directors reviews the process and reports and ensures
that there are arrangements in place in the event an independ-
ent investigation is needed and follow-up action is taken. In the
reporting year, there were no reports received through the
whistleblowing channel.
Insider Trading Policy and Managers Transaction
Policy
Since Company has its shares listed on regulated markets and
has its seat registered in the Netherlands, it must comply with
the Dutch Financial Supervision Act and with the MAR (Market
Abuse Regulation). This policy which is signed by all Group em-
ployees along with their contract of employment, has been de-
veloped to make sure that employees understand their
obligations to preserve the confidentiality of undisclosed infor-
mation and their legal obligation not to use inside information
for trading Company’s shares or debt securities. Employees
who have permanent access to confidential, inside information
are subject to trading restriction periods. They are reminded of
their obligations on a quarterly basis.
Senior managers who can be identified as Persons Discharging
with Managerial Responsibilities (as defined in the MAR) have a
special position with any publicly tradable company and there-
fore the MAR and other applicable laws impose more stringent
reporting requirements on them. According to Article 19 of the
MAR, persons discharging managerial responsibilities (PDMR),
as well as persons closely associated with them, must notify the
Company as the issuer and the competent authority (which is
the Dutch Autoriteit Financiële Markten or AFM) of every trans-
action conducted on their own account relating to the shares or
debt instruments which reaches a threshold of EUR 5,000 and
any subsequent transaction within a calendar year (1.1–31.12).
The Group’s Managers Transaction Policy informs the PDMR of
these obligations and provides guidance on how to report that
transaction, informs them what their other disclosure duties
are (when they reach or cross certain thresholds in ownership
of Company’s shares) and when there are closed periods in
which the PDMRs are restricted from trading the securities.
Cybersecurity and Use of IT Assets
Increased threats of potential cyber risks and related require-
ments that will have to be implemented as a result of the NIS 2
Directive (energy industry considered as the essential infra-
structure) has placed IT and security high on the strategic
agenda. The NIS 2 Directive entered into force in January 2023
and requires Member States to translate the Directive into na-
tional legislation by October 2024. The directive sets out cyber-
security risk-management measures and reporting obligations.
NIS2 contains stronger requirements for a broader scope of ac-
tors, including a broader set of mandatory cybersecurity risk-
management measures and new incident notification require-
ments. For organizations in scope of this directive, new cyber-
security requirements will be imposed. With the translation into
national legislation yet to be developed, there is still some un-
clarity on what to expect regarding the new requirements.
The Company carried out an ISO/IEC 27001 audit. The audit
aimed to ensure the confidentiality, integrity, and availability of
information assets within the organization. Based on the as-
sessment, security status within the Company is considered on
low level. Most of the controls are not formalized, monitored,
and tracked. We devised an action plan based on the audit find-
ings, which is already being implemented. A Policy on Use of IT
assets have been developed as a first step. The policy objective
is to contribute to the protection of the Company assets, train
and guide employees, provide clear outline and information on
how to prevent cyber-attacks and prevent the release of confi-
dential information. The goal is to implement secure processes
and effective controls and create a safe culture and environ-
ment.
Health & Safety
Healthy and safe working environment is an important focus
within the Group, and preventing accidents culture is an im-
portant part of this. The Company has a health and safety policy
implemented in each of its jurisdictions to reflect local legal re-
quirements. The employees are subject to periodic training nec-
essary for the nature of work they perform. Our Operations &
Maintenance and Engineering companies are certified under
the ISO 9001 and 14001 standard. This ISO standard covers re-
quirements for a management system relating to occupational
health and safety.
66
Stakeholder Dialogue
In addition to the above described policies (and a number of
other, more specific internal regulations which constitute the
internal framework of guidelines), the Company is in the course
of implementation of a concise Stakeholder Dialogue Policy. It
details our engagement and communication with stakeholders
such as shareholders, bond investors, suppliers, customers, lo-
cal communities.
Below is an overview of stakeholder groups and the ways the
Company engages and communicates with them:
Stakeholder Group
Ways of Engagement and Communication
Employees
All-employee meetings, trainings, team buildings, engagement surveys, all employee in-
tranet and Spark.
Investors/shareholders
Annual and Extraordinary shareholders meetings, quarterly investors presentations,
road shows and investors’ conferences which provide an opportunity to engage into a
direct dialogue with the investment community, periodic and ad-hoc reports, publica-
tion of research and valuations by various research institutes and analysts whenever
possible and allowed under the conditions of co-operation with the respective research
house.
Customers
Periodic meetings, trade fairs participation, key account management.
Suppliers
Periodic meetings, trade fair participations, close contact and DD of supply chain man-
agement, in particular with regard to human rights commitments and environmental
policies.
Local Communities
Discussion with local authorities at multiple level, universities, local research institutes,
and residents living close to our PV installations, employee volunteering, CSR days,
Company donations
Governments and Regulators
Conferences, meetings, dialogue on legislative changes through local solar associations,
policy and legislative developments.
Industry Groups
Solar Associations, Intersolar, Clean Energy Council, Australian Land and Groundwater
Associations.
Diversity for the Group
Diversity and Inclusion Policy for the entire enterprise is also
being prepared which purports to establish ambitious goals
and targets. Photon Energy Group is an international undertak-
ing with subsidiaries in a number of countries and a workforce
that includes many nationalities (26 in total). It is a matter in
which the Group takes great pride. Diversity in Photon Energy
Group focuses on a variety of abilities, skills, and nationalities.
Our employees consist of a mix of men and women and there
is a balanced age distribution. More than 95% of the respond-
ents in our engagement survey feel that the organization pro-
vides equal opportunities to everyone, regardless of age,
gender, religion or sexual orientation. Diversity of our work-
force brings along a very broad set of skills and experience. We
have a strong ambition to set ourselves ambitious targets in
terms of gender diversity; however the proportion of women in
the technical and technological areas is relatively low due to the
nature of the work and the lack of labor market supply.
We are committed to target and recruit more women also for
more senior positions and nurture the talent by introducing
programs for middle and senior management to achieve gen-
der balance. A 4- point action plan was prepared by the HR de-
partment to help the Group achieve gender balance including
for example, to open every managerial position internally first
to give everyone the opportunity to apply for, to continue sup-
porting our women when returning from maternity leave
(providing flexible workloads, hybrid regime of work) and to
identify key factors that would support our women’s ambitions
to develop their leadership potential
.
Gender Split Total
Gender
Count of Gender
Average Age
Age Range
Male
220
39,47
19–64
Female
128
37,16
22–58
Grand Total
348
38,62
19–58
67
Gender Split per Function 2023
Total
Male
Female
Male %
Female %
Target
Management Board
2
2
0
100%
0%
1/3
Supervisory Board
3
2
1
66%
34%
1/3
Senior and Mid-level Management
66
46
20
70%
30%
n/a
Senior Management
3
3
0
100%
0%
Mid-level Management
63
43
20
68%
32%
Professionals (Prof. + Admin)
280
172
108
61%
39%
n/a
Professional
257
170
87
66%
34%
Administration
23
2
21
9%
91%
KYS/KYC and Other Policies
We are also launching an Onboarding Policy for Know Your Supplier and Know Your Customer procedures and supply chain manage-
ment.
Dutch Corporate Governance Code
The Company is required to apply the Dutch Corporate Govern-
ance Code 2022 because its shares are admitted to trading on
an EU regulated market. The Dutch Corporate Governance
Code 2022 (DCGC) was prepared by the Dutch Corporate Gov-
ernance Code Monitoring Committee (Committee) which
adopted a revised text, taking effect from 1 January 2023. The
full
text
is
available
at
the
Committee’s
website
at
https://www.mccg.nl/publicaties/codes/2022/12/20/corporate-
governance-code-2022. The DCGC was updated in areas such
as focus on sustainable, long-term value creation, diversity and
the role of the Supervisory Board and stakeholder dialogue. The
application of the principles and best practice provisions of the
DCGC is not compulsory and is subject to the “comply or ex-
plain” (
pas toe of leg uit
) principle.
Principle / Best Practice
Explanation of Departure from the Dutch Corporate Governance Code
Chapter 1. Long-Term Value Creation
Internal Audit Function (Principle 1.3)
Partially applied.
The Company partially adheres to this principle. An explanation of how the Company
departs from the principle is based on the analysis of the individual best practises below.
Appointment and dismissal (Best practice
1.3.1) and assessment of the internal audit
function (Best practise 1.3.2)
Not applied.
The Company does not apply this best practice as there is no formal internal audit unit in
the Company. As of the date of this report the function of internal audit unit is performed by one senior
employee (“audit specialist”) with competence and knowledge
of accounting and auditing procedures
who
is tasked with the role by the Board of Directors. These procedures are being supervised by the
Board of Directors. The Supervisory Board performed an annual assessment of internal audit proce-
dures and included its conclusions with regards to the existing alternative measures, along with any
resulting recommendations, in the report of the Supervisory Board. The Risk Manager who reports di-
rectly to the Board of Directors supports Internal Audit function.
Internal Audit Plan (Best practise 1.3.3)
Not applied.
The Internal audit plan is not formally drawn up
Appointment and assessment of the function-
ing of the external auditor (Principle 1.6)
Partially applied.
An explanation of how the Company departs from this principle is based on the anal-
ysis of the individual best practises discussed below.
Engagement (Best practise 1.6.3)
Not applied.
The Supervisory Board has not formally engaged the external auditor. According to the
Company’s Articles of Association, the Company’s General Meeting decides (or the Board of Directors,
should the General Meeting fail to do so) on appointment of the external auditor. The external auditor
was appointed by the Board of Directors in accordance with Article 31.2 of the Articles of Association.
The Supervisory Board expressed approval with its engagement and the Audit Committee has kept close
contact with the external auditor, meeting several times during the financial year.
Chapter 2. Effective Management and Supervision
Composition and size (Principle 2.1)
Partially applied.
An explanation how the Company deviates from this principle is based on the
analysis
of the individual best practises discussed below.
Policy on Diversity and Inclusion
(Best practise 2.1.5)
Not applied.
The Company’s Policy on Diversity and Inclusion for the entire enterprise is in the prepar-
atory stage and will be finalized in the first half of 2024, it has however not been formally adopted yet.
Diversity Policy and accountability about
diversity (Best practise 2.1.6)
Partially applied.
The diversity requirements for the Supervisory Board are listed in the Profile of the
Supervisory Board adopted in 2021 and amended in 2023.The Diversity Policy for the Board of Directors
was adopted in 2022.
Due to the size of the Board of Directors, which consists of two members who
68
Principle / Best Practice
Explanation of Departure from the Dutch Corporate Governance Code
are the founders and major shareholders of the Company, the target minimum participation of the
minority group of at least 30% was not achieved. The Diversity Policy assumes that in case of an
enlargement of the Board of Directors from the current size, th
e Supervisory Board shall make best
efforts to nominate a person in order to reflect the following ratio: at least 30% of the Board of
Directors will be comprised of women and at least 30% of the Board of Directors will be comprised
of men. The Company com
plies with Article 2:142b of the Dutch Civil Code with regard to statutory
quota for the Supervisory Board (
(at least 1/3 of the Supervisory Board members are male and at least
1/3 are female)
The Company’s enterprise D&I Policy has not been implemented yet and therefore the Company is
not able to report on its goals and results; however please see the discussion in the Diversity section
above.
Appointment, succession and evaluation
(Principle 2.2)
Partially applied.
An explanation how the Company deviates from this principle is based on the analysis
of the individual best practises discussed below.
The Company believes that it adheres to this principle
partially as transparency of the procedures is ensured by the formal rules set out in the current regula-
tions of the Company, i.e. in Articles of Association.
Succession (Best practise 2.2.4)
Partially applied.
The succession plan for the Supervisory Board was implemented in 2022. Succession
plan for the Board of Directors has not been implemented.
Duties of the selection and appointment
committee (Best practice 2.2.5)
Not applicable.
This best practice has not been applied as there is no selection and appointment com-
mittee appointed in the Supervisory Board
due its limited size. The entire Supervisory Board performs
the function of the committee.
It should be noted that the Articles of Association allow that such com-
mittees are appointed by the Supervisory Board in the future, at the discretion of the Superv
isory Board
and according to the needs of the Company.
Culture (Principle 2.5)
Partially applied.
An explanation how the Company deviates from this principle is based on the analysis
of the individual best practises discussed below.
Employee participation (Best practice 2.5.3)
Not applied.
The limited size of the Company, its distribution over several countries of operation and
its flat managerial structure does not justify implementation of an employee participation body.
Preventing conflict of interest (Principle 2.7)
Partially applied.
An explanation how the Company deviates from this principle is based on the analysis
of the individual best practises discussed below.
Personal loans (Best practice 2.7.6)
Not applied.
This best practice has not been applied as the Company has granted such loans to its
Board of Directors’ members and companies controlled by them. All details about the loans are disclosed
in the annual report.
Chapter 3. Remuneration
Determination of Board of Directors
remuneration (Principle 3.2)
Not applied.
The Supervisory Board has not submitted the remuneration proposal to the General Meet-
ing and the remuneration was not discussed. .
Accountability for implementation of
remuneration policy (Principle 3.4)
Partially applied.
An explanation how the Company deviates from this principle is based on the analysis
of the individual best practises discussed below.
Agreement of Board of Directors member
(Best practice 3.4.2)
Not applied.
This best practice is not applicable as there are no Board of Directors’ agreements in place
between the Company and Board of Directors members. The Board of Directors was appointed by no-
tarial deed of incorporation in 2010 and re-appointed for the term of
4 years by the General Meeting on
4 December 2020.
Chapter 4. The General Meeting
Provision of information (Principle 4.2)
Partially applied.
An explanation how the Company deviates from this
principle is based on the analysis
of the individual best practises discussed below.
Policy on bilateral contacts with shareholders
(Best practice 4.2.2)
Partially applied.
The Company adopted the Stakeholder Dialogue Policy in which it describes the
means of communication with various stakeholders, including shareholders. The Company does not for-
mulate a separate bilateral policy of dialogue between the Company and sharehold
ers. The Company
however keeps a dialogue with its shareholders and provides extensive reports to its shareholders and
investors, also with a quarterly online presentation of business update and financial results during which
questions f
rom shareholders are answered. In addition, two Company’s major shareholders serve on
the Board of Directors and some of Company employees are Company’s shareholders through Em-
ployee Share Purchase Program. This unique set up allows for more communication
channels between
the Company and its shareholders.
Outline of anti-takeover measures (Best prac-
tice 4.2.6)
Not applied.
This best practise has not been applied as there are no anti-takeover measures imple-
mented by the Company. The Articles of Association state that anti-
takeover measures may be adopted
by the Supervisory Board, when necessary.
Casting votes (principle 4.3)
Partially applied.
An explanation how the Company deviates from this principle is based on the analysis
of the individual best practises discussed below.
Voting right on financing preference shares
(Best practice 4.3.4)
Not applicable.
There are no preference shares.
Publication of institutional investors’ voting
policy (Best practice 4.3.5)
Not applied.
The Company has not implemented a voting policy for institutional investors as there are
currently no institutional investors who have expressed an interest in participation in the Company’s
general meetings and a need for such policy to be implemented.
Report on the implementation of institutional
investors’ voting policy (Best practice 4.3.6)
Not applied.
See explanation above in point 4.3.5.
69
Principle / Best Practice
Explanation of Departure from the Dutch Corporate Governance Code
Abstaining from voting and Share lending
4.3.7 and 4.3.8
Not applicable.
No shareholders have short position in the Company and no Company shares were
lent.
Issuing depositary receipts for shares (Princi-
ple 4.5)
Not applicable.
The Company has not issued depository receipts for shares.
Best Practice for GPW Listed Companies
The WSE Best Practices for companies listed on WSE 2021 is a
set of recommendations, principles, best practices and rules of
procedure for governing bodies of publicly listed companies
and their shareholders. The publicly listed companies shall dis-
close information on their compliance with corporate govern-
ance rules and the scope of information to be provided. If a
publicly listed company does not comply with any specific rule
on a permanent basis or has breached it incidentally, such pub-
licly listed company is required to disclose this fact in the form
of a current report. Furthermore, a publicly listed company is
required to attach to its annual report information on the scope
in which it complied with the WSE Best Practices 2021 in a given
financial year. Accordingly, the Company has taken or will take
the necessary actions to observe all of the rules comprising the
WSE Best Practices to the fullest extent possible. Below is a list
of Best Practises which the Company applies only partially or
does not apply. The rest of the Best Practises are observed and
applied by the Company.
No.
Principle / Best Practice
Comments of the Company
1.
Management Board, Supervisory Board
2.2.
Decisions to elect members of the management board or the su-
pervisory board of companies should ensure that the composition
of those bodies is diverse by appointing persons ensuring diversity,
among others in order to achieve the target minimum participation
of the minority group of at least 30% according to the goals of the
established diversity policy referred to in principle 2.1.
The principle is not applied
The target minimum participation of the minority group of at least
30% was achieved in case of the composition of the Supervisory
Board. Due to the size of the Management Board, which consists
of two members - founders only, the target minimum participation
of the minority group of at least 30% was not achieved. The diver-
sity policy assumes that in case of an enlargement of the Manage-
ment Board from the current size, the Supervisory Board shall
make best efforts to nominate a person in order to reflect the fol-
lowing ratio: at least 30% of the Management Board will be com-
prised of women and at least 30% of the Management Board will
be comprised of men.
2.7.
A company’s management board members may sit on corporate
bodies of companies other than members of its group subject to
the approval of the supervisory board.
The principle is not applied
The principle is not
applied however in the Rules of Procedure of
the Supervisory Board point 3.2 states that "Management Board
members and Supervisory Board members, shall report any other
positions they may have to the Supervisory Board in advance and,
at least annually, the other positions should be discussed at the
Supervisory board meeting". This partially mitigates the risks
which are addressed by this principle.
2.
Internal Systems and Functions
3.2.
Companies’ organisation includes units responsible for the tasks of
individual systems and functions unless it is not reasonable due to
the size of the company or the type of its activity.
The principle is not applied.
The Management Board and Supervisory Board believe that the
current organization and resources responsible for the individual
systems are sufficient and adequate to the size of the Company
and specifics of its business. Given the nature of the Company’s
business, it seems reasonable to keep risk management and con-
trolling department integrated as a part of the financial depart-
ment, as they all provide necessary input for the investment
decisions. This ensures that both financial and non-financial infor-
mation is collected, analysed, and processed within the same de-
partment and the optimal business decision is taken. For more
details please see the Supervisory Board report for the year 2023.
3.3
Companies participating in the WIG20, mWIG40 or sWIG80 index
appoint an internal auditor to head the internal audit function in
compliance with generally accepted international standards for
the professional practice of internal auditing. In other companies
which do not appoint an internal auditor who meets such require-
ments, the audit committee (or the supervisory board if it performs
the functions of the audit committee) assesses on an annual basis
whether such person should be appointed.
The principle is not applied
The Audit Committee has performed a thorough and continuous
review of the internal risk management systems, internal audit
function and controlling
throughout the year and also during its
on-site visits in May, June and September 2023.
The assessment
includes the evaluation of the existing processes in place, human
resources, its competences, and responsibilities as well as the re-
porting structure within the organization. The chairman of the Au-
dit Committee performed the analysis through the consultations
with the responsible personnel (the management, the head of risk,
head of treasury, finance director, the head of accounting and con-
solidation, the head of legal and head of compliance). He reviewed
the procedures and evaluated whether adequate resources are in
70
The full text of the statement on the company's compliance with the corporate governance principles contained in Best Practice for
GPW Listed Companies 2021 is available on the Company’s website.
No.
Principle / Best Practice
Comments of the Company
place, and discussed relevant topics with external auditors. He an-
alysed the need to establish an internal audit function. The Audit
Committee concluded that while the current measures with re-
spect to internal audit function are more or less adequate and
there is no indication of any fraud, a stronger formalization of the
internal audit function (either through hiring of an appropriate
candidate or sourced out externally with the consulting firms) is
desirable at this stage. The results of this analysis were discussed
with the Board of Directors. Currently, proposals from external
consultants are being gathered and evaluated. The Company will
seek their advice to create a more formal framework ensuring the
internal audit function can operate adequately.
3.6.
The head of internal audit reports organisationally to the president
of the management board and functionally to the chair of the audit
committee or the chair of the supervisory board if the supervisory
board performs the functions of the audit committee.
The principle is not applied.
This principle is not applied as there is no separate internal audit
unit in the Company, there is no head of the internal audit depart-
ment, who could be placed in the organizational structure as re-
quired by this principle. Further explanation can be found in
comment 3.1. and 3.3.
3.10.
Companies participating in the WIG20, mWIG40 or sWIG80 index
have the internal audit function reviewed at least once every five
years by an independent auditor appointed with the participation
of the audit committee.
The principle is not applicable.
The Company is in the second year of this obligation hence this
obligation to review the internal audit function by an independent
auditor was not required in the course of the reporting period.
3.
General Meeting, Shareholder Relations
4.1.
Companies should enable their shareholders to participate in a
general meeting by means of electronic communication (e-meet-
ing) if justified by the expectations of shareholders notified to the
company, provided that the company is in a position to provide the
technical infrastructure necessary for such general meeting to pro-
ceed.
The principle is not applied.
Historically, there has never been an interest expressed by minor-
ity shareholders to participate in a general meeting by means of
electronic communication (e-meeting). While the company does
not offer participation at the general meeting through electronic
means of communication, it provides its shareholders an option to
(i) vote in advance on all resolutions on the agenda of a general
meeting; and (ii) ask questions in advance, in order to ensure full
participation of all shareholders. The shareholders also have an
option to participate in quarterly investors podcast where they can
pose questions and learn in detail about financial results, business
development and strategy.
4.3.
Companies provide a public real-life broadcast of the general
meeting.
The principle is not applied.
Please see the explanation provided in the principle 4.1.
71
Supervisory Board Report for Year 2023
The Supervisory Board of the Company is responsible for su-
pervising and advising the Management Board. In exercising its
role, the Supervisory Board follows the applicable law, the Arti-
cles of Association of the Company, Dutch and Polish Corporate
Code of Conduct, Rules of Procedure of the Supervisory Board,
and the Company’s interests. It is a separate body that operates
independently of the Management Board.
Composition and Diversity
Name
Age
Gender
Nationality
Date of Initial
Appointment
Term of
Office
Function
Independency
Status
Marek Skreta
57
male
Swiss
4.12.2020
2024
Chairman of the
Supervisory Board
Independent
Boguslawa
Skowronski
67
female
Polish, Swiss, U.S.
4.12.2020
2024
Member of the
Supervisory Board
Independent
Ariel Sergio Davidoff
56
male
Swiss
31.5.2022
2026
Chairman of the
Audit Committee
Independent
1
Independence is defined within the meaning of the Dutch Corporate Code
In accordance with the applicable law, the General Meeting may
appoint the Supervisory Directors for a maximum of four years
and his/her term of office shall lapse on the day of the annual
General Meeting held in the fourth year after the year of his/her
appointment. A Supervisory Director may be re-appointed once
for another period of four years after which he/she may be re-
appointed once for a maximum period of two years, which term
may be extended once for a maximum period of two years. A
Supervisory Director may serve for a maximum of 12 years in
total.
The profile of the Supervisory Board member was prepared and
adopted by the Supervisory Board on 31 March 2021 and is
published on the Company’s website. The composition of the
Supervisory Board complies with the gender, expertise and
other requirements as defined in the Supervisory board profile
and Dutch law. At least one third of the Supervisory Board is
comprised of female members and at least one third is com-
prised of male members. The Succession and Retirement Plan
adopted on October 14, 2022 by the resolution of the Supervi-
sory Board and ensures more staggered succession of Supervi-
sory Directors. Two of the Supervisory Directors are up for re-
election this year and will be nominated again, one Supervisory
Director’s term expires in 2026.
The Supervisory Board is independent as a whole in accordance
with the best practise provision 2.1.7. of the Dutch Corporate
Governance Code, and all Supervisory Directors, including the
chairman, are independent within the meaning of best practise
provisions 2.1.8 and 2.1.9. of the Dutch Corporate Governance
Code.
Role of the Supervisory Board
In accordance with the applicable law and the Rules of Proce-
dure, the Supervisory Board is tasked with the supervision of
the policies of the Management Board and the general course
of affairs of the Company and its affiliated business. The super-
vision of the Management Board includes,
inter alia
, the strat-
egy
of
the
Company,
the
financial
reporting
process,
functioning of internal risk management, maintenance of the
Company’s corporate governance structure, liaising with the
Company’s external auditor and supervision of preparation of
annual accounts. Full account of the Supervisory Board respon-
sibilities is given in Article IV of the Rules of Procedure, pub-
lished on the Company’s website. The Supervisory Board is
authorized to inspect the books and records of the Company
and the Management Board shall provide the Supervisory
Board with information required for the performance of its du-
ties. The role of the Supervisory Board and the Audit Committee
are currently under review to reflect the additional require-
ments of the new Dutch Corporate Governance Code.
Meetings
In accordance with the Article VII of the Rules of Procedure, the
Supervisory Board meets whenever a Supervisory Director con-
siders appropriate and as often as it is required for the proper
performance of the Supervisory Board duties. In any event, the
Supervisory Board shall meet at least once a year. The Supervi-
sory Board may also adopt resolutions without holding a meet-
ing provided that all Supervisory Directors have consented to
this manner of adopting resolutions and the votes are cast in
writing or by electronic means.
In the financial year 2023, the Supervisory Board met 6 times,
in person or through videoconference. In addition, the Audit
Committee met five times, in person or through videoconfer-
ence. The Supervisory Board adopted one written resolution. In
the meetings, the Supervisory Board discussed a wide range of
topics, including:
►
Impact of the acquisition of Lerta, a process of its inte-
gration into the Group and related challenges, purchase
price allocation requirement, and risks relating to
Lerta’s business;
►
Strategy and guidance for the year 2023 and sustaina-
ble long-term value creation was discussed at the begin-
ning of the financial year and also throughout the year
when the Company’s results were published and guid-
ance was adjusted). The Supervisory Board and the
Management discussed the need for increase in
72
capacity of connected power plans (and its feasibility of
the project pipeline in development by the end of 2024),
merchant model vs. Feed in Tariffs, green bonus and
other subsidies in the areas of interest taking into ac-
count the drop in the electricity price, and other strate-
gies for sustainable long-term value creation (such as
focus on capacity markets and DSR in Poland and other
jurisdictions, development of proprietary portfolio vs.
acquisition of ready-to-built projects; focus on external
EPC in Czech Republic and Australia as a way to leverage
the revenue stream,
and the principle risks associated
with it.
►
Financial results were discussed and analysed on quar-
terly basis, including results and margins of the individ-
ual
Company
operational
segments;
maintaining
liquidity and cashflow.
►
Developments and trends on energy markets in EU,
Australia and worldwide, and specifically in jurisdictions
where the Company is active, existing and upcoming
legislative changes affecting the Company’s business;
slowdown in component distribution business across
the industry.
►
Current operational, financial and legal affairs were an-
alysed, stabilization of the Company’s finance depart-
ment and the dual role of the CEO/interim CFO
performed by the CEO;
►
Development of Australian projects with Raygen tech-
nology, results of PFAS pilot project in cooperation with
the Department of Defence in Australia and its exten-
sion, divestment of developed projects in Poland, devel-
opment and construction of the portfolio in Romania.
►
Financing of the Group and new loans; development of
the Company’s share and Green Bond price, share buy-
back and bond buyback.
►
The Audit Committee together with the external auditor
discussed the audit plan, increase of materiality thresh-
old (in relation to the increase of EBITDA), key audit mat-
ters, Lerta’s PPA and goodwill and the outcome of audit
in accordance with the good practise 1.7.4 of the Dutch
Corporate Governance Code.
►
The chairman of the Audit Committee made several on-
site visits, met with the Management Board and individ-
ual employees/managers and reviewed Company’s in-
ternal risk management, controlling, compliance and
internal audit procedures (more on this topic below).
►
Necessary implementation of the legislative require-
ments under the EU CSRD Directive (EU taxonomy), sus-
tainability reporting and cybersecurity were discussed.
►
The Supervisory Board, through a written resolution (i)
amended the Supervisory Board Profile by stipulating
the requirement for gender diversification of the Super-
visory Board in line with Dutch Diversity Act (ii) ap-
proved the 2022 standalone and consolidated financial
statements.
Attendance of Supervisory Board Members
Supervisory Board Meetings
Boguslawa Skowronski
83%
Ariel Sergio Davidoff
100%
Marek Skreta
83%
Evaluation
During an open discussion in the meeting, the Supervisory Di-
rectors performed a self-evaluation and also the evaluation of
the Board of Directors, individually and as a whole. They agreed
that the Supervisory Board operated efficiently and its cooper-
ation with the Board of Directors and the auditors was good
with appropriate distribution of the roles and tasks. It was con-
cluded that the Supervisory Board as a whole, as well as its in-
dividual members, functioned well. The communication from
the Board of Directors takes place in a transparent and con-
structive manner and the Board of Directors has been forth-
coming in all request for information.
The Supervisory Board has further evaluated the functioning of
the Board of Directors as a whole, as well as its individual
members in a closed meeting in accordance with best practise
2.2.7 of the Dutch Corporate Governance Code and also in dis-
cussions with the Board of Directors. They stated that the com-
munication between the Boards was very good; the discussions
were held in an open and transparent atmosphere while main-
taining a sufficiently critical review. Both Managing Directors
were available and active and provided all cooperation and in-
formation necessary for successful functioning of the Supervi-
sory Board. As an organizational matter, the Boards agreed to
create a slot for monthly meetings that will serve as periodic
updates to the Supervisory Board of key ongoing matters. The
Chairman of the Supervisory Board expressed its appreciation
of the work performed by the Head of Audit Committee and the
Company Secretary.
Committees
In accordance with Article VIII of the Rules of Procedure, the Su-
pervisory Board may appoint standing and/or ad hoc commit-
tees from among its members which are charged with tasks
specified by the Supervisory Board. Currently, due to the small
size of the Supervisory Board, the function of each committee
is performed by the entire Supervisory Board. Apart from the
Audit Committee, which the Supervisory Board created formally
on 4 December 2020, no committees were established.
Other
committees, such as Remuneration Committee or Selection and
Appointment Committee, will be established if the need for
such committees arises in the future. Up until then, the Super-
visory Board will perform all functions as a whole.
73
Work of the Audit Committee
The Company’s Audit Committee (and its Chairman, in particu-
lar) undertakes preparatory work for the Supervisory Board’s
decision-making regarding the supervision of the integrity and
quality of the Company’s financial reporting and the effective-
ness of the Company’s internal risk management and control
systems. It maintains contact with the external auditors, and
also monitors the Board of Directors in connection with the
Company’s funding, tax policy and application of IT technology,
especially with respect to cybersecurity.
In the course of 2023, Audit Committee met five times in total.
The Audit Committee met three times with the external auditor,
reviewed the audit plan and was presented with the outcome
of the audit.
The Head of Audit Committee visited Company
headquarters and operations in the Czech Republic, conducted
interviews with senior personnel and engaged in preparatory
work for the Supervisory Board’s meetings. He was instrumen-
tal in the engagement of a new Company CFO.
The Supervisory Board, performing a function of the Remuner-
ation and Nomination Committee, evaluated the Management
Board’s and Supervisory Board’s remuneration and prepared
the Remuneration Report which shall be submitted to the Gen-
eral Meeting.
Assessment of the Internal Control, Internal Audit, Risk Management, Compliance Systems
The Audit Committee has performed a thorough and continu-
ous review of the internal risk management systems, internal
audit function, controlling and legal compliance policies,
throughout the year and also during its on-site visits in May,
June and September 2023.
The assessment includes the evalu-
ation of the existing processes in place, human resources, its
competences, and responsibilities as well as the reporting
structure within the organization. The chairman of the Audit
Committee performed the analysis through the consultations
with the responsible personnel (the management, the head of
risk, head of treasury, finance director, the head of accounting
and consolidation, the head of legal and head of compliance).
He reviewed the procedures and evaluated whether adequate
resources are in place, and discussed relevant topics with
external auditors. His focus was mainly on the following topics:
(a) stabilization of the finance department and search for a new
CFO, (b) creation of internal audit function. The Audit Commit-
tee concluded that while the current measures with respect to
internal audit function are more or less adequate and there is
no indication of any fraud, a stronger formalization of the inter-
nal audit function (either through hiring of an appropriate can-
didate or sourced out externally with the consulting firms) is
desirable at this stage. The results of this analysis were dis-
cussed with the Board of Directors. Currently, proposals from
external consultants are being gathered and evaluated. The
Company will seek their advice to create a more formal frame-
work ensuring the internal audit function can operate ade-
quately.
Assessment of the Compliance with the Dutch and Polish Best Corporate Governance Standards
Supervisory Board reviewed the compliance report with the
best Dutch and Polish corporate governance standards for
2023 and discussed with the Board of Directors the practises
which were improved during year 2023 and those which still
remain as ‘not applied’. The Supervisory Board gave recommen-
dations on measures which shall be taken to further improve
the compliance with best practises during the course of the year
2024.
Assessment of the rationality of expenses referred to in principle 1.5 of the Polish Best Corporate
Governance Standards (donations and sponsorship)
In accordance with the requirement of the Polish Corporate
Governance Code, the Supervisory Board has reviewed the do-
nations and sponsorship contributions for 2023. It views them
as immaterial in terms of value, and legitimate given the core
business of the Company. The Company’s policy is to give back
to local communities in which it operates its business, and it
may have a form of local initiatives’ support. An overview of the
largest donations made in 2023 by the Company is located in
‘Sponsorship & Donations’ section of the Directors Report.
Financial Statements 2023
The financial statements are audited by PricewaterhouseCoop-
ers Accountants N.V., which was appointed to be the Company’s
auditors by the Management board resolution dated 30 Sep-
tember 2023. The Supervisory Board established that the exter-
nal auditor was independent of the Company. The 2023
financial statements were approved by the Supervisory Board
on 30 April 2024. The Supervisory Board will submit the finan-
cial statements to the 2024 Annual General Meeting and will
propose that the shareholders adopt them and release the
Board of Directors from all liability in respect of its managerial
activities and release the Supervisory Board from all liability in
respect of its supervision duties.
Conclusion
The year 2023 was a turbulent year for the Company facing in-
ternal tests such as integration of the Lerta (New Division) busi-
ness into the Group and personnel changes in the senior
positions in the finance department as well as external chal-
lenges connected with decreasing electricity prices, regulatory
changes in countries of operations, overall high inflation and an
unstable geopolitical situation. Although the Company was not
able to replicate the growth of 2022, we believe that it is on a
good trajectory to a more stable and successful year.
74
On behalf of the Supervisory Board, we would like to thank the Management Board and all employees of Photon Energy Group for
their commitment and personal contribution to the successful financial year 2023.
Amsterdam, 30 April 2024
Marek Skreta
Boguslawa Skowronski
Ariel Sergio Davidoff
75
Remuneration Report
The remuneration of the Management Board members is paid
out in accordance with the Remuneration Policy, prepared by
the Supervisory Board and adopted by the General Meeting on
1 June 2021. An amendment to the Remuneration Policy was
submitted by the Supervisory Board to the General Meeting and
adopted on 31 May 2022.
It aims to attract, motivate and retain
qualified and experienced individuals and reward them with a
competitive remuneration package while considering its size
and unique characteristics. Gender, age, nationality, race, eth-
nic origin or other personal characteristics do not play any role
in determining remuneration practice.
This Remuneration Report comprises information within the
meaning of articles 2:135b Dutch Civil Code and Section 3.4.1 of
the Dutch Corporate Governance Code 2022 and is also pub-
lished as part of the 2023 Annual Report. It is submitted to the
General Meeting for an advisory vote. The Remuneration Re-
port for the 2022 financial year was approved by the 2023 An-
nual General Meeting’s unanimous vote and therefore the
Supervisory Board has not considered any changes to the cur-
rent Remuneration Report.
Management Board Remuneration
Fixed Remuneration
The Management Board members take part in the Company’s
day-to-day activities and they receive a fixed remuneration ad-
equate to the competitive market levels of remuneration. In
2023, the Company performed a comparison within a reference
group of its industry peers listed on European public markets
(France, Spain, Germany) and determined that the remunera-
tion of both Management Board members was well below the
median of the benchmark.
Since the Management Board members are also majority share-
holders, it has been decided that their compensation for the re-
sponsibility and function of the Management Board members
shall be deemed mostly realized through the value creation and
share appreciation. In accordance with the Remuneration Pol-
icy, the Management Board members therefore receive remu-
neration solely as part of their employment by an affiliated
company within the Photon Energy Group and they do not re-
ceive compensation for their duties of serving on the Manage-
ment Board for the Group of entities.
Furthermore, no emoluments of the Managing Directors, in-
cluding pension payments were paid to the Managing Directors.
No service contracts with the Company nor any of its Subsidiar-
ies have been provided to a Managing Director that give entitle-
ment to benefits upon termination of employment. Mr. Georg
Hotar receives a regular salary as an employee in his function
as managing director of Global Investment Protection AG in
Switzerland, and Mr. Michael Gartner receives a regular salary
as an employee in his function as managing director of Photon
Energy Australia Pty Ltd. in Australia.
Variable Remuneration and Stock Options
In accordance with the amended Remuneration Policy, an an-
nual variable remuneration (short-term incentive) linked to
companies KPIs and adequate to competitive market levels can
be awarded to the Management Board members. In alignment
with the Company’s strategy, the Supervisory Board, at its dis-
cretion, will consider short or longer-term goals and their re-
spective weights and targets for the respective bonus period; a
part of the variable remuneration may therefore reflect a pe-
riod longer than one performance year. The Supervisory Board
shall also consider the following: (i) Company’s strategy; (ii) his-
torical performance and business outlook; (iii) long term value
creation; (iv) stakeholders expectations. Due to the worsening
of the Company’s financial results in 2023, it was decided not to
distribute variable remuneration to the Managing Directors and
therefore no applicable performance targets were considered.
No variable remuneration was paid to the Managing Directors
in the financial year 2023.
The Managing Directors currently do not receive stock options
or any other rights to acquire shares in the Company. In line
with the Remuneration Policy, the interests of the Company in
long-term value creation are ensured by the members of the
Management Board being also the founders and majority
shareholders of the Company. As such, the long-term incentive
for the Management Board is the Company‘s share apprecia-
tion. Both directors benefit primarily from the growth of the
Company’s value so their interests are aligned with the interest
of other (minority) shareholders.
No stock options or other rights were granted to the Managing
Directors or the employees of the Company in 2023.
Claw-backs/Severance Payments
No claw-back of remuneration was exercised in 2023. No sever-
ance payment was made to the members of the Management
Board.
76
Overview of the Total Remuneration of the Management Board
In thousands of EUR
Total Fixed
Compensation
Total Variable
Compensation
Ratio Fixed
Compensation / Total
Compensation
Stock
Options
Granted
Georg Hotar, Managing Director and CEO
2023
355
0
100%
0
2022
350
97
78%
0
2021
321
0
100%
0
Michael Gartner, Managing Director and CTO
0
2023
138
0
100%
0
2022
149
0
100%
0
2021
144
0
100%
0
Internal Pay Ratio
The average remuneration of employees who are not directors
in 2023 was EUR 44,387 per year. The internal pay ratio, as av-
erage compensation of the Management Board members in re-
lation to the average annual compensation per full time
employee of the Company for the financial year 2023 was 5.56.
The internal pay ratio of the remuneration of CEO in relation to
the average annual compensation per full time employee was
8%.
The Company’s shares were not listed on the public regulated
markets before January 2021, and therefore, the Company was
not obliged to publish the Remuneration Report in the financial
years prior to 2021. For this reason, the Company can only pub-
lish comparisons with previous two years.
Comparison of Internal Pay Ratio
Year
Internal Pay Ratio
2023
5.6
2022
5.8
2021
5.3
Business performance highlights and remuneration comparison
2023
2022
% change
2021
Revenues
EUR 70.6 million
EUR 95.1 million
-25.8%
EUR 36.4million
EBITDA
EUR 3.7 million
EUR 24.3 million
-84.8%
EUR 9.6 million
Net result
EUR -15.75 million
EUR 6.3 million
na
EUR -6.4 million
Installed Capacity
127.3 MWp
91.9 MWp
+38.5%
90.5 MWp
Number of Employees
348
220
+58.2%
144
Remuneration
Board of Directors
EUR 493,000
EUR 596,000
-17.3%
EUR 465,000
Remuneration Employees
without Board of Directors
EUR 17.986 million
EUR 8.490 million
+111.9%
EUR 5.955 million
Average compensation
per full time employee
EUR 44 387
EUR 49 000
-9.4%
EUR 44 000
77
Loans
The following loans have been granted to the Managing Directors by the Company or the Company’s affiliated entity.
In thousands of EUR
Total Loan Amount in 2023
% change
Total Loan Amount in 2022
Georg Hotar, Managing Director and CEO
728
22.5%
594
Michael Gartner, Managing Director and CTO
94
3.2%
91
The loans bear an interest rate of 3% and are short term for a period of up to 12 months, due on 31st December 2024.
The Company or its affiliated entity also provided loans to the entities fully owned by the Managing Directors.
In thousands of EUR
Total Loan Amount in 2023
% change
Total Loan Amount in 2022
Solar Age Investments B.V.
1
1,343
17.0%
1,148
Solar Power to the People Cooperatief U.A.
2
650
5.9%
614
The loans bear an interest rate of EURIBOR plus 3% and are short term for a period of up to 12 months, due on 31st December 20
Supervisory Board Remuneration
The Remuneration Policy aims at providing a competitive com-
pensation package to attract, motivate and retain qualified Su-
pervisory Directors while considering the Company’s size and
its unique characteristics. This is essential for executing the
Company’s strategy and safeguarding and promoting its long-
term value and sustainability. Supervisory Board members re-
ceive fixed remuneration for their responsibilities that does not
depend on the Company‘s results in order to protect their inde-
pendence when supervising the manner in which the Manage-
ment Board members implement the long-term value creation
strategy. These responsibilities are part of the membership of
the Supervisory Board and its Audit Committee and the position
of Chairman of the Supervisory Board and/or Audit Committee.
The certainty of the fixed compensation also allows Supervisory
Board members in their supervisory role to focus on the long-
term interest and sustainability of the Company. Each member
of the Supervisory Board is entitled to reimbursement by the
Company for all expenses incurred by him/her in connection
with performing his/her duties as the Supervisory Board mem-
ber. Due to its small size, all members of the Supervisory Board
perform functions of the Audit and other Committees. There-
fore, the chairman of the Supervisory Board and the chairman
of the Audit Committee do not receive extra compensation for
the performance of their function. At least two of the Audit
Committee comply with the requirement of financial expert
within the meaning of Article 39, paragraph 1, of Directive
2014/56/EU.
The Company does not grant loans, advance payments or guar-
antees to members of the Supervisory Board.
Overview of the Supervisory Board Remuneration in 2023
In thousands of EUR
Total fixed compensation
in 2023
Total fixed compensation
in 2022
Total fixed compensation
in 2021
Boguslawa Skowronski
15
15
15
Marek Skreta
15
15
15
Ariel Sergio Davidoff*
15
8.75
n/a
* Mr. Davidoff’s term of office commenced on 31 May 2022.
1
Entity owned by Michael Gartner (51.67%) and by Georg Hotar (48.33%)
2
Entity 100% owned by Georg Hotar
Mokrá Lúka, Slovakia
Financials
Photon Energy N.V.
Financial Statements
For the Year Ended 31 December 2023
81
Photon Energy N.V.
Financial Section
Annual Report 2023
Financial Statements for the Year Ended 31 December 2023
82
Table of Contents
Photon Energy N.V. Consolidated Financial Statements
For the Year Ended 31 December 2023
84
Consolidated Statement of Comprehensive Income
for the Year Ended 31 December
85
Consolidated Statement of Financial Position
as of 31 December
86
Consolidated Statement of Changes in Equity
for the Year Ended 31 December
87
Consolidated Statement of Cash Flows
for the Year Ended 31 December
88
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2023
89
1.
Reporting Entity
90
2.
Basis of Preparation
90
2.1
Statement of Compliance
90
2.2
Basis of Measurement
90
2.3
Functional Currency
91
2.4
Use of Estimates and Judgments
91
2.4.1
Recognition of Deferred Tax Asset
91
2.4.2
Recognition of Revenues from Contracts with
Customers
91
2.4.3
ECL Measurement
91
2.4.4
Key Assumptions used in Measurement of Fair
Value of Other Financial Investments
91
2.4.5
Impairment of Goodwill
92
2.4.6
Initial Recognition of Intangible Assets
92
2.4.7
Useful Economic Life of Tangible and Intagible
Assets and Right of Use
92
2.4.8
Business Combination
92
2.5
Restatement of the Comparative Period
92
3.
Application of New and Revised EU IFRSs
93
3.1
New and Revised EU IFRSs Affecting Amounts
Reported in the Current Year
(and/or Prior Years)
93
3.2
New Accounting Pronouncements
93
4.
Material Accounting Policies
94
4.1
Basis of Consolidation
94
4.1.1
Business Combinations
94
4.1.2
Subsidiaries
94
4.1.3
Loss of Control
94
4.1.4
Investments in Associates and Jointly Controlled
Entities (Equity-accounted Investees)
94
4.1.5
Transactions Eliminated on Consolidation
95
4.2
Foreign Currency
95
4.2.1
Foreign Currency Transactions
95
4.2.2
Foreign Operations
95
4.2.3
Cash and Cash Equivalents/Liquid Assets
95
4.2.4
Borrowing Costs
95
4.3
Financial Instruments
95
4.3.1
Non-derivative Financial Assets
95
4.3.2
Non-derivative Financial Liabilities
96
4.3.3
Derivative Financial Instruments
96
4.3.4
Cash Flow Hedges that Qualify for Hedge
Accounting
96
4.3.5
Share Capital
96
4.4
Property, Plant and Equipment
97
4.4.1
Recognition and Measurement
97
4.4.2
Depreciation
97
4.5
Right-of-use Assets
97
4.6
Intangible Assets
98
4.6.1
Goodwill
98
4.7
Impairment
98
4.8
Inventories
98
4.9
Provisions
98
4.9.1
Warranties
98
4.10
Lease Liabilities
98
4.11
Revenue Recognition
99
4.11.1
Revenue from Electricity Generation
99
4.11.2
Revenue from Electricity Trading
99
4.11.3
Revenue from the Capacity Market Contracts
99
4.11.4
Revenue from Sale of Goods
99
4.11.5
Revenues from Sale of Services
99
4.11.6
Revenue from Engineering, Procurement and
Construction (EPC)
100
4.12
Finance Income and Financial Expenses
100
4.13
Employee Benefits
100
4.14
Government Grants
100
4.15
Income Tax
100
4.16
Earnings Per Share
101
4.17
Segment Reporting
101
4.18
Changes in Presentation of Financial
Information
101
4.19
Alternative Performance Measures
101
5.
Determination of Fair Values
103
5.1
Property, Plant and Equipment
103
5.2
Inventories
103
5.3
Financial Instruments – Other Financial
Assets and Derivatives
103
6.
Financial Risk Management
104
6.1
Risk Management Framework
104
6.2
Sovereign Risk
104
6.3
Operational Risk
104
6.4
Currency Risk
104
6.5
Credit Risk
104
6.5.1
Trade and Other Receivables
104
6.5.2
Liquid Assets with Restriction on Disposition
105
6.6
Liquidity Risk
105
6.7
Interest Risk
105
7.
Operating Segments
106
8.
Business Combination
110
8.1
Valuation of Lerta
110
8.2
Steps of the Acquisition
110
Photon Energy N.V.
Financial Section
Annual Report 2023
Financial Statements for the Year Ended 31 December 2023
83
9.
Acquisitions of Subsidiary and Non-controlling
Interests; Financial Information for the Joint
Ventures
113
9.1
Establishment of New Subsidiaries
113
9.2
Acquisitions of Subsidiaries
113
9.3
Financial Information for the Joint Ventures
115
10.
Revenue
116
11.
Other Income
118
12.
Raw Materials and Consumables Used
118
13.
Solar Levy
119
14.
Personnel Expenses
119
15.
Other Expenses
119
16.
Impairment Charges
120
17.
Financial Income and Financial Expense
120
18.
Income Tax Expense
121
18.1
Income Tax Recognized in Profit or Loss
121
18.2
Reconciliation of Effective Tax Rate
121
19.
Property, Plant and Equipment
122
20.
Right-of-use Assets and Lease Liabilities
124
21.
Goodwill
125
22.
Intangible Assets
128
23.
Other Financial Investments
128
24.
Deferred Tax Assets and Liabilities
131
25.
Inventories
132
26.
Trade and Other Receivables, Loans to Related
Parties
132
27.
Assets and Liabilities Arising from Contracts with
Customers
134
28.
Liquid Assets
135
29.
Assets Held for Sale
135
30.
Capital and Reserves
136
31.
Earnings Per Share
139
32.
Loans and Borrowings
140
33.
Provisions
143
34.
Trade and Other Payables
143
35.
Current Income Tax Receivables / Current Tax
Liability
143
36.
Derivative Financial Instruments
144
37.
Financial Risk Management
144
37.1
Liquidity Risk
144
37.2
Credit Risk
145
37.3
Interest Rate Risk
145
37.4
Currency Risk
146
38.
Fair Value Disclosures
147
38.1
Recurring Fair Value Measurements
147
38.2
Assets and Liabilities Not Measured at Fair
Value but for Which Fair Value is Disclosed
151
39.
Presentation of Financial Instruments by
Measurement Category
152
40.
Related Parties
152
41.
Group Entities
154
42.
Contingent Assets and Liabilities, Commitments
160
43.
Subsequent Events
160
Standalone Financial Statements
For the Year ended 31 December 2023
162
Company Balance Sheet as of 31 December 2023
163
Company Income Statement for the Financial Year
Ended 31 December 2023
164
Notes to the Company Financial Statements
For the Year Ended 31 December 2023
165
44.
Accounting Information and Policies
166
44.1
Basis of Preparation
166
44.2
Financial Fixed Assets
166
45.
Financial Fixed Assets
167
46.
Accounts Receivable from Group Companies
169
47.
Current Assets
170
48.
Shareholders’ Equity
171
48.1
Reconciliation of Movement in Capital and
Reserves
171
48.2
Share Capital and Share Premium
172
49.
Long-Term Debt
173
50.
Current Liabilities
175
51.
Financial Instruments
175
51.1
General
175
51.2
Fair Value
175
51.3
Liquidity risk
176
52.
Revenues
176
53.
Other Operating Income
176
54.
Other Operating Expenses
177
55.
Other Interest Income and Similar Income
177
56.
Other Interest Expense and Similar Expense
177
57.
Share in Results from Participating Interests
177
58.
Employee Benefits and Information
178
59.
Fees of the Auditor
178
60.
Related Parties
178
60.1
Transactions with Key Management
Personnel
178
Other Information
180
I.
Provisions in the Articles of Association
Governing the Appropriation of Profit
181
II.
Independent Auditor’s Report
181
Photon Energy N.V.
Consolidated
Financial Statements
For the Year Ended 31 December 2023
84
Photon Energy N.V.
Financial Section
Annual Report 2023
Consolidated Financial Statements for the Year Ended 31 December 2023
83
Consolidated Statement of Comprehensive Income for the Year Ended 31 December
In thousands of EUR
Note
2023
2022 restated
Revenue
10
70,649
95,136
Other income
11
932
552
Raw materials and consumables used
12
-36,877
-43,929
Solar levy
13
-1,621
-1,969
Personnel expenses
14
-18,479
-9,534
Other expenses
15
-10,898
-15,947
Earnings before interest taxes depreciation & amortisation (EBITDA)
3,706
24,309
Depreciation
19,20,22
-11,044
-8,949
Impairment charges
16
-977
-684
Gain on investment revaluation
23
2,902
0
Gain on derecognition of associate
8
0
2,182
Share of profit equity-accounted investments (net of tax)
9
217
127
Results from operating activities (EBIT)
-5,196
16,985
Financial income
17
743
362
Financial expenses
17
-11,434
-9,535
Gains less losses on derecognition of financial liabilities at amortised costs
17
-221
-114
Revaluation of derivatives
17
-194
1,027
Profit/loss before taxation (EBT)
-16,302
8,725
Income tax due/deferred
18
552
-2,463
Profit/loss
-15,750
6,262
Other comprehensive income (loss)
Items that will not be reclassified subsequently to profit or loss
Revaluation of property plant and equipment
19,30
14,482
433
Revaluation of other investments
23
5,235
605
Items that will be reclassified subsequently to profit or loss
Foreign currency translation difference – foreign operations
30
-430
342
Derivatives (hedging)
30,36
-3,996
2,310
Derivatives (hedging)
– related to JV
30,36
0
5
Other comprehensive income
15,291
3,695
Total comprehensive income
-459
9,957
Profit/loss attributable to:
Attributable to the owners of the company
-15,684
6,309
Attributable to non-controlling interest
-66
-47
Profit/loss for the year
-15,750
6,262
Total comprehensive income attributable to:
Attributable to the owners of the company
-393
10,004
Attributable to non-controlling interest
-66
-47
Total comprehensive income
-459
9,957
Earnings per share
Earnings per share (basic) (in EUR)
31
-0.264
0.111
Earnings per share (diluted) (in EUR)
31
-0.264
0.111
Total comprehensive income per share (in EUR)
31
-0.007
0.175
The notes on pages 87 to 157 are an integral part of these financial statements.
Photon Energy N.V.
Financial Section
Annual Report 2023
Consolidated Financial Statements for the Year Ended 31 December 2023
84
Consolidated Statement of Financial Position as of 31 December
In thousands of EUR
Note
31 December 2023
31 December 2022 restated
Assets
Goodwill
21
15,272
15,272
Intangible assets
22
8,062
7,541
Property, plant and equipment
19
172,511
145,549
Right of use- leased assets
20
4,990
3,449
Long term advances
26
0
780
Investments in equity-accounted investees
9
1,823
1,509
Long-term receivable from derivatives
26
2,012
5,087
Other receivables - non-current
26
534
543
Deferred tax asset
24
2,778
1,601
Other non-current financial assets
23
17,021
7,816
Non-current assets
225,003
189,147
Inventories
25
14,093
20,328
Contract asset
27
855
1,154
Trade receivables
26
4,870
9,624
Other receivables
26
12,105
9,039
Loans to related parties
26
2,815
2,447
Current income tax receivable
35
2,759
0
Prepaid expenses
1,287
597
Liquid assets
28
12,978
21,358
Cash and cash equivalents
5,838
11,271
Liquid assets with restriction on disposition
7,140
6,373
Precious metals
0
3,714
Asset held for sale
659
0
Current assets
52,421
64,547
Total assets
277,424
253,694
Equity & Liabilities
Equity
30
Share capital
612
600
Share premium
40,687
40,524
Revaluation reserve
55,668
38,326
Legal reserve
13
13
Hedging reserve
358
4,354
Currency translation reserve
1,935
2,364
Retained earnings
-28,717
-15,408
Other capital funds
30
38
38
Treasury shares held
30
-827
-139
Equity attributable to owners of the Company
69,767
70,672
Non-controlling interests
-263
-197
Total equity
69,504
70,475
Liabilities
Loans and borrowings
32
83,503
58,446
Issued bonds
32
78,539
76,511
Lease liability
20
4,181
2,914
Other non-current liabilities
32
208
230
Provisions
32
555
566
Deferred tax liabilities
24
11,070
11,013
Long-term payables from derivatives
1,722
0
Non-current liabilities
179,778
149,680
Loans and borrowings
32
11,448
7,259
Issued bonds
32
529
3,670
Trade payables
34
9,308
11,988
Other payables
34
5,252
6,610
Contract liabilities
27
662
592
Lease liability
20
943
712
Current tax liabilities
18
0
2,708
Current liabilities
28,142
33,539
Total liabilities
207,920
183,219
Total equity and liabilities
277,424
253 694
The notes on pages 87 to 157 are an integral part of these financial statements.
Photon Energy N.V.
Financial Section
Annual Report 2023
Consolidated Financial Statements for the Year Ended 31 December 2023
Consolidated Statement of Changes in Equity for the Year Ended 31 December
Statutory
Revalu-
Currency
Other
Own
Non-
Share
Share
Hedging
Retained
TOTAL
In thousands of EUR
Note
reserve
ation
translation
capital
treasury
TOTAL
controlling
capital
premium
reserve
earnings
EQUITY
fund
reserve
reserve
funds
shares
interests
Restated balance as at 1 January 2022
30
600
31,443
13
40,251
2,022
2,039
38
-38
-24,680
51,688
-150
51,538
Profit/loss for the year
0
0
0
0
0
0
0
0
6,309
6,309
-47
6,262
Increase in revaluation of PPE
19
0
0
0
433
0
0
0
0
0
433
0
433
Change in fair value of derivatives
30
0
0
0
0
0
2,310
0
0
0
2,310
0
2,310
Change in fair value of other investments (FVOCI)
23
0
0
0
605
0
0
0
0
0
605
0
605
Foreign currency translation differences (restated)
30
0
0
0
0
342
0
0
0
0
342
0
342
Change in fair value of derivatives (JV share)
36
0
0
0
0
0
5
0
0
0
5
0
5
Other comprehensive income (restated)
0
0
0
1,038
342
2,315
0
0
0
3,695
0
3,695
Total comprehensive income (restated)
0
0
0
1,038
342
2,315
0
0
6,309
10,004
-47
9,957
Acquisition of subsidiary
30
0
8,781
0
0
0
0
0
-23
0
8,781
0
8,781
Other movements (restated)
30
0
0
0
0
0
0
0
0
0
0
0
0
Recycled from revaluation reserve to retained
30
0
0
0
-2,963
0
0
0
0
2,963
0
0
0
earnings
Other transactions with owners in their capacity
30
0
300
0
0
0
0
0
-78
0
199
0
199
as owners
BALANCE at 31 December 2022
30
600
40,524
13
38,326
2,364
4,354
38
-139
-15,408
70,672
-197
70,475
Profit/loss for the year
0
0
0
0
0
0
0
0
-15,684
-15,684
-66
-15,750
Increase in revaluation of PPE
19
0
0
0
14,482
0
0
0
0
0
14,482
0
14,482
Change in fair value of derivatives
30
0
0
0
0
0
-3,996
0
0
0
-3,996
0
-3,996
Change in fair value of other investments (FVOCI)
23
0
0
0
5,235
0
0
0
0
0
5,235
0
5,235
Foreign currency translation differences
30
0
0
0
0
-430
0
0
0
0
-430
0
-430
Change in fair value of derivatives (JV share)
36
0
0
0
0
0
0
0
0
0
0
0
0
Other comprehensive income
0
0
0
19,717
-430
-3,996
0
0
0
15,291
0
15,291
Total comprehensive income
0
0
0
19,717
-430
-3,996
0
0
-15,684
-393
-66
-459
Acquisition of subsidiary
8
0
0
0
0
0
0
0
0
0
0
0
0
Other movements
30
0
0
0
0
1
0
0
0
0
1
0
1
Recycled from revaluation reserve to retained
30
0
0
0
-2,375
0
0
0
0
2,375
0
0
0
earnings
Other transactions with owners in their capacity
30
12
163
0
0
0
0
0
-688
0
-513
0
-513
as owners
BALANCE at 31 December 2023
30
612
40,687
13
55,668
1,935
358
38
-827
-28,717
69,767
-263
69,504
The notes on pages 87 to 157 are an integral part of these financial statements.
85
Photon Energy N.V.
Financial Section
Annual Report 2023
Consolidated Financial Statements for the Year Ended 31 December 2023
86
Consolidated Statement of Cash Flows for the Year Ended 31 December
In thousands of EUR
Note
2023
2022 restated
Cash flows from operating activities
Profit/loss for the year before tax
-16,302
8,725
Adjustments for:
Depreciation
19,20,22
11,044
8,949
Share of profit of equity-accounted investments
9
-217
-127
Impairment charges
26
977
684
Gain on disposal of financial investments
9
0
0
Net finance costs
17
11,106
8,259
Other non-cash items
-840
-5,991
Changes in:
Trade and other receivables
26
1,457
-7,544
Gross amount due from customers for contract work
27
-360
-23
Prepaid expenses
26
-691
-157
Inventories
25
5,901
-17,890
Trade and other payables
34
-3,990
9,690
Income tax paid (advances)
35
-4,883
-1,728
Proceeds from sale of gold
4,012
0
Net cash from operating activities
7,214
2,847
Cash flows from investing activities
Acquisition of property, plant and equipment
19
-23,284
-27,576
Acquisition of subsidiaries, associates, JV
9
-3,425
-6,214
Acquisition of other financial asset
28
0
-277
Acquisition of other investments
23
0
-120
Proceeds from sale of investment loans
9
0
757
Net cash used in investing activities
-26,709
-33,430
Cash flows from financing activities
Proceeds from issuance of ordinary shares
30
0
0
Proceeds from borrowings
32
38,710
29,086
Transfer to restricted cash account
28
-10,638
-22,559
Transfer from restricted cash account
28
9,871
19,774
Repayment of borrowings
32
-9,934
-6,649
Repayment of principal element of lease liability
20
-1,177
-668
Proceeds from issuing bonds
32
2,500
22,500
Payment of placement fee/exchange bonus fee for bonds issued
17
-75
-331
Repayment of long term liabilities/bonds
32
-3,761
-23,719
Interest payments
32
-11,434
-8,281
Proceeds from terminated derivatives
17
0
195
Net cash from financing activities
14,062
9,348
Net decrease/increase in cash and cash equivalents
-5,433
-21,235
Cash and cash equivalents at 1 January
11,271
32,506
Cash and cash equivalents at 31 December
28
5,838
11,271
The notes on pages 87 to 157 are an integral part of these financial statements.
87
Notes to the Consolidated
Financial Statements
For the Year Ended 31 December 2023
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
88
1.
Reporting Entity
Photon Energy N.V. (“Photon Energy” or the “Company”), ID
51447126, is a joint-stock company incorporated under the
laws of Netherlands on 9 December 2010. The statutory seat of
the Company is Barbara Strozzilaan 201, 1083HN Amsterdam.
The consolidated financial statements of the Company as at
and for the year ended 31 December 2023 comprise the Com-
pany and its subsidiaries (together referred to as the “Group”
and individually as “Group entities”) and the Group’s interest in
jointly controlled entities.
Photon Energy N.V. is the Group’s ultimate parent company. It
is a a joint-stock company incorporated and domiciled in the
Netherlands. Principal place of business on the Company is the
Netherlands.
Photon Energy NV’s shares are listed on the regulated markets
of the Warsaw and Prague Stock Exchanges, as well as on the
Quotation Board of the Frankfurt Stock Exchange. Trading of
the shares on regulated markets on the Warsaw Stock
Exchange and Prague Stock Exchange commenced on 5 January
2021. Trading of the Company’s shares on the Quotation Board
of the Open Market of the Frankfurt Stock Exchange (FSX) com-
menced on 11 January 2021.
The bonds are traded on the Open Market of the Frankfurt
Stock exchange, and on the stock exchanges in Berlin, Ham-
burg, Hannover, Munich and Stuttgart.
The Group is mainly engaged in the development of photovol-
taic power plants. This activity involves securing suitable sites
by purchase or long-term lease, obtaining all licenses and per-
mits, the design, procurement and installation of photovoltaic
equipment, financing, operations and maintenance. Photon En-
ergy pursues a comprehensive strategy of focusing both on
green-field and rooftop installations while trying to cover the
largest possible part of the value chain and lifecycle of the
power plant.
2.
Basis of Preparation
2.1
Statement of Compliance
The consolidated financial statements have been prepared in
accordance with IFRS Accounting Standards (IFRSs) as adopted
by the European Union (“EU IFRSs”) and title 9 Book 2 of the
Netherlands Civil code. It represents the international account-
ing standards adopted in the form of European Commission
Regulations in accordance with Regulation (EC) No 1606/2002
of the European Parliament and of the Council.
The consolidated financial statements were authorised for is-
sue by the Board of Directors on 30 April 2024.
Going Concern
During 2023, the Company encountered difficult market condi-
tions that resulted in overall worsening financial results at the
level of EBITDA and total negative net loss.
While assessing the going concern for the Company, the Man-
agement considered several critical scenarios including the fol-
lowing going concern risk triggers, such as:
►
Results presented in the most recent financial state-
ments;
►
Industry conditions;
►
Belated payments of non-core business-related liabilities;
►
Inability to comply with the terms of loan agreements;
►
Specific forecast events.
In order to diminish the negative 2023 results, the impacts of
the above listed triggers, and to improve the Company’s finan-
cial position in 2024 and onwards, the Management of the Com-
pany took the following decisions:
►
Change from merchant scheme to Feed in Tariff scheme
in Hungary, ensuring the guaranteed electricity revenues
with no adverse impacts of the volatile market develop-
ments. This measurement will also strengthen the
financial stability of the entities and thus the ability of
meeting the covenants as required by the financing
banks.
►
Change from merchant scheme to Feed in Tariff scheme
in Czech Republic, ensuring the guaranteed electricity rev-
enues with no adverse impacts of the volatile market de-
velopments.
►
Investments in innovations to improve lines of services at
Lerta and extending of service portfolio as an additional
source of the revenues
►
Planned rebalancing of our asset portfolio
►
Focus on 3
rd
party EPC business with high margins and re-
alization within the one-year period with regular cash in-
flow
►
New refinancing agreements
Scenarios based on the supporting cashflow forecasts take into
account internal and external developments relevant in the as-
sessment of the ability of the Company to continue as a going
concern, including but not limited to market developments,
change in electricity prices/schemes, new EPC projects pipe-
lines, sale of assets in non-core areas and new refinancing
agreements.
The consolidated financial statements have been prepared on
a going concern basis, resulting from the Management’s assess-
ment of the Company’s ability to continue its operations for the
foreseeable future.
2.2
Basis of Measurement
The consolidated financial statements have been prepared on
historical cost basis except for the following material items in
the statement of financial position:
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
89
►
Property, plant and equipment – photovoltaic power
plants are measured at revalued amounts (for revaluation
details refer to the note 19)
►
Financial instruments, except for derivatives, FVPL and
FVOCI financial investments, are measured at amortised
costs
►
Derivatives, FVPL and FVOCI financial investments are
measured at fair value.
2.3
Functional Currency
These financial statements are presented in EUR.
The functional currencies used in the Group are CZK for Czech
subsidiaries, EUR for Dutch, German and Slovak companies,
CHF for Swiss subsidiaries, HUF for Hungarian entities AUD for
Australian subsidiaries ROM for Romanian entities and PLN for
Polish entities. All financial information presented in EUR has
been rounded to the nearest thousand.
2.4
Use of Estimates and Judgments
The preparation of the consolidated financial statements in
conformity with EU IFRSs requires management to make judge-
ments, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets, liabili-
ties, income and expenses. Actual results may differ from these
estimates.
Estimates and underlying assumptions are reviewed on an on-
going basis. Revisions to accounting estimates are recognized
in the period in which the estimates are revised and in any fu-
ture periods affected.
Information about assumptions and estimation uncertainties
that have a significant risk of resulting in a material adjustment
within the next financial year are included in the following notes
or below:
►
Note 5.1 – Key assumptions used in discounted cash flow
projections related to the valuation of the photovoltaic
power plants
►
Note 2.4.1. – Recognition of deferred tax asset
►
Note 2.4.2. – Recognition of revenues from constructions
contracts
►
Note 2.4.3. – ECL measurement
►
Note 2.4.4 – Key assumptions used in measurement of
fair value of other financial investments
►
Note 2.4.5 – Impairment of goodwill
►
Note 2.4.6 – Initial recognition of intangible assets
►
Note 2.4.7 – Useful economic life of tangible and intangi-
ble assets and right of use
►
Note 2.4.8 – Business combination
Other factors, such as climate-related risks, do not have signifi-
cant impact on Group’s operations and do not lead to a signifi-
cant risk of material adjustments and therefor are not
considered to be significant judgements. The power plants are
not affected by global warming itself. Potential increase of dam-
ages by thundersorms are covered by the insurance, which cost
is minor. Due to the geographical diversification of the power
plants there is no risk that a material part of the portfolio could
be damaged at the same time.
The businesses reported in the New Energy segment, such as
electricity trading and capacity market trading, including the as-
sets held by these companies are not significantly affected by
the climate related risks. Most of the non-current assets consist
of intangible assets (e.g. software or goodwill) are not affected
by climate change impact, disparities in resources or other eco-
logical and sociological consequences. The market develop-
ment and increasing volume of the power resources with the
volatile level of production on the other hand leads to an in-
creasing number of market participants and importance of ca-
pacity markets. Both factors positively influence market size
and the performance of the segment.
2.4.1
Recognition of Deferred Tax Asset
The recognised deferred tax assets represent income taxes re-
coverable through future deductions from taxable profits and
are recorded in the consolidated statement of financial posi-
tion. Deferred income tax assets are recorded to the extent that
realisation of the related tax benefit is probable. This includes
temporary difference expected to reverse in the future and the
availability of sufficient future taxable profit against which the
deductions can be utilised. The future taxable profits and the
amount of tax benefits that are probable in the future are based
on the medium-term business plan prepared by the Manage-
ment and extrapolated results thereafter. The business plan is
based on management expectations that are believed to be
reasonable under the circumstances. More information relating
to not-recognised deferred tax assets are presented in note 24.
2.4.2
Recognition of Revenues from Contracts
with Customers
Revenues from contracts are recognised for engineering, pro-
curement, and construction (EPC) contracts to external custom-
ers. The management estimates progress towards complete
satisfaction of that performance obligation. The stage of com-
pletion is measured by reference to the contract costs incurred
up to the reporting date as a percentage of total estimated
costs for each contract. When the outcome of a construction
contract cannot be estimated reliably, contract revenue is rec-
ognized only to the extent of contract costs incurred that are
likely to be recoverable. The Group regularly reviews and vali-
dates the methods that are used for the progress estimation.
2.4.3
ECL Measurement
Measurement of ECLs is a significant estimate that involves de-
termination methodology, models and data inputs. Details of
ECL measurement methodology are disclosed in note 26. The
Group regularly reviews and validates the models and inputs to
the models to reduce any differences between expected credit
loss estimates and actual credit loss experience.
2.4.4
Key Assumptions used in Measurement of
Fair Value of Other Financial Investments
Other financial investments are stated at its fair value based on
valuation models prepared by the Management. These models
and the assumptions underlying them are regularly reviewed
by the Management. The Management considers that the valu-
ation of its other financial investment is currently subject to an
increased degree of judgement and an increased likelihood that
actual proceeds on a sale may differ from the carrying value.
For the investment in Valuetech the profit share
of the equity
value of the participations in ValueTech is considered as of the
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
90
reporting date with deduction of a 30% transaction discount
(covering cost and price discounts) from this value.
Other financial investments include primarily ordinary and
preference shares and related share options held (see also note
23).
The principal assumptions underlying the estimation of the
fair value are following:
►
Market price of the shares
►
Probability of the realisation of the share options granted
and expected market price of the shares to be purchased
at the realisation of the share options
►
Discount rate reflecting required return on investment on
this type of the Group’s investments
For investment in Valuetech
►
transaction discount (covering cost and price discounts)
►
share on equity
These valuations are regularly compared to actual market data
and most recent actual similar transactions made on the rele-
vant market.
2.4.5
Impairment of Goodwill
Goodwill is reviewed at least annually for impairment. Any im-
pairment loss is recognised as an expense immediately and is
not subsequently reversed. For the purpose of impairment test-
ing, goodwill is allocated to groups of individual Cash-Generat-
ing Units (CGUs) expected to benefit from the combination. If
the recoverable amount of the CGU is less than the carrying
amount of goodwill allocated to it, the resulting impairment loss
is applied first to the allocated goodwill and then to the other
assets on a pro-rata basis of the carrying amount of each asset.
Reversals of impairment losses on goodwill are not permitted.
2.4.6
Initial Recognition of Intangible Assets
Intangible assets measured in fair value are recognized in the
value calculated based on the discounted cash-flow model and
will
be regularly amortized in line with the utilization of the un-
derlying contracts during the period of 2023-2027. Those assets
(capacity market contracts) have been recognized during busi-
ness combination (note 8) and they are disclosed in note 22.
2.4.7
Useful Economic Life of Tangible and Intagi-
ble Assets and Right of Use
Useful economic life of the intangible assets is determined in
line with the underlying contracts, in case of the demand re-
sponse contracts, it is a 5 years period for 2023-2027. Those as-
sets (capacity market contracts) have been recognized during
business combination (note 8) and they are disclosed in note
22.Right of use economic life is determined to be in line with the
period of the contract signed for the lease of an underlying as-
set. Useful economic life of the tangible asset is usually defined
for the period of the future estimated cash-flows, usually up to
25-30 years in case of the photovoltaic powerplants.
2.4.8
Business Combination
In business combinations, identifiable assets and liabilities, and
contingent liabilities, are recognized at their fair values at the
acquisition date. Determining the fair value requires significant
judgments on future cash flows to be generated.
Goodwill in a business combination represents the excess of
the consideration paid over the net fair value of the acquired
identifiable assets, liabilities and contingent liabilities. If the cost
of an acquisition is less than the fair value of the net assets of
the subsidiary acquired, the difference is recognized directly in
the statement of income.
The fair value of brands, customer relationships and know-how
acquired in a business combination is estimated using generally
accepted valuation methods. These include the relief-from-roy-
alty method, the incremental cash flow method and the multi-
period excess earnings method.
The fair value of property, plant and equipment acquired in a
business combination is based on estimated market values.
The fair value of inventories acquired in a business combination
is determined based on estimated selling prices in the ordinary
course of business, less the estimated costs of completion and
sale and a reasonable profit margin, based on the effort re-
quired to complete and sell the inventories.
2.5
Restatement of the comparative period
The Group took over the control of Lerta Group as 31 December
2022 when Photon Energy increased its shareholding from
56.75% to 85.62%. As at 31 December 2022 Photon gained full
control effectively (described in detail in chapter 8). The acqui-
sition accounting was prepared on a provisional basis. During
preparation of these consolidated financial statements the
Group completed the acquisition accounting as allowed by IFRS
3 and therefore revised comparative financial information. The
revision stated below therefore does not represent retrospec-
tive restatement of error.
Adjustment to fair value of assets and liabilities in final PPA of Lerta
In thousands of EUR
Fair value
31 December 2022
– provisional acquisition
accounting
Change
Fair value 31 December 2022 –
final acquisition accounting
Software
356
671
1,027
Goodwill
461
-461
0
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
91
Equipment
326
0
326
Inventory
290
0
290
Loans, accounts receivables, prepayments
4,679
0
4,679
Bank and cash
1,060
0
1,060
Provisions and accruals
379
0
379
Loans and trade payables
5,348
0
5,348
Capacity market contracts (note 22)
6,048
-589
5,459
Deferred tax liability
1,149
-112
1,037
Total net assets acquired
6,344
-267
6,077
Goodwill arising from the acquisition
15,005
267
15,272
Total purchase price
21,349
0
21,349
The group revaluated the software internally developed and capacity market contracts to its fair value as of the date of the acquisition.
Other restatements
In current period the transfers on restricted cash account has been reported in gross amount on two separate line in the Colsolida-
ted Statemets of cash flow; Transfer to restricted cash account EUR -10,638 thousand (2022 EUR -22,559 thousand) and Transfer
from restricted cash account
EUR 9,871 thousand (2022 EUR 19,774 thousand). The Consolidated Statemets of cash flow of
the Company for the year ended 31 December 2022 presented the transfers on restricted cash account on netto basis on financial
statment line Transfer to/from restricted cash account in amount of EUR -2,785 EUR.
In the statement of movement in equity, the presentation of the movement of the currency reserve has been unified with the approach
in the financial year 2023. Originally separately presented other movement was transferred to the line Foreign currency translation
differences and it is shown as one figure. Closing balance of the currency reserve has not been changed, however the other compre-
hensive income has increased by EUR 2,285 thousand to EUR 3,695 thousand (originally EUR 1,410 thousand).
3.
Application of New and Revised EU IFRSs
3.1
New and Revised EU IFRSs Affecting
Amounts Reported in the Current Year
(and/or Prior Years)
Certain new standards and interpretations have been issued
that are mandatory for the annual periods beginning on or after
1 January 2023 or later, and which the Group has not early
adopted.
The management assessed the impact of New and Revised EU
IFRSs Affecting Amounts Reported in the Current Year and con-
cluded that these has not had material impact on Consolidated
financial statements as of 31.12.2023.
Amendments to IAS 1 and IFRS Practice Statement 2: Disclosure
of Accounting policies (issued on 12 February 2021 and effective
for annual periods beginning on or after 1 January 2023) have
been reflected in Consolidated financial statements. In conse-
quence the Group reported those accentuating policies, which
have been considered as material in terms of the amendment.
3.2
New Accounting Pronouncements
Certain new standards and interpretations have been issued
that are mandatory for the annual periods beginning on or after
1 January 2024 or later, and which the Group has not early
adopted.
Amendment to IFRS 16 – Leases on sale and leaseback –
(issued on September 2022 and effective for annual peri-
ods beginning on or after 1 January 2024).
These amendments include requirements for sale and lease-
back transactions in IFRS 16 to explain how an entity accounts
for a sale and leaseback after the date of the transaction. Sale
and leaseback transactions where some or all the lease pay-
ments are variable lease payments that do not depend on an
index or rate are most likely to be impacted.The Group is cur-
rently assessing the impact of the amendments on its consoli-
dated financial statements and no significant impacts are
expected.
Amendment to IAS 1 – Non-current liabilities with cove-
nants (issued on January 2020 and November 2022 and ef-
fective for annual periods beginning on or after 1 January
2024).
These narrow scope amendments clarify that liabilities are clas-
sified as either current or non-current, depending on the rights
that exist at the end of the reporting period.
The Group is
Photon Energy N.V.
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Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
92
currently assessing the impact of the amendments on its con-
solidated financial statements and no impacts are expected.
Amendment to IAS 7 and IFRS 7 - Supplier finance (issued
on May 2023 and effective for annual periods beginning on
or after 1 January 2024).
These amendments require disclosures to enhance the trans-
parency of supplier finance arrangements and their effects on
an entity’s liabilities, cash flows and exposure to liquidity
risk.The Group is currently assessing the impact of the amend-
ments on its consolidated financial statements.
New accounting Pronouncements are aligned with the EU En-
dorsement Status Report of 20.12.2023.
4.
Material Accounting Policies
The accounting policies set out below have been applied con-
sistently to all periods presented in these consolidated financial
statements and have been applied consistently by Group enti-
ties.
4.1
Basis of Consolidation
The consolidated financial statements incorporate the financial
statements of the Company and entities (including special pur-
pose entities) controlled by the Company (its subsidiaries). Con-
trol is achieved when the Company is exposed, or has rights, to
variable returns from its involvement with the subsidiary and
has the ability to affect those returns through its power over the
subsidiary.
4.1.1
Business Combinations
The acquisition method of accounting is used to account for all
business combinations, regardless of whether equity instru-
ments or other assets are acquired. The consideration trans-
ferred for the acquisition of a subsidiary comprises the:
►
fair values of the assets transferred
►
liabilities incurred to the former owners of the acquired
business
►
equity interests issued by the group
►
fair value of any asset or liability resulting from a contin-
gent consideration arrangement, and
►
fair value of any pre-existing equity interest in the subsid-
iary.
Identifiable assets acquired and liabilities and contingent liabil-
ities assumed in a business combination are, with limited ex-
ceptions, measured initially at their fair values at the acquisition
date. The group recognises any non-controlling interest in the
acquired entity on an acquisition-by-acquisition basis either at
fair value or at the non-controlling interest’s proportionate
share of the acquired entity’s net identifiable assets.
Acquisition-related costs are expensed as incurred.
The excess of the:
►
consideration transferred,
►
amount of any non-controlling interest in the acquired en-
tity, and
►
acquisition-date fair value of any previous equity interest
in the acquired entity over the fair value of the net identi-
fiable assets acquired is recorded as goodwill. If those
amounts are less than the fair value of the net identifiable
assets of the business acquired, the difference is recog-
nised directly in profit or loss as a bargain purchase.
Where settlement of any part of cash consideration is de-
ferred, the amounts payable in the future are discounted
to their present value as at the date of exchange. The dis-
count rate used is the entity’s incremental borrowing rate,
being the rate at which a similar borrowing could be ob-
tained from an independent financier under comparable
terms and conditions. Contingent consideration is classi-
fied either as equity or a financial liability. Amounts clas-
sified as a financial liability are subsequently remeasured
to fair value, with changes in fair value recognised in profit
or loss. If the business combination is achieved in stages,
the acquisition date carrying value of the acquirer’s previ-
ously held equity interest in the acquiree is remeasured
to fair value at the acquisition date. Any gains or losses
arising from such remeasurement are recognised in profit
or loss.
4.1.2
Subsidiaries
Subsidiaries are entities controlled by the Company. The finan-
cial statements of subsidiaries are included in the consolidated
financial statements from the date that control commences un-
til the date that control ceases.
Income and expenses and other comprehensive income of sub-
sidiaries acquired or disposed of during the year are included
in the consolidated statement of comprehensive income from
the effective date of acquisition and up to the effective date of
disposal, as appropriate. Total comprehensive income of sub-
sidiaries is attributed to the owners of the Company and to the
non-controlling interests even if doing so causes the non-con-
trolling interests to have a deficit balance.
When necessary, adjustments are made to the financial state-
ments of subsidiaries to bring their accounting policies into line
with Group accounting policies.
4.1.3
Loss of Control
Upon the loss of control, the Group derecognizes the assets and
liabilities of the subsidiary, any non-controlling interests and
the other components of equity related to the subsidiary. Any
surplus or deficit arising from the loss of control is recognized
in profit or loss. If the Group retains any interest in the previous
subsidiary, then such interest is measured at fair value at the
date that control is lost. Subsequently it is accounted for as an
equity-accounted investee or as other financial asset depend-
ing on the level of influence retained.
4.1.4
Investments in Associates and Jointly Con-
trolled Entities (Equity-accounted Investees)
Associates are those entities in which the Group has significant
influence, but not control, over the financial and operating
Photon Energy N.V.
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Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
93
policies. Significant influence is presumed to exist when the
Group holds 20 percent or more of the voting power of another
entity. Joint ventures are arrangements that the Company con-
trols jointly with one or more other investors, and over which
the Company has rights to a share of the arrangements net as-
sets rather than direct rights to underlying assets and obliga-
tions for underlying liabilities.
Investments in associates and jointly controlled entities are ac-
counted for using the equity method (equity-accounted inves-
tees) and are recognized initially at cost. The cost of the
investment includes transaction costs.
The consolidated financial statements include the Group’s
share of the profit or loss and other comprehensive income, af-
ter adjustments to align the accounting policies with those of
the Group, from the date that significant influence or joint con-
trol commences until the date that significant influence or joint
control ceases.
Share of profit equity-accounted investments (net of tax) is pre-
sented in Result from operating activities.
When the Group’s share of losses exceeds its interest in an eq-
uity-accounted investee, the carrying amount of that interest,
including any long-term investments, is reduced to zero, and
the recognition of further losses is discontinued except to the
extent that the Group has an obligation or has made payments
on behalf of the investee.
4.1.5
Transactions Eliminated on Consolidation
Regarding subsidiaries all intra-group transactions, balances,
income and expenses are eliminated in full on consolidation.
Regarding equity-accounted investees (see note 4.1.4) part of a
margin on sales to these entities is eliminated. This part is cal-
culated as a percentage of margins equal to the percentage of
the entity's shares owned by the Group.
4.2
Foreign Currency
4.2.1
Foreign Currency Transactions
Transactions in foreign currencies are translated to the respec-
tive functional currencies of Group entities at exchange rates at
the dates of the transactions. Monetary assets and liabilities de-
nominated in foreign currencies at the reporting date are trans-
lated to the functional currency at the exchange rate at that
date. The foreign currency gain or loss on monetary items is the
difference between amortised cost in the functional currency at
the beginning of the year, adjusted for effective interest and
payments during the year, and the amortised cost in foreign
currency translated at the exchange rate at the end of the year.
Non-monetary assets and liabilities denominated in foreign
currencies that are measured at fair value are retranslated to
the functional currency at the exchange rate at the date that the
fair value was determined. Non-monetary items in a foreign
currency that are measured in terms of historical cost are trans-
lated using the exchange rate at the date of the transaction.
Foreign currency differences arising on retranslation are recog-
nized in profit or loss.
4.2.2
Foreign Operations
The assets and liabilities of foreign operations (those in the
Czech Republic, Switzerland, Hungary, Romania, Poland and
Australia as of 31 December 2023 and 2022) are translated into
Euro at exchange rates at the reporting date. The income and
expenses of foreign operations are translated into Euro at ex-
change rates at the dates of the transactions.
Loans between the Group entities and related foreign exchange
gains or losses are eliminated upon consolidation. However,
where the loan is between the Group entities that have differ-
ent functional currencies, the foreign exchange gain or loss can-
not be eliminated in full and is recognised in the consolidated
profit or loss, unless the loan is not expected to be settled in the
foreseeable future and thus forms part of the net investment in
foreign operation. In such a case, the foreign exchange gain or
loss is recognised in other comprehensive income.
4.2.3
Cash and Cash Equivalents/Liquid Assets
Cash and cash equivalents include cash in hand, deposits held
at call with banks, and other short-term highly liquid invest-
ments with original maturities of three months or less. Cash
and cash equivalents are carried at amortised cost (AC) be-
cause: (i) they are held for collection of contractual cash flows
and those cash flows represent SPPI, and (ii) they are not desig-
nated at fair value through profit or loss (FVTPL).
Restricted balances are disclosed in the notes to cash and cash
equivalents (note 28) for the purposes of the consolidated
statement of cash flows. The debt service and project reserve
accounts are excluded from cash and cash equivalents as they
serve as collateral for the lending banks and can only be used
with the approval of the lending banks.
Gold ingots purchased by the Group, are initially recognised at
costs and subsequently measured at fair value through profit
or loss.
4.2.4
Borrowing Costs
Borrowing costs directly attributable to the acquisition, con-
struction or production of qualifying assets, which are assets
that necessarily take a substantial period of time to get ready
for their intended use or sale, are added to the cost of those
assets, until such time as the assets are substantially ready for
their intended use or sale.
Investment income earned on the temporary investment of
specific borrowings pending their expenditure on qualifying as-
sets is deducted from the borrowing costs eligible for capitali-
sation.
All other borrowing costs are recognized in profit or loss in the
period in which they are incurred.
4.3
Financial Instruments
Financial instruments are only used to mitigate risks and are
not used for trading purposes.
4.3.1
Non-derivative Financial Assets
Recognition and Derecognition
Financial assets and financial liabilities are recognised when the
Group becomes a party to the contractual provisions of the fi-
nancial instrument. Regular way purchases and sales of finan-
cial assets are accounted for at trade date.
Financial assets are derecognised when the contractual rights
to the cash flows from the financial asset expire, or when the
financial asset and substantially all the risks and rewards are
Photon Energy N.V.
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Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
94
transferred. A financial liability is derecognised when it is extin-
guished, discharged, cancelled or expires.
Classification and Initial Measurement of Financial Assets
Except for those trade receivables that do not contain a signifi-
cant financing component and are measured at the transaction
price in accordance with IFRS 15, all financial assets are initially
measured at fair value adjusted for transaction costs (where ap-
plicable).
Financial assets, other than those designated and effective as
hedging instruments, are classified into the following catego-
ries:
►
amortised cost
►
fair value through profit or loss (FVTPL)
►
fair value through other comprehensive income (FVOCI).
All income and expenses relating to financial assets that are rec-
ognised in profit or loss are presented within finance costs, fi-
nance income or other financial items, except for impairment
of trade receivables which is presented within Impairment
charges.
Financial Assets at Amortised Cost
Financial assets are measured at amortised cost if the assets
meet the following conditions (and are not designated as FVTPL
nor FVOCI):
►
they are held within a business model whose objective is
to hold the financial assets and collect its contractual cash
flows
►
the contractual terms of the financial assets give rise to
cash flows that are solely payments of principal and inter-
est on the principal amount outstanding
After initial recognition, these are measured at amortised cost
using the effective interest method.
Financial Assets at Fair Value Through Profit or Loss
(FVTPL) or/and at Fair Value Through Other Comprehen-
sive Income (“FVOCI”)
Financial assets that are held within a different business model
other than ‘hold to collect’ or ‘hold to collect and sell’ are cate-
gorised as FVOCI. Further, irrespective of business model finan-
cial assets whose contractual cash flows are not solely
payments of principal and interest are accounted for at FVTPL.
All derivative financial instruments fall into this category, except
for those designated and effective as hedging instruments, for
which the hedge accounting requirements apply.
Financial Assets Impairment – Credit Loss Allowance for
Expected Credit Loss (ECL)
Trade and other receivables, loans issued and contract assets
are presented in the consolidated statement of financial posi-
tion net of the allowance for ECL.
The Group applies simplified approach for impairment of trade
receivables and contract assets.
Financial Assets – Write-off
Financial assets are written-off, in whole or in part, when the
Group exhausted all practical recovery efforts and has con-
cluded that there is no reasonable expectation of recovery. The
write-off represents a derecognition event.
4.3.2
Non-derivative Financial Liabilities
Classification and Initial Measurement of Financial Liabili-
ties
The Group’s financial liabilities include borrowings, trade and
other payables and derivative financial instruments. Financial
liabilities are initially measured at fair value, and, where appli-
cable, adjusted for transaction costs unless the Group desig-
nated a financial liability at fair value through profit or loss.
Subsequently, financial liabilities are measured at amortised
cost using the effective interest method except for derivatives
and financial liabilities designated at FVTPL, which are carried
subsequently at fair value with gains or losses recognised in
profit or loss (other than derivative financial instruments that
are designated and effective as hedging instruments).
All interest-related charges and, if applicable, changes in an in-
strument’s fair value that are reported in profit or loss are in-
cluded within finance costs or finance income.
Financial Liabilities – Derecognition
Financial liabilities are derecognised when they are extin-
guished (i.e. when the obligation specified in the contract is dis-
charged, cancelled or expires).
An exchange between the Group and its original lenders of debt
instruments with substantially different terms, as well as sub-
stantial modifications of the terms and conditions of existing fi-
nancial liabilities, are accounted for as an extinguishment of the
original financial liability and the recognition of a new financial
liability. The terms are substantially different if the discounted
present value of the cash flows under the new terms, including
any fees paid net of any fees received and discounted using the
original effective interest rate, is at least 10% different from the
discounted present value of the remaining cash flows of the
original financial liability. If the exchange or modification is not
accounted for as an extinguishment, any costs or fees incurred
adjust the carrying amount of the liability and are amortised
over the remaining term of the modified liability.
Modifications of liabilities that do not result in extinguishment
are accounted for as a change in estimate using a cumulative
catch up method, with any gain or loss recognised in profit or
loss, unless the economic substance of the difference in carry-
ing values is attributed to a capital transaction with owners.
4.3.3
Derivative Financial Instruments
Derivative financial instruments, including interest rates swaps,
are carried at their fair value. All derivative instruments are car-
ried as assets when fair value is positive and as liabilities when
fair value is negative. Changes in the fair value of derivatives
that do not meet the requirements for application of hedge ac-
counting are included in profit or loss for the year.
4.3.4
Cash Flow Hedges that Qualify for Hedge
Accounting
The Group decided to apply hedge accounting in accordance
with IFRS 9. The Group designates certain derivatives prospec-
tively as either a hedge of the fair value of a recognised asset or
liability (fair value hedge), or a hedge of future cash flows at-
tributable to a recognised asset or liability or a forecasted trans-
action (cash-flow hedge). Hedge accounting is used for
derivatives designated in this way, provided that certain criteria,
including defining the hedging strategy and hedging relation-
ship before hedge accounting is applied and ongoing
Photon Energy N.V.
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Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
95
documentation of the actual and expected effectiveness of the
hedge, are met.
Changes in the fair value of derivatives that qualify as effective
fair-value hedges are recorded in the income statement, along
with the corresponding change in fair value of the hedged asset
or liability that is attributable to that specific hedged risk.
Changes in the fair value of derivatives that qualify as effective
cash-flow hedges are recorded as revaluation reserve from as-
sets and liabilities in equity and are transferred to the income
statement and classified as an income or expense in the period
during which the hedged item affects the income statement.
4.3.5
Share Capital
Ordinary Shares
Ordinary shares are classified as equity. Consideration received
above the nominal value of the ordinary shares is classified in
equity as Share premium. Incremental costs directly attributa-
ble to the issue of ordinary shares are recognized as a deduc-
tion from equity, net of any tax effects.
Treasury Shares
Where the Company or its subsidiaries purchase the Company’s
equity instruments, the consideration paid, including any di-
rectly attributable incremental costs, net of income taxes, is de-
ducted from the equity attributable to the Company’s owners
until the equity instruments are reissued, disposed of or can-
celled. Where such shares are subsequently sold or reissued,
any consideration received, net of any directly attributable in-
cremental transaction costs and the related income tax effects,
is included in equity attributable to the Company’s owners.
4.4
Property, Plant and Equipment
4.4.1
Recognition and Measurement
Photovoltaic power plants are stated in the consolidated state-
ment of financial position at their revalued amounts, being the
fair value at the date of revaluation, less any subsequent accu-
mulated depreciation and subsequent accumulated impair-
ment losses. Revaluations are performed at sufficient regularity
so that the carrying amounts do not differ materially from those
that would be determined using fair values at the end of each
reporting period. The need for revaluations is assessed every
quarter.
For fair value determination see note 5.1.
Any revaluation surplus arising on the revaluation of such pho-
tovoltaic power plant is recognized in other comprehensive in-
come and accumulated in equity, except to the extent that the
surplus reverses a revaluation deficit on the same asset previ-
ously recognized in profit or loss. Any deficit on the revaluation
of such photovoltaic power plants is recognized in profit or loss
except to the extent that it reserves a previous revaluation sur-
plus on the same asset, in which case the debit to that extent is
recognized in other comprehensive income.
Photovoltaic power plants, which the Company consolidates, in
the course of construction are carried at cost, less any recog-
nized impairment loss. The cost of self-constructed assets in-
cludes the cost of materials and direct labor plus any other
costs directly attributable to bringing the assets to a working
condition for their intended use and capitalized borrowing
costs. Such properties are reported as Property, plant,
equipment - Assets in progress and are classified to Property,
plant and equipment - Photovoltaic power plants when com-
pleted and ready for use. These assets are completed and ready
for use when the power plant is connected to the electricity net-
work and all technical parameters necessary for electricity pro-
duction are completed. Depreciation of these assets, on the
same basis as other property assets, commences when the as-
sets are ready for their intended use.
Additional costs capitalized in the value of the asset are in-
cluded in the regular review of power plants value as done on
quarterly basis.
The costs of maintenance, repairs, renewals or replacements
which do not extend productive life are charged to operations
as incurred. The costs of replacements and improvements
which extend productive life are capitalized. The cost of replac-
ing part of an item of property and equipment is recognized in
the carrying amount of the item if it is probable that the future
economic benefits embodied within the part will flow to the
Company and its cost can be measured reliably.
Included in the property plant and equipment are non separa-
ble intangible assets mainly relating to the rights to build and
operate photovoltaic power plants in a specific country. Be-
cause the items are non separable, the rights are included in
property, plant and equipment.
Fixtures and equipment are stated at cost less accumulated de-
preciation and accumulated impairment losses. Cost includes
expenditure that is directly attributable to the acquisition of the
asset. The gain or loss on disposal of an item of fixtures and
equipment is determined by comparing the proceeds from dis-
posal with the carrying amount of the property, plant and
equipment, and is recognized net within other income/other ex-
penses in profit or loss.
4.4.2
Depreciation
Depreciation is recognized so as to write off the costs or reval-
ued amount of property, plant and equipment (other than land
and properties under construction) less their residual values
over their useful lives, using the straight-line method. The esti-
mated useful lives, residual values and depreciation methods
are reviewed at the end of each reporting period, with the effect
of any changes in estimate accounted for on a prospective ba-
sis.
Depreciation of revalued photovoltaic power plants is recog-
nized in profit or loss. Every quarter the amount equal to the
difference between depreciation based on the revalued carry-
ing amount of photovoltaic power plants and depreciation
based on asset’s original cost is transferred directly to retained
earnings. On the subsequent sale or retirement of a revalued
property, the attributable revaluation surplus remaining in the
properties revaluation reserve is transferred directly to re-
tained earnings.
Land is not depreciated.
The estimated useful lives for the current and comparative
years are as follows (based on the professional judgement com-
bining the Feed in Tariff period and useful estimated live of the
components and technology used in the power plants):
►
Photovoltaic power plants
20-30 years
►
Fixtures and equipment
3–10 years
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
96
4.5
Right-of-use Assets
The group leases land, various offices and vehicles. Contracts
may contain both lease and non-lease components. The group
allocates the consideration in the contract to the lease and non-
lease component based on their relative stand-alone prices.
Assets arising from a lease are initially measured on a present
value basis. Right of use assets are measured at cost comprising
the following:
►
the amount of the initial measurement of lease liability,
►
any lease payments made at or before the commence-
ment date less any lease incentives received,
►
any initial direct costs, and
►
cost to restore the asset to the conditions required by
lease agreements.
Right-of-use assets are generally depreciated over the shorter
of the asset's useful life and the lease term on a straight-line
basis. If the Group is reasonably certain to exercise a purchase
option, the right-of-use asset is depreciated over the underlying
assets’ useful lives. Depreciation on the items of the right-of-use
assets is calculated using the straight-line method over their es-
timated useful lives as follows:
►
Lands and easements
lease term, 15-35 years
►
Cars
lease term, 5 years
4.6
Intangible Assets
The Group’s intangible assets have definite useful lives and pri-
marily include capitalised computer software and patents.
Development costs that are directly associated with identifiable
and unique software or patents controlled by the Group are
recorded as intangible assets if an inflow of incremental eco-
nomic benefits exceeding costs is probable. All other costs as-
sociated with computer software, e.g. its maintenance, are
expensed when incurred.
Intangible assets are amortised using the straight-line method
over their useful lives:
►
Capitalised software development costs
3 years
If impaired, the carrying amount of intangible assets is written
down to the higher of value in use and fair value less costs of
disposal.
Separately acquired trademarks and licences are shown at his-
torical cost. Trademarks, licences and customer contracts ac-
quired in a business combination are recognised at fair value at
the acquisition date. They have a finite useful life of 5 years and
are subsequently carried at cost less accumulated amortisation
and impairment losses.
4.6.1
Goodwill
Goodwill is measured initially as described under “Consolidated
financial statements “ in note 4.1.1. Goodwill is not amortised
but it is tested for impairment annually (note 2.4.5.). Goodwill is
allocated to the cash-generating units, or groups of cash-gener-
ating units, that are expected to benefit from the synergies of
the business combination. Such units or groups of units repre-
sent the lowest level at which the Group monitors goodwill and
are not larger than an operating segment.
The Group tests goodwill for impairment at least annually and
whenever there are indications that goodwill may be impaired.
The carrying value of the cash-generating unit containing good-
will is compared to the recoverable amount, which is the higher
of value in use and the fair value less costs of disposal. Any im-
pairment is recognised immediately as an expense and is not
subsequently reversed.
Gains or losses on disposal of an operation within a cash gen-
erating unit to which goodwill has been allocated include the
carrying amount of goodwill associated with the disposed oper-
ation, generally measured on the basis of the relative values of
the disposed operation and the portion of the cash-generating
unit which is retained.
4.7
Impairment
Other assets are tested for impairment whenever events or
changes in circumstances indicate that the carrying amount
may not be recoverable. An impairment loss is recognised for
the amount by which the asset’s carrying amount exceeds its
recoverable amount. The recoverable amount is the higher of
an asset’s fair value less costs of disposal and value in use. For
the purposes of assessing impairment, assets are grouped at
the lowest levels for which there are separately identifiable cash
inflows which are largely independent of the cash inflows from
other assets or groups of assets (cash-generating units). Non-
financial assets other than goodwill that suffered impairment
are reviewed for possible reversal of the impairment at the end
of each reporting period.
4.8
Inventories
Inventories are measured at the lower of cost and net realizable
value. The cost of inventories is based on the weighted average
principle, and includes expenditure incurred in acquiring the in-
ventories, production or conversion costs and other costs in-
curred in bringing them to their existing location and condition.
Net realisable value is the estimated selling price in the ordinary
course of business, less the estimated costs of completion and
selling expenses.
4.9
Provisions
A provision is recognized if, as a result of a past event, the
Group has a present legal or constructive obligation that can be
estimated reliably, and it is probable that an outflow of eco-
nomic benefits will be required to settle the obligation. Provi-
sions are determined by discounting the expected future cash
flows at a pre-tax rate that reflects current market assessments
of the time value of money and the risks specific to the liability.
4.9.1
Warranties
A provision for warranties is recognized when the underlying
services are sold, i.e. when the construction contracts are fin-
ished. The provision is based on historical warranty data and a
weighting of all possible outcomes against their associated
probabilities.
4.10
Lease Liabilities
Liabilities arising from a lease are initially measured on a pre-
sent value basis. Lease liabilities include the net present value
of fixed payments (including in-substance fixed payments), less
any lease incentives receivable. There are no variable payments
that are based on an index or a rate, no amounts expected to
be payable by the Group under residual value guarantees nor
Photon Energy N.V.
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Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
97
purchase option for which the Group is reasonably certain to
exercise that option.
Extension and termination options are included in some prop-
erty leases across the Group. These terms are used to maximise
operational flexibility in terms of managing the assets used in
the Group’s operations. The majority of extension and termina-
tion options held are exercisable only by the Group and not by
the respective lessor. Extension options (or period after termi-
nation options) are only included in the lease term if the lease
is reasonably certain to be extended (or not terminated). Lease
payments to be made under reasonably certain extension op-
tions are also included in the measurement of the liability.
The lease payments are discounted using the interest rate im-
plicit in the lease. If that rate cannot be readily determined,
which is generally the case for leases of the Group, the Group’s
incremental borrowing rate is used, being the rate that the
Group would have to pay to borrow the funds necessary to ob-
tain an asset of similar value to the right-of-use asset in a similar
economic environment with similar terms, collateral and condi-
tions.
To determine the incremental borrowing rate, the Group:
►
where possible, uses recent third-party financing received
by the individual lessee as a starting point, adjusted to re-
flect changes in financing conditions since third party fi-
nancing was received,
►
uses a build-up approach that starts with a risk-free inter-
est rate adjusted for credit risk, and
►
makes adjustments specific to the lease, e.g. term, coun-
try, currency and collateral.
Lease payments are allocated between principal and finance
costs. The finance costs are charged to profit or loss over the
lease period so as to produce a constant periodic rate of inter-
est on the remaining balance of the liability for each period.
Payments associated with short-term leases of equipment and
vehicles and all leases of low-value assets are recognised on a
straight-line basis as an expense in profit or loss. Short-term
leases are leases with a lease term of 12 months or less. Low-
value assets comprise IT equipment and small items of office
furniture with value of EUR 4 thousand or less.
4.11
Revenue Recognition
Revenue is income arising in the course of the Group’s ordinary
activities. The Group recognises revenues from the following
activities:
►
Revenue from electricity generation
►
Revenue from electricity trading
►
Revenue from capacity market contracts
►
Revenue from engineering, procurement and construc-
tion (EPC)
►
Revenue from sale of goods (solar panels, inverters and
related technologies)
►
Revenue from sale of services (e.g. maintenance, tech-
nical-administrative; installation)
Revenue is recognised in the amount of transaction price.
Transaction price is the amount of consideration to which the
Group expects to be entitled in exchange for transferring
control over promised goods or services to a customer, exclud-
ing the amounts collected on behalf of third parties.
Revenue is recognised net of discounts, value added taxes, ex-
port duties and similar mandatory payment.
4.11.1
Revenue from Electricity Generation
Revenues from sale of electricity are coming from the sale of
electricity produced and sold to merchant or to the local elec-
tricity distributor directly. Invoices are issued/ revenues are rec-
ognised only when the electricity is delivered to the distribution
net in the volume reviewed and accepted by the distributors.
No element of financing is deemed present as the sales are
made with credit terms of 30 days, which is consistent with mar-
ket practice.
Government grants for power generation intended as a com-
pensation for the price of power, are recognised under revenue
from electricity generation. The subsidies are based on the vol-
ume of electricity generate and sold to local electricity distribu-
tor and announced subsided unit price. The compensation is
billed to the operator in the same moment as the revenues
from the electricity sold.
Solar levy of 10% applied to electricity produced in the Czech
Republic is presented separately in costs.
4.11.2
Revenue from Electricity Trading
Revenues from trading of electricity are primarily coming from
the sale of electricity purchased on the market or from the gen-
erators. Revenues are recognised based on the daily reconcilia-
tions with clearing houses in the monthly billing period. The
group is trading only on the intraday and day-ahead market
only.
The Group purchased the whole outcome of the generator,
therefore the controls it before physical delivey to customer
and faces related risk including balancing of the balancing
group. The saling price of the electricity is not fixed (do not rep-
resent fix fee). In consequence of those fact, the Group oper-
ates as an principal and recognize the the revenues from
electricity trading in the gross amount.
In case of imbalances minor revenues are also generated from
the balancing market where balancing market operator is the
customer. Billing arises monthly or in 10 days period.
No element of financing is deemed present as payments arise
daily based on the daily reconciliation.
4.11.3
Revenue from the Capacity market con-
tracts
Revenues from the capacity market contracts are recognized
based on the fulfillment of the obligation of readiness to deliver
capacity per capacity market units. Billing arises on the monthly
basis.
The readiness might be tested by the market operator once a
quarter per capacity market unit.
Test result impacts the read-
iness recognition for the whole quarter.
No element of financing is deemed present as the sales are
made with credit terms of 30 days.
4.11.4
Revenue from Sale of Goods
Sales are recognised when the control over the goods has trans-
ferred to the customer. This transfer of control is clearly defined
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
98
in the contractual conditions. Group as a supplier does not pro-
vide in major of the cases any other separate performance as
part of the delivery. In minor cases, the storage services, trans-
portation, or arrangement of customs duty is provided and in-
voiced individually, however this is provided only on the
individual basis and represents an immaterial part of the over-
all revenues within the sale of technology division.
No element of financing is deemed present as the sales are
made with credit terms of 30-60 days, which is consistent with
market practice. In most cases, the Company requires advance
payments (partial or 100%) for the sales of goods. Advances re-
ceived are recognised as contract liability.
If the Group provides any additional services to the customer
after contract over goods has passed, revenues from such ser-
vices is considered to be separate performance obligation and
is recognised over the time the service is rendered.
4.11.5
Revenues from Sale of Services
Revenues from sale of services (e.g. maintenance, technical-ad-
ministrative; installation) are recognised on regular and recur-
ring basis for a fixed fee agreed in the contract, additionally to
this ad-hoc interventions are invoiced based on the actual us-
age of the on call service intervention. In this case, the invoice
is issued only on the basis of the accepted protocol confirming
the services were really provided to the customer and were ac-
cepted. Part of this intervention and service provided can be
also provision/usage of miscellaneous material that is at the
end part of the total invoice. However, this is not provided inde-
pendently without the related service so it cannot be consid-
ered as a separate performance obligation. No element of
financing is deemed present as the sales are made with credit
terms of 30 days, which is consistent with market practice.
4.11.6
Revenue from Engineering, Procurement
and Construction (EPC)
Construction services are provided based on engineering, pro-
curement and construction (EPC) contracts either to internal or
external customers. In the contract, milestones for invoicing are
clearly defined. The EPC provider commits himself to the con-
struction and delivery of the power plant with the regular war-
ranty for quality of the work delivered. No long-term
extraordinary guarantees that could be considered as a sepa-
rate obligation under IFRS 15 are provided. EPC services repre-
sent one single performance obligation as EPC services are not
distinct to a customer and cannot be separated from each
other.
Revenues from EPC are recognised over the time and include
the initial amount agreed in the contract plus any variations in
contract work, claims and incentive payments. In accordance
with contract terms, the Group has an enforceable right to pay-
ment for performance completed to date.
For each performance obligation satisfied over time, the Group
recognised revenue by measuring the progress towards com-
plete satisfaction of that performance obligation using the input
method. The Group is entitled to invoice the customers when
defined milestones are achieved. The Group recognises con-
tract assets for construction work delivered. Invoiced amount
of contract assets is reclassified to trade receivable upon its in-
voicing. In case the payment for the milestones exceed the
amount of revenues recognised based on the input method,
the Group recognises a contract liability. No significant financ-
ing component is deemed in EPC contracts, as the time period
between revenue recognition based on input method and the
milestone payment is always shorter that one year, in most
cases with credit terms from 30 to 90 days.
4.12
Finance Income and Financial Expenses
Financial income comprises interest income on loans. Interest
income is recognized in profit or loss using the effective interest
rate method.
Financial expenses comprise interest expense on borrowings,
bank account fees and net foreign currency losses. Interest ex-
pense is recognized using the effective interest rate method.
Borrowing costs that are not directly attributable to the acqui-
sition, construction or production of a qualifying asset are rec-
ognized in profit or loss. Borrowing costs incurred by the Group
directly attributable to the construction of power plants is capi-
talized in the cost of the related asset until the date of its com-
pletion.
Foreign currency gains and losses are reported on a net basis
and recognised in profit and loss
.
4.13
Employee Benefits
Wages, salaries, contributions to the state pension and social
insurance funds in the Czech Republic, Slovakia, Hungary, Po-
land, Romania, Netherlands, Switzerland and Australia, paid an-
nual leave and sick leave, bonuses, and non-monetary benefits
(such as health services and kindergarten services) are accrued
in the year in which the associated services are rendered by the
employees of the Group. Beside the contributions to the statu-
tory defined contribution schemes, there are no other obliga-
tions of the Group beyond these contributions.
The Group also provides an Employee Share Purchase program
to some of its employees. Under this program, the employees
receive an automatic monthly bonus of 10% to their gross sal-
ary and the difference between after-tax amounts of 100% and
110% of the base salary is used for the purchase of shares. The
10% bonus to the gross salary as well as related social and
health contribution are recorded and expense in each respec-
tive period.
4.14
Government Grants
Grants from the government are recognised at their fair value
where there is reasonable assurance that the grant will be re-
ceived and the Group will comply with all attached conditions.
Government grants relating to costs are deferred and recog-
nised in profit or loss for the year as other income over the pe-
riod necessary to match them with the costs that they are
intended to compensate.
Compensations from government agencies related to revenue
from fixed feed-in-tariffs, where applicable, are included in Rev-
enue from electricity generation, as they represent part of the
Group’s core activity clearly linked to the model of PVP revenue
from sales of electricity.
4.15
Income Tax
Income tax expense comprises current and deferred tax. Cur-
rent tax and deferred tax is recognized in profit or loss except
to the extent that it relates to a business combination, or items
recognized directly in equity or in other comprehensive income.
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
99
Current tax is the expected tax payable or receivable on the tax-
able income or loss for the year, using tax rates enacted or sub-
stantively enacted at the reporting date, and any adjustment to
tax payable in respect of previous years.
Deferred tax is recognized in respect of temporary differences
between the carrying amounts of assets and liabilities for finan-
cial reporting purposes and the amounts used for taxation pur-
poses. Deferred tax is not recognized for:
►
Temporary differences on the initial recognition of assets
or liabilities in a transaction that is not a business combi-
nation and that affects neither accounting nor taxable
profit or loss;
►
Temporary differences related to investments in subsidi-
aries and jointly controlled entities to the extent that it is
probable that they will not reverse in the foreseeable fu-
ture; and
►
Taxable temporary differences arising on the initial recog-
nition of goodwill.
A deferred tax liability is recognized for assets revaluation re-
ported in other comprehensive income and other temporary
differences. Assets revaluation represents the revaluation of
photovoltaic power plants described in note 4.4.1.
Deferred tax is measured at the tax rates that are expected to
be applied to temporary differences when they reverse, based
on the laws that have been enacted or substantively enacted by
the reporting date.
Deferred tax assets and liabilities are offset if there is a legally
enforceable right to offset current tax liabilities and assets, and
they relate to income taxes levied by the same tax authority on
the same taxable entity, or on different tax entities, but they in-
tend to settle current tax liabilities and assets on a net basis or
their tax assets and liabilities will be realised simultaneously.
A deferred tax asset is recognized for unused tax losses, tax
credits and deductible temporary differences, to the extent that
it is probable that future taxable profits will be available against
which they can be utilised. Deferred tax assets are reviewed at
each reporting date and are reduced to the extent that it is no
longer probable that the related tax benefit will be realised.
4.16
Earnings Per Share
The Group uses ordinary shares only. The Group presents basic
earnings per share and total comprehensive income per share
data.
Basic earnings per share is calculated by dividing the profit or
loss attributable to ordinary shareholders of the Company by
the weighted average number of ordinary shares outstanding
during the year.
Diluted earnings per share is calculated by adjusting the
weighted average number of common shares outstanding dur-
ing the year for the diluting effect of the assumption that con-
vertible instruments are converted, that options or warrants
are exercised, or that ordinary shares are issued upon the sat-
isfaction of specified condition.
Total comprehensive income per share is calculated by dividing
the total comprehensive income attributable to ordinary
shareholders of the Company by the weighted average number
of ordinary shares outstanding during the year.
Total diluted comprehensive income per share is calculated by
dividing the total comprehensive income by the weighted aver-
age number of common shares outstanding during the year ad-
justed for the diluting effect of the assumption that convertible
instruments are converted, that options or warrants are exer-
cised, or that ordinary shares are issued upon the satisfaction
of specified condition.
4.17
Segment Reporting
An operating segment is a component of the Group that en-
gages in business activities from which it may earn revenues
and incur expenses, including revenues and expenses that re-
late to transactions with any of the Group’s other components.
All operating segments’ operating results are reviewed regularly
by the Group’s management and directors to make decisions
about resources to be allocated to the segment and to assess
its performance, and for which discrete financial information is
available. Reportable segments whose revenue, result or assets
are ten percent or more of all the segments are reported sepa-
rately. Reportable segments including information on how op-
erating segments are aggregated are included in note 7.
Segment results that are reported include items directly at-
tributable to a segment as well as those that can be allocated
on a reasonable basis. Unallocated items comprise mainly cor-
porate assets (primarily the Company’s office premises), head
office expenses, and other minor expenses non-allocable to any
of the segments.
Segment capital expenditure is the total cost incurred during
the year to acquire property, plant and equipment, and intangi-
ble assets other than goodwill.
4.18
Changes in Presentation of Financial In-
formation
There were no changes presentation of financial information
during the year.
4.19
Alternative Performance Measures
The Board of Directors evaluates the Company’s and the
Group’s performance using selected financial statements subo-
totals and and ratios presented in this section as Alternative
Performance Measures (APM) within the meaning of the ESMA
Guidelines on Alternative Performance Measuresr. The dis-
closed Alternative Performance Measures comply with ESMA
Guidelines on Alternative Performance Measures. The Board of
Directors believes that the Alternative Performance Measures
are among the measures used by the Board of Directors to eval-
uate the financial performance of the Company and the Group
and they are frequently used by securities analysts, investors
and other interested parties to perform their own evaluation.
They do not have uniform definitions and are not calculated by
entities in the same manner; therefore, no assurance may be
given that the Alternative Performance Measures of the Group
will be comparable with similar ratios presented by other enti-
ties, including entities operating in the same sector as the
Group.
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
100
The following tables show the basic Alternative Performance Measures of the Group used by the Board of Directors as of the dates
and for the periods indicated along with a justification for their use, as well as the method of calculation of the individual Alternative
Performance Measures with reference to the specific financial statement items.
EBITDA
In thousands of EUR
2023
2022
A.
Revenue
70,649
95,136
B.
Other income
932
552
C.
Raw materials and consumables used
-36,877
-43,929
D.
Solar levy
-1,621
-1,969
E.
Personnel expenses
-18,479
-9,534
F.
Other expenses
-10,898
-15,947
EBITDA = (A+B+C+D+E+F)
Earnings before interest taxes depreciation & amortisation (EBITDA)
3,706
24,309
Liquid assets
In thousands of EUR
2023
2022
A.
Cash and cash equivalents
5,838
11,271
B.
Liquid assets with restriction on disposition
7,140
6,373
C.
Precious metals
0
3,714
Liquid assets = (A+B+C)
Liquid assets
12,978
21,358
Total comprehensive income per share
In EUR
2023
2022
A.
Total comprehensive income (in thousands EUR)
-459
9,957
B.
Average number of shares (in thousands)
59,608
56,830
TCI per share = A/B
Total comprehensive income (TCI) per share
-0,008
0,175
The table below presents the definitions of the Alternative Performance Measures and the rationale for their use.
Name of Alternative
Performance Measure
Definitions
Rationale for using the Alternative Performance Measure
EBITDA
The Group defines EBITDA for a re-
spective period as earnings on conti-
nuing operations for such period
before interest, taxes, depreciation
and amortisation.
EBITDA measures the Group’s operating performance net of
financial burdens and amortisation, depreciation and impair-
ment, which makes it possible to analyse performance regar-
dless of any changes in interest bearing liabilities or the
balance of noncurrent assets held by the Group, which,
through depreciation and amortisation, may affect other per-
formance measures.
Liquid assets
The Group defines Liquid assets for
a respective period as sum all cash
and cash equivalnets, cash depostis
with restrictions and liquide precious
metals (not used as an invetory for
an operation activities).
Liquid assets measure the Group’s value of bank account ba-
lances and liquid precious metals regardless of the restricti-
ons imposed on the account by the bank.
Total comprehensive
income per share
The Group defines total comprehen-
sive income per share as a ration of
TCI and average number of ordinary
shares issued.
Total comprehensive income per share measure the leverage
of TCI per average number of ordinary share issued. The me-
asure provides a comprehensive and holistic view of the
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
101
Group’s financial performance taking into account not only
the net income but also OCI.
5.
Determination of Fair Values
A number of the Group’s accounting policies and disclosures re-
quire the determination of fair value, for both financial and non-
financial assets and liabilities. Fair values have been deter-
mined for measurement and/or disclosure purposes based on
the following methods. When applicable, further information
about the assumptions made in determining fair values is dis-
closed in the notes specific to that asset or liability.
5.1
Property, Plant and Equipment
The fair value of items of plant, equipment, fixtures and fittings
is based on the market approach, using quoted market prices
for similar items when available, or the income approach (an
internally generated discounted cash-flow model) if there is no
market-based evidence of the fair value.
For photovoltaic power plants comparable market prices are
not sufficiently available due to a lack of transactions in some
markets and a lack of public available specific data of such
transactions. The market values of power plants significantly
vary dependent on a large number of parameters, which are
usually not sufficiently disclosed. Those parameters are among
others the actual feed-in-tariff and its duration, actual and ex-
pected production output, used technology components, con-
tracted operating cost of the power plant, financing structure,
conditions and financing cost, etc. Most investors use the in-
come approach also as a basis to determine a purchase price
for a transaction. Based on the aforementioned lack of reliable
and comparable market data, the income approach is used by
the Company as a more relevant method. Under this approach
the fair value of photovoltaic power plants is based on an inter-
nally generated discounted cash flow models, discounted at
weighted average cost of capital. For PVPs the future cash flows
are calculated for the period equaling the estimated useful life
(30 years in Australia, 25 years in the Czech Republic, Slovakia,
Romania and Hungary) and are based on Feed-in-Tariffs or ex-
pected electricity and certificate prices on the relevant markets
and on the WACC (Weighted Average Cost of Capital).
On a quarterly basis, management reviews the expected costs
of debt of individual projects vis-à-vis actual interest cost, finan-
cial market conditions, and interest rate for a 15-year state
bond. On a quarterly basis, management also reviews expected
cost of equity for the period of the cash flow model. Based on
the those cost the WACC is revised as well. The initial valuations
are done as of the date of put in use of an individual power
plant, and each model is periodically reviewed and any poten-
tial change in inputs is considered. As of 31 December 2023 the
cash flow projections are prepared for 25 years in Czech Repub-
lic, Slovak Republic and Hungary, equal to the expected tech-
nical and commercial life time of the projects. Main other inputs
used in the models are the following: overall project budget,
taxes, interest rates, reserve funds, feed in tariff or electricity
market price assumptions, OPEX, CAPEX and degradation factor
assumption.
The revaluation reserve created, based on the DCF models, is
annually released to the retained earnings in the amount equal
to the depreciation calculated from the amount of revaluation
(see also Note 4.4.2 Depreciation).
Since 2014 the Group uses the DCF Equity valuation method
which is based on a Discounted Cash Flow method. This
method includes the future cash flows available to the share-
holders/providers of equity of photovoltaic projects (i.e. after all
debt repayments and interests) that are later discounted by re-
spective discount rates.
The valuation of the project keeps in mind the risk profile of fu-
ture cash flows and the way the project is financed. The risk
profile is represented by a discount rate (WACC).
Quarterly discounting is applied that follows the fact that debt
repayments are happening on quarterly basis. This is effecting
the overall change in financing structure and indirectly effecting
WACC.
Changes in the Valuation Parameters in 2023
The most significant change in the valuations is related to Pho-
ton’s biggest portfolio in Hungary. A major part of Hungarian
PVPs is set to return under feed-in tariff scheme from 1.4.2024.
The current tariff price (47.04 KUF/kWh) is substantially above
the expected market price resulting in the 6.5 mil EUR increase
in portfolio value. Also Czech PVPs is set to return under feed-
in tariff scheme, the effect on the valuation has not been signif-
icant therefore the value of the portfolio has not been revalu-
ated.
Major technical modifications in general set-up of models is in
the calculation of the Discount Rate which was switched from
Levered Cost of Equity to WACC which is more suitable consid-
ering the debt/equity structure of SPVs.
Changes in the Valuation Parameters in 2022
In June 2022 the Hungarian government issued a decree intro-
ducing a 65% tax on the excess revenues (that is above the feed-
in-tariff/contract-for-difference price of EUR 85 per MWh) gen-
erated by licensed PV power plants (required for installations
with a grid connection capacity exceeding 500 KW AC) which
had either exited one of the support schemes or had been
awarded a METÁR license in auction but did not execute the
contract-for-difference with the designated Hungarian state en-
tity, for the financial years 2022 and 2023. On that basis, seven
power plants with a total installed capacity of 9.86 MWp (repre-
senting 19.3% of the Company’s capacity in Hungary) have been
and will continue being affected by the excess revenue tax. All
other power plants in Hungary are exempt from this tax.
The Group updated the DCF models for Hungary to reflect these
changes and it resulted in a decrease of fair value of property,
plant and equipment by EUR 567 thousand compensated in in-
crease of fair value of property, plant and equipment in other
countries with overall zero effect on the whole portfolio. Intro-
duced windfall taxes in other countries do not affect the propri-
etary portfolio of the Group.
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
102
5.2
Inventories
The fair value of inventories acquired in a business combination
is determined based on the estimated selling price in the ordi-
nary course of business less the estimated costs of completion
and sale, and a reasonable profit margin based on the effort
required to complete and sell the inventories.
5.3
Financial Instruments – Other Financial
Assets and Derivatives
Fair value of financial instruments traded in an active market is
measured as the product of the quoted price for the individual
asset or liability and the number of instruments held by the en-
tity. This is the case even if a market’s normal daily trading vol-
ume is not sufficient to absorb the quantity held and placing
orders to sell the position in a single transaction might affect
the quoted price.
Valuation techniques such as discounted cash flow models or
models based on recent arm’s length transactions or consider-
ation of financial data of the investees are used to measure fair
value of certain financial instruments for which external market
pricing information is not available. Fair value measurements
are analysed by level in the fair value hierarchy as follows: (i)
level one are measurements at quoted prices (unadjusted) in
active markets for identical assets or liabilities, (ii) level two
measurements are valuations techniques with all material in-
puts observable for the asset or liability, either directly (that is,
as prices) or indirectly (that is, derived from prices), and (iii) level
three measurements are valuations not based on solely observ-
able market data (that is, the measurement requires significant
unobservable inputs).
6.
Financial Risk Management
6.1
Risk Management Framework
The Group’s risk management policies are established to iden-
tify and analyse the risks faced by the Group, to set appropriate
risk limits and controls, and to monitor risks and adherence to
limits. Risk management policies and systems are reviewed reg-
ularly to reflect changes in market conditions and the Group’s
activities. The Group, through its training and management
standards and procedures, aims to develop a disciplined and
constructive control environment in which all employees un-
derstand their roles and obligations.
6.2
Sovereign Risk
The Company’s results can be adversely affected by political or
regulatory developments negatively impacting on the income
streams of projects in the portfolio. A number of countries have
already succumbed to retroactive measures reneging on exist-
ing agreements, guarantees and legislation by imposing levies,
cancelling contracts or renegotiating terms unilaterally or by
other measures reducing or in the worst-case cancelling Feed
in Tariffs (FiT) for renewable energy investments. Legal reme-
dies available to compensate investors for expropriation or
other takings may be inadequate. Lack of legal certainty ex-
poses projects in the portfolio to increased risk of adverse or
unpredictable actions by government officials, and also makes
it more difficult for us to enforce existing contracts. In some
cases these risks can be partially offset by agreements to arbi-
trate disputes in an international forum, but the adequacy of
this remedy may still depend on the local legal system to en-
force the award.
6.3
Operational Risk
The economic viability of energy production using photovoltaic
power plants installations depends on FiT systems. The FiT sys-
tem can be negatively affected by a number of factors including,
but not limited to, a reduction or elimination in the FiT or green
bonus per KWh produced, an elimination or reduction of the
indexation of the FiT and a shortening of the period for which
the FiT applies to photovoltaic installations. On the investment
side the Company faces uncertainty in relation to the approval
process for the construction of photovoltaic installations, grid
connection and the investment cost per KWp of installed
capacity. The operating and financial results of the Company
can be seriously affected by a sudden or significant change in
the regulatory environment in each of the countries where the
Company or its subsidiaries conduct business.
During the fourth quarter of 2010, the Czech parliament and
the Czech government approved several changes in the legal
framework governing certain aspects of the photovoltaic and
other industries. Those changes included mainly: (i) a 3 years
solar levy, newly introduced into the Czech tax system, of 26%
on the revenues of photovoltaic power plants above 30kW of
installed capacity, completed in the years 2009 and 2010, (ii) the
abolishment of a six-year corporate income tax exemption for
photovoltaic power plants, and (iii) a tenfold increase of the con-
tractual fees previously agreed between the photovoltaic power
plant operators and the state Land Fund for the extraction of
certain classes of land from the state fund.
In September 2013, additional prolongation of the solar levy
was approved. The percentage was decreased to 10% and ap-
plicability of this tax prolonged till end of the useful economic
life of the power plants.
In September 2021, an additional 10% solar levy was introduced
in the Czech Republic for the powerplants put in operation in
2009 and 2010 (see 5.1 above).
From 2016 and 2017 the Group opted for its Czech power plants
for the green bonus scheme and for the years 2018 onwards
the Management decided to opt again for the feed-in-tariff. For
2022 the Group opted for the green bonus scheme again. In July
2021, the Slovak Republic decided to prolong and reduce the
feed-in-tariff for the power plants connected in 2010 and 2011
(see 5.1 above).
6.4
Currency Risk
The Group is exposed to a currency risk on sales, purchases and
borrowings that are denominated in a currency other than the
respective functional currencies of Group entities.
The transactions of the Group entities are mainly denominated
in CZK, EUR, AUD, CHF, RON, PLN and HUF. The Group does not
manage the foreign currency risk by the use of FX derivatives, it
rather uses natural hedging by actively managing FX positions.
It is not done in a formalised way.
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
103
6.5
Credit Risk
Credit risk is the risk of financial loss to the Group if a customer
or counterparty to a financial instrument fails to meet its con-
tractual obligations, and arises principally from the Group’s re-
ceivables from customers, including the electricity distributors.
6.5.1
Trade and Other Receivables
The Group’s exposure to credit risk is influenced mainly by indi-
vidual characteristics of each customer. However, management
also considers the demographics of the Group’s customer base,
including the default risk of the industry and country in which
customers operate, as these factors may have an influence on
credit risk. In most cases, the Company requires advance pay-
ments (partial or 100%) for the delivery of electricity in order to
minimise the credit risk. Additionally, in case of new customers,
the company looks for market references of the potential cus-
tomers that are available in public resources. The collections
are regularly monitored by the responsible employees and any
significant overdue receivables are discussed with the manage-
ment of the company. Management of the company is respon-
sible for the decision whether allowance is to be created or any
other steps need to be performed.
The Group establishes an allowance for impairment that repre-
sents its estimate of expected losses in respect of trade and
other receivables.
6.5.2
Liquid assets with restriction on disposition
The Group held liquid assets of EUR 12,978 thousand at 31 De-
cember 2023 (2022: EUR 21,358 thousand), which represents
its maximum credit exposure on these assets. Liquid Assets
consist of following items:
In thousands of EUR
2023
2022
Cash and cash equivalents
5,838
11,271
Cash with restriction on disposition
7,140
6,373
Precious metals
0
3,714
Liquid assets
12,978
21,358
The cash and cash equivalents and liquid assets with restriction
on disposition are held with banks and financial institution
counterparties. Only those banks and financial institutions,
which were approved by the members of the board of directors,
can be used by the Group.
Some of the cash held by the Czech, Slovak, Hungarian and Aus-
tralian SPVs having received external financing is restricted only
for certain transactions, e.g. debt service, or maintenance ser-
vice for inverters. Further, several bank guarantees have been
issued by banks for Photon Energy Australia Pty Ltd., Photon
Energy Engineering Australia Pty Ltd., Photon Energy Corporate
Services CZ s.r.o. and by Greenford Solar srl. for which the
banks requested security deposits. Total amount of this re-
stricted cash by these companies is EUR 7,140 thousand as at
31 December 2023 (2022: EUR 6,373 thousand), see also note
28.
6.6
Liquidity Risk
Liquidity risk is the risk that the Group will encounter difficulty
in meeting the obligations associated with its financial liabilities
that are settled by delivering cash or another financial asset.
The Group’s approach to managing liquidity is to ensure, as far
as possible, that it will always have sufficient liquidity to meet
its liabilities when due, under both normal and stressed condi-
tions, without incurring unacceptable losses or risking damage
to the Group’s reputation.
6.7
Interest Risk
Interest rate risk is the risk that the value of a financial instru-
ment will fluctuate due to changes in market interest rates. It is
measured by the extent to which changes in market interest
rates impact on net interest expense. The Company uses inter-
est rate derivatives for managing the interest rate risk.
All the connected SPVs refinanced by bank, consolidated in full
or by using the equity method by the Group, own interest rate
derivatives used for hedging. The purpose of the derivatives is
to hedge against movement of interest rates. Concluding the
derivative contract was one of conditions required by financing
bank as defined in the Loan contract.
The change in fair value of these derivatives is recognized via
equity of the Company and the result is shown in Derivatives
reserve of the Company’s equity.
6.8
Inflation Risk
State support, especially feed-in tariffs, is indexed in the cases
of Czech and Hungarian projects; i.e. they are subject to infla-
tionary adjustment that is defined by a specific band. In case of
high inflation, there is consequently a risk that the running op-
erative costs increase while the yields will not be adjusted ac-
cordingly. In projects that are not supported by the state there
is a different risk - namely that by lower inflation the calculated
market prices for electricity will not develop as it was planned.
The occurrence of any of the mentioned risks can have a nega-
tive impact on the financial situation, of the Group.
Capital Management
The Group manages its capital to ensure that entities in the
Group will be able to continue as a going concern while max-
imising the return to stakeholders through the optimisation of
the debt and equity balance. The Group’s overall strategy will
unwind accordingly to the further negotiations with the Group's
creditors.
The Group’s net debt to equity ratio at the reporting date was
as follows:
In thousands of EUR
2023
2022
Total liabilities
207,920
183,219
Less: Liquid assets
12,978
21,358
Net debt
194,942
161,861
Total equity
69,767
70,672
Net debt to equity ratio
at 31 December
2.794
2.29
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
104
Equity ratios:
2023
2022
Full Equity ratio
25.1%
27.8%
Adjusted Equity ratio
(for bond governance)
28.0%
32.0%
Adjusted Equity ratio is calculated as Total Equity/(Loans and
borrowings (Non-current liabilities)+ Issued bonds and Other
long term liabilities+ Loans and borrowings (Current liabilities)+
Issued bonds and Other loans (Current liabilities)).
There were no changes in the Group’s approach to capital
management during the year.
7.
Operating Segments
An operating segment is a component of the Group that en-
gages in business activities from which it may earn revenues or
incur expenses, including revenues and expenses that relate to
transactions with any of the Group’s other components. All op-
erating segments’ operating results are reviewed regularly by
the Group’s management and Board of directors to make deci-
sions about resources to be allocated to the segment and to
assess its performance, and for which discrete financial infor-
mation is available. The chief operating decision maker (CODM)
has been identified as the Board of Directors and the CFO of the
Group.
The Board of Directors identified the following segments to be
reported:
►
Engineering
: Development, engineering and construc-
tion services of-turn-key photovoltaic systems’ installa-
tions for external clients and Photon Energy). This
segment was formerly named Energy Solutions and in-
cluded as well wholesale of technology, which became
due to its size an own reportable segment. Further activi-
ties of project development were taken out of this seg-
ment and are reported now under “Others”, since the
nature of the activity changed from purely internal devel-
opment for our own projects to project development for
external partners,
►
Technology
: Wholesale, import and export of FVE com-
ponents,
►
Investments (Electricity Generation)
: Investment into
photovoltaic power plants and generation of revenues
from production of electricity (this segment includes SPV
that finished building of photovoltaic power plants and
those that are connected to the distribution network and
produce electricity). Previously this segment was split into
“Production of Electricity” and “PV Investments” as those
income is generated by the same assets,
►
Operations & Maintenance
: Operations, maintenance
and PVPP supervision. This segment includes also the ser-
vices of Inverter Cardio and Monitoring and Control,
►
Other segments
: Other, not related to any of the above
mentioned segments. Others include project develop-
ment, water technology and remediation services and
other activities, such as corporate services. None of these
activities meets any of the quantitative thresholds for de-
termining reportable segments in neither 2022 nor 2023.
►
New Energy:
Capacity markets, energy trading, demand
side response.
Starting from 2023, the New Energy divi-
sion was added to the Company’s business lines. It con-
sists of Lerta in its current form (capacity market, energy
trading, real-time asset aggregator, DSR) and absorbed di-
vision of Photon Energy Solutions (Solutions entities) to
develop and provide next generation energy services to
energy consumers with energy storage playing growing
role.
Segment results that are reported include items directly at-
tributable to a segment as well as those that can be allocated
on a reasonable basis. Interest income, interest expense and
income tax charges are allocated directly to the segments. Seg-
ment capital expenditure is the total cost incurred during the
reporting period to acquire property, plant and equipment, and
intangible assets other than goodwill.
Factors that Management Used to Identify the Reportable
Segments
The Group’s segments are strategic business units that focus on
different business activities. They are managed separately be-
cause each business unit requires different processes.
Measurement of Operating Segment Profit or Loss, Assets
and Liabilities
The Group’s management and directors review financial infor-
mation prepared based on IFRS as adopted by EU adjusted to
meet the requirements of internal reporting.
The financial in-
formation does not differ from IFRS as adopted by EU.
The Group’s management and directors evaluate the segments
based on total comprehensive income which is considered to
be the key measure.
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
105
Information About Reportable Segment Profit or Loss, Assets and Liabilities
Information About Reportable Segments
Operating segments for the period from 1 January 2023 to 31 December 2023
In thousands of EUR
Engineering
New Energy
Technology
Investments
Operations
and
Maintenance
Other
Total for
segments
before
elimination
Elimination
Consolidated
financial
information
External revenues from the sale of products, goods & services
9,070
24,507
18,831
12,820
3,597
1,824
70,649
0
70,649
Internal revenues from the sale of products, goods & services
18,139
5,120
5,034
8,587
2,436
23,176
62,492
-62,492
0
Total revenues
27,209
29,627
23,865
21,407
6,033
25,000
133,141
-62,492
70,649
Other external income
36
82
19
8
30
757
932
0
932
Raw materials and consumables used
-3,842
-11,684
-20,327
-28
-294
-702
-36,877
0
-36,877
Raw materials and consumables used within segments
-3,037
-8,846
-1,125
0
-70
0
-13,078
13,078
0
Solar levy
0
0
0
-1,621
0
0
-1,621
0
-1,621
Personnel expenses and other expenses
-8,158
-6,116
-1,398
-2,979
-4,350
-6,376
-29,377
0
-29,377
Personnel and other expenses within segments
-10,235
-4,283
-27
-1,230
-1,536
-22,958
-40,269
40,269
0
EBITDA
1,973
-1,220
1,007
15,557
-187
-4,279
12,851
-9,145
3,706
Depreciation
-99
-1,828
-61
-7,288
-498
-1,270
-11,044
0
-11,044
Impairment charges
0
-121
-856
0
0
0
-977
0
-977
Other gain (loss)
0
0
0
0
0
2,902
2,902
0
2,902
Gain (loss) on disposal of investments
0
0
0
0
0
0
0
0
0
Profit/loss share in equity-accounted investees
0
0
0
217
0
0
217
0
217
Results from operating activities (EBIT)
1,874
-3,168
90
8,486
-685
-2,647
3,949
-9,145
-5,196
Financial income
132
531
25
1,632
1,111
13,562
16,993
-16,250
743
Interest expense
-1,566
-1,065
-765
-8,441
-1,580
-14,020
-27,437
16,003
-11,434
Financial espenses
-338
15
-342
-779
-5
1,228
-221
0
-221
Revaluation of derivatives
0
0
0
-115
0
-79
-194
0
-194
Profit/loss before taxation (EBT)
102
-3,687
-992
783
-1,159
-1,957
-6,910
-9,392
-16,302
Income Tax (income and deferred)
1,172
-133
0
-744
-9
266
552
0
552
Profit/loss after taxation
1,274
-3,821
-992
39
-1,168
-1,690
-6,358
-9,392
-15,750
Other comprehensive income
-158
-198
-198
12,773
223
2,849
15,291
0
15,291
Total comprehensive Income
1,116
-4,019
-1,190
12,812
-945
1,159
8,933
-9,392
-459
Assets
43,504
46,422
22,172
190,985
19,095
224,056
546,234
-268,810
277,424
Liabilities
-45,252
-36,309
-18,973
-152,202
-29,929
-190,552
-473,217
265,297
-207,920
Investments in JV accounted for by equity method
0
0
0
1,823
0
0
1,823
1,823
Additions to non-current assets
0
0
0
38,859
0
0
38,859
38,859
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
106
Operating segments for the period from 1 January 2022 to 31 December 2022
In thousands of EUR
Engineering
New Energy
Technology
Investments
Operations
and
Maintenance
Other
Total for
segments
before
elimination
Elimination
Consolidated
financial
information
External revenues from the sale of products, goods & services
5,180
210
50,786
35,239
2,854
868
95,137
0
95,137
Internal revenues from the sale of products, goods & services
10,049
0
14,100
49
2,196
7,725
34,119
-34,119
0
Total revenues
15,229
210
64,886
35,288
5,050
8,593
129,256
-34,119
95,137
Other external income
-12
0
7
11
30
516
552
0
552
Raw materials and consumables used
-2,295
-142
-40,988
0
-426
-78
-43,929
0
-43,929
Raw materials and consumables used within segments
-2,055
0
-14,026
-33
0
0
-16,114
16,114
0
Solar levy
0
0
0
-1,969
0
0
-1,969
0
-1,969
Personnel expenses and other expenses
-7,511
-41
-3,175
-4,064
-3,329
-7,362
-25,482
0
-25,482
Personnel and other expenses within segments
-179
0
0
-1,238
-1,408
-5,628
-8,453
8,453
0
EBITDA
3,177
27
6,704
27,995
-83
-3,959
33,861
-9,552
24,309
Depreciation
-51
-1
-41
-7,419
-619
-817
-8,948
0
-8,948
Impairment charges
-1
0
-657
0
-20
-5
-683
0
-683
Gain (loss) on disposal of investments
0
0
0
0
0
0
0
0
Gain on derecognition of associate
0
0
0
0
0
2,182
2,182
0
2,182
Profit/loss share in equity-accounted investees
0
0
0
127
0
0
127
0
127
Results from operating activities (EBIT)
3,125
26
6,006
20,703
-722
-2,599
26,539
-9,552
16,987
Financial income
440
0
7
392
275
4,128
5,242
-4,879
363
Interest expense
-530
0
-342
-4,237
-475
-8,556
-14,140
4,879
-9,261
Finanacial expenses
177
0
-30
-571
90
59
-275
0
-275
Other net financial expenses
0
0
0
0
0
-114
-114
0
-114
Revaluation of derivatives
0
0
0
413
0
614
1,027
0
1,027
Profit/loss before taxation (EBT)
3,212
26
5,641
16,700
-832
-6,468
18,279
-9,552
8,727
Income Tax (income and deferred)
-932
0
-708
-790
-27
-7
-2,464
0
-2,464
Profit/loss after taxation
2,280
26
4,933
15,910
-859
-6,475
15,815
-9,552
6,263
Other comprehensive income
97
15
82
2,415
-29
1,114
3,695
0
3,695
Total comprehensive Income
2,377
41
5,015
18,325
-888
-5,361
19,510
-9,552
9,957
Assets
39,032
11,460
41,186
172,409
18,200
199,579
481,866
-228,172
253,694
Liabilities
-36,766
-9,677
-29,043
-110,410
-26,970
-189,308
-402,174
218,955
-183,219
Investments in JV accounted for by equity method
0
0
0
1,509
0
0
1,509
0
1,509
Additions to non-current assets
0
0
0
26,216
511
23,062
49,789
0
49,789
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
107
7.
Operating Segments (Continued)
All the operational segments are managed on an international
basis (not on a country level). In 2023, the Group operated in
the Czech Republic, Slovak Republic, Germany, Hungary, Aus-
tralia, Switzerland, Romania, Poland, Mongolia, South Africa
and the Netherlands with headquarters in the Netherlands.
In 2023, revenues were generated in all above mentioned mar-
kets, except of the Netherlands, Mongolia and South Africa.
Non-current assets (power plants) are located in the Czech Re-
public, Slovak Republic, Hungary, Romania and Australia.
For the booking of transactions between the segments, the
same rules for the recognition are applied as for the third par-
ties.
Geographical information below, including revenues based on
the geographical location of entities generating the revenues
and segment assets based on the geographical location of the
assets is presented in notes 10 and 19.
Major Customer
The Group has many customers. For the companies selling elec-
tricity, there is usually only one distribution company, which
buys produced electricity in a region. These local electricity dis-
tributors further deliver and resell electricity to final customers.
Distributors are obliged to purchase all of the electricity produc-
tion for the price based on Feed in Tariff prices. The Group as
such is not dependent on any individual customer.
During 2023 the Group commissioned a powerplants in Roma-
nia where electricity is sold directly into the wholesale electricity
market and the revenues from sale of this electricity are based
on actual market prices.
Revenues from customers over 10% of total revenues
In thousands of EUR
2023
2022
Lerta Energy HU Kft
0
13,904
European Commodity Clearing Luxembourg
11,664
0
Polskie Sieci Elektroenergetyczne S.A.
8,328
0
OTE, a.s.
9,748
9,617
Total revenue from customers over 10% of total revenues
29,739
23,521
Total revenue
70,649
95,136
Revenues from European Commodity Clearing Luxembourg is
presented in segment New Energy and represent sales of elec-
tricity. Revenues from Polskie Sieci Elektroenergetyczne S.A. is
representing mostly gains from capacity market and they are
also presented in New Energy Segment. Unlike 2022 a smaller
part of revenues from OTE, a.s.
are presented in segment new
energy, but a major part of revenues from sale of internally gen-
erated electricity are still presented in segment Investments as
in 2022,In 2022 revenues from Lerta Energy HU Kft and OTE
a.s.were presented in segment Investments and represent rev-
enues from sale of electricity from various PVPs.
Non-current assets by geographical location
In thousands of EUR
2023
2022
The Czech Republic
45,017
52,055
Hungary
56,736
47,905
Romania
53,653
27,126
Poland
25,765
25,383
Australia
34,126
23,580
The Slovak Republic
9,618
11,102
Netherlands
87
67
Total
225,003
187,218
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
108
8.
Business Combination
Lerta Spółka Akcyjna is a joint-stock company organized under
the laws of Poland, with its office at Naramowicka 76, 61-622
Poznań, Poland, registered in the register of entrepreneurs of
the National Court Register kept by District Court Poznań –
Nowe Miasto i Wilda in Poznań, VIII Commercial Division of the
National Court Register, under number KRS 0000848411 (here-
inafter referred to as “Lerta”).
Lerta is an energy startup on a mission to become the biggest
clean energy company free of generation assets. Lerta enables
energy consumers and generators to maximize profits or sav-
ings with effective, AI-based management of aggregated in Vir-
tual
Power
Plant
(“VVP”)
assets
on
several
markets
simultaneously.
Lerta fully owns directly nine subsidiaries in five countries
(hereinafter referred to as “Lerta Group”). Those subsidiaries
are:
Nr
Subsidiary Name
Short
Country
1
Lerta Poland Sp. z o.o.
LPL
Poland
2
Lerta Power Poland Sp. z o.o.
LPPL
Poland
3
Lerta JRM Sp. z o.o.
LJRM
Poland
4
Lerta Technology Sp. z o.o.
LTECH
Poland
5
Lerta Energy S.r.l.
LROM
Romania
6
LERTA Magyarország Kft.
LMAG
Hungary
7
Lerta Energy HU Kft.
LHUK
Hungary
8
Lerta Czech Republic s.r.o.
LCR
Czechia
9
Lerta Lithuania UAB
LLIT
Lithuania
8.1
Valuation of Lerta
The purchase price for Lerta shares was agreed at PLN 5.80
(EUR 1.25) per one share. Above information was disclosed in
the financial statements 2022 and during 2023 has not been
changed.
8.2
Steps of the Acquisition
The book value of Lerta previously presented as Associate for
24.27% stake was EUR 3,202 thousand.
Step
Amount In thousands of EUR
Book value of Lerta
3,202
Cash transfers
6,720
Book value as of 24 November 2022
9,922
As of 24 November 2022,
the Company acquired all shares which were owned by three financial investors i.e., 5,594,202 shares rep-
resenting 32.48% in the capital of Lerta. The sale/purchase price was agreed between the parties at PLN 5.80 per share and amounted
in the total contractual value of PLN 32.446 million (EUR 6.5 million). Upon completion of this transaction Photon Energy Group in-
creased its shareholding in Lerta from 24.27% up to 56.75%. Additionally, an agreement was signed between the Company and the
founders of Lerta to protect the Founders interest until the final acquisition of their shares by the Company. In this agreement, the
Company agrees to not take over control of Lerta by not taking any actions that would imply control as long as such investment agree-
ment between the founders and the Company is signed. On 20 December 2022 the Company concluded an investment agreement
with the founders of Lerta, and certain executive contracts to this agreement. Under the terms of this agreement, an additional equity
stake of 7,449,750 shares, representing 43.25% of Lerta’s equity was acquired by the Company for a combination of a PLN 2.16 million
(EUR 464 thousand) cash consideration, the transfer of 2,300,110 treasury shares in the Company and 1,238,521 Company shares to
be newly issued in an in-kind contribution. As of 31 December 2022, Photon Energy N.V. acquired 4,972,708 shares in Lerta in the
exchange of 2,300,110 treasury shares in the Company and PLN 2.16 million (EUR 464 thousand) paid in cash to the Founders. As a
result, the Company increased its shareholding in Lerta to 85.62%.
Between 24 November 2022 and 31 December 2022 Photon Energy has not appointed or recalled a member to the supervisory board,
nor requested to appoint or recall a member to the board of directors. Photon Energy has also not taken any other measures that
could be considered as taking over control of Lerta. Management of Lerta was in the full responsibility of the Founders as being mem-
bers of the board of directors.
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
109
Based on the above the date of taking over control of Lerta Group is considered as 31 December 2022 when Photon Energy increased
its shareholding from 56.75% to 85.62%. Photon gained full control effectively as at 31 December 2022. The transfer of the outstanding
consideration was deferred to the year 2023, when remaining 14.38% have been taken over in a in-kind contribution of Lerta shares
against the issuance of new shares of the Company in February 2023.
As at 31 December 2022, the date of taking over control of Lerta Group, the investment in the acquiree held prior to the acquisition
was remeasured to its fair value at the acquisition date and a gain of EUR 2,182 thousand was recognised as a gain in profit and loss
income.
As at 31 December 2022, the consideration transferred was calculated as follows:
Step
Amount in thousands of EUR
Book value of of 24 November 2022
9,922
Cash transfers
464
Value of shares issued
5,700
Remeasure of the previously held equity interest
2,182
In-kind contribution against issuance of new shares
3,081
Book value as of 31 December 2022
21,349
The total value of 100% share in Lerta was calculated to EUR
21,349 thousand in the purchase price allocation. There is no
non-controlling interest calculated and booked as a result of the
transaction with the owners, share swaps have been posted to
the share premium (the transfer of remaining shares of Lerta
was only deferred due to Photon's need to issue new shares).
In the purchase price allocation, the fair values of assets and
liabilities acquired are based on discounted cash flow models.
Based on it, the following items were included in the purchase
price allocation:
►
Demand response contracts
Demand Side Response which means the reduction of
electricity consumption on demand is becoming an in-
creasingly vital tool in keeping the power grid balanced.
Lerta aggregates DSR capacity from a fast-growing num-
ber of Polish flexumers (industrial or commercial clients
with controllable loads or behind-the-meter generation
who has flexibility to adjust its generation or consumption
of electricity on demand). The aggregated pool of energy
and flexibility helps the Polish system operator to balance
the market and keep the grid stable and delivers it to the
system operator on demand, realizing contractually
agreed revenues which are presented I the model as rev-
enues from the capacity market.
The fair value of Demand response contracts in the purchase
price allocation activated as intangible asset was evaluated at
EUR 5,458 shousand (before restatement EUR 6,047 thousand)
with attributable deferred tax liability of EUR 1,037 thousand
(before restatement EUR 1,149 thousand).
The fair value in the purchase price allocation was calculated
based on secured demand response contracts for the years
2023 to 2027. Expected cash flows were discounted at a rate of
18,1% (before restatement 13.61%).
Starting from 1 January 2023 the demand response contracts
will be amortized in line with the utilization of the contracts.
Goodwill calculated in the purchase price allocation in the
amount of EUR 15,272 thousand (before restatement EUR
15,005 thousand) arises from the main synergies described be-
low.
The integration of Lerta into Photon Energy Group represents
the fusion of physical and digital energy to create a customer-
centric renewable energy utility that will be uniquely positioned
to effectively address the pain points of energy generators, en-
ergy users and transmission system operators. Energy genera-
tors will be able to benefit from an integrated approach to asset
operation and management as well as cost-efficient market ac-
cess, including balancing services. Energy users will be able to
manage and optimise their costs from a combination of on-site
generation and off-site supply. This will include the benefit of
energy storage and the monetisation of their demand flexibility.
Transmission systems operators will be provided with flexible
supply, DSR and ancillary services to the power grid.
The impact on Photon Energy Group’s strategic and operational
priorities following the Transaction will include:
►
Capacity building and product development for the effi-
cient delivery of a ‘one-stop shop’ offering that combines
assets, services and IT solutions to establish Photon En-
ergy Group as the preferred partner for commercial and
industrial customers in the CEE region and Australia on
their journey from passive energy users to proactive en-
ergy flexumers.
►
A significant acceleration in the deployment of utility-
scale and on-site energy storage capacities both as an EPC
supplier as well as an investor, leveraging the Group’s ex-
perience in Australia such as the Lord Howe Island hybrid
- energy system and the planned utility-scale hybrid plant
in Boggabri, New South Wales.
►
Close monitoring of the emergence of markets for grid
flexibility and other ancillary services worldwide and eval-
uation of opportunities as they emerge, which may lead
to relatively low-risk and low-cost market entries into new
locations currently not served by the Company.
Information stated above in this chapter was disclosed in the financial statements 2022 and resembles the background of the transac-
tion. Except from the references to the restated figures the management of the Group has decided to keep this part of the chapter
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
110
unabridged to clarify the background situation in view of the development that followed in 2023. This is described in the following
paragraphs and the comparison table bellow.
Details of net assets acquired and goodwill in the final purchase price allocation arising are as follows:
In thousands of EUR
31 December 2022
Change
31 December 2022 restated
Total net assets acquired
1,445
-461
984
Capacity market contracts (note 22)
6,047
-589
5,458
SW revaluation up-lift
0
671
671
Deferred tax liability
-1,149
112
-1,037
Goodwill arising from the acquisition
15,005
267
15,272
Total net assets acquired
21,349
0
21,349
In 2022 the acquisition accounting was prepared on a provi-
sional basis. During preparation of consolidated financial state-
ments as of 31.12.2023 the Group completed the acquisition
accounting as allowed by IFRS 3 and therefore revised compar-
ative financial information.
Throughout of the year the Group was able to review all assets
considered for revaluation as of the deciding date for acquisi-
tion. Two groups of intangible assets (internally developed soft-
wares and capacity market contracts) had not been valued on
its fair value based on the information management had real-
ized through out the year 2023, therefore the revaluation was
carried out based
facts and circumstances available as of the
date of acquisition
. The amount of the adjustments recog-
nized are reported in the table above.
The inhouse software development in Lerta is activated at ac-
tual development cost (based on timesheets spent and actual
hourly labour cost of the programmers. As of the end of the
year 2022 the amount of EUR 356 thousand was activated un-
der intangibles. Software under development was revalued us-
ing the cost approach namely the reproduction cost new
approach (hereinafter also “CRN”). The resulting fair value of de-
velopment costs was estimated at EUR 856 thousand. Increase
of value based on PPA was thus EUR 500 thousand.
On top of that the 20% margin (EUR 171 thousand) was added
to the reproduction costs. The margin represents the market
standard margin for the software development, which has been
commonly used by the software development companies in the
Central Europe. The overall impact based on PPA on the value
of software resulted in EUR 671 thousand.
Main classes of assets and liabilities recognised in fair value in the provisional purchase price allocation because of acquisition are as
follows:
In thousands of EUR
Fair value 31 December 2022 restated
Software
1,027
ROU
326
Inventory
290
Loans, accounts receivables, prepayments
4,679
Bank and cash
1,060
Provisions and accruals
-379
Loans and trade payables
-4,999
Lease liability
-349
Capacity market contracts (note 22)
5,458
Deferred tax liability
-1,037
Total net assets acquired
6,077
Goodwill arising from the acquisition
15,272
Total purchase price
21,349
Total amount of Goodwill arising from the acquisition and as-
sets
recognized
upon
acquisition
including
fair
value
adjustments of already recognized assets are not expected to
be deductible for tax purposes.
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
111
If the acquisition had occurred on 1 January 2022, consolidated
pro-forma revenues and profit for the would have been EUR
118,158 thousand and EUR 4,735 thousand respectively.
Nothing is expected to be tax deductible from GW or other FV
adjustments.
In thousands of EUR
2022
Total purchase consideration and previously held interest in the acquiree
15,964
Less: Non-cash consideration
-8,781
Outflow of cash and cash equivalents on acquisition
7,183
9.
Acquisitions of Subsidiary and Non-controlling Interests;
Financial Information for the Joint Ventures
9.1
Establishment of New Subsidiaries
During 2023, Photon Energy N.V. (directly or via its subsidiaries)
incorporated the following subsidiaries:
►
On 5 May 2023, Photon Energy Investments AG (ex-
ALFEMO AG) became 100% shareholder of Dartford Solar
Kft.
►
On 9 May 2023, Photon Energy Investments AG (ex-
ALFEMO AG) became 100% shareholder of RochesterSo-
lar Kft.
►
On 10 May 2023, Photon Energy Investments AG (ex-
ALFEMO AG) became 100% shareholder of Newhamp-
Solar Kft.
►
On 11 May 2023, Photon Energy Investments AG (ex-
ALFEMO AG) became 100% shareholder of Brixton Solar
Kft.
►
On 28 September 2023, Photon Energy N.V. became 100%
shareholder of Photon Energy AUS SPV 14 Pty. Ltd.,
►
On 9 November 2023, Photon Energy Engineering B.V. be-
came 100% shareholder of Photon Energy Engineering NZ
Pty. Limited.
During 2022, Photon Energy N.V. (directly or via its subsidiaries)
incorporated the following subsidiaries:
►
On 10 June 2022, Photon Energy N.V. became 100% share-
holder of Photon Energy Solutions AG.
►
On 10 June 2022, Photon Energy N.V. became 100% share-
holder of Photon Property AG
►
On 16 September 2022, Photon Energy Solutions CZ a.s.
became 100% shareholder of PESPV 1 s.r.o..
►
On 16 September 2022, Photon Energy Solutions CZ a.s.
became 100% shareholder of PESPV 2 s.r.o..
9.2
Acquisitions of Subsidiaries
During 2023, Photon Energy N.V. (directly or via its subsidiaries)
acquired the controlling share in the following entities:
►
On 5 May 2023, Photon Energy Investments AG (ex-
ALFEMO AG) became 100% shareholder of Photon New
Energy Beta Kft. Followingly, on 24 August 2023, Photon
Energy Solutions AG became 100% shareholder of Photon
New Energy Beta Kft.
►
On 10 May 2023, Photon Energy Investments AG (ex-
ALFEMO AG) became 100% shareholder of Photon New
Energy Alfa Kft. Followingly, on 22 August 2023, Photon
Energy Solutions AG became 100% shareholder of Photon
New Energy Alfa Kft.
►
On 21 August 2023, Photon Energy Solutions AG became
100% shareholder of Photon New Energy Gamma Kft.
►
On 11 April 2023, Photon Energy Projects s.r.o. became
95% shareholder and Photon Energy Engineering s.r.o.
became 5% shareholder of Faget Solar Three Srl.
►
On 21 August 2023, Photon Energy Projects s.r.o. became
95% shareholder of Giulvaz Solar S.R.L., and Photon En-
ergy Engineering s.r.o. became shareholder of remaining
5%
►
On 5 September 2023, Photon Energy Projects s.r.o. be-
came 95% shareholder of Faget Solar Five S.R.L., and Pho-
ton Energy Engineering s.r.o. became shareholder of
remaining 5%
During 2022, Photon Energy N.V. (directly or via its subsidiaries)
acquired the controlling share in the Lerta S.A. and its subsidi-
aries as described in note 8 Business combination. Also, 100%
share in originally 51% owned joint venture Photon AUS SPV 6
was acquired during the year. On 1 February 2023, Photon En-
ergy N.V. became holder of 100% of the share capital of Lerta
S.A.
Other Developments in 2023
►
On 17 February 2023, the merger of Barbican Solar Kft.,
Caledonian Solar Kft., Hampstead Solar Kft. and Ladány
Solar Delta Kft. into Ladány Solar Delta Kft. was registered.
The three SPV’s Barbican Solar Kft., Caledonian Solar Kft.,
Hampstead Solar Kft. ceased to exist as of 16 February.
►
On 10 July 2023, Photon Energy Solutions CZ a.s. became
100% shareholder of Lerta Czech Republic s.r.o.
►
On 24 July 2023, Photon Energy Investments AG became
95% shareholder of Aldgate Solar S.R.L., and KORADOL AG
became shareholder of remaining 5%
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
112
►
On 24 July 2023, Photon Energy Investments AG became
95% shareholder of Holloway Solar S.R.L., and KORADOL
AG became shareholder of remaining 5%
►
On 24 July 2023, Photon Energy Investments AG became
95% shareholder of Chesham Solar S.R.L., and KORADOL
AG became shareholder of remaining 5%
►
On 24 July 2023, Photon Energy Investments AG became
95% shareholder of Watford Solar S.R.L., and KORADOL
AG became shareholder of remaining 5%
►
On 21 August 2023, Photon Energy Solutions AG became
100% shareholder of Photon New Energy Gamma Kft.,
►
On 23 August 2023, Photon Energy Investments AG be-
came 95% shareholder of Brentford Solar S.R.L., and KO-
RADOL AG became shareholder of remaining 5%
►
On 23 August 2023, Photon Energy Investments AG be-
came 95% shareholder of Greenford Solar S.R.L., and KO-
RADOL AG became shareholder of remaining 5%
►
On 23 August 2023, Photon Energy Investments AG be-
came 95% shareholder of Halton Solar S.R.L., and KO-
RADOL AG became shareholder of remaining 5%
►
On 23 August 2023, Photon Energy Investments AG be-
came 95% shareholder of Kenton Solar S.R.L., and KO-
RADOL AG became shareholder of remaining 5%
►
On 23 August 2023, Photon Energy Investments AG be-
came 95% shareholder of Faget Solar Three S.R.L., and
KORADOL AG became shareholder of remaining 5%
►
On 27 September 2023, Lerta Power Poland Sp. z o.o has
changed its name to Photon Energy Trading PL Sp. z o.o.,
►
On 6 November 2023, Lerta Energy Srl. has changed its
name to Photon Energy Solutions Romania Srl.,
►
On 9 November 2023, Lerta Technology Sp. z o.o. has
changed its name to Photon Energy Systems Sp. z o.o.
Other Developments in 2022
►
On 17 January 2022, KORADOL AG became 100% share-
holder of Photon SPV 3 s.r.o.. Photon SPV 4 s.r.o., Photon
SPV 6 s.r.o., Photon SPV 8 s.r.o., Photon SPV 10 s.r.o., Exit
90 SPV s.r.o., Onyx Energy s.r.o., Onyx Energy projekt II
s.r.o., and Kaliopé Property s.r.o..
►
On 10 February 2022, ALFEMO AG became 90% share-
holder and KORADOL AG became 10% shareholder of
Siria Solar S.r.l..
►
On 24 February 2022, Photon Energy Projects became
95% shareholder and Photon Energy Solutions CZ be-
came 5% shareholder of Deptford Solar Srl..
►
On 28 February 2022, Photon Energy Projects became
95% shareholder and Photon Energy Solutions CZ be-
came 5% shareholder Kenton Solar Srl., Lancaster Solar
Srl., and Perivale Solar Srl..
►
On 7 March 2022, Photon Energy Projects became 95%
shareholder and Photon Energy Solutions CZ became 5%
shareholder of Weston Solar Srl. and Harlow Solar Srl..
►
On 14 March 2022, Photon Energy Projects became 95%
shareholder and Photon Energy Soluions CZ became 5%
stakeholder of Brentford Solar Srl., Camberwell Solar Srl.,
Romford Solar Srl., and Stratford Solar Srl..
►
On 18 March 2022, Photon Energy N.V. became 95%
shareholder and Photon Energy Projects became 5%
shareholder of Photon Energy Engineering Romania SRL..
►
On 22 March 2022, PE Solar Technology Ltd. was success-
fully dissolved.
►
On 6 April 2022, Photon Energy Solutions s.r.o. was re-
named to Photon Energy Engineering s.r.o..
►
On 27 April 2022, Photon SPV 1 s.r.o. was renamed to Pho-
ton Energy Solutions CZ s.r.o.
►
On 24 May 2022, Solar Age Polska S.A. was renamed to
Photon Energy Solutions PL S.A..
►
On 1 July 2022, Photon Energy Solutions CZ s.r.o. success-
fully changed its name (and legal form) to Photon Energy
Solutions CZ a.s..
►
On 2 September 2022, Photon Energy Operations CZ s.r.o.
PRAGA SUCURSALA BUCURESTI was successfully deregis-
tered.
►
On 5 October 2022, Photon AUS SPV 12 Pty. Ltd. has
changed its name to Photon New Energy Pty. Ltd..
►
On 19 October 2022, Photon Energy Solutions CZ a.s. be-
came 100% shareholder of Photon Energy Solutions s.r.o..
►
On 20 October 2022, Photon Energy Solutions HU Kft has
changed its name to Photon Energy Engineering HU Kft..
►
On 30 December 2022, ALFEMO AG has changed its name
to Photon Energy Investment AG.
9.3
Financial Information for the Joint Ventures
The table below summarises the movements in the carrying amount of the Group’s investments in joint ventures.
In thousands of EUR
2023
2022
Joint ventures
Joint ventures
Carrying amount at 1 January
1,635
1,626
Share of profit of joint ventures
217
127
Share of other comprehensive income of joint ventures
29
73
Dividends received from joint ventures
-59
-191
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
113
Carrying amount at 31 December
1,823
1,635
Joint ventures
Investments in equity-accounted investees amounting to EUR 1,823 thousand (2022: EUR 1,509 thousand) represent the nominal share
in the joint ventures owned by the Group.
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
114
2023:
In thousands of EUR
Photon
SK SPV 1
Solarpark
Myjava
Solarpark
Polianka
Total
Definition
joint venture
joint venture
joint venture
Share
50%
50%
50%
Equity of the entity
1,298
1,040
1,308
3,646
Share on equity
649
520
654
1,823
Net profit
-143
-163
-128
-434
Share of profit
-72
-81
-64
-217
Cash and cash equivalents
90
96
77
263
Current assets
178
188
163
529
Long-term assets
1,831
1,363
1,909
5,102
Current liabilities (financial)
-217
-217
-188
-622
Long-term liabilities (financial)
-159
-34
-253
-446
Depreciation
97
108
108
313
Interest expense
11
8
13
33
Revenues
-251
-277
-249
-777
Other comprehensive income
-4
-2
-7
-13
Dividends paid
-33
-12
-14
-59
Total comprehensive income (loss)
96
117
102
314
2022:
In thousands of EUR
Photon
SK SPV 1
Solarpark
Myjava
Solarpark
Polianka
Total
Definition
joint venture
joint venture
joint venture
Share
50%
50%
50%
Equity of the entity
1,107
806
1,105
3,018
Share on equity
554
403
553
1,509
Net profit
-78
-94
-82
-254
Share of profit
-39
-47
-41
-127
Cash and cash equivalents
81
54
60
195
Current assets
156
132
124
412
Long-term assets
1,844
1,377
1,922
5,143
Current liabilities
-238
-235
-218
-691
Long-term liabilities
-294
-184
-375
-853
Depreciation
97
108
95
300
Interest expense
20
17
22
59
Revenues
-271
-295
-263
-829
Total comprehensive income (loss)
-5
8
-37
-34
All of the entities included in the above table are accounted for
using the equity method of consolidation as at 31 December
2023 and 31 December 2022. The above included joint ventures
can distribute profit only after agreement of the financing bank
and the approval of the co-owner of the entity (via the general
meeting).
10.
Revenue
The Group derives revenue from the transfer of goods and services at a point in time and over time in the following major product
lines and geographical regions:
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
115
Timing of revenues:
In thousands of EUR
2023
2022
At a point of time
18,831
50,786
Over time
50,458
44,008
Total revenue from contracts with customers
69,289
94,794
Compensations for sales from electricity generation
1,360
342
Total revenue
70,649
95,136
Revenues by major revenue types:
In thousands of EUR
2023
2022
Sale of goods and technologies
18,831
50,786
Sale of electricity and certificates
20,047
34,897
Revenues from capacity market contracts
7,642
0
Revenues from EPC contracts
9,070
5,389
Revenues from electricity trading and balancing
7,955
0
Rendering of services
5,744
3,722
Total revenue from contracts with customers
69,289
94,794
Compensations for sales from electricity generation
1,360
342
Total revenue
70,649
95,136
The Group uses various revenue models for PVP generating rev-
enues from sale of electricity – fixed feed in tariffs, contracts for
difference, and going forward the merchant model (sale of elec-
tricity into the wholesale market at actual market prices).
Revenues from sales of electricity from fixed feed-in-tariffs in
2023 amounted to EUR 11,605 thousand (2022: EUR: 13,363
thousand), revenues from sales of electricity from contract for
difference revenue model amounted to zero both in 2023 and
2022;
and revenues from sales of electricity for market price
amounted to EUR 9,802 thousand (2022: EUR 23,286 thousand).
Total amount of subsidies returned under the contract for dif-
ference scheme in 2023 was EUR 195 thousand (2022: EUR
1,780 thousand) as the average market price of electricity sold
to the market exceeded the agreed price.
As the Group operates in regulated business under various
models for PVP revenues from sales of electricity, the Group in-
voices the revenues from sale of electricity to different partners,
including government agencies which in fact do not receive any
generated electricity, such as the short-term electricity market
operator OKTE, a.s. (“OKTE”) in Slovakia.
Total amount of compensations for sales from electricity gen-
eration invoiced to OKTE in 2023 amounted to EUR 1,360 thou-
sand (2022: EUR 342 thousand) and from MAVIR in Hungary
negative EUR 195 thousand (2022: EUR 1,780 thousand).
An energy certificate is a transferable record or guarantee re-
lated to the amount of energy or material goods consumed by
an energy conversion device in industrial production. A certifi-
cate may be in any form, including electronic, and lists attrib-
utes such as method, quality, compliance, and tracking. One of
the examples of energy certificates are e.g. guarantees of
origin.
Even though the revenues were invoiced in 2023 and 2022 to
government agency, the Group does not consider them to be
government grants and recognised them as revenues from sale
of electricity as these revenues are representing core activity of
the Group and are clearly linked to revenue model that is deter-
mined for each PVP.
Trading revenues (including direct sales and balancing) from
electricity purchased from the 3rd. parties are presented on line
Revenues from electricity trading and balancing in the above ta-
ble. On the face of financial statements, they are included in re-
venues. Sales of electricity and certificates mentioned in the
table above represent just the internally generated electricity.
Revenues from capacity market contracts are representing re-
venues from providing capacities (reduction of power con-
sumption) to the grid.
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
116
Revenues by geographical split:
In thousands of EUR
2023
2022
Czech Republic
30,256
68,257
Hungary
17,483
17,473
Poland
8,590
88
Australia
8,373
6,483
Romania
3,033
3
Slovak Republic
820
1,916
Germany
734
574
Total revenue from contracts with customers
69,289
94,794
Compensations for sales from electricity generation – Slovak Republic
1,360
342
Total revenue
70,649
95,136
Decrease in total revenues in 2023 is mainly a result of lower electricity generation and lower electricity prices and significantly lower
volume of technology sold.
11.
Other Income
In thousands of EUR
2023
2022
Miscellaneous
536
287
Grants received
344
234
Settlement agreement/insurance compensation
52
31
Total Other income
932
552
In 2023, the amount of EUR 432 thousand in Miscelanneous represent income from sale of project rights for project Zlocew in Poland.
12.
Raw Materials and Consumables Used
Main expense’ classes represent material consumed and cost of goods sold.
In thousands of EUR
2023
2022
Goods (modules, inverters, etc.)
-23,068
-42,600
Electricity purchased
-8,649
0
Demand side response
-3,876
0
Material consumed
-1,284
-1,329
Raw materials and consumables used
-36,877
-43,929
Raw materials and consumables consist mainly of material and
goods used for technology sales and necessary for construction
of photovoltaic power plants. Its decrease is mainly caused by
lower technology sales and lower consumption of material dur-
ing 2023.
Electricity purchased (EUR 8,649 thousand) represent electricity
purchased from 3 rd. parties and sold as trading revenue de-
scribed in the note 10.
Demand side response (EUR 3,876 thousand) represents fee
paid to 3rd parties providing their power demand capacities.
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
117
13.
Solar Levy
In thousands of EUR
2023
2022
21%/11% solar levy
-1,621
-1,969
Solar levy
-1,621
-1,969
For detailed information about the solar levy refer to note 6.3. Solar levy represent 21%/11% levy imposed on the solar electricity
produced in the Czech Republic. Solar levy is calculated and settled on a monthly basis.
14.
Personnel Expenses
In thousands of EUR
2023
2022
Wages and salaries
-15,377
-7,661
Social and health insurance
-2,825
-1,575
Pension costs
-277
-298
Personnel expenses
-18,479
-9,534
Pension costs represent contributions to state defined pension
contributions schemes.
On 31 December 2023 the Group employed 348 employees. 4
were employed in Slovakia by Slovak entities; 34 were em-
ployed in Hungary, 37 in Australia; 76 in Poland, 32 in Romania,
2 in Switzerland and 1 in the Netherlands and New Zealand. The
remaining 161 employees were employed in the Czech Repub-
lic. Out of 348 employees, 2 of them were the Board members,
66 senior and mid level management and 280 professional and
administration employees.
Overall increase in personnel expenses is related to general in-
crease in number of employees due to Lerta acquisition and
natural growth of the staff.
Part of the personnel expenses rep-
resent also severance payments for the terminated employees
paid during 2023.
On 31 December 2022 the Group employed 220 employees. 4
were employed in Slovakia by Slovak entities; 17 were em-
ployed in Hungary, 23 in Australia; 15 in Poland, 19 in Romania,
2 in Switzerland and 1 in the Netherlands. The remaining 139
employees were employed in the Czech Republic. Out of 220
employees, 2 of them were the Board members, 26 senior and
mid level management and 192 professional and administra-
tion employees. In addition, 63 employees on employment con-
tract and 29 employees on different types of contract joined the
group with the acquisition of Lerta Group as of the end of the
year. Those employees are mainly employed in Poland.
Key management compensation including salaries, bonuses
and social and health insurance is disclosed in note 40 Related
parties.
15.
Other Expenses
In thousands of EUR
2023
2022
3rd party services received
-2,643
-5,920
Construction subcontractors – services
-2,982
-2,863
Accounting and audit services
-1,075
-847
Warehousing and Freight
-959
-2,632
Legal costs
-962
-834
Balancing/scheduling/service costs
-839
-692
Travel & Accommodation costs
-624
-378
Cars – fuel and maintenance
-475
-326
Projects write off
-99
-253
Low value / short term leases
-24
-253
Miscellaneous
-216
-949
Total Other expenses
-10,898
-15,947
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
118
Miscellaneous expenses comprise of other taxes, penalties and other minor expenses.
16.
Impairment Charges
In thousands of EUR
2023
2022
Net impairment losses on financial and contract assets
-927
-684
Write off receivables
-50
0
Total Impairment charges
-977
-684
In 2023 the Group created 100% allowance
for the customers
Nubland Nexus and Alpha Solar systems s.r.o. in the total
amount EUR 539 thousand. The allowance created for the cus-
tomer EkoFachowcy Sp. z. o. o. in the comparative period has
remained unchanged. Another EUR 215 thousand out of the
total balance of impairment charges relates to the allowance for
inventories.
In 2022, the Group created 100% allowance for the customer
EkoFachowcy Sp. z. o. o. in the total amount of EUR 653 thou-
sand because of its filing for insolvency.
The remaining part of the bad debt provisions represents vari-
ous small irrecoverable receivable from several entities.
17.
Financial Income and Financial Expense
In thousands of EUR
2023
2022
Interest revenue calculated using the effective interest method*
465
162
Gains from financial assets sold/liabilities purchased
278
0
Revaluation of precious metals
0
200
Financial income
743
362
Interest expense on loans & borrowings calc. using effective interest method
-11,434
-9,260
Foreign exchange gains and losses (net)
-221
-275
Financial expense
-11,655
-9,535
Gains less losses on derecognition of financial liabilities – bonds
0
-114
Gains less losses on derecognition of financial liabilities recognised at amortised costs
0
-114
Net result from revaluation of trading derivatives/revaluation of
-194
1,027
Revaluation of derivatives
-194
1,027
* Interest revenue calculated using the effective interest method includes interest revenue from financial assets carried at amortised costs only.
Incremental bank costs, such as arrangement and refinancing
fees, are reflected in the amortised amount of financial liabili-
ties using effective interest rate method.
The Group did not capitalise any borrowing costs for SPVs built
and connected in 2023 and in 2022.
Gains less losses on derecognition of financial liabilities in 2023
amounted to 0 EUR. In 2022 amount of EUR 114 thousand rep-
resent exchange bonus paid to the existing bondholders for the
exchange of the EUR bond (see also note 32).
Net result from revaluation of derivatives represent change in
fair value of derivatives for which no hedge accounting is ap-
plied (see also note 36) out of that EUR – 115 thousand in 2023
(2022: EUR 217 thousand) is related to the Czech SPVs. Revalu-
ation of the other investment in EUR 31
thousand is included
in Net result from revaluation of trading derivatives, see also
note 23.
Net result in revaluation of precious metals represents change
in fair value of gold held by the Group.
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
119
18.
Income Tax Expense
18.1
Income Tax Recognized in Profit or Loss
In thousands of EUR
2023
2022
Current tax expense
Current year
-2,269
-4,738
Deferred tax expense
Deferred tax on temporary differences
2,821
2,275
Total tax expense
552
-2,463
For movement in deferred tax arising on temporary difference see note 24.
Pillar 2 is not applicable for the Group , as it is relevant only for multinational groups with turnover higher than EUR 750 million per
annum.
18.2
Reconciliation of Effective Tax Rate
In thousands of EUR
2023
2022
Profit (+)/ Loss (-)
before income tax
-16,303
8,725
Theoretical tax return / charge (25%)
4,076
-2,181
Effects of different tax rates in other countries
-1,375
2,667
Unrecognised tax losses of the period
-4,482
-2,813
Use of prior year losses (previously not recognised)
511
84
Recognition of deferred tax assets previously not recognised
1,826
65
Permanent differences
-4
-285
Total tax expense
552
-2,463
Theoretical tax rate of 25% represent tax rate applicable to the Netherlands, which is the country of incorporation of Photon Energy
NV.
The Group has accumulated tax losses for which no deferred tax asset has been recognised, see also note 24.
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
120
19.
Property, Plant and Equipment
In thousands of EUR
Land
Photovoltaic
power plant
Other
equipment
In progress
Total
Net carrying amounts
Gross revalued amount at 1 January 2022
5,169
182,473
1,628
3,052
192,322
Accumulated depreciation at 1 January 2022
0
-64,208
-622
0
-64,830
Net carrying amounts 1 January 2022
5,169
118,265
1,006
3,052
127,492
Other Additions/Transfers
142
1,018
673
25,056
26,889
Acquisition of subsidiary
0
0
361
0
361
Revaluation increase (note 30)
0
475
0
0
475
Disposal of property, plant and equipment
0
0
0
0
0
Depreciation for the year
0
-7,419
-408
0
-7,827
Effect of movements in exchange rates
7
-1,736
-112
0
-1,841
Net carrying amounts
Gross revalued amount at 31 December 2022
5,318
182,230
2,550
28,108
218,206
Accumulated depreciation at 31 December 2022
0
-71,627
-1,030
0
-72,657
Net carrying amounts 31 December 2022
5,318
110,603
1,520
28,108
145,549
Net carrying amounts 1 January 2023
5,318
110,603
1,520
28,108
145,549
Other Additions/Transfers
1,015
23,815
1,237
-6,642
19,425
Acquisition of subsidiary
0
0
0
0
0
Revaluation increase (note 30)
0
14,461
0
0
14,461
Disposal of property, plant and equipment
0
0
0
0
0
Depreciation for the year
0
-7,288
-806
0
-8,094
Effect of movements in exchange rates
0
1,170
0
0
1,170
Net carrying amounts
Gross revalued amount at 31 December 2023
6,333
221,676
3,787
21,466
253,262
Accumulated depreciation at 31 December 2023
0
-78,915
-1,836
0
-80,751
Net carrying amounts 31 December 2023
6,333
142,761
1,951
21,466
172,511
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
121
Revaluation details by power plants:
In thousands of EUR
kWp
Original costs less
accumulated
depreciation as at
31 December 2023
Revalued amount
less accumulated
depreciation as at
31 December 2023
Original costs less
accumulated
depreciation as at
31 December 2022
Revalued amount
less accumulated
depreciation as at
31 December 2022
Country
CZ
Breclav
347
312
727
321
815
CZ
Mostkovice
926
678
2,437
713
3,016
CZ
Svatoslav
1,231
886
2,960
925
3,362
CZ
Slavkov
1,159
1,026
3,036
1,068
3,611
CZ
Zvikov
2,031
1,482
5,660
1,563
6,970
CZ
Dolni Dvoriste
1,645
1,311
4,167
1,371
5,212
CZ
Radvanice
2,305
1,894
6,483
1,977
7,149
CZ
Komorovice
2,354
1,798
6,024
1,887
7,703
CZ
Zdice 1
1,499
1,139
4,078
1,200
5,258
CZ
Zdice 2
1,499
1,177
3,948
1,232
4,759
SK
Blatna
700
829
734
840
932
SK
Mokra Luka II
963
1,031
1,141
1,046
1,348
SK
Mokra Luka III
963
1,012
998
1,027
1,391
SK
Jovice V
979
941
925
954
1,136
SK
Jovice VI
979
940
901
953
1,134
SK
Babina II
999
1,137
929
1,150
1,150
SK
Babina III
999
1,143
923
1,156
1,157
SK
Prsa
999
1,165
1,076
1,180
1,264
HU
Fertod I
528
458
553
461
431
HU
Tiszakecske
5,512
3,253
5,474
3,284
4,010
HU
Almasfuzito
5,494
3,146
5,533
3,177
4,074
HU
Nagyecsed
2,067
1,299
2,047
1,310
1,506
HU
Fertod II
3,487
2,221
3,853
2,240
2,645
HU
Kunszentmarton I
1,394
972
1,986
980
1,065
HU
Taszar
2,103
1,428
2,809
1,440
1,669
HU
Monor
5,552
3,026
7,025
3,058
4,459
HU
Tata
5,375
4,146
7,731
4,179
4,655
HU
Malyi
2,085
1,755
2,742
1,766
1,627
HU
Kunszentmarton II
1,386
992
1,477
999
1,016
HU
Puszpokladany
14,118
9,284
12,971
9,375
12,986
HU
Tolna 1
1,358
941
814
950
1,326
HU
Facankert
1,358
979
740
988
1,449
AUS
Leeton and Fivebough
14,522
11,194
14,020
11,377
15,638
RO
Siria
5,691
3,706
4,965
0
0
RO
Calafat
6,028
4,370
5,786
0
0
RO
Holloway
9,460
6,278
7,932
0
0
RO
Sahateni
7,112
4,372
6,411
0
0
RO
Faget
3,178
1,924
2,966
0
0
RO
Faget 2
3,931
3,215
3,589
0
0
124,316
88,858
148,571
66,147
115,921
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
122
Revalued amount of EUR 148,571 thousand as at 31 December
2023 (31 December 2022: EUR 115.921 thousand) includes net
carrying amount of photovoltaic power plants and value of land
connected to the photovoltaic power plants of EUR 5,597 thou-
sand as at 31 December 2023 (31 December 2022: EUR 4,889
thousand) which are included under Land.
In 2022, due to legislative changes in Czech Republic and Slo-
vakia, the Group updated the DCF models to reflect the condi-
tions valid as of 1 January 2022, which resulted in net decrease
of fair value of the property, plant and equipment in Czech Re-
public and Slovakia by EUR 3,509 thousand including the impact
of deferred tax (EUR 2,895
thousand excluding the impact of
deferred tax, (see note 5.1.)
During Q2 2022, the Group performed revaluation of a newly
connected power plant in Hungary resulting in increase of the
value of property, plant, and equipment by EUR 475 thousand
including the the impact of deferred tax (EUR 432 thousand ex-
cluding the impact of deferred tax).
Therough out of the year the group performed revaltuation of
a newly connected power plants in Romania amounted to EUR
8,351 thousand (EUR 7,041 thousand excluding the impact of
deferred tax).
At the end of 2023 the management made a strategic decision
to return to feedin-tariffs in the Czech Republic and Hungary, to
mitigate the risk of expected low energy prices and its potential
impact on the Group's profitability. The guanteed price in Hun-
gary has got material impact (EUR 5,983 thousands) on the val-
uation of Hungarin power plan portfolio, which has been
revalued as of 31.12.2023.
In 2023 the Group did not capitalize any borrowing cost (2022:
EUR 0 thousand) into Property, plant and equipment.
Assets pledged
As at 31 December 2023 the following properties with a carrying
amount of EUR thousand (2022: EUR thousand) are subject to
a registered pledges to secure bank loans (see note 32). All
other restrictions and pledges, including information on re-
stricted cash accounts are included in notes 28 and 42.
►
Property, plant and equipment – Land in an amount of
EUR 603 thousand (2022: EUR 611
thousand) pledged to
UniCredit Bank Czech Republic and Slovakia a.s., EUR
1,260 thousand (2022: EUR 1,094 thousand) to K&H Bank
and EUR 292 thousand (2022: 352 EUR ) to CIB Bank.
►
Property, plant and equipment – Photovoltaic power
plants in an amount of EUR 47,147 thousand (2022: EUR
54,202 thousand) pledged to UniCredit Bank Czech Re-
public and Slovakia a.s., EUR 39,259 thousand (2022: EUR
23,540 thousand) pledged to K&H Bank Hungary and EUR
16,495 thousand (2022: EUR 15,216 thousand) pledged to
CIB Bank. Property, plant and equipment – Photovoltaic
power plants in an amount of EUR 14,020 thousand
(2022: EUR 15,638 thousand) were pledged in Australia.
Property, plant and equipment – Photovoltaic power
plants in an amount of EUR
31,648 thousand were
pledged in Romania.
Property, plant and equipment under construction
Property, plant and equipment under construction equaled to
the amount of EUR 21,466 thousand (2022: 28,108 EUR thou-
sand) comprising mainly of power plants under construction in
Romania (2022: Hungary and Romania).
Sale of property, plant and equipment
There were no sales of property, plant and equipment in 2023
nor 2022.
20.
Right-of-use Assets and Lease Liabilities
The Group leases land, offices and vehicles. Rental contracts are typically made for fixed periods of 36 months to 15 years.
In thousands of EUR
Land
Buildings
Vehicles
Total
Carrying amount as at 1 January 2022
1,281
857
0
2,138
Additions
576
1,120
205
1,901
Depreciation charge
-128
-515
0
-643
Effect of translation to presentation currency
51
1
0
52
Carrying amount as at 31 December 2022
1,780
1,463
205
3,448
Additions
191
2,288
296
2,775
Depreciation charge
-130
-840
-146
-1,116
Disposals
0
0
-57
-57
Effect of translation to presentation currency
14
-118
44
-60
Carrying amount as at 31 December 2023
1,855
2,793
342
4,990
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
123
The Group recognised lease liabilities as follows:
In thousands of EUR
31 December 2023
31 December 2022
Short-term lease liabilities
943
712
Long-term lease liabilities
4,181
2,914
5,124
3,626
Interest expense included in financial expenses of 2023 was
EUR 179 thousand (2022: EUR 139 thousand).
The value of short-term leases and leases of low-value assets in
2022 equalled to EUR 24 thousand (2022: EUR 253 thousand)
and it is included in other expenses.
Total cash outflow for leases in 2023 was EUR 1,177 thousand
(2022: EUR 807 thousand).
21.
Goodwill
Goodwill in the preliminary purchase price allocation in the
amount of EUR 15,446 thousand is result of the business acqui-
sition. The integration of Lerta into Photon Energy Group rep-
resents the fusion of physical and digital energy to create a
customer-centric renewable energy utility that will be uniquely
positioned to effectively address the pain points of energy gen-
erators, energy users and transmission system operators. En-
ergy generators will be able to benefit from an integrated
approach to asset operation and management as well as cost-
efficient market access, including balancing services. Energy us-
ers will be able to manage and optimise their costs from a com-
bination of on-site generation and off-site supply. This will
include the benefit of energy storage and the monetisation of
their demand flexibility. Transmission systems operators will be
provided with flexible supply, DSR and ancillary services to the
power grid.
The impact on Photon Energy Group’s strategic and operational
priorities following the Transaction will include:
►
Capacity building and product development for the effi-
cient delivery of a ‘one-stop shop’ offering that combines
assets, services and IT solutions to establish Photon En-
ergy Group as the preferred partner for commercial and
industrial customers in the CEE region and Australia on
their journey from passive energy users to proactive en-
ergy flexumers.
►
A significant acceleration in the deployment of utility-
scale and on-site energy storage capacities both as an EPC
supplier as well as an investor, leveraging the Group’s ex-
perience in Australia such as the Lord Howe Island hybrid
- energy system and the planned utility-scale hybrid plant
in Boggabri, New South Wales.
Close monitoring of the emergence of markets for grid flexibil-
ity and other ancillary services worldwide and evaluation of op-
portunities as they emerge, which may lead to relatively low-
risk and low-cost market entries into new locations currently
not served by the Company.
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
124
In thousands of EUR
Goodwill
Total
Carrying amount as at 1 January 2022
0
0
Additions/transfers
0
0
Acquisition of subsidiary
15,466
15,466
Amortisation charge
0
0
Effect of movements in exchange rates
0
0
Carrying amount as at 31 December 2022
15,466
15,466
Effect of the PPA adjutment
-194
-194
Carrying amount as at 31 December 2022 restated
15,272
15,272
Additions/transfers
0
0
Acquisition of subsidiary
0
0
Amortisation charge
0
0
Effect of movements in exchange rates
0
0
Carrying amount as at 31 December 2022 restated
15,272
15,272
Cost
15,272
15,272
Accumulated amortisation
0
0
Effect of movements in exchange rates
0
0
Preliminary valuation
For the purpose of the preliminary valuation of the Lerta S.A.
Group and subsequent calculation of the goodwill, the Board of
Directors used the Discounted Cash Flow Method (the
“Method”) based on a 5-year business plan of Lerta, i.e. for years
2023-2027 and assuming going concern basis after the fore-
casting period. The valuation date was 31 December 2022.
As at 31 December 2022 Photon gained full control effectively
(described in detail in chapter 8). The acquisition accounting
was prepared on a provisional basis. During preparation of
these consolidated financial statements the Group completed
the acquisition accounting as allowed by IFRS 3 and therefore
revised comparative financial information including value of
Goodwill (described in detail in note 2.5).
Goodwill assignment
After acquisition all Lerta entities have become part of the op-
erational segment “New Energy”. The segment has its own op-
erational management and with other companies included
within this segment, all Lerta entities are managed, financed
and operated uniformly and equally. All Lerta entities are inter-
linked in its operating activities, especially related to the sharing
capacities of individual departments, mainly those related to
back office and ITS services and cash management.
The whole operating concept of the „New Energy“ segment is to
build, operate and maintain „virtual power plant“. Basically, it
means combining electricity and capacity trading together with
other services to provide customers and providers of capacities
entire portfolio of services.
Except for the working capital, the assets of „New Energy“ seg-
ment consist primarily from software, which is used for trading
activities and data collection related to them. The software is
developed and owned basically by one single entity (PE Sys-
tems). Developed and maintained trading SW platforms are in-
terconnected and thus help in generating cash flows from all
the businesses mentioned above. This individual specific plat-
form would hardly generate independent cash flows without
using other software owned and used.
Currently the electricity trading and capacity trading is or will be
done in the same states and markets to follow the concept of
virtual powerplant as was mentioned above.
In consequence, all Lerta entities are considered as one cash
generating unit to which the goodwill mentioned above is as-
signed.
Goodwill impairment test
The total value of Lerta Group as calculated based on the Dis-
counted cash flow (DCF) valuation method is PLN 170 million
(EUR 39,141 thousand). The value of equity, goodwill and intan-
gible assets recognized uplo acquisition amount to PLN 91 mil-
lion (EUR 20,981 thousand) representing in a 46% discount
towards the enterprise value and 33% discount towards equity
value in used based on the DCF valuation method. The
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
125
recoverable amount of goodwill is significantly higher than the
carrying amount and there was no indication for impairment
identified.
For the purpose of the valuation of the Lerta S.A. Group (in the
structure as of 31.12.2022; the date of taking over control of
Lerta Group) and subsequent calculation of the goodwill, the
Board of Directors used the Discounted Cash Flow Method (the
“Method”) based on a 2024 forecast and business plan of Lerta
for years 2025-2027 and assuming going concern basis after the
forecasting period. The valuation date is 31 December 2023.
The terminal value is calculated on the assumption that the ter-
minal free cash flow will continue to increase at 2% p.a. Such a
terminal growth rate is determined by the current economic en-
vironment of inflation rates in the region of Central and Eastern
Europe.
The following key assumptions were used for the business plan
of Lerta: Revenues were planned by service provided whereas
for the trading business the Company assumed external trad-
ing sales of 225 MW in 2025 growing to 1800 MW in 2027. For
the trading business a gross profit margin of 2.3% in 2024 in-
creasing to 3.1% in 2027 was considered.
Except from 2024, when we the Group forecasting EBITDA mar-
gin about 8,9 %, the margin expected should range between
3,6% to 4,4% during the planning horizon.
For the dynamically growing demand response services growth
rates of 183% in 2024 decreasing to 65% in 2027 were assumed.
For these services, a gross profit margin of 29% was considered.
Operating expenses consists of mainly remuneration expenses,
external services such as legal, consulting, accounting and other
IT and administrative expenses and are expected to increase by
214 % in 2024 and 65% afterwards in line with the growing busi-
ness.
The discount rate used to discount free cash flows amounted
to 15,6 % and was calculated using the weighted average cost
of capital, using the government bonds yield in local currency in
Poland and the adequate risk factors (5,25% Equity Risk Pre-
mium)
for equity discount rate and selected 20Y interest rate
swap rate raised about the credit margin and adjusted by local
income tax.
Sensitivities in DCF
Sensitivity tests were performed to asses the impact of changes
in some key assumptions like the discount rate and the change
of the growth rate of the terminal value (TV).
The below analysis shows impact of change in the used Discount rates by +/-3% on the enterprise value in absolute and relative figures
as of 31.12.2023:
In thousands of EUR
Discount rate +3%
Discount rate +3% in %
Discount rate -3%
Discount rate -3% in %
Lerta Valuation
-7,933
-20%
12,487
32%
The below analysis shows impact of change in growth rate of the terminal value by +/-3% on the enterprise value in absolute and
relative figures as of 31.12.2023:
In thousands of EUR
Terminal value rate
+3%
Terminal value rate
+3% in %
Terminal value rate -
3%
Terminal value rate -
3% in %
Lerta Valuation
10,797
28%
-6,895
-18%
Carrying value was calculated as a “value in use” based on the DCF model and key assumptions described above.
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
126
22.
Intangible Assets
In thousands of EUR
Intangible assets in
course of development
Software
Capacity market
contracts
Total
Carrying amount as at 31 December 2021
159
685
0
844
Additions/transfers
0
356
0
356
Acquisition of subsidiary
353
317
6,047
6,717
Amortisation charge
0
-479
0
-479
Effect of movements in exchange rates
0
21
0
41
Carrying amount as at 31 December 2022
512
900
6,047
7,459
Cost
512
2,517
6,047
9,076
Accumulated amortisation
0
-1,658
0
-1,658
Effect of movements in exchange rates
0
41
0
41
Carrying amount as at 31 December 2022
512
900
6,047
7,459
Effect of the PPA adjutment
671
-589
82
Carrying amount as at 31 December 2022 restated
512
1,571
5,458
7,541
Additions/transfers
1,135
1,366
0
2,501
Acquisition of subsidiary
0
0
0
0
Amortisation charge
0
-508
-1,325
-1,833
Effect of movements in exchange rates
49
-135
-61
-147
Carrying amount as at 31 December 2023
1,696
2,294
4,072
8,062
Cost
1,696
4,595
5,458
11,749
Accumulated amortisation
0
-2,166
-1,325
-3,491
Effect of movements in exchange rates
0
-135
-61
-196
Carrying amount as at 31 December 2023
1,696
2,294
4,072
8,062
Intangible assets in course of development of EUR
1,696
thou-
sand at 31 December 2023 represents software internally de-
veloped by Lerta for their internal purposes. Also the carrying
amount of Software is mainly represet by the internally devel-
oped systems developed by Lerta.
Capacity market contracts in the amount of EUR 4072 thousand
represent activated intangibles acquired together with acquisi-
tion of Lerta described in note 8 Business combination and ac-
tivated based on the DCF model.
23.
Other Financial Investments
Other non-current investments include following investments:
In thousands of EUR
2023
2022
Other financial investments
Other financial assets at FVTPL
5,922
1,698
Other financial assets at FVOCI
11,099
6,118
Total non-current financial assets
17,021
7,816
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
127
The table below discloses investments in equity securities at 31 December 2023 by measurement categories and classes:
In thousands of EUR
Other financial
assets at FVTPL
Other financial
assets at FVOCI
Total
Other financial investments
Corporate shares
0
11,099
11,099
Convertible note
1,332
0
1,332
Share options
4,590
0
4,590
Total Other financial investments at 31 December 2022
5,922
11,099
17,021
The gain from the financial assets recognized in FVTPL (RayGen share option and convertible note) has been classified on the sepa-
rate financial statement line Gain on investment revaluation. As of the 31 December 2023 the gain was amounted to EUR 2,902 thou-
sand (2022 0 EUR).
Both share options and convertible note relate to RayGen Resources Pty Ltd. The group provided funding to RayGen Resources Ltd in
form of convertible note in notional amount of EUR 1,115 thousand. Note is convertible into shares upon qualifying equity financing
round at RayGen. Number of conversion shares is determined based on defined price per share. Revaluation gain from convertible
note recorded in profit and loss amounted to EUR 218 thousand). Maturity date of convertible note is 24 months from issue date of
the first notes.
The table below discloses investments in equity securities at 31 December 2022 by measurement categories and classes:
In thousands of EUR
Other financial
assets at FVTPL
Other financial
assets at FVOCI
Total
Other financial investments
Corporate shares
-
6,118
6,118
Share options
1,698
-
1,698
Shares not yet registered
-
-
-
Total Other financial investments at 31 December 2022
1,698
6,118
7,816
(a)
Other financial assets at FVOCI – Corporate shares
At 31 December 2023, the Group designated investments dis-
closed in the following table as equity securities at FVOCI. The
FVOCI designation was made because the investments are
expected to be held for strategic purposes rather than with a
view to profit on a subsequent sale, and there are no plans to
dispose of these investments in the short or medium term.
In thousands of EUR
Fair value at
31 December 2023
Dividend income
recognised for the year
Other financial assets at FVOCI
Investment in RayGen Resources Pty Ltd ordinary shares
6,934
0
Investment in RayGen Resources Pty Ltd preference shares
3,527
0
Investment in ValueTech Fund shares
637
0
Total Other financial assets at FVOCI
11,099
0
At 31 December 2022, the Group designated investments dis-
closed in the following table as equity securities at FVOCI. The
FVOCI designation was made because the investments are
expected to be held for strategic purposes rather than with a
view to profit on a subsequent sale, and there are no plans to
dispose of these investments in the short or medium term.
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
128
In thousands of EUR
Fair value at
31 December 2022
Dividend income
recognised for the year
Other financial assets at FVOCI
Investment in RayGen Resources Pty Ltd ordinary shares
3,534
0
Investment in RayGen Resources Pty Ltd preference shares
1,979
0
Investment in ValueTech Fund shares
605
0
Shares not yet registered (Lerta SA)
0
0
Total Other financial assets at FVOCI
6,118
0
At 31 December 2023 securities at FVOCI include equity securi-
ties which are not publicly traded. Due to the nature of the local
financial markets, it is not possible to obtain current market
value for these investments. For these investments, fair value is
estimated by reference to subscription value of additional
shares placed. Refer to note 38.
Reconciliation of movements in Other financial assets at FVOCI
follows:
In thousands of EUR
Valuetech
Investment in
RayGen Resources
Pty Ltd
Investment in
Lerta SA
Total
Other financial assets at FVOCI as at 1 January 2022
0
5,355
3,139
8,494
Revaluation recognised in OCI
605
0
0
605
Fx impact
0
158
63
221
Derecognition (result of business combination/acquiring a
control over Lerta)
0
0
-3,202
-3,202
Other financial assets at FVOCI as at 31 December 2022
605
5,513
0
6,118
Revaluation recognised in OCI
-16
5,271
0
5,255
Fx impact
48
-322
0
-274
Derecognition (change of consolidation method)
0
0
0
0
Other financial assets at FVOCI as at 31 December 2023
637
10,462
0
11,099
At the year-end 2023, the Group has revalued its share in the
Valuetech fund based on the equity value of the participations
in the Valuetech books by EUR 31 thousand presented in OCI.
In 2023, the revaluation of investment in RayGen was per-
formed and EUR 4,949 thousand was booked in OCI and EUR
4,224 thousands was booked in PL.
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
129
24.
Deferred Tax Assets and Liabilities
Movement in temporary differences during the year:
In thousands of EUR
Balance as at
1 January 2022
Recognized
in profit or loss
Recognized in OCI of which
Fx translation
Recognized in OCI of which
DT from revaluation
Balance as at
31 December 2022
Restatement
Balance as at
31 December 2023 restated
Recognized
in profit or loss
Recognized in OCI of which
Fx translation
Recognized in OCI of which
DT from revaluation
Balance as at
31 December 2023
Accumulated tax losses carried forward
0
95
0
0
95
0
95
0
0
0
95
Internal margins eliminated
0
1,506
0
0
1,506
0
1,506
1,256
-79
0
2,683
Total recognised deferred tax asset
0
1,601
0
0
1,601
0
1,601
1,256
-79
0
2,778
Internal margins eliminated
0
69
0
0
69
0
69
52
0
0
121
Accumulated tax losses carried forward
371
-188
0
0
183
0
183
203
0
0
386
Revaluation reserve – Derivatives
-211
0
0
-251
-462
0
-462
0
0
-168
-630
Intangible assets
0
0
0
-1,149
-1,149
112
-1,037
263
0
151
-623
Property, plant and equipment
-10,359
793
-156
-44
-9,766
0
-9,766
1,047
-367
-1,238
-10,324
Net deferred tax asset/(liability)
-10,199
2,275
-156
-1,444
-9,524
112
-9,412
2,821
-446
-1,255
-8,292
Recognised deferred tax asset
0
1,601
0
0
1,601
0
1,601
1,256
-79
0
2,778
Recognised deferred tax liability
-10,199
674
-156
-1,444
-11,125
112
-11,013
1,565
-367
-1,255
-11,070
Recognised deferred tax liability is arising mainly from revalua-
tion of property, plant and equipment. Deferred tax liability is
initially recognised against equity (revaluation reserve) upon re-
valuation of PPE (see also 5.1 and 17). Corresponding release of
recognised deferred tax liability is recognised in OCI and subse-
quently recycled to retained earnings.
Majority of deferred tax balances are expected to be recovered
or settled after more than 12 months after the reporting period
and therefore the whole deferred tax liability is presented as
Non Current Liability.
In 2023 the Group reassessed the probability of generation of
sufficient taxable profits prior to their expiry and recognised de-
ferred tax assets of EUR 0 thousand arising from part of the tax
losses carried forward that are expected to be utilised.
Recog-
nised deferred tax asset relates mainly to tax losses to be uti-
lised in Czech Republic, Hungary and Germany. Deferred tax
liability relates to temporary differences in PPE mainly in Czech
Republic, Slovakia and Hungary. Additionally, the Group recog-
nised also deferred tax asset from internal margins eliminated
of EUR 1,256 thousand.
In 2023, deferred tax asset from internal margins eliminated
was created in the amount of EUR 2,804 thousand. This de-
ferred tax asset relates to the intercompany eliminations of
margin from construction of the powerplants for the group en-
tities. On the consolidated level, this margin is eliminated, but it
is taxable on the local level and the temporary difference thus
creates a deferred tax asset.
In addition to recognised deferred tax liability, the Group also
has unrecognised deferred tax assets mainly attributable to fol-
lowing:
In thousands of EUR
Note
2023
2022
Unrecognised deferred tax asset resulting from:
Provisions and other temporary differences
373
0
Accumulated tax losses
23,835
4,469
Unrecognised deferred tax asset
24,231
4,469
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
130
No deferred tax assets arising from these temporary differ-
ences has been recognized in the financial statements as it is
either not probable that sufficient taxable profits will be gener-
ated prior to the expiry of unused tax losses or as the Group is
not able to reliably assess the amounts and timing of future tax-
able profits.
The potential deferred tax assets have been calculated using
the tax rates valid in individual countries where accumulated
tax losses arise (Czech Republic, Slovakia, Germany, Nether-
lands, Switzerland, Australia, Romania and Hungary).
As of 31 December 2023 the Group has unused tax losses carry
forward of EUR 23,838 thousand for which no deferred tax
assets have been recognised. Out of these tax losses, EUR 3,209
thousand expire in 2024, EUR 18,259 thousand expire in the pe-
riod 2025-2027, EUR 2,390 thousand expire in the period 2027-
2031 and EUR 0 thousand have an unlimited expiry date.
Unrecognised deferred tax asset from provisions equaled to
EUR 373 thousand.
As of 31 December 2022 the Group had unused tax losses carry
forward of EUR 21,858 thousand for which no deferred tax as-
sets have been recognised. Out of these tax losses, EUR 1,369
thousand were to expire in 2022, EUR 9,465 thousand in the pe-
riod 2023-2025, EUR 10,000 thousand in the period 2027-2031
and EUR 1,024 thousand had an unlimited expiry date.
25.
Inventories
In thousands of EUR
2023
2022
Goods
12,966
18,190
Spare parts
1,127
2,138
Inventories
14,093
20,328
Goods consist mainly of photovoltaic panels, inverters, batter-
ies and other system components for photovoltaic power
plants.
The cost of inventories recognized as an expense in Raw mate-
rials and consumables used during the year in respect of con-
tinuing operations amounted to EUR 33,577 thousand (31
December 2022: EUR 43,929 thousand).
Amount of EUR 132 thousand of goods represents goods in
transit based on Incoterms.
In 2023, allowance for
inventories amounted to EUR 340 thou-
sand (31 December 2022: EUR 0 thousand).
26.
Trade and Other Receivables, Loans to Related Parties
Trade and other receivables
In thousands of EUR
Note
2023
2022
Trade receivables (gross)
6,170
10,671
Other than trade receivables
3,221
1,420
Loans provided to related parties
40
2,815
2,447
Fair value of derivatives
36
2,012
5,087
Less credit loss allowance
-1,300
-1,047
Advances paid (deposits) – current and non current
0
1,322
Total financial assets with trade and other receivables
12,918
19,900
Advances paid – current and non current
2,851
5,165
VAT receivables
6,567
2,455
Total non-financial assets with trade and other receivables
9,418
7,620
Total trade and other receivables, loans to related parties
22,336
27,520
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
131
Trade receivables of EUR thousand less credit loss allowance of
EUR 6,170 thousand (2022: EUR 10,671 thousand) include
mainly current and overdue receivables from sale of electricity,
O&M services and sales of technologies. Other than trade re-
ceivables include mainly other receivables from reinvoicing,
loans provide to non-related parties and other receivables in
total amount of EUR 3,221 thousand (2022: EUR 1,420 thou-
sand).
Current and non-current advances paid of EUR 2,851 thousand
(2022: EUR 6,487 thousand) include mainly advances paid for
purchase of technology.
There are no advances paid for auctions as at 31 December
2023 (2022: EUR 1,322 thousand).
Remaining portion of advances presented separately in amount
of EUR 534 thousand includes paid non-current advances re-
lated to Resolar provision of EUR 534 thousand (2022: EUR 542
thousand) which will be settled upon liquidation of panels in ac-
cordance with requirement of EU and Czech regulation in 2030,
see also note 33, and other current advance for goods and ser-
vices of EUR 2,851 thousand (2022: 4,623 thousand).
Fair value of derivatives of EUR 2,012 thousand is presented as
long-term receivable as the derivatives are related to the long-
term financing.
Receivables of EUR 2 thousand were written off during 2023
(2022: EUR 1 thousand which were not provided for).
Other receivables as per financial statements include the ad-
vances, VAT receivables and other than trade receivables from
the table above (total EUR 12,641 thousand). Increase in VAT re-
ceivable is caused by the administrative procedures in Roma-
nia, when VAT can be refund after long period of time.
Loans provided to related parties represent mainly loans pro-
vided to Solar Age Investments B.V. and other related parties
that are not eliminated in the consolidation of PENV. For more
information on related party transactions, see also note 40.
The Group applies the IFRS 9 simplified approach to measuring
expected credit losses which uses a lifetime expected loss al-
lowance for all trade receivables, other receivables, and receiv-
ables from related parties. To measure the expected credit
losses, receivables have been grouped based on shared credit
risk characteristics and the days past due.
The expected loss rates are based on the payment profiles of
customers/counterparty over a period of 36 month before each
balance sheet date and the corresponding historical credit
losses experienced within this period. The historical loss rates
are adjusted to reflect current and forward-looking information
on macroeconomic factors affecting the ability of the customers
to settle the receivables. The Group has identified the GDP and
the unemployment rate of the countries in which it sells its
goods and services to be the most relevant factors, and accord-
ingly adjusts the historical loss rates based on expected
changes in these factors.
The credit loss allowance for trade receivables and other receiv-
ables is determined according to provision matrix presented in
the table below. The provision matrix is based the number of
days that an asset is past due, adjusted for forward looking in-
formation.
The credit loss allowance for Loans provided to related parties
is determined according to internal analysis of recoverability of
Loans provided to related parties, based on this analysis no ECL
provisions were created as at 31 December 2023 and 31 De-
cember 2022.
In thousands of EUR
31 December 2023
31 December 2022
Loss rate
Gross
Lifetime
ECL
Net
Loss rate
Gross
Lifetime
ECL
Net
Trade receivables
Current
0.10%
2,982
-3
2,979
0.15%
6,182
-9
6,172
Less than 30 days overdue
0.50%
485
-2
483
0.15%
3,007
-5
3,002
30 to 90 days overdue
1.50%
370
-6
364
0.20%
367
-1
366
90 to 360 days overdue
2.00%
581
-12
569
1%
85
-1
84
Over 360 days overdue
100.00%
272
-272
0
100%
379
-379
0
Specific allowance
85.00%
1,170
-1,005
165
100%
653
-653
0
Total for trade receivables
5,860
-1,300
4,560
10,672
-1,047
9,624
Other receivables
0.10%
310
0
310
0.05%
1,962
0
1,962
Total
6,170
-1,300
4,870
1,047
Specific ECL for receivables overdue for more than 360 days as
at 31 December 2023 was based on present value of future cash
flow of related receivables. Specific allowance was created for
the customers Nubland Nexus and Alpha Solar Systems (2022:
EkoFachowcy
Sp.z.o.o.) because of its filing for insolvency (see
also Note 16).
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
132
The following table explains the changes in the credit loss allowance for trade receivables under simplified ECL model between the
beginning and the end of the annual period:
In thousands of EUR
2023
2022
Allowance for credit losses on trade and other receivables as at 1 January
1,047
391
New originated
517
684
Released due to write off
-2
-1
Changes in estimates and assumptions
-153
0
Total credit loss allowanceexchange in profit or loss for the period
1,409
1,074
Foreign exchange movements
-109
-27
Allowance for credit losses on trade and other receivables as at 31 December
1,300
1,047
27.
Assets and Liabilities Arising from Contracts with Customers
The Group has recognised following assets and liabilities arising from contracts with customers:
In thousands of EUR
2023
2022
Current contract assets from contracts with customers
855
1,154
Loss allowance
0
0
Total current contract assets
855
1,154
Contract liabilities – advances from customers
662
592
Total current contract liabilities
662
592
Contract assets represents un-invoiced part of recognised rev-
enue based on progress towards complete satisfaction. In-
voiced amount of contract assets is reclassified to trade
receivable upon its invoicing.
At 31 December 2023 the most significant part of the contract
asset was represented by several Polish projects in amount of
EUR 360 thousand (2022: North East Water project of EUR 897
thousand).
Contract liabilities represent mostly advances received from
customers which are due within one year and relate to the
short-term projects. Based on this condition, the Group utilized
practical expedience in accordance with IFRS 15:121 (a) in prep-
aration of the financial statements.
The Group applies the IFRS 9 simplified approach to measuring
expected credit losses which uses a lifetime expected loss al-
lowance for contract assets. To measure the expected credit
losses, contract assets have been grouped based on shared
credit risk characteristics and the days outstanding as unbilled.
The contract assets relate to unbilled work in progress and have
substantially similar risk characteristics as the trade receivables
for the same types of contracts.
The expected loss rates are based on the past data collected
over a period of 36 month (2022: 36 months) prior to the end of
the reporting period and the corresponding historical losses ex-
perienced within this period. The historical loss rates are ad-
justed to reflect current and forward-looking information on
macroeconomic factors affecting the ability of the customers to
settle the receivables. The Group has identified the gross do-
mestic product and the unemployment rate of the countries in
which it sells its goods and services to be the most relevant in-
dicators, and accordingly adjusts the historical loss rates based
on expected changes in these variables.
The credit loss allowance for contract assets as at 31 December
2023 is determined according to provision matrix presented in
the table below.
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
133
In thousands of EUR
31 December 2023
31 December 2022
Loss rate
Gross
carrying
amount
Lifetime
ECL
Net
carrying
value
Loss rate
Gross
carrying
amount
Lifetime
ECL
Net
carrying
value
Contract assets
Outstanding as unbilled for less
than 90 days
0.03%
855
0
855
0.05%
1,154
0
1,154
Total
0.03%
855
0
855
0.05%
1,154
0
1,154
28.
Liquid Assets
For the purposes of the consolidated statement of cash flows,
cash and cash equivalents include cash on hand and at banks.
Cash and cash equivalents at the end of the reporting period as
shown in the consolidated statement of cash flows can be rec-
onciled to the related items in the consolidated statement of
financial position as follows
I
n thousands of EUR
2023
2022
Cash and cash equivalents
5,838
11,271
Cash with restriction on disposition
7,140
6,373
Precious metals
0
3,714
Liquid assets*
12,978
21,358
*Liquide assets represt the alternative performance measure described in note 4.19
Cash with restriction on disposition includes mainly DSRA (debt
service reserve accounts) and MRA (maintenance reserve ac-
counts) for Czech, Slovak, Hungarian, Romanian and Australian
SPVs (2022: without Czech SPVs) and guarantees issued.
Part of the movement on Cash with restriction on disposition
related to operating activities of the Group in 2023 in amount
of EUR 0
thousand (2022: EUR 30 thousand) was presented as
Change in trade and other receivables. Movement in Cash with
restriction on disposition relating to borrowings of EUR -767
thousand (2022: EUR -2,785
thousand) was presented in Cash
flows from financing activities.
29.
Assets Held for Sale
Assets held for sale include the project Domanowo that will be most probably sold to third party during the H1 2024. This consists of
projects rights to the project under development and work in progress related to the project.Company has decided to sell it as there
is no interest to develop and finalize the project internally anymore.
There are also another projects open for potential sale, however, with no specific offer as of the year-end 2023 and therefore not
disclosed as assets held for sale.
In thousands of EUR
2023
2022
Asset held for sale
659
0
Liquid assets
659
0
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
134
30.
Capital and Reserves
Share capital and share premium
Ordinary shares
In shares
2023
2022
On issue at 1 January
60,000,000
60,000,000
On issue at 31 December – fully paid
61,238,521
60,000,000
The Company’s issued share capital is EUR 612,238 divided into
61,238,521 shares with a nominal value of EUR 0.01 each. The
share capital is fully paid-up. Please refer also to Chapter 31,
weighted average number of ordinary shares section.
Ordinary shares
All shares rank equally with regard to the Company’s residual
assets.
The holders of ordinary shares are entitled to receive dividends
as declared from time to time and are entitled to one vote per
share at the shareholders’ meetings of the Company.
Treasury shares
At 31 December 2023 treasury shares included 1,481,781 ordi-
nary shares of the Company (2022: 1,332,797
ordinary shares)
owned directly by the Company. These ordinary shares carry no
voting rights at the Shareholders Meeting.
Share premium represents the excess of contributions received
over the nominal value of shares issued. Proceeds from alloca-
tion of treasury shares to employees in excess to nominal value
of shares are also recorded in Share premium.
Nominal value
of sold treasury shares is recorded against Treasury shares re-
serve.
Share buy back programme
As fo 16 December 2022 the Board of Directors signed a reso-
lution to commence a share buy back programme starting on
19 December 2022 and lasting for 6 month i.e. until 19 June
2023 but no longer than until the funds allocated by the Com-
pany for this purpose are exhausted.
During year 2023 i.e. between 2 January 2023 and 7 June 2023,
the Company purchased 223,753 shares (0.37% of share
capital) for the total amount of 2,864,683.79 zl (EUR 630,709)
and at the average price of 12.80 zl (EUR 2.8).
During year 2022, the Company purchased 26,247 shares
(0.04% of share capital) for the total amount of 339,369.96 zl
(EUR 72,643) and at the average price of 12.93 zl (EUR 2.77).
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
135
Movement in share capital can be analysed as follow:
In thousands of EUR
Ordinary shares
Share premium
Treasury shares
Total
At 1 January 2022
600
31,443
-38
32,005
Treasury shares allocated to employees
0
151
-78
73
Other movement
0
149
0
149
Acquisition of subsidiary (note 9)
0
8,781
-23
8,758
Treasury shares allocated to qualified investors
0
0
0
0
At 31 December 2022
600
40,524
-139
40,985
Treasury shares allocated to employees
0
175
-175
0
Other movement
0
0
-513
-513
Acquisition of subsidiary (note 9)
12
-12
0
0
Treasury shares allocated to qualified investors
0
0
0
0
At 31 December 2023
612
40,687
-827
40,472
As of 31 December 2023 the shareholder structure was as follows:
Shareholder
No. of shares
% of capital
No. of votes at
Shareholders
Meeting
% of votes at
Shareholders
Meeting
Solar Future Cooperatief U.A.
21,769,075
35.55%
21,769,075
36.44%
Solar Power to the People Cooperatief U.A.
20,057,485
32.75%
20,057,485
33.57%
Tomala Investments ASI Sp. z o.o.
2,288,537
3.74%
2,288,537
3.83%
Photon Energy N.V.
1,491,781
2.44%
0
0.00%
Free float
15,631,643
25.52%
15,631,643
26.16%
Total
61,238,521
100.00%
59,746,740
100.00%
As of 31 December 2022 the shareholder structure was as follows:
Shareholder
No. of shares
% of capital
No. of votes at
Shareholders
Meeting
% of votes at
Shareholders
Meeting
Solar Future Cooperatief U.A.
21,775,075
36.29%
21,775,075
37.12%
Solar Power to the People Cooperatief U.A.
20,492,057
34.15%
20,492,057
34.93%
Photon Energy N.V.
1,332,797
2.22%
0
0.00%
Free float
16,400,071
27.33%
16,400,071
27.95%
Total
60,000,000
100.00%
58,667,203
100.00%
Mr. Michael Gartner and Mr. Georg Hotar are the only members
of the Company’s Board of Directors.
Mr. Michael Gartner indirectly owns 37.12 % of the votes, via
Solar Future Cooperative U.A. and directly 0.04% of votes at the
Shareholders Meeting. Mr. Georg Hotar indirectly owns 34.93 %
of votes, via Solar Power to the People Coöperatief U.A. and di-
rectly 0.13% of votes at the Shareholders Meeting.
The Free float includes shares allocated to the employee share
purchase programme and also shares allocated as purchase
price for acquisition of subsidiary as described in Note 8. The
disposition rights to these shares are limited and employees
can dispose of these shares only under specific conditions.
The other reserves relate to the legal reserve; the revaluation of
property, plant and equipment – photovoltaic power plants the
hedging reserve and the currency translation reserve. Refer be-
low.
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
136
In thousands of EUR
2023
2022
Legal reserve fund
13
13
Revaluation reserve
55,668
38,326
Currency translation reserve
1,933
2,363
Hedging reserve
359
4,355
Other capital funds
38
38
Total reserves
58,011
45,095
Legal reserve fund
The Legal reserve fund is a reserve fund previously required by
the Czech commercial law and Slovak commercial law. It has
been created from the prior years’ profit of the Czech and Slo-
vak entities based on the approval of the general meeting.
The statutory reserve fund amounts to EUR 13
thousand at
31 December 2023 (2022: EUR 13 thousand).
Revaluation reserve
In thousands of EUR
Revaluation
reserve
– PPE
Revaluation reserve
– Other financial in-
vestments
Revaluation
reserve
total
Balance as at 1 January 2022
37,594
2,657
40,251
Increase of revaluation reserve (note 19)
432
605
1,038
Increase of revaluation reserve – deferred tax recognised
0
0
0
Share on increase on revaluation of properties – JV
0
0
0
Move from revaluation reserve to retained earnings
-2,963
0
-2,963
Other movements
1
0
1
Balance as at 31 December 2022
35,064
3,262
38,327
Increase of revaluation reserve (note 19)
14,461
5,255
19,716
Increase of revaluation reserve – deferred tax recognised
0
0
0
Share on increase on revaluation of properties – JV
0
0
0
Move from revaluation reserve to retained earnings
-2,375
0
-2,375
Other movements
0
0
0
Balance as at 31 December 2023
47,150
8,517
55,668
The revaluation reserve arises on the revaluation of photovol-
taic power plants (PVP).
In 2023, 6 Romanian projects have been activated with the total
other comprehensive income booked EUR 14,113 thousand.
Additionally to this, the Group has recognized and revalued
other financial investment in RayGen and Valuetech by EUR
5,255 thousand.
Additionally, Hungarian portfolio has been revalued by approx
6 mio EUR due to change from the merchant scheme to Feed in
Tariff starting in April 2024.
In 2022, Facankert project has been activated with the total
other comprehensive income booked in the amount of EUR 432
thousand. Additionally to this, the Group has recognized and
revalued other financial investments in Valuetech fund with a
total increase in value of EUR 605 thousand.
The revaluation reserve is being released to the retained earn-
ings during the duration of Feed-in-Tariff-currently 25 years in
the Czech Republic, 25 years in Slovakia (increased to 25 years
as of 2022, before 15 years) and up to 25 years in Hungary and
up to 30 years in Australia.
The amount equal to the amount of depreciation coming from
revaluation recycled to retained earnings in 2022 equals to EUR
2,319 thousand (2022: EUR 2,626 thousand).
The revaluation reserve as such cannot be distributed only the
amounts released to retained earnings can be distributed to the
shareholder.
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
137
Foreign currency translation reserve
In thousands of EUR
2023
2022
Balance at beginning of year
2,363
2,021
Foreign currency differences arising from the translation of financial statements
and foreign exchange gains or losses arising from net investments
-430
342
Balance at end of year
1,933
2,363
The foreign currency translation reserve comprises all foreign
currency differences arising from the translation of the financial
statements of operations using different currency from Euro. It
relates to Czech Republic, Hungary, Switzerland, Romania and
Australia.
In accordance with accounting policies are foreign exchange
gains or losses arising from net investments in foreign opera-
tions also recognized
in other comprehensive income.
This reserve cannot be distributed.
Derivatives hedging reserve
In thousands of EUR
2023
2022
Balance at beginning of year
4,355
2,039
Change in fair value of hedging derivatives – fully consolidated entities (note 36)
-3,996
2,310
Share on change in fair value of hedging derivatives of JV
0
5
Balance at end of year
359
4,355
Derivatives hedging reserve cannot be distributed.
Other capital funds
In line with the acquisition of treasury shares free of charge in
2013 the Company recognised Other capital funds of EUR 100
thousand. Nominal value of sold treasury shares is recorded
against Other capital funds.
Dividends
There were no dividends declared and paid by the Company in
2023 and 2022.
31.
Earnings Per Share
In EUR
2023
2022
Basic earnings per share
-0.2642
0.111
Diluted earnings per share
-0.2642
0.111
Total comprehensive income per share
Basic TCI per share*
-0.0077
0.175
Diluted TCI per share
-0.0077
0.175
*
Total comprehensive income per share represts the alternative performance measure described in note 4.19
Basic and diluted earnings per share
The calculation of basic earnings per share at 31 December
2023 was based on the profit attributable to ordinary share-
holders of EUR -15,750
thousand (2022: EUR 6,262
thousand)
and a weighted average number of ordinary shares outstanding
of 59,608 thousand (2022: 56,608 thousand).
Share on profit of equity-accounted investees amounted to EUR
217 thousand (2022: EUR 127 thousand).
Basic and diluted total comprehensive income per share
The calculation of total comprehensive earnings per share and
diluted total comprehensive earnings per share at 31 December
2023 and 2022 was based on the total comprehensive income
of EUR -459 thousand (2022: EUR 9,957 thousand) attributable
to ordinary shareholders and a weighted average number of or-
dinary shares outstanding of 59,608 thousand (2022: of 56,608
thousand).
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
138
Weighted average number of ordinary shares
In 2023, 1,238,521 new shares issued were issued (zero in
2022). The number of shares at the year-end 2023 equaled to
61,238,521 and in 2022,it
was 60,000,000.
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
139
32.
Loans and Borrowings
This note provides information about the contractual terms of the Group’s interest-bearing loans and borrowings, which are measured
at amortised cost.
In thousands of EUR
2023
2022
Non-current liabilities
Issued bonds
78,539
76,511
Long-term secured bank loans
82,073
58,446
Long term lease liability
4,181
2,914
Long-term portion of other loans
208
230
Total
165,001
138,101
Current liabilities
Issued bonds
529
3,670
Current portion of long-term secured bank loans, including accrued interest
12,878
7,259
Short-term lease liability
943
712
Total
14,350
11,641
Total loans & borrowings
179,351
149,742
Reconciliation of liabilities arising from financing activities
The table below sets out an analysis of liabilities from financing activities and the movements in the Group’s liabilities from financing
activities for each of the periods presented. The items of these liabilities are those that are reported as financing in the statement of
cash flows:
In thousands of EUR
Borrowings
Issued
bonds
Lease
liabilities
Other
liabilities from
financing
activities
Total
Liabilities from financing activities at 1 January 2022
45,460
81,330
2,273
373
129,436
Cash flows
Loan drawdowns / New issues of bonds
29,086
22,500
0
0
51,586
Placement costs paid
0
-331
0
0
-331
Repayments of principal
-6,649
-23,719
-668
-102
-31,138
Interest payments
-2,244
-5,898
-139
0
-8,281
Capitalized interest
Non-cash changes
Interest expense, including capitalized interest
2,710
6,213
139
0
9,062
New leasing contracts
0
0
1,901
0
1,901
Foreign exchange adjustments
-2,658
86
120
-41
-2,493
Liabilities from financing activities at 31 December 2022
65,705
80,181
3,626
230
149,742
Cash flows
Loan drawdowns / New issues of bond
38,710
2,500
0
0
41,210
Placement costs paid
0
-75
0
0
-75
Repayments of principal
-8,550
-3,146
-1,177
-22
-12,895
Repurchase of bond
0
-615
0
0
-615
Interest payments
-5,874
-5,352
-208
0
-11,434
Non-cash changes
Interest expense, including capitalized interest
5,739
5,608
208
0
11,556
New leasing contracts
0
0
2,775
0
2,775
Foreign exchange adjustments
605
-33
-100
0
472
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
140
Liabilities from financing activities at 31 December 2023
94,951
79,068
5,124
208
179,351
Terms and debt repayment schedule
Terms and conditions of outstanding loans were as follows:
In thousands of EUR
Portfolio
Bank
Currency
Nominal
interest rate
Year of
maturity
31 December
2023
31 December
2022
Credit
limit
Utilised
Credit
limit
Utilised
Czech
Secured bank loan
(Unicredit)
CZK
3M PRIBOR + 1.9%
31.12.2029
18,241
18,241
18,701
18,701
Czech
Secured bank loan
(Unicredit)
EUR
3M EURIBOR + 2.35%
31.12.2025
6,133
6,133
9,017
9,017
Slovak
Secured bank loan
(Unicredit)
EUR
3M EURIBOR + 1.55%
30.6.2025 –
30.9.2027
6,407
6,407
3,763
3,763
Hungary
Secured bank loan
(K&H)
HUF
3M BUBOR
+ 2.2–2.5%
28.6.2034
31.3.2035
11,852
11,852
11,779
11,779
Hungary
Secured bank loan
(K&H)
EUR
3M EURIBOR
+ 2.5-2.8%
28.6.2034
7,587
7,587
7,882
7,882
Hungary
Secured bank loan
(K&H)
EUR
3M EURIBOR + 3.3%
30.09.2044
6,000
3,500
-
-
Hungary
Secured bank loan
(CIB)
HUF
3M BUBOR + 2.5%
31.12.2035
4,645
4,645
5,386
5,386
Hungary
Secured bank loan
(CIB)
EUR
3M EURIBOR + 2.75%
30.6.2032
3,837
3,837
4,384
4,384
Australia
Secured bank loan
(Infradebt)
AUD
3M BBSW (min 0,5%)
+2,35-3,25%
31.12.2025
3,611
3,611
4,295
4,295
Romania
Secured bank loan
EUR
3M EURIBOR+3.95%
31.3.2028
21,900
19,545
-
-
Romania
Revolving credit (RB)
EUR
6M EURIBOR + 4.25%
30.06.2029
5,000
5,000
-
-
Poland
Bank loan (ING)
PLN
3M WIBOR + 4%
30.11.2025
92
61
-
-
Poland
Bank loan (ING)
PLN
3M WIBOR + 4%
28.02.2030
92
72
-
-
Czech
Overdraft account
EUR
1W EURIBOR + 1,9%*
n/a
5,000
4,968
-
-
Accrued fees and
interest
-
(508)
-
498
Total interest bearing loans
100,397
94,951
65,207
65,705
*
can be used in CZK and USD as well with relevant rate (
1W PRIBOR + 1,90% or SOFR + 1,90%)
The exposure of the Group’s borrowings to interest rate
changes and the contractual re-pricing dates at the end of the
reporting period are disclosed in note 37.
All secured bank loans are pledged by SPVs’ assets of power
plants including real estate if any and technology receivables
generated by power plants. In case of secured bank loans all
power plants are cross-collateralized within the financing
banks, see also note 19.
In March 2023, The Group
has closed a non-recourse project
refinancing agreement in the amount of EUR 21.9 million with
Austrian Raiffeisen Bank International (RBI) for its portfolio of
PV power plants in Romania with a total installed capacity of
31.5 MWp.
Compliance with Covenants
The Group is subject to certain covenants related primarily to
its borrowings. Non-compliance with such covenants may re-
sult in negative consequences for the Group including growth
in the cost of borrowings and declaration of default.
The Group was substantially in compliance with all financial cov-
enants set by the lenders as of 31 December 2023 except for
debt service cover ratio with one of the lenders in Hungary. This
does not represent an event of default under the borrowings or
permit the lender to immediately recall borrowings but may re-
quire remediating actions in the form of mandatory prepay-
ment (cash sweep) as of 31 December 2022.
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
141
Issued bonds
In thousands of EUR
Amortised amount
Fair value
2023
2022
2023
2022
Current liabilities
CZK bond 2016/23
0
3,146
0
3,127
Green bond 2021/27
529
524
528
0
Non-current liabilities
Green bond 2021/27
78,539
76,511
79,743
70,284
Total
79,068
80,181
80,271
73,411
In November 2021, the Group has issued an EUR green bond
with annual coupon of 6.50% and maturity in November 2027
(six-year maturity). The EUR green bond 2021/27 was offered to
bondholders of the existing 2017/2022 EUR bond in form of an
exchange offer and as a result, EUR 21,281 thousand were ex-
changed. The principal amount of EUR 50,000 thousand was
oversubscribed and the overall volume of the new green bond
was increased to EUR 55,000 thousand. Total amount of place-
ment costs paid for the issuance/exchange of the Green bond
amounted to EUR 1,202 thousand. Exchange bonus paid to ex-
isting bondholder of EUR 420 thousand was recognised in Gains
less losses on derecognition of financial liabilities while the re-
maining amount of EUR 782 thousand is included in the amor-
tised amount of the Issued bonds and will be recognised as
interest expense from Issued bonds using effective interest
rate.
The EUR green bonds 2021/27 are traded on the unregulated
market segments of the Stock Exchanges in Frankfurt, Berlin,
Hamburg, Hannover, Munich, Düsseldorf and Stuttgart. The net
proceeds of the transaction are allowed to be used only for fi-
nancing and expanding eligible assets in accordance with its
Green Financing Framework.
In May 2022, the Company tapped its EUR green bond 2021/27
in the amount of EUR 10,000 thousand to a total outstanding
amount of EUR 65 million. In October 2022 and November
2022, the Company tapped the bond in the amount of another
EUR 12,500 thousand to a total outstanding amount of EUR
77,500 thousand.
The bonds from the second tap in autumn, were also offered to
bondholders of the existing 2017/2022 corporate bonds in form
of an exchange offer with a 1.5% loyalty premium plus the dif-
ference in net accrued interest on each exchanged bond. After
the exchange the outstanding volume of the corporate EUR
bond 2017/22 was EUR 15.232 million and was fully repaid to-
gether with the final interest payment to the bondholders on 27
October 2022. Total amount of placement costs paid for the
tapping/exchange of the Green bond amounted to EUR 451
thousand. Exchange bonus paid to existing bondholder of EUR
114 thousand was recognised in Gains less losses on derecog-
nition of financial liabilities while the remaining amount of EUR
337 thousand is included in the amortised amount of the Issued
bonds and will be recognised as interest expense from Issued
bonds using effective interest rate.
In q1 2023, another EUR 2,500 thousand was tapped and out-
standing balance of EUR bonds reached EUR 80,000 thousand.
In September and October 2023, Company rebought from mar-
ket bond in nominal value of EUR 615 thousand.
CZK bond 2016/23 issued in October 2016 has an annual cou-
pon of 6%, with an outstanding nominal amount of EUR 3,146
thousand as of 31 December 2022 (2021: EUR 3,052 thousand)
which was repaid in December 2023. CZK bonds 2016/23 were
traded on the unregulated market segment of the Prague Stock
Exchange.
Accrued interest of EUR 529 thousand at 31 December 2023 for
EUR Green bond (2022: EUR 524 thousand) is presented within
current liabilities.
The fair values are based on cash flows discounted using a rate
based
on
the
borrowing
rate
of
7,69%
(applicable
credit spread) + risk free rate for relevant currency (2022:
6,78%) and are within level 2 of the fair value hierarchy.
Other long-term financing
Other long-term financing of EUR 208 thousand (2022: EUR 230
thousand) that includes mainly consumer loans received for car
financing and other long-term liabilities.
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
142
33.
Provisions
Movements in provisions for liabilities and charges are as follows:
In thousands of EUR
2023
2022
Carrying amount as at 1 January
566
545
Foreign exchange impact
-11
21
Carrying amount as at 31 December
555
566
Provision for liabilities and charges includes provision for eco-
logical liquidation and recycling of solar panels created in ac-
cordance with European directive and Czech legislation. For all
solar panels purchased before 2013, all responsibilities con-
nected to recycling of solar panels are with the PVP operators.
In accordance with the legislation, the Group paid contribution
to the selected provider responsible for liquidation of solar pan-
els of EUR 555 thousand (2022: EUR 566 thousand), paid con-
tributions are presented as non-current advances paid in Other
receivables – non-current, see note 26.
There are no similar ob-
ligations connected to the liquidation of solar panels in Slovakia,
Hungary nor Australia.
34.
Trade and Other Payables
In thousands of EUR
Note
2023
2022
Trade payables
9,308
11,988
Other payables
1,192
4,349
Total financial liabilities with trade and other payables
10,500
16,337
Payables to employees
1,886
1,292
Other liabilities
2,174
969
Total non-financial liabilities with trade and other payables
4,060
2,261
Total trade and other payables
14,560
18,598
Trade payables of EUR 9,308 thousand (2022: EUR 11,988 thou-
sand) include mainly regular trade payables and payables for
supply of goods and services to the Group.
Other payables of EUR 1,192 thousand include accrued liabili-
ties mainly related to the delivery of goods in transit. Non-finan-
cial other liabilities include mostly advances received and
employees related accruals.
35.
Current Income Tax Receivables / Current Tax Liability
Current income tax receivable of EUR 2,759 thousand (2022:
payable EUR 2,708
thousand) represent tax liability for profita-
ble entities (mainly SK, CZ, HU SPVs and few operating
Romanian and Hungarian entities decreased by tax advances
for income tax paid mainly in Hungary, Czech Republic, Roma-
nia and Slovakia.
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
143
36.
Derivative Financial Instruments
In thousands of EUR
31 December 2023
31 December 2022
Contracts with
positive fair value
Contracts with
negative fair value
Contracts with
positive fair value
Contracts with
negative fair value
Interest rate swaps, fair values, at
the end of reporting period
Trading derivatives
0
-59
217
0
Hedging derivatives
2,009
-1,663
4,981
-106
Value of interest rate swaps
2,009
-1,722
5,198
-106
Net value of interest rate swaps
287
5,092
Other Derivative Financial
Instruments
FX options
3
0
0
0
Shares options (note 23)
4,590
0
1,699
0
Net Value of Other Derivative
Financial Instruments
4,880
6,791
Interest rate swaps are derivative financial instruments entered
into by the Group are generally concluded with financing banks
on standardised contractual terms and conditions. Derivatives
have potentially favourable (assets) or unfavourable (liabilities)
conditions as a result of fluctuations in market interest rates,
foreign exchange rates or other variables relative to their terms.
The aggregate fair values of derivative financial assets and lia-
bilities can fluctuate significantly from time to time.
In accordance with accounting policies described in note 4.3.3,
changes in fair value of derivatives for which no hedge account-
ing is in place are recognized in profit and loss, changes in fair
value of hedging derivatives are recognized in other compre-
hensive income.
The Company determines whether an economic relationship
exists between the cash flows of the hedged item and hedging
instrument based on an evaluation of the qualitative character-
istics of these items. The company considers whether the criti-
cal terms of the hedged item and hedging instrument closely
align when assessing the presence of an economic relationship.
The Company evaluates whether both hedging instrument and
hedged items are concluded in the same currency and, there-
fore, are subject to the same risk, whether the nominal amount
of the hedging instrument and hedged items are identical and
whether the maturity dates are identical.
37.
Financial Risk Management
The major financial risks faced by the Company are those re-
lated to credit exposures, exchange rate and interest rate. The
primary function of financial risk management is to establish
risk limits and to ensure that any exposure to risk stays within
these limits. These risks are managed in the following manner.
37.1
Liquidity Risk
Liquidity risk is the risk that the Company will not be able to
meet its financial obligations as they fall due. The Group’s ap-
proach to managing liquidity is to ensure, as far as possible, that
it will always have sufficient liquidity to meet its liabilities when
due, under both normal and stressed conditions, without incur-
ring unacceptable losses or risking damage to the Company’s
reputation.
The table below shows liabilities at 31 December 2023 and 31
December 2022 by their remaining contractual maturity. The
amounts disclosed in the maturity table are the contractual un-
discounted cash flows. Such undiscounted cash flows differ
from the amount included in the statement of financial position
because the statement of financial position amount is based on
discounted cash flows. Financial derivatives are settled on net
basis. Foreign currency payments are translated using the spot
exchange rate at the end of the reporting period.
Group does not disclose concentration risk as a specific risk, as
there is a high number of bank accounts used within various
banks in several European countries, therefore this kind of risk
is considered as not relevant for the Group. Derivatives pre-
sented in the table below are settled net (assets and liabilities).
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
144
31 December 2023
In thousands of EUR
Carrying
amount
1 – 12 months
1 – 2 years
2 – 5 years
More than
5 years
Contractual
cash flows
Financial liabilities
0
Secured bank loans
94,952
15,357
17,685
53,742
34,610
121,395
Derivatives
-290
-1,294
-1,076
-2,204
-384
-4,958
Bonds
79,068
5,160
5,160
89,724
0
100,044
Lease liability
5,124
1,142
1,024
2,058
1,887
6,111
Other L-T loans
208
0
208
0
0
208
Trade and other payables
12,454
12,454
0
0
0
12,454
Total future payments,
including future principal
and interest payments
191,515
32,819
23,001
143,320
36,113
235,253
31 December 2022
In thousands of EUR
Carrying
amount
1 – 12 months
1 – 2 years
2 – 5 years
More than
5 years
Contractual
cash flows
Financial liabilities
Secured bank loans
65,705
12,789
12,157
37,027
39,987
101,960
Derivatives
-5,092
-2,394
-2,380
-5,592
-1,850
-12,216
Bonds
80,181
8,341
5,038
92,613
0
105,991
Lease liability
3,626
865
731
1,236
1,912
4,744
Other L-T loans
230
0
230
0
0
230
Trade and other payables
16,337
16,337
0
0
0
16,337
Total future payments,
including future principal
and interest payments
160,987
35,938
15,776
125,284
40,049
217,046
It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly different
amounts.
37.2
Credit Risk
Exposure to Credit Risk
Credit risk is the risk that counterparty fails to discharge an ob-
ligation to the Group.
The Group’s maximum exposure to credit risk is reflected in the
carrying amounts of financial assets in the consolidated state-
ment of financial position.
Credit risk in respect of cash balances held with banks and de-
posits with banks are managed via diversifications of bank de-
posits and only with the major reputable financial institutions
with rating by S&P between A- and BBB+.
IFRS 9 allows entities to apply a ‘simplified approach’ for trade
receivables and contract assets. The simplified approach allows
entities to recognise lifetime expected losses on all these assets
without the need to identify significant increases in credit risk.
For trade and other receivables, receivables from related and
contract assets that do not contain a significant financing com-
ponent, the Group recognises a lifetime expected loss allow-
ance.
The Group applies a provision matrix that applies the relevant
loss rates to the trade receivable balances. See also note 26 for
more.
37.3
Interest Rate Risk
The Group takes on exposure to the effects of fluctuations in
the prevailing levels of market interest rates on its financial po-
sition and cash flows. Interest margins may increase as a result
of such changes, but may reduce or create losses in the event
that unexpected movements arise. Management monitors on a
daily basis and sets limits on the level of mismatch of interest
rate repricing that may be undertaken.
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
145
The table below summarises the Group’s exposure to Interest
rate risks. The table presents the aggregated amounts of the
Group’s monetary financial assets and liabilities (out of the eq-
uity investments) at carrying amounts, categorised by the ear-
lier of contractual interest repricing or maturity dates. In
respect of interest-bearing financial liabilities, the following ta-
ble indicates their effective interest rates at the balance sheet
date and also due date of loans based on the valid repayment
schedules.
In thousands of EUR
Demand and
less than
1 month
From 1 to
6 months
From 6 to
12 months
More than
1 year
Not specified
Total
31 December 2023
Total financial assets
21,069
2,815
0
2,012
0
25,897
Total financial liabilities
10,500
94,952
0
80,998
5,124
191,575
Net interest sensitivity gap
at 31 December 2023
10,569
-92,136
0
-78,986
5,124
-165,677
31 December 2022
Total financial assets
35,390
0
0
5,868
0
41,258
Total financial liabilities
16,344
65,737
3,184
77,188
3,626
166,079
Net interest sensitivity gap
at 31 December 2022
19,046
-65,737
-3,184
-71,320
4,190
-124,821
Actual interest expense related to bank loans and borrowings
incurred by the Company in 2023 was EUR 5,649 thousand
(2022: EUR 2,706 thousand) related to the loans drawn in the
amount of EUR 94,952 thousand (31 December 2022: EUR
65,705
thousand).
Information on variable interest rates for all
bank loans received is included in note 32.
At 31 December 2023, if interest rates at that date had been
basis points 100 lower (2022: 100 basis points lower) with all
other variables held constant, profit for the year would have
been EUR
950 thousand (2022: EUR 657 thousand) higher,
mainly as a result of lower interest expense on variable interest
liabilities. The impact into actual result (and subsequently into
retained earnings) in equity would be EUR
950 thousand (2022:
EUR 657 thousand) higher.
If interest rates had been basis points 100 higher (2022: 100 ba-
sis points higher), with all other variables held constant, profit
would have been EUR 950 thousand (2022: EUR 657 thousand)
lower, mainly as a result of higher interest expense on variable
interest liabilities. The impact into actual result (and subse-
quently into retained earnings) in equity would be EUR
950
thousand (2022: EUR 657 thousand) lower.
Bonds issued bear fixed interest rate risk and therefore are not
subject to interest rate risk.
37.4
Currency Risk
The Company’s functional currency of its major subsidiaries is
EUR, CZK, AUD, RON and HUF. Foreign exchange risk is associ-
ated with sales and purchases of goods and services and loans
received denominated in local currencies.
The table below summarises the Group’s exposure to foreign
currency exchange rate risk at the end of the reporting period:
In thousands
of EUR
At 31 December 2023
At 31 December 2022
Monetary
financial
assets
Monetary
financial
liabilities
Derivati-
ves
Net
position
Monetary
financial
assets
Monetary
financial
liabilities
Derivati-
ves
Net
position
EUR
7 882
-141 495
-159
-133 772
2,449
-108,506
-106
-106,164
CZK
5 596
-20 627
-1 201
-16 231
3,480
-24,647
66
-21,101
HUF
5 785
-18 397
2 009
-10 603
14,388
-20,418
5,126
-904
AUD
1 699
-5 057
0
-3 358
11,411
-7,063
0
4,348
CHF
261
-170
0
91
21
0
0
21
PLN
1 189
-944
0
245
3,393
-2,723
0
670
RON
1 461
-3 160
-359
-2 058
719
-2,723
0
-2,004
Other
12
-2
0
10
313
0
0
313
Total
23 885
-189 852
290
-165 677
36,174
-166,081
5,086
-124,821
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
146
Derivatives presented above are monetary financial assets or
monetary financial liabilities, but are presented separately in
order to show the Group’s gross exposure. The Group has only
interest rate derivatives, there are no FX derivatives.
The above analysis includes only monetary assets and liabilities.
Investments in equities and non-monetary assets are not con-
sidered to give rise to any material currency risk.
The following table presents sensitivities of profit or loss and
equity to reasonably possible changes in exchange rates ap-
plied at the end of the reporting period relative to the functional
currency of the respective Group entities, with all other varia-
bles held constant:
In thousands of EUR
At 31 December 2023
At 31 December 2022
Impact on
profit or loss
Impact on
equity
Impact on
profit or loss
Impact on
equity
CZK strengthening by 10% (2022: strengthening by 10%)
11,107
-120
1,924
-6
HUF strengthening by 10% (2022: strengthening by 10%).
-2,428
201
548
-466
AUD strengthening by 10% (2022: strengthening by 10%)
3,985
0
-395
0
PLN strengthening by 10% (2022: strengthening by 10%)
165
0
-61
0
RON strengthening by 10% (2022: strengthening by 10%)
1,528
-36
182
0
Total
14,358
45
2,198
-472
38.
Fair Value Disclosures
Fair value measurements are analysed by level in the fair value
hierarchy as follows:
►
Level 1
are measurements at quoted prices (unadjusted)
in active markets for identical assets or liabilities,
►
Level 2
measurements are valuations techniques with all
material inputs observable for the asset or liability, either
directly (that is, as prices) or indirectly (that is, derived
from prices), and
►
Level 3
measurements are valuations not based on ob-
servable market data (that is, unobservable inputs).
Management applies judgement in categorized financial
instruments using the fair value hierarchy. If a fair value
measurement uses observable inputs that require signif-
icant adjustment, that measurement is a Level 3 measure-
ment. The significance of a valuation input is assessed
against the fair value measurement in its entirety.
The fair values of financial assets and liabilities together with
the carrying amounts shown in the statement of financial posi-
tion are as follows. For the other financial assets/financial liabil-
ities, the fair value approximates the carrying amount.
38.1
Recurring Fair Value Measurements
Recurring fair value measurements are those that the accounting standards require or permit in the statement of financial position at
the end of each reporting period. The level in the fair value hierarchy into which the recurring fair value measurements are categorized
are as follows:
In thousands of EUR
2023
2022
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Financial assets
Precious metals
0
0
0
0
3,714
0
0
3,714
Derivatives
0
2,012
0
2,012
0
5,087
0
5,087
Other financial investments
0
0
17,021
17,021
0
0
7,816
7,816
Non financial assets
Property, plant and equipment
0
0
149,093
149,093
0
0
115,921
115,921
Total assets recurring FV
measurement at 31 December
0
2,012
166,114
168,126
3,714
5,087
123,737
132,538
Financial liabilities
Derivatives
0
1,722
0
1,722
0
0
0
0
Total assets recurring FV
measurement at 31 December
0
1,722
0
1,722
0
0
0
0
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
147
The valuation technique, inputs used in the fair value measurement for level 3 measurements and related sensitivity to reasonably
possible changes in those inputs are as follows:
31 December 2023:
In thousands of EUR
Fair value
Valuation
technique
Inputs used
Range of
inputs
Reasonable
change
Sensitivity of FV
measurement
Non financial assets
Property, plant and equipment
149,093
DCF
note 5.1
See below
See below
See below
Other financial investments
17,021
MtM
note 5.3
See below
See below
See below
Total assets recurring FV
measurement at 31 December
166,114
31 December 2022:
In thousands of EUR
Fair value
Valuation
technique
Inputs used
Range of
inputs
Reasonable
change
Sensitivity of FV
measurement
Non financial assets
Property, plant and equipment
115,921
DCF
note 5.1
See below
See below
See below
Other financial investments
7,816
MtM
note 5.3
See below
See below
See below
Total assets recurring FV
measurement at 31 December
123,737
The DCF Equity valuation method is based on a Discounted
Cash Flow method. It includes the future cash flows available to
the shareholders/providers of equity of photovoltaic projects
(i.e. after all debt repayments and interests) that are later dis-
counted by WACC (Weighted Average Cost of Capital). The risk
profile is represented by a discount rate (Weighted Average
Cost of Capital).
In the valuation model, a quarterly discount is applied. This is
based on the fact that debt repayments are happening on quar-
terly basis. This is effecting the overall change in financing struc-
ture and indirectly affecting WACC.
The used Weighted Average Cost of Capital rates to discount
estimated cash flows, vary between countries from 5%-13% for
2023 (2022: 9% to 26%).
Other financial investments are stated at its fair value based on
valuation models prepared by management. Other financial in-
vestments include primarily ordinary, preference shares, re-
lated share options held and convertible notes (see also note
23). The Group has used Mark to Market valuation method
(hereinafter referred to as “MtM”). The principal assumptions
used for valuation in addition to the market price of the shares
(based on the latest round of the share subscription), are prob-
ability of the realisation of the share options granted and dis-
count rate reflecting required return on investment on this type
of the Group’s investments.
Sensitivity analysis of DCF for power plants – change in WACC
The below analysis shows impact of change in the used WACC rates by +/-3% on the enterprise/entity value in absolute and relative
figures as of 31.12.2023:
In thousands of EUR
Discount rate +3%
Discount rate +3% in %
Discount rate -3%
Discount rate -3% in %
HU power plants
-5,601
-10.2%
8,169
14.8%
CZ power plants
-1,956
-4.9%
2,421
6.0%
SK power plants
-336
-3.8%
413
4.6%
AU power plants
-1,837
-14.6%
2,799
22.3%
RO power plants
-3,592
-11.3%
6,169
19.4%
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
148
The below analysis shows impact of change in the used WACC rates by +/-3% on the enterprise/entity value in absolute and relative
figures as of 31.12.2022:
In thousands of EUR
Discount rate 3%
Discount rate +3% in %
Discount rate -3%
Discount rate -3% in %
HU power plants
-3,221
-6.4%
5,240
10.5%
CZ power plants
-5,789
-12.1%
7,109
14.9%
SK power plants
-1,591
-10.7%
2,022
13.6%
AU power plants
-3,109
-19.9%
5,226
33.5%
Sensitivity analysis of DCF for power plants – change in production output
The below analysis shows impact of change in production output by +/-2% on the enterprise/entity value in absolute and relative figures
as of 31.12.2023:
In thousands of EUR
Production +2%
Production +2% in %
Production -2%
Production -2% in %
HU power plants
-112
-0.2%
-2,081
-3.8%
CZ power plants
750
1.9%
-750
-1.9%
SK power plants
196
2.2%
-197
-2.2%
AU power plants
239
1.9%
-239
-1.9%
RO power plants
598
1.9%
-598
-1.9%
The below analysis shows impact of change in production output by +/-2% on the enterprise/entity value in absolute and relative figures
as of 31.12.2022:
In thousands of EUR
Production +2%
Production +2% in %
Production -2%
Production -2% in %
HU power plants
745
1.5%
-748
-1.5%
CZ power plants
809
1.8%
-808
-1.8%
SK power plants
196
2.3%
-196
-2.3%
AU power plants
308
2.0%
-308
-2.0%
Sensitivity analysis of DCF for power plants – change in electricity and LGC prices
The below analysis shows impact of change in electricity prices by +/-10% on the enterprise/entity value for selected power plants in
absolute and relative figures as of 31.12.2023:
In thousands of EUR
Electricity prices
+10%
Electricity prices
+10% in %
Electricity prices
-10%
Electricity prices
-10% in %
HU power plants
1,456
2.6%
-1,468
-2.7%
AU power plants–- prices
999
7.9%
-1,002
-8.0%
AU power plants–- LGCs
261
2.1%
-248
-2.0%
RO power plants
3,320
10.4%
-3,331
-10.5%
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
149
The below analysis shows impact of change in electricity prices by +/-10% on the enterprise/entity value for selected power plants in
absolute and relative figures as of 31.12.2022:
In thousands of EUR
Electricity prices
+10%
Electricity prices
+10% in %
Electricity prices
-10%
Electricity prices
-10% in %
HU power plants–- FIT
19
1.6%
-19
-1.6%
HU power plants–- Merchant
2,845
6.5%
-2,768
-6.3%
\AU power plants–- prices
944
6.3%
-944
-6.3%
AU power plants–- LGCs
228
1.5%
-228
-1.5%
Sensitivity analysis of MtM of other financial investments – changes in significant estimates
The below analysis shows impact of change in significant estimates on the MtM value in absolute and relative figures as of 31.12.2023:
In thousands of EUR
Market price of the
share +10%
Market price of the
share +10% in %
Market price of the
share -10%
Market price of the
share -10% in %
Investment in RayGen Resources Pty Ltd
1,769
10.8%
-1,769
-10.8%
In thousands of EUR
Discount rate + 3%
Discount rate
+3% in %
Discount rate
-3% in %
Discount rate
-3% in %
Investment in RayGen Resources Pty Ltd
-434
-2.7%
459
2.8%
In thousands of EUR
Probability +10%
Probability
+10% in %
Probability -10%
Probability
-10% in %
Investment in RayGen Resources Pty ltd
688
4.2%
-688
-4.2%
There is not real exposure for the actual price risk in case of RayGen valuation, as the price per share was decided and determined by
the current shareholders for the new round of the financing and issuing the new shares and it does not represent the volatile market
price.
The below analysis shows impact of change in significant estimates on the MtM value in absolute and relative figures as of 31.12.2022:
In thousands of EUR
Market price of the
share +10%
Market price of the
share +10% in %
Market price of the
share -10%
Market price of the
share -10% in %
Investment in Lerta SA
Investment in RayGen Resources Pty Ltd
548
7.6%
-548
-7.6%
In thousands of EUR
Discount rate + 3%
Discount rate
+3% in %
Discount rate
-3% in %
Discount rate
-3% in %
Investment in RayGen Resources Pty Ltd
-66
-0.9%
71
1.0%
In thousands of EUR
Probability +10%
Probability
+10% in %
Probability -10%
Probability
-10% in %
Investment in RayGen Resources Pty ltd
255
3.6%
-255
-3.6%
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
150
38.2
Assets and Liabilities Not Measured at Fair Value but for Which Fair Value is Disclosed
Fair values analysed by level in the fair value hierarchy and the carrying value of assets and liabilities not measured at fair value are as
follows:
In thousands of EUR
2023
2022
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Financial assets
Financial assets at amortised costs
Trade and other receivables
0
8,091
0
8,091
0
12,366
0
12,366
Loans provided
0
2,815
0
2,815
0
2,447
0
2,447
Other
0
19,033
0
17,311
0
17,644
0
17,644
Total assets
0
29,939
0
28,218
0
32,457
0
32,457
Financial liabilities
Borrowings
Bank loan
0
94,952
0
94,952
0
65,705
0
65,705
Issued bonds
0
76,995
0
76,995
0
73,411
0
73,411
Lease liabilities
0
5,124
0
5,124
0
3,626
0
3,626
Other non-current liabilities
0
208
0
208
0
230
0
230
Other financial liabilities
Trade and other payables
0
12,222
0
12,454
0
16,337
0
16,337
Total liabilities
0
189,501
0
189,732
0
159,309
0
159,309
All financial assets and financial liabilities have been defined to
Level 2.
The fair values in level 2 and level 3 of the fair value hierarchy
were estimated using the discounted cash flows valuation tech-
nique.
Financial Assets Carried at Amortised Cost
The fair value of floating rate instruments is normally their car-
rying amount. The estimated fair value of fixed interest rate in-
struments is based on estimated future cash flows expected to
be received discounted at current interest rates for new instru-
ments with similar credit risks and remaining maturities. Dis-
count rates used depend on the credit risk of the counterparty.
Liabilities Carried at Amortised Cost
The fair value of issued bonds is based on quoted market
prices. Fair values of other liabilities were determined using val-
uation techniques.
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
151
39.
Presentation of Financial Instruments by Measurement Category
For the purposes of measurement, IFRS 9 Financial Instruments
classifies financial assets into the following categories: (a) finan-
cial assets at FVTPL; (b) debt instruments at FVOCI, (c) equity in-
struments at FVOCI and (d) financial assets at AC. Financial
assets at FVTPL have two sub-categories: (i) assets mandatorily
measured at FVTPL, and (ii) assets designated as such upon
initial recognition. In addition, finance lease receivables form a
separate category.
The following table provides a reconciliation of financial assets
with these measurements:
31 December 2023:
In thousands of EUR
FVOCI
FVPL
AC
Total
Assets
Cash and cash equivalents
0
0
5,838
5,838
Liquid assets with restriction on disposition
0
0
7,140
7,140
Precious metals
0
0
0
0
Other financial assets
11,099
5,922
0
17,021
Trade and other receivables
290
0
16,685
16,975
Loans provided
0
0
2,815
2,815
Total financial assets
11,389
5,922
32,479
49,790
As of 31 December 2023, all of the Group’s financial liabilities were carried at amortised costs.
31 December 2022:
In thousands of EUR
FVOCI
FVPL
AC
Total
Assets
Cash and cash equivalents
0
0
11,271
11,271
Liquid assets with restriction on disposition
0
0
6,373
6,373
Precious metals
0
3,714
0
3,714
Other financial assets
6,118
1,698
0
7,816
Trade and other receivables
4,875
217
12,366
17,458
Loans provided
0
0
2,447
2,447
Total financial assets
10,993
5,629
32,457
49,079
As of 31 December 2022, all of the Group’s financial liabilities were carried at amortised costs.
40.
Related Parties
Parties are generally considered to be related if the parties are
under common control or if one party has the ability to control
the other party or can exercise significant influence or joint con-
trol over the other party in making financial and operational de-
cisions. In considering each possible related party relationship,
attention is directed to the substance of the relationship, not
merely the legal form.
Balances and transactions between the Company and its sub-
sidiaries which are related parties of the Company have been
eliminated on consolidation and are not disclosed in this note.
Details of transactions between the Group and other related
parties are disclosed below.
The Company is jointly controlled by Mr. Michael Gartner (via
Solar Future Coöperatief U.A.) and Mr. Georg Hotar (via Solar
Power to the People Coöperatief U.A.), who are the Company’s
directors.
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
152
At 31 December 2023, the outstanding balances with related parties were as follows:
In thousands of EUR
Note
Parent companies
Joint ventures
Key management
personnel
Gross amount of trade receivables
26
-
64
-
Loans issued
26
1,993
-
822
Investments in JV
9
-
1,823
-
Loans issued to related parties include loans to Solar Age Investments B.V. and Solar Power to the People U.A. which are short term
for a period of up to 12 month and bear interest rate of 3%.
At 31 December 2022, the outstanding balances with related parties were as follows:
In thousands of EUR
Note
Parent companies
Joint ventures
Key management
personnel
Gross amount of trade receivables
26
-
107
-
Loans issued
26
1,762
-
685
Investments in JV
9
-
1,509
-
Loans issued to related parties include loans to Solar Age Investments B.V. and Solar Power to the People U.A. which are short term
for a period of up to 12 month and bear interest rate of 3%.
The income and expense items with related parties for the year ended 31 December 2023 were as follows:
In thousands of EUR
Note
Parent companies
Joint ventures
Key management
personnel
Revenue from services rendered
-
116
-
– Interest income
17
300
-
113
The income and expense items with related parties for the year ended 31 December 2022 were as follows:
In thousands of EUR
Note
Parent
companies
Joint ventures
Associates
Key management
personnel
Revenue from services rendered
-
58
13,904
-
– Interest income
17
95
-
-
-
Key Management Compensation
Key management includes Directors and Senior management.
Members of the board of directors did not receive any compen-
sation during 2023 nor 2022 for their duties serving on the
board of directors for the Group of entities. Furthermore, no
emoluments of managing directors, including pension obliga-
tions were charged to the Company. No service contracts with
the Company nor any of its Subsidiaries have been provided to
a member of the Board of Directors for benefits upon termina-
tion of employment. Mr Georg Hotar receives a regular salary
as an employee in his function as managing director of Global
Investment Protection AG in Switzerland and Mr Gartner re-
ceives a regular salary as an employee in his function as man-
aging director of Photon Energy Australia Pty Ltd. in Australia.
These compensations are in no direct relation to their Board of
Director functions. The overall cost of compensations for the
key management from their employment relations with the
Company or its subsidiaries amounted to EUR 493 thousand in
2023 (2022: EUR 1,119 thousand). The agreements between the
key management with the Company or its Subsidiaries do not
foresee any stock option plans, severance payments, company
pension plans or other deferred compensation. Termination
period of the agreements is up to six months. There are no com-
mitments and contingent obligations towards key management
personnel at 31 December 2023 nor 31 December 2023.
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
153
41.
Group Entities
Subsidiaries and joint ventures
The following entities were in the Group as at 31 December 2023:
Name
% of share
capital held by
the holding
company
Country of
registration
Seat
of the
company
Consolid.
method
Legal
Owner
1
Photon Energy N.V. (PENV)
Holding
NL
Amsterdam
Full Cons.
-
2
Photon Energy Operations NL B.V.
(former Photon Directors B.V.)
100%
NL
Amsterdam
Full Cons.
PEONV
3
Photon Energy Engineering B.V. (PEEBV)
100%
NL
Amsterdam
Full Cons.
PENV
4
Photon Energy Operations N.V. (PEONV)
100%
NL
Amsterdam
Full Cons.
PENV
5
Photon Remediation Technology N.V.
100%
NL
Amsterdam
Full Cons.
PENV
6
Photon Energy Australia Pty Ltd.
100%
AU
Sydney
Full Cons.
PENV
7
Photon Energy AUS SPV 1 Pty. Ltd.
100%
AU
Sydney
Full Cons.
PENV
8
Leeton Solar Farm Pty Ltd
(former Photon Energy AUS SPV 2 Pty. Ltd.)
100%
AU
Sydney
Full Cons.
PENV
9
Fivebough Solar Farm Pty Ltd.
(former Photon Energy AUS SPV 3 Pty. Ltd.)
100%
AU
Sydney
Full Cons.
PENV
10
Photon Energy AUS SPV 4 Pty. Ltd.
100%
AU
Sydney
Full Cons.
PENV
11
Photon Energy AUS SPV 6 Pty. Ltd.
100%
AU
Sydney
Full
PENV
12
Photon Energy Operations Australia Pty.Ltd.
100%
AU
Sydney
Full Cons.
PEONV
13
Photon Energy Engineering Australia Pty Ltd
100%
AU
Sydney
Full Cons.
PEEBV
14
Photon Remediation Technology Australia Pty Ltd.
100%
AU
Sydney
Full Cons.
PRTNV
15
Photon Energy SGA Pty. Ltd.
100%
AU
Sydney
Full Cons.
PENV
16
Photon Water Australia Pty. Ltd.
100%
AU
Sydney
Full Cons.
PENV
17
RayGen Resources Pty. Ltd.
7.49%
AU
Sydney
Equity
PENV
18
Photon New Energy Pty. Ltd.
100%
AU
Sydney
Full Cons.
PENV
19
Photon Energy AUS SPV 14 Pty Ltd
100%
AU
Sydney
Full Cons.
PENV
20
Global Investment Protection AG
100%
CH
Zug
Full Cons.
PENV
21
Photon Energy Investments AG (PEIAG)
100%
CH
Zug
Full Cons.
PENV
22
KORADOL AG (KOAG)
100%
CH
Zug
Full Cons.
PENV
23
Photon Energy Solutions A.G.
100%
CH
Zug
Full Cons.
PENV
24
Photon Property AG,
100%
CH
Zug
Full Cons.
PENV
25
Photon Energy Corporate Services CZ s.r.o.
100%
CZ
Prague
Full Cons.
PENV
26
Photon Energy Solutions CZ a.s.
(former Photon Energy Solutions CZ s.r.o.)
100%
CZ
Prague
Full Cons.
KOAG
27
Photon SPV 11 s.r.o.
100%
CZ
Prague
Full Cons.
KOAG
28
Photon Energy Operations CZ s.r.o. (PEOCZ)
100%
CZ
Prague
Full Cons.
PEONV
29
Photon Energy Control s.r.o.
100%
CZ
Prague
Full Cons.
PEOCZ
30
Photon Energy Technology CEE s.r.o.
100%
CZ
Prague
Full Cons.
PEEBV
31
Photon Water Technology s.r.o.
65%
CZ
Prague
Full Cons.
PENV
32
Photon Remediation Technology Europe s.r.o.
(former Charles Bridge s.r.o.)
100%
CZ
Prague
Full Cons.
PENV
33
Photon Energy Engineering s.r.o.
(former Photon Energy Solutions s.r.o. ) (PEECZ)
100%
CZ
Prague
Full Cons.
PENV
34
Photon Energy Projects s.r.o. (PEP)
100%
CZ
Prague
Full Cons.
PENV
35
Photon Energy Cardio s.r.o.
100%
CZ
Prague
Full Cons.
PEOCZ
36
Photon Maintenance s.r.o. (former The Special One s.r.o.)
100%
CZ
Prague
Full Cons.
PENV
37
Exit 90 SPV s.r.o.
100%
CZ
Prague
Full Cons.
KOAG
38
Onyx Energy s. r. o.
100%
CZ
Prague
Full Cons.
KOAG
39
Onyx Energy projekt II s.r.o.
100%
CZ
Prague
Full Cons.
KOAG
40
Photon SPV 3 s.r.o.
100%
CZ
Prague
Full Cons.
KOAG
41
Photon SPV 4 s.r.o.
100%
CZ
Prague
Full Cons.
KOAG
42
Photon SPV 6 s.r.o.
100%
CZ
Prague
Full Cons.
KOAG
43
Photon SPV 8 s.r.o.
100%
CZ
Prague
Full Cons.
KOAG
44
Photon SPV 10 s.r.o.
100%
CZ
Prague
Full Cons.
KOAG
45
Kaliopé Property, s.r.o.
100%
CZ
Prague
Full Cons.
KOAG
46
PESPV 1 s.r.o.
100%
CZ
Prague
Full Cons.
PESCZ
47
PESPV 2 s.r.o.
100%
CZ
Prague
Full Cons.
PESCZ
48
Photon Energy Solutions s.r.o.
100%
CZ
Prague
Full Cons.
PESCZ
49
Photon Energy Home CZ s.r.o.
(previously Lerta Czech Republic s.r.o., PESCZ)
100%
CZ
Prague
Full Cons.
PESCZ
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
154
50
Photon Energy Technology EU GmbH
100%
DE
Neuhagen*
Full Cons.
PENV
51
Photon Energy Corporate Services DE GmbH
100%
DE
Neuhagen*
Full Cons.
PENV
52
EcoPlan 2 s.r.o.
100%
SK
Bratislava
Full Cons.
PENV
53
EcoPlan 3 s.r.o.
100%
SK
Bratislava
Full Cons.
PENV
54
Fotonika s.r.o.
100%
SK
Bratislava
Full Cons.
PENV
55
Photon SK SPV 1 s.r.o.
50%
SK
Bratislava
Equity
PENV
56
Photon SK SPV 2 s.r.o.
100%
SK
Bratislava
Full Cons.
PENV
57
Photon SK SPV 3 s.r.o.
100%
SK
Bratislava
Full Cons.
PENV
58
Solarpark Myjava s.r.o.
50%
SK
Bratislava
Equity
PENV
59
Solarpark Polianka s.r.o.
50%
SK
Bratislava
Equity
PENV
60
SUN4ENERGY ZVB s.r.o.
100%
SK
Bratislava
Full Cons.
PENV
61
SUN4ENERGY ZVC s.r.o.
100%
SK
Bratislava
Full Cons.
PENV
62
ATS Energy, s.r.o.
100%
SK
Bratislava
Full Cons.
PENV
63
Photon Energy Operations SK s.r.o.
100%
SK
Bratislava
Full Cons.
PEONV
64
Photon Energy HU SPV 1 Kft. b.a
100%
HU
Budapest
Full Cons.
PEIAG
65
Fertod Napenergia-Termelo Kft.
100%
HU
Budapest
Full Cons.
PEIAG
66
Photon Energy Operations HU Kft.
100%
HU
Budapest
Full Cons.
PEONV
67
Photon Energy Engineering HU Kft.
100%
HU
Budapest
Full Cons.
PENV
68
Future Solar Energy Kft
100%
HU
Budapest
Full Cons.
PEIAG
69
Montagem Befektetési Kft.
100%
HU
Budapest
Full Cons.
PEIAG
70
Solarkit Befektetesi Kft.
100%
HU
Budapest
Full Cons.
PEIAG
71
Energy499 Invest Kft.
100%
HU
Budapest
Full Cons.
PEIAG
72
SunCollector Kft.
100%
HU
Budapest
Full Cons.
PEIAG
73
Green-symbol Invest Kft.
100%
HU
Budapest
Full Cons.
PEIAG
74
Ekopanel Befektetési és Szolgaltató Kft.
100%
HU
Budapest
Full Cons.
PEIAG
75
Onyx-sun Kft.
100%
HU
Budapest
Full Cons.
PEIAG
76
Tataimmo Kft
100%
HU
Budapest
Full Cons.
PEIAG
77
Öreghal Kft.
100%
HU
Budapest
Full Cons.
PEIAG
78
European Sport Contact Kft.
100%
HU
Budapest
Full Cons.
PEIAG
79
ALFEMO Alpha Kft.
100%
HU
Budapest
Full Cons.
PEIAG
80
ALFEMO Beta Kft.
100%
HU
Budapest
Full Cons.
PEIAG
81
ALFEMO Gamma Kft.
100%
HU
Budapest
Full Cons.
PEIAG
82
Archway Solar Kft.
100%
HU
Budapest
Full Cons.
PENV
83
Belsize Solar Kft.
100%
HU
Budapest
Full Cons.
PEIAG
84
Blackhorse Solar Kft.
100%
HU
Budapest
Full Cons.
PEIAG
85
Camden Solar Kft
100%
HU
Budapest
Full Cons.
PEIAG
86
Ráció Master Oktatási
100%
HU
Budapest
Full Cons.
PEIAG
87
Aligoté Kereskedelmi és Szolgáltató Kft.
100%
HU
Budapest
Full Cons.
PEIAG
88
MEDIÁTOR PV Plant Kft.
100%
HU
Budapest
Full Cons.
PEIAG
89
PROMA Mátra PV Plant Kft.
100%
HU
Budapest
Full Cons.
PEIAG
90
Optisolar Kft.
100%
HU
Budapest
Full Cons.
PEIAG
91
Ladány Solar Alpha Kft.
100%
HU
Budapest
Full Cons.
PEIAG
92
Ladány Solar Beta Kft.
100%
HU
Budapest
Full Cons.
PEIAG
93
Ladány Solar Gamma Kft.
100%
HU
Budapest
Full Cons.
PEIAG
94
Ladány Solar Delta Kft.
100%
HU
Budapest
Full Cons.
PEIAG
95
ÉGÉSPART Energiatermelő és Szolgáltató Kft
100%
HU
Budapest
Full Cons.
PEIAG
96
ZEMPLÉNIMPEX Kereskedelmi és Szolgáltató Kf
100%
HU
Budapest
Full Cons.
PEIAG
97
ZUGGÓ-DŰLŐ Energiatermelő és Szolgáltató Kft
100%
HU
Budapest
Full Cons.
PEIAG
98
Ventiterra Kft.
100%
HU
Budapest
Full Cons.
PEIAG
99
VENTITERRA ALFA Kft.
100%
HU
Budapest
Full Cons.
PEIAG
100
VENTITERRA BETA Kft.
100%
HU
Budapest
Full Cons.
PEIAG
101
Hendon Solar Kft.
100%
HU
Budapest
Full Cons.
PEIAG
102
Mayfair Solar Kft.
100%
HU
Budapest
Full Cons.
PEIAG
103
Holborn Solar Kft.
100%
HU
Budapest
Full Cons.
PEIAG
104
Lerta Energy HU Kft.
100%
HU
Budapest
Full cons.
Lerta S.A.
105
LERTA Magyarország Kft.
100%
HU
Budapest
Full cons.
Lerta S.A.
106
Photon New Energy Alfa Kft.
100%
HU
Budapest
Full cons.
PESAG
107
Photon New Energy Beta Kft.
100%
HU
Budapest
Full cons.
PESAG
108
Photon New Energy Gamma Kft.
100%
HU
Budapest
Full cons.
PESAG
109
Dartford Solar Kft.
100%
HU
Budapest
Full cons.
PEIAG
110
Rochester Solar Kft.
100%
HU
Budapest
Full cons.
PEIAG
111
Newhamp Solar Kft.
100%
HU
Budapest
Full cons.
PEIAG
112
Brixton Solar Kft.
100%
HU
Budapest
Full cons.
PEIAG
113
Lerta Lithuania UAB
100%
LI
Vilnius
Full cons.
Lerta S.A.
114
Photon Energy Project Development XXK (PEPD)
99%
MN
Ulaanbaatar
Full Cons.
PEP
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
155
115
PEPD Solar XXK.
100%
MN
Ulaanbaatar
Full Cons.
PEPD
116
Photon Energy Solutions PL S.A.
100%
PL
Warsaw
Full Cons.
PENV
117
Photon Energy Polska Sp. Z o.o.
100%
PL
Warsaw
Full cons.
PENV
118
Photon Energy Operations PL Sp. z o.o.
100%
PL
Łodz
Full cons.
PEONV
119
Alperton Solar Sp. z o.o.
100%
PL
Poznań
Full cons.
PENV
120
Beckton Solar Sp. z o.o.
100%
PL
Poznań
Full cons.
PENV
121
Debden Solar Sp. z o.o.
100%
PL
Poznań
Full cons.
PENV
122
Chigwell Solar Sp. z o.o.
100%
PL
Poznań
Full cons.
PENV
123
Ealing Solar Sp. z o.o.
100%
PL
Poznań
Full cons.
PENV
124
Lerta S.A.
100%
PL
Poznań
Full cons.
PENV
125
Lerta Poland Sp. z o.o.
100%
PL
Poznań
Full cons.
Lerta S.A.
126
Photon Energy Trading PL Sp. z o.o.
(former Lerta Power Poland Sp. z o.o.)
100%
PL
Poznań
Full cons.
Lerta S.A.
127
Lerta JRM Sp. z o.o.
100%
PL
Poznań
Full cons.
Lerta S.A.
128
Photon Energy Systems Sp. z o.o.
(former Lerta Technology Sp. z o.o.)
100%
PL
Poznań
Full cons.
Lerta S.A.
129
Stanford Solar Srl.
100%
RO
Bucharest
Full cons.
PEP & PEECZ
130
Halton Solar Srl.
100%
RO
Bucharest
Full cons.
PEIAG &
KOAG
131
Aldgate Solar Srl
100%
RO
Bucharest
Full cons.
PEIAG &
KOAG
132
Holloway Solar Srl.
100%
RO
Bucharest
Full cons.
PEIAG &
KOAG
133
Moorgate Solar Srl.
100%
RO
Bucharest
Full cons.
PEP & PEECZ
134
Redbridge Solar Srl.
100%
RO
Bucharest
Full cons.
PEP & PEECZ
135
Watford Solar Srl
100%
RO
Bucharest
Full cons.
PEIAG &
KOAG
136
Photon Energy Operations Romania Srl.
100%
RO
Bucharest
Full cons.
PEONV
&PEO CZ
137
Greenford Solar Srl.
100%
RO
Bucharest
Full cons.
PEIAG &
KOAG
138
Chesham Solar Srl.
100%
RO
Bucharest
Full cons.
PEIAG &
KOAG
139
Photon Energy Romania Srl.
100%
RO
Bucharest
Full cons.
PENV & PEP
140
Siria Solar SRL
100%
RO
Bucharest
Full Cons.
PEIAG &
KOAG
141
Brentford Solar SRL
100%
RO
Bucharest
Full cons.
PEIAG &
KOAG
142
Camberwell Solar SRL
100%
RO
Bucharest
Full cons.
PEP & PEECZ
143
Deptford Solar SRL
100%
RO
Bucharest
Full cons.
PEP & PEECZ
144
Harlow Solar SRL
100%
RO
Bucharest
Full cons.
PEP & PEECZ
145
Kenton Solar SRL
100%
RO
Bucharest
Full cons.
PEIAG &
KOAG
146
Lancaster Solar SRL
100%
RO
Bucharest
Full cons.
PEP & PEECZ
147
Perivale Solar SRL
100%
RO
Bucharest
Full cons.
PEP & PEECZ
148
Romford Solar SRL
100%
RO
Bucharest
Full cons.
PEP & PEECZ
149
Stratford Solar SRL
100%
RO
Bucharest
Full cons.
PEP & PEECZ
150
Weston Solar SRL
100%
RO
Bucharest
Full cons.
PEP & PEECZ
151
Photon Energy Engineering Romania SRL
100%
RO
Bucharest
Full cons.
PENV & PEP
152
Photon Energy Solutions Romania SRL
(former Lerta Energy S.r.l.)
100%
RO
Bucharest
Full cons.
Lerta S.A.
153
Faget Solar Three Srl.
100%
RO
Bucharest
Full cons.
PEIAG &
KOAG
154
Faget Solar Five SRL
100%
RO
Bucharest
Full cons.
PEP & PEECZ
155
Giulvaz Solar SRL
100%
RO
Bucharest
Full cons.
PEP & PEECZ
156
Photon Renewable Energy Pty. Ltd.
100%
SA
West. Cape
Full Cons.
PENV
157
Solar Age SPV 1 Pty. Ltd.
100%
SA
West. Cape
Full Cons.
PENV
158
Photon Energy Engineering NZ Pty. Limited
100%
NZ
Auckland
Full Cons.
PEEBV
* Neuhagen bei Berlin
Notes:
Country of registration:
AU – Australia
CH – Switzerland
CZ – Czech Republic
DE – Germany
HU – Hungary
NL – Netherlands
MN – Mongolia
PL – Poland
PE – Peru
RO – Romania
SK – Slovakia
SA – South Africa
LI - Lithuania
Consolidation method:
Full Cons. – Full Consolidation
Not Cons. – Not Consolidated
Equity – Equity Method
Photon Energy Operations CZ s.r.o. established a branch office in Romania.
PEP & PESCZ – Photon Energy Projects s.r.o. owns 95% and Photon Energy Solution s.r.o. owns 5%
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
156
The following entities were in the Group as at 31 December 2022:
Name
% of share
capital held by
the holding
company
Country of
registration
Seat
of the
company
Consolid.
method
Legal
Owner
1
Photon Energy N.V. (PENV)
Holding
NL
Amsterdam
Full Cons.
-
2
Photon Energy Operations NL B.V.
(PEONL, former Photon Directors B.V.)
100%
NL
Amsterdam
Full Cons.
PEONV
3
Photon Energy Engineering B.V. (PEEBV)
100%
NL
Amsterdam
Full Cons.
PENV
4
Photon Energy Operations N.V. (PEONV)
100%
NL
Amsterdam
Full Cons.
PENV
5
Photon Remediation Technology N.V. (PRTNV)
100%
NL
Amsterdam
Full Cons.
PENV
6
Photon Energy Australia Pty Ltd.
100%
AU
Sydney
Full Cons.
PENV
7
Photon Energy AUS SPV 1 Pty. Ltd.
100%
AU
Sydney
Full Cons.
PENV
8
Leeton Solar Farm Pty Ltd
(former Photon Energy AUS SPV 2 Pty. Ltd.)
100%
AU
Sydney
Full Cons.
PENV
9
Fivebough Solar Farm Pty Ltd.
(former Photon Energy AUS SPV 3 Pty. Ltd.)
100%
AU
Sydney
Full Cons.
PENV
10
Photon Energy AUS SPV 4 Pty. Ltd.
100%
AU
Sydney
Full Cons.
PENV
11
Photon Energy AUS SPV 6 Pty. Ltd.
100%
AU
Sydney
Full Cons.
PENV
12
Photon Energy Operations Australia Pty.Ltd.
100%
AU
Sydney
Full Cons.
PEONV
13
Photon Energy Engineering Australia Pty Ltd
100%
AU
Sydney
Full Cons.
PEEBV
14
Photon Remediation Technology Australia Pty Ltd.
100%
AU
Sydney
Full Cons.
PRTNV
15
Photon Energy SGA Pty. Ltd.
100%
AU
Sydney
Full Cons.
PENV
16
Photon Water Australia Pty. Ltd.
100%
AU
Sydney
Full Cons.
PENV
17
RayGen Resources Pty. Ltd.
7.85%
AU
Sydney
Equity
PENV
18
Photon New Energy Pty.
(former Photon Energy AUS SPV 12 Pty. Ltd.)
100%
AU
Sydney
Full Cons.
PENV
19
Global Investment Protection AG (GIP)
100%
CH
Zug
Full Cons.
PENV
20
Photon Energy Investment AG (former ALFEMO AG (ALAG))
100%
CH
Zug
Full Cons.
PENV
21
KORADOL AG (KOAG)
100%
CH
Zug
Full Cons.
PENV
22
Photon Energy Solutions AG
100%
CH
Zug
Full Cons.
PENV
23
Photon Property AG,
100%
CH
Zug
Full Cons.
PENV
24
Photon Energy Corporate Services CZ s.r.o.
100%
CZ
Prague
Full Cons.
PENV
25
Photon Energy Solutions CZ a.s.
(former Photon Energy Solutions CZ s.r.o.) (PESCZ)
100%
CZ
Prague
Full Cons.
KOAG
26
Photon SPV 11 s.r.o.
100%
CZ
Prague
Full Cons.
KOAG
27
Photon Energy Operations CZ s.r.o. (PEOCZ)1
100%
CZ
Prague
Full Cons.
PEONV
28
Photon Energy Control s.r.o.
100%
CZ
Prague
Full Cons.
PEONV
29
Photon Energy Technology CEE s.r.o.
100%
CZ
Prague
Full Cons.
PEOCZ
30
Photon Water Technology s.r.o.
65%
CZ
Prague
Full Cons.
PEEBV
31
Photon Remediation Technology Europe s.r.o.
(former Charles Bridge s.r.o.)
100%
CZ
Prague
Full Cons.
PENV
32
Photon Energy Engineering s.r.o.
(former Photon Energy Solutions s.r.o. ) (PEECZ)
100%
CZ
Prague
Full Cons.
PENV
33
Photon Energy Projects s.r.o. (PEP)
100%
CZ
Prague
Full Cons.
PENV
34
Photon Energy Cardio s.r.o.
100%
CZ
Prague
Full Cons.
PENV
35
Photon Maintenance s.r.o. (former The Special One s.r.o.)
100%
CZ
Prague
Full Cons.
PEOCZ
36
Exit 90 SPV s.r.o.
100%
CZ
Prague
Full Cons.
PENV
37
Onyx Energy s. r. o.
100%
CZ
Prague
Full Cons.
KOAG
38
Onyx Energy projekt II s.r.o.
100%
CZ
Prague
Full Cons.
KOAG
39
Photon SPV 3 s.r.o.
100%
CZ
Prague
Full Cons.
KOAG
40
Photon SPV 4 s.r.o.
100%
CZ
Prague
Full Cons.
KOAG
41
Photon SPV 6 s.r.o.
100%
CZ
Prague
Full Cons.
KOAG
42
Photon SPV 8 s.r.o.
100%
CZ
Prague
Full Cons.
KOAG
43
Photon SPV 10 s.r.o.
100%
CZ
Prague
Full Cons.
KOAG
44
Kaliopé Property, s.r.o.
100%
CZ
Prague
Full Cons.
KOAG
45
PESPV 1 s.r.o.
100%
CZ
Prague
Full Cons.
KOAG
46
PESPV 2 s.r.o.
100%
CZ
Prague
Full Cons.
PESCZ
47
Photon Energy Solutions s.r.o.
100%
CZ
Prague
Full Cons.
PESCZ
48
Lerta Czech Republic s.r.o.
100%
CZ
Prague
Full Cons.
PESCZ
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
157
49
Photon Energy Technology EU GmbH
85.62%
CZ
Prague
Full Cons.
Lerta S.A.
50
Photon Energy Corporate Services DE GmbH
100%
DE
Neuhagen*
Full Cons.
PENV
51
EcoPlan 2 s.r.o.
100%
DE
Neuhagen*
Full Cons.
PENV
52
EcoPlan 3 s.r.o.
100%
SK
Bratislava
Full Cons.
PENV
53
Fotonika s.r.o.
100%
SK
Bratislava
Full Cons.
PENV
54
Photon SK SPV 1 s.r.o.
50%
SK
Bratislava
Equity
PENV
55
Photon SK SPV 2 s.r.o.
100%
SK
Bratislava
Full Cons.
PENV
56
Photon SK SPV 3 s.r.o.
100%
SK
Bratislava
Full Cons.
PENV
57
Solarpark Myjava s.r.o.
50%
SK
Bratislava
Equity
PENV
58
Solarpark Polianka s.r.o.
50%
SK
Bratislava
Equity
PENV
59
SUN4ENERGY ZVB s.r.o.
100%
SK
Bratislava
Full Cons.
PENV
60
SUN4ENERGY ZVC s.r.o.
100%
SK
Bratislava
Full Cons.
PENV
61
ATS Energy, s.r.o.
100%
SK
Bratislava
Full Cons.
PENV
62
Photon Energy Operations SK s.r.o.
100%
SK
Bratislava
Full Cons.
PENV
63
Photon Energy HU SPV 1 Kft. b.a
100%
SK
Bratislava
Full Cons.
PEONV
64
Fertod Napenergia-Termelo Kft.
100%
HU
Budapest
Full Cons.
ALAG
65
Photon Energy Operations HU Kft.
100%
HU
Budapest
Full Cons.
ALAG
66
Photon Energy Engineering HU Kft.
(former Photon Energy Solutions HU Kft.)
100%
HU
Budapest
Full Cons.
PEONV
67
Future Solar Energy Kft
100%
HU
Budapest
Full Cons.
PENV
68
Montagem Befektetési Kft.
100%
HU
Budapest
Full Cons.
ALAG
69
Solarkit Befektetesi Kft.
100%
HU
Budapest
Full Cons.
ALAG
70
Energy499 Invest Kft.
100%
HU
Budapest
Full Cons.
ALAG
71
SunCollector Kft.
100%
HU
Budapest
Full Cons.
ALAG
72
Green-symbol Invest Kft.
100%
HU
Budapest
Full Cons.
ALAG
73
Ekopanel Befektetési és Szolgaltató Kft.
100%
HU
Budapest
Full Cons.
ALAG
74
Onyx-sun Kft.
100%
HU
Budapest
Full Cons.
ALAG
75
Tataimmo Kft
100%
HU
Budapest
Full Cons.
ALAG
76
Öreghal Kft.
100%
HU
Budapest
Full Cons.
ALAG
77
European Sport Contact Kft.
100%
HU
Budapest
Full Cons.
ALAG
78
ALFEMO Alpha Kft.
100%
HU
Budapest
Full Cons.
ALAG
79
ALFEMO Beta Kft.
100%
HU
Budapest
Full Cons.
ALAG
80
ALFEMO Gamma Kft.
100%
HU
Budapest
Full Cons.
ALAG
81
Archway Solar Kft.
100%
HU
Budapest
Full Cons.
PENV
82
Barbican Solar Kft.
100%
HU
Budapest
Full Cons.
ALAG
83
Belsize Solar Kft.
100%
HU
Budapest
Full Cons.
ALAG
84
Blackhorse Solar Kft.
100%
HU
Budapest
Full Cons.
ALAG
85
Caledonian Solar Kft
100%
HU
Budapest
Full Cons.
ALAG
86
Camden Solar Kft
100%
HU
Budapest
Full Cons.
ALAG
87
Hampstead Solar Kft.
100%
HU
Budapest
Full Cons.
ALAG
88
Ráció Master Oktatási
100%
HU
Budapest
Full Cons.
ALAG
89
Aligoté Kereskedelmi és Szolgáltató Kft.
100%
HU
Budapest
Full Cons.
ALAG
90
MEDIÁTOR PV Plant Kft.
(former MEDIÁTOR Ingatlanközvetítő és Hirdető Kft.)
100%
HU
Budapest
Full Cons.
ALAG
91
PROMA Mátra PV Plant Kft.
(former PROMA Mátra Ingatlanfejlesztési Kft.)
100%
HU
Budapest
Full Cons.
ALAG
92
Optisolar Kft.
100%
HU
Budapest
Full Cons.
ALAG
93
Ladány Solar Alpha Kft.
100%
HU
Budapest
Full Cons.
ALAG
94
Ladány Solar Beta Kft.
100%
HU
Budapest
Full Cons.
ALAG
95
Ladány Solar Gamma Kft.
100%
HU
Budapest
Full Cons.
ALAG
96
Ladány Solar Delta Kft.
100%
HU
Budapest
Full Cons.
ALAG
97
ÉGÉSPART Energiatermelő és Szolgáltató Kft
100%
HU
Budapest
Full Cons.
ALAG
98
ZEMPLÉNIMPEX Kereskedelmi és Szolgáltató Kf
100%
HU
Budapest
Full Cons.
ALAG
99
ZUGGÓ-DŰLŐ Energiatermelő és Szolgáltató Kft
100%
HU
Budapest
Full Cons.
ALAG
100
Ventiterra Környezetgazdálkodási és Szolgáltató Kft.
100%
HU
Budapest
Full Cons.
ALAG
101
VENTITERRA ALFA Kft.
100%
HU
Budapest
Full Cons.
ALAG
102
VENTITERRA BETA Kft.
100%
HU
Budapest
Full Cons.
ALAG
103
Hendon Solar Kft.
100%
HU
Budapest
Full Cons.
ALAG
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
158
104
Mayfair Solar Kft.
100%
HU
Budapest
Full Cons.
ALAG
105
Holborn Solar Kft.
100%
HU
Budapest
Full Cons.
ALAG
106
Lerta Energy HU Kft.
100%
HU
Budapest
Full cons.
Lerta S.A.
107
LERTA Magyarország Kft.
85.62%
HU
Budapest
Full cons.
Lerta S.A.
108
Lerta Lithuania UAB
85.62%
HU
Budapest
Full cons.
Lerta S.A.
109
Photon Energy Project Development XXK (PEPD)
85.62%
LI
Vilnius
Full Cons.
PEP
110
PEPD Solar XXK.
99%
MN
Ulaanbaatar
Full Cons.
PEPD
111
Photon Energy Solutions PL S.A.(former Solar Age Polska S.A.)
100%
MN
Ulaanbaatar
Full Cons.
PENV
112
Photon Energy Polska Sp. z o.o.
100%
PL
Warsaw
Full cons.
PENV
113
Photon Energy Operations PL Sp. z o.o.
100%
PL
Łodz
Full cons.
PENV
114
Alperton Solar Sp. z o.o.
100%
PL
Poznań
Full cons.
PEONV
115
Beckton Solar Sp. z o.o.
100%
PL
Poznań
Full cons.
PENV
116
Debden Solar Sp. z o.o.
100%
PL
Poznań
Full cons.
PENV
117
Chigwell Solar Sp. z o.o.
100%
PL
Poznań
Full cons.
PENV
118
Ealing Solar Sp. z o.o.
100%
PL
Poznań
Full cons.
PENV
119
Lerta S.A.
85.62%
PL
Poznań
Full cons.
PENV
120
Lerta Poland Sp. z o.o.
85.62%
PL
Poznań
Full cons.
PENV
121
Lerta Power Poland Sp. z o.o.
85.62%
PL
Poznań
Full cons.
Lerta S.A.
122
Lerta
JRM Sp. z o.o.
85.62%
PL
Poznań
Full cons.
Lerta S.A.
123
Lerta Technology Sp. z o.o.
85.62%
PL
Poznań
Full cons.
Lerta S.A.
124
Stanford Solar Srl.
85.62%
PL
Poznań
Full cons.
Lerta S.A.
125
Halton Solar Srl.
100%
RO
Bucharest
Full cons.
PEP & PEECZ
126
Aldgate Solar Srl
100%
RO
Bucharest
Full cons.
PEP & PEECZ
127
Holloway Solar Srl.
100%
RO
Bucharest
Full cons.
PEP & PEECZ
128
Moorgate Solar Srl.
100%
RO
Bucharest
Full cons.
PEP & PEECZ
129
Redbridge Solar Srl.
100%
RO
Bucharest
Full cons.
PEP & PEECZ
130
Watford Solar Srl
100%
RO
Bucharest
Full cons.
PEP & PEECZ
131
Photon Energy Operations Romania Srl.
(former Becontree Solar Srl.)
100%
RO
Bucharest
Full cons.
PEP & PEECZ
132
Greenford Solar Srl.
100%
RO
Bucharest
Full cons.
PEONV &
PEOCZ
133
Chesham Solar Srl.
100%
RO
Bucharest
Full cons.
PEP & PEECZ
134
Photon Energy Romania Srl.
100%
RO
Bucharest
Full cons.
PEP & PEECZ
135
Siria Solar SRL
100%
RO
Bucharest
Full Cons.
PENV & PEP
136
Brentford Solar SRL
100%
RO
Bucharest
Full cons.
ALAG &
KOAG
137
Camberwell Solar SRL
100%
RO
Bucharest
Full cons.
PEP & PEECZ
138
Deptford Solar SRL
100%
RO
Bucharest
Full cons.
PEP & PEECZ
139
Harlow Solar SRL
100%
RO
Bucharest
Full cons.
PEP & PEECZ
140
Kenton Solar SRL
100%
RO
Bucharest
Full cons.
PEP & PEECZ
141
Lancaster Solar SRL
100%
RO
Bucharest
Full cons.
PEP & PEECZ
142
Perivale Solar SRL
100%
RO
Bucharest
Full cons.
PEP & PEECZ
143
Romford Solar SRL
100%
RO
Bucharest
Full cons.
PEP & PEECZ
144
Stratford Solar SRL
100%
RO
Bucharest
Full cons.
PEP & PEECZ
145
Weston Solar SRL
100%
RO
Bucharest
Full cons.
PEP & PEECZ
146
Photon Energy Engineering Romania SRL
100%
RO
Bucharest
Full cons.
PEP & PEECZ
147
Lerta Energy S.r.l.
100%
RO
Bucharest
Full cons.
PENV & PEP
148
Photon Renewable Energy Pty. Ltd.
85.62%
RO
Bucharest
Full Cons.
Lerta S.A.
149
Solar Age SPV 1 Pty. Ltd.
100%
SA
West. Cape
Full Cons.
PENV
* Neuhagen bei Berlin
Notes:
Country of registration:
AU – Australia
CH – Switzerland
CZ – Czech Republic
DE – Germany
HU – Hungary
NL – Netherlands
MN – Mongolia
PL – Poland
PE – Peru
RO – Romania
SK – Slovakia
SA – South Africa
UK – United Kingdom
Consolidation method:
Full Cons. – Full Consolidation
Not Cons. – Not Consolidated
Equity – Equity Method
Photon Energy Operations CZ s.r.o. established a branch office in Romania.
PEP & PESCZ – Photon Energy Projects s.r.o. owns 95% and Photon Energy Solution s.r.o. owns 5%
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
159
Other consolidated entities
Name
% of Consolidated
share
% of Ownership
share
Country of
registration
Seat of the
company
Legal Owner
1
Kaliope s.r.o.
100%
0%
CZ
Prague
RL
2
Photon SPV 3 s.r.o.
100%
0%
CZ
Prague
RL
3
Photon SPV 8 s.r.o.
100%
0%
CZ
Prague
RL
4
Exit 90 SPV s.r.o.
100%
0%
CZ
Prague
RL
5
Photon SPV 4 s.r.o.
100%
0%
CZ
Prague
RL
6
Photon SPV 6 s.r.o.
100%
0%
CZ
Prague
RL
7
Onyx Energy s.r.o.
100%
0%
CZ
Prague
RL
8
Onyx Energy projekt II s.r.o.
100%
0%
CZ
Prague
RL
9
Photon SPV 10 s.r.o.
100%
0%
CZ
Prague
RL
100% share in the above entities was owned by Raiffeisen –
Leasing s.r.o. (“RL”). Although those companies were legally
owned by RL, the Group consolidated them under IFRS rules
since Photon Energy N.V. was considered as the beneficial
owner as it was owner of economic benefits and was directly
exposed to economic risks of those companies in 2021 (see also
note 2.4.1). In 2022, those entities were transferred to the full
ownership of the Group.
42.
Contingent Assets and Liabilities, Commitments
Legal Proceedings
From time to time and in the normal course of business, claims
against the Group may be received. On the basis of its own es-
timates and both internal and external professional advice,
management is of the opinion that no material losses will be
incurred in respect of claims in excess of provisions that have
been made in these consolidated financial statements.
Assets Pledged and Restricted
At 31 December 2023 and 2022 the Group has the assets
pledged as collateral and included in note 19. Additionally to
those assets listed in note 19, shares in Czech SPVs are pledged
as security to the financing bank.
Guarantees
Guarantees are irrevocable assurances that the Group will
make payments in the event that another party cannot meet its
obligations. The parent company has issued guarantees in total
amount of EUR 68,914 thousand (2022: EUR 41,106 thousand)
to subsidiaries creditors. Most of the new guarantees in 2023
were issued in connection with the capacity guarantees for the
capacity market in Poland and for building of the new power-
plants in Romania (specifically used only on applications for Set-
Up Licenses ANRE). Bank accounts restricted due to guarantees
are included in restricted cash presented in note 28.
43.
Subsequent Events
Internal change of ownership and name
On 9 January 2024, Photon Energy Projects s.r.o. became 95%
shareholder of Faget Solar Four S.R.L., and Photon Energy Engi-
neering s.r.o. became shareholder of remaining 5%
On 27 February 2024, LERTA Magyarország Kft. has changed its
name to Photon Energy Solutions HU Kft.
Connection of new power plants
In January 2024, two powerplants in Romania were connected.
They are located in region of Faget and Bocsa, with capacity of
3.8 MWp for Faget and 3.9 MWP for Bocsa.
Appointment of David Forth as Group CFO
The Management Board of Photon Energy Group (‘The Group’)
announces that the Board of Directors has appointed David
Forth as Group Chief Financial Officer, effective 1 February
2024. David Forth will take over this position from Georg Hotar,
the Chief Executive Officer of the Group, who assumed the re-
sponsibilities of Interim CFO on 12 May 2023. Mr. Forth will re-
port directly to the Board of Directors of Photon Energy Group.
The additional 2025 capacity auctions
On 14 March 2024, PSE S.A. (the Polish Transmission System
Operator) conducted its additional auctions for each quarter of
2025. Photon Energy participated and secured 316 MW in ca-
pacity, with 315 MW designated for DSR (Demand Side Re-
sponse) units. Including the previously contracted capacity, the
Group’s total maximum capacity contracted with PSE will be
326.088 MW in Q1 2025 and lower in the following quarters. The
auction for Q1 cleared in the second round, while Q2, Q3 and
Q4 cleared in the eighth round, reflecting a lower demand for
capacity in these quarters. Based on preliminary results, the
Group secured an average price weighted by volume of PLN
172,168 (EUR 39,892) per MW/year, including the previously
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2023
160
contracted capacity of 10 MW, ensuring contracted revenues of
PLN 56.1 million (EUR 13 million) for 2025.
The additional tranche of loan on Czech SPVs level
On 15 April 2024, agreement for additional tranche of CZK 40
million was signed with UniCredit
Czech Republic and Slovakia,
a.s.. The due date of this tranche is 31 December 2025 and in-
terest rate 3M PRIBOR + 1.9%.
VAT credit line
On 4 April 2024, the VAT credit line for the the following SPVs in Romania: Halton Solar srl, Brentford Solar srl, Faget Solar 3 srl, Kenton
Solar srl, Greenford Solar srl. The overall facility is RON 25 million with interest of
3M ROBOR +0.375% and due date on 4 April 2025.
This
facility is going to be used for reimbursement of VAT receivables from
the Romanian state.
Standalone
Financial Statements
For the Year Ended 31 December 2023
162
Photon Energy N.V.
Financial Section
Annual Report 2023
Standalone Financial Statements for the Year Ended 31 December 2023
163
Company Balance Sheet as of 31 December 2023
(before profit appropriation)
In thousands of EUR
Note
31 December 2023
31 December 2022 restated
Assets
A. Fixed assets
121,709
79,813
I. Intangible fixed assets
15,278
15,293
3. Concessions, licences and intellectual property
22
7
21
4. Goodwill
21
15,272
15,272
II Tangible fixed assets
0
III Financial fixed assets
106,431
64,520
1. Interest in group companies
45
66,476
55,788
2. Accounts receivable from group companies
46
22,106
776
3. Other participations
45
17,021
7,817
5. Treasury shares
48
828
139
B. Current assets
110,619
114,443
II Accounts receivable
110,560
112,449
1. Trade debtors
47
16,418
11,750
2. From group companies
46,47
77,051
97,516
4. Other accounts receivable
47
17,031
3,150
6. Prepayments and accrued income
47
60
33
IV Cash at banks and in hand
47
59
1,994
Assets
232,328
194,257
Equity and liabilities
Note
31 December 2023
31 December 2022
A. Equity
48
134,277
107,016
I. Called-up share capital
612
600
II. Share premium
53,798
53,636
III. Revaluation reserve
37,108
19,738
IV. Legal and statutory reserves
12
13
V. Other reserves*
2,674
2,115
VI. Retained earnings
30,913
13,949
Profit for the year
9,160
16,965
C. Long-term debt
49
80,730
78,758
2. Other bonds and private loans
78,539
76,511
7. Accounts payable to group companies
2,191
2,247
D. Current liabilities
50
17,321
8,484
2. Other bonds and private loans
49
529
3,670
5. Trade creditors
7,134
626
7. Accounts payable to group companies
8,289
3,870
11. Other liabilities
1,037
141
12. Accruals and deferred income
333
177
Equity and liabilities
232,328
194,257
*Revaluation reserve and the legal reserves are non-distributable
The notes on pages 165 to 179 are an integral part of these financial statements.
Photon Energy N.V.
Financial Section
Annual Report 2023
Standalone Financial Statements for the Year Ended 31 December 2023
164
Company Income Statement for the Financial Year Ended 31 December 2023
In thousands of EUR
Note
1 January –
31 December 2023
1 January –
31 December 2022
Revenues
52
9,261
5,472
Other operating income
54
0
223
Total operating income
9,261
5,695
Costs of raw materials and consumables
0
0
Wages and salaries
-14
-29
Amortisation of intangible fixed assets and depreciation of tangible
fixed assets
-14
0
Gain on derecognition of associate
8
0
2,182
Other operating expenses
54
-8,237
-5,462
Total operating expenses
-8,265
-3,309
Other interest income and similar income
55
9,670
2,587
Changes in value of fixed asset investments
56,57
3,194
615
Interest expense and similar expenses
56
-7,613
-7,046
Results before tax
6,247
-1,458
Taxes
0
0
Share in profit/loss of participations
57
2,913
18,423
Net result after tax
9,160
16,965
The notes on pages 165 to 179 are an integral part of these financial statements.
Notes to the Company
Financial Statements
For the Year Ended 31 December 2023
165
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Company Financial Statements for the Year Ended 31 December 2023
166
44.
Accounting Information and Policies
44.1
Basis of Preparation
The company’s standalone financial statements of Photon En-
ergy N.V., KvK 51447126, (hereafter: the company) have been
prepared in accordance with Part 9, Book 2 of the Dutch Civil
Code. In accordance with sub 8 of article 362, Book 2 of the
Dutch Civil Code, the company’s standalone financial state-
ments are prepared based on the accounting principles of
recognition, measurement, and determination of profit, as ap-
plied in the consolidated financial statements. These principles
also include the classification and presentation of financial in-
struments, being equity instruments or financial liabilities.
In case no other policies are mentioned, refer to the accounting
policies as described in the accounting policies in the consoli-
dated financial statements of this Annual Report. For an appro-
priate interpretation, the company financial statements of
Photon Energy N.V. should be read in conjunction with the con-
solidated financial statements.
All amounts are presented in EUR thousand, unless stated oth-
erwise. The balance sheet and income statement include refer-
ences. These refer to the notes.
The company prepared its consolidated financial statements in
accordance with the International Financial Reporting Stand-
ards (‘IFRS’) as adopted by the European Union.
44.2
Financial Fixed Assets
43.2.1
Goodwill
Goodwill is measured initially as described under “Consolidated
financial statements “ in note 4.1.1. Goodwill is not amortised
but it is tested for impairment annually. Goodwill is allocated to
the cash-generating units, or groups of cash-generating units,
that are expected to benefit from the synergies of the business
combination. Such units or groups of units represent the lowest
level at which the Group monitors goodwill and are not larger
than an operating segment.
The Group tests goodwill for impairment at least annually and
whenever there are indications that goodwill may be impaired.
The carrying value of the cash-generating unit containing good-
will is compared to the recoverable amount, which is the higher
of value in use and the fair value less costs of disposal. Any im-
pairment is recognised immediately as an expense and is not
subsequently reversed.
Gains or losses on disposal of an operation within a cash gen-
erating unit to which goodwill has been allocated include the
carrying amount of goodwill associated with the disposed oper-
ation, generally measured on the basis of the relative values of
the disposed operation and the portion of the cash-generating
unit which is retained.
Consolidated subsidiaries are all entities (including intermedi-
ate subsidiaries) over which the company has control. The com-
pany controls an entity when it is exposed, or has rights, to
variable returns from its involvement with the subsidiary and
has the ability to affect those returns through its power over the
subsidiary. Subsidiaries are recognised from the date on which
control is transferred to the company or its intermediate hold-
ing entities. They are derecognised from the date that control
ceases.
The company applies the acquisition method to account for ac-
quiring subsidiaries, consistent with the approach identified in
the consolidated financial statements. The consideration trans-
ferred for the acquisition of a subsidiary is the fair value of as-
sets transferred by the company, liabilities incurred to the
former owners of the acquiree and the equity interests issued
by the company. The consideration transferred includes the fair
value of any asset or liability resulting from a contingent consid-
eration arrangement. Identifiable assets acquired and liabilities
and contingent liabilities assumed in an acquisition are meas-
ured initially at their fair values at the acquisition date, and are
subsumed in the net asset value of the investment in consoli-
dated subsidiaries.
Acquisition-related costs are expensed as incurred.
Investments in consolidated subsidiaries are measured at net
asset value. Net asset value is based on the measurement of
assets, provisions and liabilities and determination of profit
based on the principles applied in the consolidated financial
statements. Share of profit in consolidated subsidiaries (net of
tax) is presented in Share in profit/loss of participations.
Other investments include investment of the Company where
the Company has no significant influence and other financial in-
struments, and are valued at fair value.
Changes in fair value of investments into equity instruments are
recognised in Revaluation reserve in equity, changes in fair
value of other financial instruments (derivatives) are recognised
in
Income statement in line Changes in value of fixed asset
investments.
43.2.2
Investments in Consolidated Subsidiaries
Consolidated subsidiaries are all entities (including intermedi-
ate subsidiaries) over which the company has control. The com-
pany controls an entity when it is exposed, or has rights, to
variable returns from its involvement with the subsidiary and
has the ability to affect those returns through its power over the
subsidiary. Subsidiaries are recognised from the date on which
control is transferred to the company or its intermediate hold-
ing entities. They are derecognised from the date that control
ceases.
The company applies the acquisition method to account for ac-
quiring subsidiaries, consistent with the approach identified in
the consolidated financial statements. The consideration trans-
ferred for the acquisition of a subsidiary is the fair value of as-
sets transferred by the company, liabilities incurred to the
former owners of the acquiree and the equity interests issued
by the company. The consideration transferred includes the fair
value of any asset or liability resulting from a contingent consid-
eration arrangement. Identifiable assets acquired and liabilities
and contingent liabilities assumed in an acquisition are meas-
ured initially at their fair values at the acquisition date, and are
subsumed in the net asset value of the investment in consoli-
dated subsidiaries.
Acquisition-related costs are expensed as incurred.
Investments in consolidated subsidiaries are measured at net
asset value. Net asset value is based on the measurement of
assets, provisions and liabilities and determination of profit
based on the principles applied in the consolidated financial
statements. Share of profit in consolidated subsidiaries (net of
tax) is presented in Share in profit/loss of participations.
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Company Financial Statements for the Year Ended 31 December 2023
167
Other investments include investment of the Company where
the Company has no significant influence and other financial in-
struments, and are valued at fair value.
Changes in fair value of investments into equity instruments are
recognised in Revaluation reserve in equity, changes in fair
value of other financial instruments (derivatives) are recognised
in
Income statement in line Changes in value of fixed asset
investments.
44.2.3
Revenues from Sale of Services (other income)
Revenues from sale of services (e.g.administration services) are
recognised on regular and recurring basis for a fixed fee agreed
CZ and SK SPVs on annual basis. No element of financing is
deemed present as the sales are made with credit terms of 30
days, which is consistent with market practice.
44.2.4
Restatement of the comparative period
The company took over control of Lerta Group as 31 December
2022 when Photon Energy increased its shareholding from
56.75% to 85.62%. As at 31 December 2022 Photon gained full
control effectively (described in detail in chapter 8). The acqui-
sition accounting was prepared on a provisional basis. During
preparation of these standalone financial statements the com-
pany completed the acquisition accounting as allowed by IFRS
3 and therefore revised comparative financial information.
In thousands of EUR
Fair value
31 December 2022
– provisional acquisition
accounting
Change
Fair value 31 December 2022 –
final acquisition accounting
Interest in group companies
6,344
-267
6,077
Goodwill arising from the acquisition
15,005
267
15,272
Total net assets acquired
21,349
0
21,349
45.
Financial Fixed Assets
In thousands of EUR
31 December 2023
31 December 2022
Interests in group companies
66,476
56,055
Other participations
17,021
7,817
Total Financial Fixed Assets
83,497
63,872
Other non-current investments include following investments:
In thousands of EUR
Fair value at
31 December 2023
Fair value at
31 December 2022
Investment in Raygen Resources Pty Ltd ordinary shares
6,934
3,535
Investment in Raygen Resources Pty Ltd preference shares
3,527
1,978
Investment in Raygen Resources Pty Ltd convertible note
1,333
0
Investment in Valuetech
637
605
Share options
4,590
1,698
Total Other investments
17,021
7,816
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Company Financial Statements for the Year Ended 31 December 2023
168
The movements of the Financial Fixed assets can be shown as follows:
In thousands of EUR
Participating
interests in
group companies
Other
investments
Shares not yet
registered
Total
Balance at 31 December 2021
30,882
8,007
1,740
40,629
Share in result of participating interests
18,423
0
0
18,423
Sale of investments
-7
0
0
-7
Other movements
-132
0
0
-132
Share in PPE revaluation reserve s in participating interest
432
0
0
432
Share in derivatives revaluation in participating interest
2,514
0
0
2,514
Revaluation of investments–- OCI
0
0
0
0
Revaluation of investments–- PL
0
615
0
615
Dividend received by Company
-1,783
0
0
-1,783
Capital contribution
1,120
0
0
1,120
Currency reserve
-1,932
0
0
-1,932
Derecognition (change of category)
0
-1,410
-1,740
-3,150
New investments
195
605
0
800
Fair value of net assets acquired (Lerta)
6,343
0
0
6,343
Balance at 31 December 2022
56,055
7,817
0
63,872
Effect of the PPA adjustment
-267
0
0
-267
Balance at 31 December 2022 restated
55,788
7,817
0
63,604
Share in result of participating interests
2,913
0
0
2,913
Sale of investments
0
0
0
0
Other movements (system revaluation)
552
0
0
554
Acquisition of the Financial fixed asset
0
1,115
0
1,115
Share in PPE revaluation reserve s in participating interest
13,624
0
0
13,624
Share in derivatives revaluation in participating interest
260
0
0
260
Revaluation of investments- OCI
0
4,981
0
4,981
Revaluation of investments- PL
0
3,110
0
3,110
Dividend received by Company
-5,448
0
0
-5,448
Capital contribution
9
0
0
9
Currency reserve
298
0
0
298
Derecognition (change of category)
0
0
0
0
New investments
0
0
0
0
Fair value of net assets acquired (Lerta)
-1,521
0
0
-1,521
Balance at 31 December 2023
66,476
17,021
0
83,497
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Company Financial Statements for the Year Ended 31 December 2023
169
2023
A participating legal Company is under Dutch law a participation
which exercises significant influence over the operating and fi-
nancial policies (hereinafter: participation), valued using the eq-
uity method. This method means that the carrying amount of
the investment is increased or decreased by the share in the
results and changes in equity of the associate, less the dividend
from the participation. The carrying amount, the share in the
results and changes in equity are determined according to the
principles of the holding. Result from the participation is recog-
nised only in the case of net assets value higher than nil. Posi-
tive assets value is recognised only in case the previous
negative value is covered sufficiently by the actual positive re-
sults from the participation.
Therefore, the direct changes in equity in the participations of
PE NV are included in the standalone financial statements of the
Company.
The direct equity movements of the subsidiaries of PENV con-
sist of:
1)
Revaluation of assets valued at fair value in the participa-
tions (decrease of value of assets)
2)
Foreign currency translation differences in the participa-
tions
3)
Effective portion of hedging derivatives in the participa-
tions
The Company measures interest in group companies at net as-
set value. Net asset value is based on the measurement of as-
sets, provisions and liabilities and determination of profit based
on the principles applied in the consolidated financial state-
ments.
In case the net asset value is negative the Company con-
siders the value of participation to be EUR 1.
No impairment
provision to the financial fixed assets has been recorded as at
31 December 2023 nor 2022. The unrecognized share of the
loss for the period in the participation valued on the basis of
equity accounting that is valued at zero as equal to EUR 3,265
thousand for the period and EUR 17,572 thousand cumula-
tively.
There are no obligations to cover the losses of the subsidiaries
beyond the amount of unpaid share capital and therefore, the
value of participations is not further increase by negative equity
amounts.
Other investments include investment of the Company where
the Company has no significant influence and other financial in-
struments, and are valued at fair value.
Changes in fair value of investments into equity instruments are
recognised in Revaluation reserve in equity, changes in fair
value of other financial instruments (derivatives) are recognised
in
Income statement in line Changes in value of fixed asset
investments.
The Company, with statutory seat in Amsterdam, is the holding
company and has the financial interests as disclosed under
note 40.
The parent entity is not liable for the deficits of its subsidiaries
and therefore no liability resulting from this has been recog-
nized.
Business combination performed in 2022
The control
and 100% ownership of Lerta Group was obtained
fully as at 31 December 2022. Total consideration paid for the
acquisition equals to EUR 21,349 thousand. As a result of this
transaction, company booked goodwill in amount of EUR
15,272 thousand and fair value of net assets acquired in
amount of EUR 5,458 thousand, which relates mostly to the ca-
pacity market contracts as described also in the note 8 Business
combination and note 22 Intangible assets.
46.
Accounts Receivable from Group Companies
In thousands of EUR
31 December 2023
31 December 2022
Accounts receivable from group companies – non current
22,106
776
Accounts receivable from group companies – current
77,051
97,516
Total loans provided
99,157
98,292
Movement schedule for loans provided:
In thousands of EUR
2023
2022
Opening balance
98,292
95,225
Newly provided loans
50,849
88,030
Accrued interest
7,770
2,502
Loans repayments/transfers
-59,046
-83,492
FX differences
1,292
-3,973
Closing balance
99,157
98,292
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Company Financial Statements for the Year Ended 31 December 2023
170
The balance of loans provided consists of the loans provided
primarily to the companies within the Group and its increase is
caused by provision of new funds during the year to the subsid-
iaries. Interest charged by PENV to its subsidiaries is 3% and the
loans have mostly a short-term character and are due within
one-year. Decrease in non-current accounts receivable from
group companies was caused by the early repayment of the
portion of the loan, and the outstanding amount is due in more
than 1 year period.
The credit loss allowance for Loans provided to related parties
is determined according to internal analysis of recoverability of
these loans. Based on this analysis no ECL provisions were cre-
ated as at 31 December 2023 and 31 December 2022.
47.
Current Assets
In thousands of EUR
31 December 2023
31 December 2022
Trade debtors
16,418
11,750
Receivables from group companies
77,051
97,516
Other accounts receivable and prepayments
17,091
3,183
Cash at banks and in hand
59
1,994
Total current assets
110,619
114,443
Trade receivables fall due in less than one year, unless other-
wise disclosed below.
The fair value of the receivables approximates the book value,
due to their short-term character.
Trade debtors at 31 December 2023 include trade receivables
from companies within the Group of EUR 16,418 thousand
(2022: EUR 11,750 thousand).
Receivable from group companies of EUR 77,051 thousand
(2022: 97,516 thousand) represent loans provided to group
companies. These loans are due on 31 December 2024 and
therefor are presented as current assets, interest charged on
these loans based on the national interbank offered rate (ac-
cording to the nominal currency of the loan) plus 3% margin.
Other accounts receivable include mainly loans receivables pro-
vided outside the Group of EUR 2090 thousand (2022: 1,841
thousand), receivables from investments settlements agree-
ment inside the Group of EUR 10,773 thousand (2022: nill)
and
other short-term assets of EUR 3,814 thousand (2022: EUR: 837
thousand) and are due within one year.
Receivables from related parties (Georg Hotar and Michael
Gartner) of EUR 414 thousand (2022: EUR 472 thousand) are in-
cluded in Other account receivable, see also note 40 of consoli-
dated financial statements. Interest charged on these loans is
3% and the loans have mostly a short-term character.
Cash at bank and in hand are freely disposable.
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Company Financial Statements for the Year Ended 31 December 2023
171
48.
Shareholders’ Equity
48.1
Reconciliation of Movement in Capital and Reserves
In thousands of EUR
Note
Issued
share
capital
Own
treasury
shares
Share
premium
Revaluation
reserve
Currency
translation
reserve
Hedging
reserve
Treasury
shares
reserve
Non-
controlling
interest
Retained
earnings
Unappro-
priated
result
Total
equity
Balance at 1 January 2022
600
-38
44,554
19,037
-1,046
2,579
38
-
9,945
3,667
79,336
Foreign currency translation differences
in participating interest
-
-
-
-
-1,933
-
-
-
-
-
-1,933
Transfer to retained earnings
-
-
-
-
-
-
-
-
3,667
-3,667
0
Derivatives
-
-
-
-
-
2,515
-
-
-
-
2,515
Revaluation of PPE and other investments
-
-
-
1,037
-
-
-
-
-
-
1,037
Other movements
-
38
300
-336
-
-
-25
-
337
-
314
New shares placed with premium
-
-
8,782
-
-
-
-
-
-
-
8,782
Actual result
-
-
-
-
-
-
-
-
-
16,965
16,965
Balance at 31 December 2022
600
-
53,636
19,738
-2,979
5,094
13
-
13,949
16,965
107,016
Foreign currency translation differences
in participating interest
-
-
-
-
0
-
-
-
-
-
0
Transfer to retained earnings
-
-
-
-
-
-
-
-
16,965
-16,965
0
Derivatives
-
-
-
-
-
261
-
-
-
-
261
Revaluation of PPE and other investments
-
-
-
17,370
-
-
-
-
-
-
17,370
Other movements*
12
-
162
-1,521*
298
-
-1
-
-
-
471
New shares placed with premium
-
-
-
-
-
-
-
-
-
0
Actual result
-
-
-
-
-
-
-
-
-
9,160
9,160
Balance at 31 December 2023
612
-
53,798
37,108
-2,681
5,355
12
-
30,913
9,160
134,277
* The movement relates to the settlement of the acquisition of control share in Lerta S.A.
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Company Financial Statements for the Year Ended 31 December 2023
172
48.2
Share Capital and Share Premium
Ordinary Shares
The Company’s share capital is EUR 612,385,000 divided into
61,238,521shares with a nominal value of EUR 0.01 each. The
share capital is fully paid-up. Each of the 61,238,521 shares rep-
resent one vote at the General Meeting.
The holders of ordinary shares (except of Treasury shares) are
entitled to receive dividends as declared from time to time and
are entitled to one vote per share at shareholders’ meetings of
the Company.
Treasury Shares
At 31 December 2023 treasury shares included 1,481,781 ordi-
nary shares of the Company (2022: 1,332,797ordinary shares)
owned directly by the Company in the nominal value of 0.01
EUR per share. There is no pledge imposed on the shares. These
ordinary shares carry no voting rights at the Shareholders
Meeting.
Share premium represents the excess of contributions received
over the nominal value of shares issued. Proceeds from alloca-
tion of treasury shares to employees in excess to nominal value
of shares are also recorded in Share premium.
Nominal value
of sold treasury shares is recorded against Treasury shares re-
serve.
There are no costs associated with the issue of the
shares that could be deducted from the amount of share pre-
mium, so all amount of premium is considered to be fully paid
for tax purposes.
On 25 June 2021, the Company announced the results of an of-
fering of its existing treasury shares addressed to qualified in-
vestors. In total, 5 million shares were placed at a price of PLN
7.0, which corresponds to the gross amount of PLN 35.0 million.
Total proceeds of EUR 7,766 thousand from the placement net
of placement costs of EUR 442 thousand were recorded in
Share premium.
On 20 December 2022 Photon Energy concluded an investment
agreement with the founders of Lerta, i.e. Tomala Investments
alternatywna spółka inwestycyjna sp. z.o.o. and Krzysztof
Drożyński (‘Founders’ and/or each “Founder”) and certain exec-
utive contracts to this agreement. Under the terms of this
agreement, an additional equity stake of 7,449,750 shares, rep-
resenting 43.25% of Lerta’s equity was acquired by the Group
for a combination of a PLN 2,160 thousand (EUR 462 thousand)
cash consideration, the transfer of 2,300,110 treasury shares in
Photon Energy and 1,238,521 Photon Energy shares to be newly
issued in an in-kind contribution. As of 31 December 2022, Pho-
ton Energy N.V. acquired 4,972,708 shares in Lerta in the ex-
change of 2,300,110 treasury shares in Photon Energy and the
above cash consideration to the Founders. As a result Photon
Energy increased its shareholding in Lerta to 85.62%.
On 1 February 2023, on the basis of a General Meeting author-
ization from 31 May 2021, the Board of Directors decided to is-
sue 1,238,521 new shares with a nominal value of EUR 0.01
each. The new shares were issued against a contribution in-kind
consisting of 2,477,042 shares in Lerta S.A., in line with the
above-mentioned investment agreement. Upon the completion
of this transaction Photon Energy Group increased its share-
holding in Lerta to 100% while the Founders of Lerta hold jointly
approximately 5.78% of Photon Energy’s fully issued share
capital. The Founders are subject to a lock-up agreement on
their Photon Energy’s shares and have provided representa-
tions and warranties commensurate with this type of transac-
tion. Borys Tomala, one of the Founders, will manage the
Group’s New Energy Division into which Lerta will be integrated
while Krzysztof Drożyński, the other Founder, will act as Direc-
tor of Advanced Technologies and remain responsible for the
development of the AI-driven Virtual Power Plant software plat-
form. The Founders will be subject to an earn-out and manage-
ment incentive plan which, subject to the achievement of
certain economic parameters by the New Energy Division in the
financial year 2025, will entitle them to a maximum of 2,383,846
additional Photon Energy shares.
Other movement in the share premium of EUR 162 thousand
(2022: EUR 300 thousand) includes payments to employees
paid by shares.
Other movement in revaluation reserve of EUR 1,223 thousand
represts the impact of the finalization of Lerta acquisition pro-
cess.
In 2022 Other movement in revaluation reserve and retained
earnings of EUR 336 thousand is reclassification of pre-acquis-
tion revaluation of Lerta booked historically in Other compre-
hensive income and reclassified as part of the acquisition
process.
Reserves
Reserves of the Company consist of the revaluation reserve, the
currency translation reserve and the hedging reserve.
The revaluation reserve arises on the revaluation of photovol-
taic power plant owned by the participation(s) and on the reval-
uation of fixed financial assets. Revaluation reserve from PPE
amounted to EUR 28,591 thousand at 31 December 2023 (31
December 2022: EUR 16,813 thousand) and revaluation reserve
arising from revaluation of other financial investments
amounted to EUR 8,517 thousand at 31 December 2023 (31 De-
cember 2022: EUR 2,925 thousand).
Currency translation reserve includes all foreign translation ex-
change differences in the participations and amounted to EUR
-2,681 thousand at 31 December 2023 (31 December 2022: EUR
-2,979 thousand).
The hedging reserve includes results from hedging derivatives
in the participations and amounted to EUR 5,355 thousand at
31 December 2022 (31 December 2022: EUR 5,094 thousand).
Unappropriated Result
To the General Meeting of Shareholders the following appropri-
ation of the result 2023 will be proposed: the profit of EUR 9,160
thousand to be transferred and added to the retained earnings
item in the shareholders’ equity.
Unappropriated Result 2023 contains the amount of EUR 217
thousand of net profit of joint ventures, where the entity cannot
control the distribution of these profits. This represent the legal
reserve following article 389 subsection 6 of Book 2 of the Dutch
Civil Code. This profits are regularly distributed to JV part-
ners. The amount of EUR 91 thousand of net profit of joint ven-
tures was distributed as a dividend to the Company in 2023.
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Company Financial Statements for the Year Ended 31 December 2023
173
Movement schedule of retained earnings:
In thousands of EUR
Balance at 1 January 2022
9,945
Movements in 2022
4,003
Closing balance 31 December 2022
13,948
Movements in 2023
16,965
Closing balance 31 December 2023
30,913
Reconciliation of consolidated group equity with company equity
In thousands of EUR
31 December 2023
31 December 2022
Group equity
69,504
70,475
Non-controlling interest
-263
-197
Group equity attributable to owners of the Company
69,767
70,672
Non-attributable losses of financial interest recognised in equity*
64,510
36,344
Shareholders’ equity (Company)
134,277
107,016
In thousands of EUR
31 December 2023
31 December 2022
Group total comprehensive income
-425
7,672
Profit/loss attributable to non-controlling interest
-66
-47
Group total comprehensive income attributable to the owners of the company
-359
7,719
Non-attributable losses of financial interest recognised in profit and loss*
9,519
9,246
Net result (Company)
9,160
16,965
*Non-attributable losses of financial interest recognised in equity relate to negative net assets of participations which are included in
consolidated equity at their value but are not recognised in standalone financial statement of the Company, due to the fact, that value
of the participation is set at EUR 1, see also note 45.
49.
Long-Term Debt
In thousands of EUR
31 December 2023
31 December 2022
Other bonds – non current
78,539
76,511
Accounts payable to group companies
2,191
2,247
Total Long-Term Debt
80,730
78,758
As at 31 December 2023 and 2022 none of the Long term liabilities are due in more than 5 years. All of the debts included in the table
above is due in more than one year.
Other bonds
In thousands of EUR
31 December 2023
31 December 2022
Other bonds – current
529
3,670
Other bonds – non current
78,539
76,511
Total
79,068
80,181
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Company Financial Statements for the Year Ended 31 December 2023
174
Movement schedule for issued bonds:
In thousands of EUR
2023
2022
Opening balance
80,181
81,330
Newly issued bonds
1,885
22,500
Placement cost paid
-75
-331
Repayments of principal
-3,146
-23,719
Accrued interest
5,608
6,213
Coupon paid
-5,352
-5,898
FX differences
-33
86
Closing balance
79,068
80,181
In November 2021, the Group has issued an EUR green bond
with annual coupon of 6.50% and maturity in November 2027
(six-year maturity). The EUR green bond 2021/27 was offered to
bondholders of the existing 2017/2022 EUR bond in form of an
exchange offer and as a result, EUR 21,281 thousand were ex-
changed. The principal amount of EUR 50,000 thousand was
oversubscribed and the overall volume of the new green bond
was increased to EUR 55,000 thousand. Total amount of place-
ment costs paid for the issuance/exchange of the Green bond
amounted to EUR 1,202 thousand. Exchange bonus paid to ex-
isting bondholder of EUR 420 thousand was recognised in Gains
less losses on derecognition of financial liabilities while the re-
maining amount of EUR 782 thousand is included in the amor-
tised amount of the Issued bonds and will be recognised as
interest expense from Issued bonds using effective interest
rate.
The EUR green bonds 2021/27 are traded on the unregulated
market segments of the Stock Exchanges in Frankfurt, Berlin,
Hamburg, Hannover, Munich, Düsseldorf and Stuttgart. The net
proceeds of the transaction are allowed to be used only for fi-
nancing and expanding eligible assets in accordance with its
Green Financing Framework.
In May 2022, the Company tapped its EUR green bond 2021/27
in the amount of EUR 10,000 thousand to a total outstanding
amount of EUR 65 million. In October 2022 and November
2022, the Company tapped the bond in the amount of another
EUR 12,500 thousand to a total outstanding amount of EUR
77,500 thousand.
The bonds from the second tap in autumn, were also offered to
bondholders of the existing 2017/2022 corporate bonds in form
of an exchange offer with a 1.5% loyalty premium plus the dif-
ference in net accrued interest on each exchanged bond. After
the exchange the outstanding volume of the corporate EUR
bond 2017/22 was EUR 15.232 million and was fully repaid to-
gether with the final interest payment to the bondholders on 27
October 2022. Total amount of placement costs paid for the
tapping/exchange of the Green bond amounted to EUR 451
thousand. Exchange bonus paid to existing bondholder of EUR
114 thousand was recognised in Gains less losses on derecog-
nition of financial liabilities while the remaining amount of EUR
337 thousand is included in the amortised amount of the Issued
bonds and will be recognised as interest expense from Issued
bonds using effective interest rate.
In q1 2023, another EUR 2,500 thousand was tapped and out-
standing balance of EUR bonds reached EUR 80,000 thousand.
In September and October 2023, Company rebought from mar-
ket bond in nominal value of EUR 596 thousand.
CZK bond 2016/23 issued in October 2016 has an annual cou-
pon of 6%, with an outstanding nominal amount of EUR 3,146
thousand as of 31 December 2022 (2021: EUR 3,052 thousand)
which was repaid in December 2023. CZK bonds 2016/23 were
traded on the unregulated market segment of the Prague Stock
Exchange.
Accrued interest of EUR 529 thousand at 31 December 2023 for
EUR Green bond (2022: EUR 524 thousand) is presented within
current liabilities.
Movement schedule for non current liabilities:
In thousands of EUR
2023
2022
Opening balance
2,247
2,180
FX revaluation
-117
67
Closing balance
2,130
2,247
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Company Financial Statements for the Year Ended 31 December 2023
175
50.
Current Liabilities
In thousands of EUR
31 December 2023
31 December 2022
Accounts payable from group companies
8,289
3,870
Other bonds and private loans
529
3,670
Trade payables
7,134
626
Accruals and deferred income
333
177
Other liabilities
1,037
141
Total Current Liabilities
17,321
8,484
All current liabilities fall due in less than one year, unless other-
wise disclosed below.
Other bonds and private loans included in current liabilities as
31 December 2022 include CZK bonds which matured in De-
cember 2023 and short-term portion of the Green bond.
All loans included in the above table are provided by the sub-
sidiaries of the entity.
Remaining other payables consisted of Company’s liabilities
from VAT, liabilities towards employees, advances or resulting
from the cash transfers within the Group.
Accounts payable from group companies of EUR 8,289 thou-
sand represent loans from group companies. These loans are
due on 31 December 2023 and therefor are presented as cur-
rent liabilities, interest charged on these loans is based on the
national interbank offered rate (according to the nominal cur-
rency of the loan) plus 3% margin.
The fair value of the accounts payable from group companies
approximates the book value, due to their short-term charac-
ter.
Applicable tax rate for the year 2023 is equal to rate of 25%.
51.
Financial Instruments
51.1
General
The Group has exposure to the following risks from its use of
financial instruments:
►
Credit risk.
►
Liquidity risk.
►
Market risk.
In the notes to the consolidated financial statements infor-
mation is included about the Group’s exposure to each of the
above risks, the Group’s objectives, policies and processes for
measuring and managing risk, and the Group’s management of
capital.
These risks, objectives, policies and processes for measuring
and managing risk, and the management of capital also apply
to the company financial statements of Photon Energy N.V.
No derivative financial instruments are being used at parent
company level.
51.2
Fair Value
The fair value of the financial instruments stated on the balance
sheet, including cash at bank and in hand and current liabilities,
is close to the carrying amount.
Fair value of long term liabilities to group companies is close to
the carrying amount.
Fair value of issued bonds is disclosed below:
Issued bonds
In thousands of EUR
Amortised amount
Fair value
2023
2022
2023
2022
Current liabilities
CZK bond 2016/23
0
3,146
0
3,127
Green bond 2021/27
529
524
528
0
Non-current liabilities
Green bond 2021/27
78,539
76,511
79,743
70,284
Total
79,068
80,181
80,271
73,411
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Company Financial Statements for the Year Ended 31 December 2023
176
51.3
Liquidity risk
Liquidity risk is the risk that the Company will not be able to
meet its financial obligations as they fall due. The table below
shows liabilities at 31 December 2023 by their remaining con-
tractual maturity. The amounts disclosed in the maturity table
are the contractual undiscounted cash flows. Such undis-
counted cash flows differ from the amount included in the
statement of financial position because the statement of finan-
cial position amount is based on discounted cash flows.
In thousands of EUR
Carrying
amount
1 –
12
months
1 – 2 years
2 – 5 years
More than
5 years
Contractual
cash flows
Financial liabilities
Accounts payable to group S-T
8,289
8,971
0
0
0
8,971
Accounts payable to group L-T
2,130
0
2,582
0
0
2,582
Bonds
79,128
5,160
5,160
89,724
0
100,044
Total future payments, including future
principal and interest payments
89,547
14,131
7,742
89,724
0
111,597
Accounts receivable/payable from group companies represent loans from/to group companies. Interest charged on these loans is
based on the national interbank offered rate (according to the nominal currency of the loan) plus 3% margin
52.
Revenues
In thousands of EUR
2023
2022
Revenues from provision of services
9,261
5,472
Total revenues
9,261
5,472
Revenues from provision of services of EUR 7,963 thousand
(2022: 5,472 thousand) represent management services pro-
vided to the companies in the Group charged as management
fees within the Group. Out of the total revenues, EUR 2,574
thousand was charged in Netherlands, EUR 1,372 thousand was
charged in Romania, EUR 1,531 thousand was charged in the
Czech republic, EUR 277 thousand was charged in Hungary, EUR
1,169 thousand was charged in Switzerland, amount of EUR 770
thousand was charged in Poland, the remaining
amount EUR
270 thousand Australia and Germany. EUR 1,298 thousand in
revenues represent administrative fees charged to Czech and
Slovak SPVs.
Gain on derecognition of associate of EUR 2,182 thousand re-
lates to the revaluation of the original share in Lerta entity be-
fore the acquisition of the controlling interest as at the year-end
as described in note 8.
53.
Other Operating Income
In thousands of EUR
2023
2022
Other income
0
223
Total other operating income
0
223
In 2022, other income included payment from Valuetech for future profit.
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Company Financial Statements for the Year Ended 31 December 2023
177
54.
Other Operating Expenses
In thousands of EUR
2023
2022
Consulting services
-7,269
-4,299
Audit and accounting services
-568
-288
Investment relations costs
-98
-41
Legal
-141
-88
Miscellaneous
-161
-746
Other Operating Expenses
-8,237
-5,462
Audit fees are presented separately in note 59.
55.
Other Interest Income and Similar Income
In thousands of EUR
2023
2022
Interest Income
9,670
2,587
Revaluation of financial participation
2,892
615
Other Income
302
0
Other Interest Income and Similar Income
12,864
3,202
Interest Income from group companies and related parties amounted in 2023 to EUR 9,670 thousand (2022: EUR 2,587 thousand).
Revaluation of EUR 2,892 thousand (2022: EUR 615 thousand) relates to revaluation of RayGen investment.
56.
Other Interest Expense and Similar Expense
In thousands of EUR
2023
2022
Interest expense
-7,209
-6,374
Exchange bonus paid
0
-114
Other expense
-404
-558
Other Interest Expense and Similar Expense
-7,613
-7,046
Exchange bonus paid to existing bondholder of EUR 114 thou-
sand was recognised in Other Interest Expense and Similar Ex-
pense. Remaining amount of placement fees paid of EUR 337
thousand is included in the amortised amount of the Issued
bonds and will be recognised as interest expense from Issued
bonds using effective interest rate. (see also note 49).
Interest expense from group companies amounted in 2023 to
1,447 EUR
thousand (2022: EUR 126 thousand).
Other expense of EUR 404
thousand (2022: EUR 558thousand)
include mainly FX losses and bank fees.
57.
Share in Results from Participating Interests
An amount of EUR 2,913 thousand (profit) of share in results from participating interests relates to group companies (2022: profit of
EUR 18,423 thousand).
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Company Financial Statements for the Year Ended 31 December 2023
178
58.
Employee Benefits and Information
The company has only employee (2022: 1 employee) who is
working in the Netherlands. No employees are working outside
of the Netherlands.
The two members of the board of directors are not employees
of the Company and did not receive any compensation during
2023 nor 2022 for their duties serving on the board of directors
for the Group of entities.
More information on management compensation is included in
note 40 of consolidated financial statements and note 57 of
standalone financial statements.
59.
Fees of the Auditor
With reference to Section 2:382a(1) and (2) of the Netherlands Civil Code, the following fees for the financial year have been charged
by PricewaterhouseCoopers to the Company in 2023:
2023:
In thousands of EUR
PricewaterhouseCoopers Ac-
countants N.V.
Other PricewaterhouseCoopers
firms and affiliates
Total
Statutory audit of annual accounts
170
245
415
Other audit procedures
0
0
0
Tax services
0
0
0
Other non-audit services
0
0
0
With reference to Section 2:382a(1) and (2) of the Netherlands Civil Code, the following fees for the financial year have been charged
by PricewaterhouseCoopers to the Company in 2022:
2022:
In thousands of EUR
PricewaterhouseCoopers Ac-
countants N.V.
Other PricewaterhouseCoopers
firms and affiliates
Total
Statutory audit of annual accounts
126
120
246
Other audit procedures
0
0
0
Tax services
0
0
0
Other non-audit services
6
0
6
60.
Related Parties
60.1
Transactions with Key Management
Personnel
Key Management Personnel Compensation
Key management personnel did not obtain any compensation
for their activity for Photon Energy N.V. in 2023 nor 2022. Fur-
ther information on key management compensation is included
in the consolidated financial statements for 2023, note 40.
Key Management Personnel and Director
As at 31 December 2023 the directors of the Company control
73,84 % (2022: 72.65%) of the voting shares of the Company.
The Directors hold positions in other group entities that result
in having control or significant influence over the financial or
operating policies of these entities.
Emoluments of Directors and Supervisory Directors
No emoluments, including pension obligations as intended in
Section 2:383(1) of the Netherlands Civil Code were charged in
the financial period to the Company.
Photon Energy N.V.
Financial Section
Annual Report 2023
Notes to the Company Financial Statements for the Year Ended 31 December 2023
179
Amsterdam, 30 April 2024
The Board of Directors:
Georg Hotar, Director
Michael Gartner, Director
The Supervisory Board:
Marek Skreta, Chairman
Bogusława Skowroński, Member
Ariel Sergio Davidoff, Member
Original signed.
Other Information
180
Photon Energy N.V.
Financial Section
Annual Report 2023
Other Information
181
Other Information
I.
Provisions in the Articles of Association
Governing the Appropriation of Profit
According to article 20 of the company’s Articles of Association,
the profit is at the disposal of the General Meeting of Share-
holders, which can allocate the profit wholly or partly to the
general or specific reserve funds.
The Company can only make payments to the shareholders and
other parties entitled to the distributable profit for the amount
the shareholders’ equity are greater than the paid-up and
called-up part of the capital plus the legally required reserves.
For a list of affiliated legal entities and corporations in conform-
ity with articles 379 and 414, Book 2 of the Dutch Civil Code be-
longing to Photon Energy N.V., Amsterdam, reference is made
to Note 41 of the Consolidated financial statements.
II.
Independent Auditor’s Report
The independent auditor’s report is set forth on the next pages.
NLE00023838.1.1
PricewaterhouseCoopers Accountants N.V., Thomas R. Malthusstraat 5, 1066 JR Amsterdam, P.O. Box 90357,
1006 BJ Amsterdam, the Netherlands
T: +31 (0) 88 792 00 20, F: +31 (0) 88 792 96 40, www.pwc.nl
‘PwC’ is the brand under which PricewaterhouseCoopers Accountants N.V. (Chamber of Commerce 34180285), PricewaterhouseCoopers Belastingadviseurs N.V.
(Chamber of Commerce 34180284), PricewaterhouseCoopers Advisory N.V. (Chamber of Commerce 34180287), PricewaterhouseCoopers Compliance Services B.V.
(Chamber of Commerce 51414406), PricewaterhouseCoopers Pensions, Actuarial & Insurance Services B.V. (Chamber of Commerce 54226368),
PricewaterhouseCoopers B.V. (Chamber of Commerce 34180289) and other companies operate and provide services. These services are governed by General Terms
and Conditions (‘algemene voorwaarden’), which include provisions regarding our liability. Purchases by these companies are governed by General Terms and Conditions
of Purchase (‘algemene inkoopvoorwaarden’). At www.pwc.nl more detailed information on these companies is available, including these General Terms and Conditions
and the General Terms and Conditions of Purchase, which have also been filed at the Amsterdam Chamber of Commerce.
Independent auditor’s report
To: the general meeting of shareholders and the supervisory board of Photon Energy N.V.
Report on the audit of the financial statements 2023
Our opinion
In our opinion:
•
the consolidated financial statements of Photon Energy N.V. together with its subsidiaries
(‘the Group’) give a true and fair view of the financial position of the Group as of
31 December 2023 and of its result and cash flows for the year then ended in accordance with
International Financial Reporting Standards as adopted by the European Union (‘EU-IFRS’)
and with Part 9 of Book 2 of the Dutch Civil Code;
•
the standalone financial statements of Photon Energy N.V. (‘the Company’) give a true and fair
view of the financial position of the Company as of 31 December 2023 and of its result for the
year then ended in accordance with Part 9 of Book 2 of the Dutch Civil Code.
What we have audited
We have audited the accompanying financial statements 2023 of Photon Energy N.V., Amsterdam.
The financial statements comprise the consolidated financial statements of the Group and the
standalone financial statements of the Company.
The consolidated financial statements comprise:
•
the consolidated statement of financial position as of 31 December 2023;
•
the following consolidated statements for the year ended 31 December 2023: statement of
comprehensive income, statement of changes in equity, and statement of cash flows; and
•
the notes to the consolidated financial statements for the year ended 31 December 2023,
including material accounting policy information and other explanatory information.
The standalone financial statements comprise:
•
the company balance sheet as of 31 December 2023;
•
the company income statement for the year then ended; and
•
the notes to the company financial statements for the year ended 31 December 2023, comprising
a summary of the accounting policies applied and other explanatory information.
The financial reporting framework applied in the preparation of the financial statements is EU-IFRS
and the relevant provisions of Part 9 of Book 2 of the Dutch Civil Code for the consolidated financial
statements and Part 9 of Book 2 of the Dutch Civil Code for the company financial statements.
Photon Energy N.V. - NLE00023838.1.1
Page 2 of 16
The basis for our opinion
We conducted our audit in accordance with Dutch Law, including the Dutch Standards on Auditing.
We have further described our responsibilities under those standards in the section
‘Our responsibilities for the audit of the financial statements’ of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Independence
We are independent of Photon Energy N.V. in accordance with the European Union Regulation on
specific requirements regarding statutory audit of public-interest entities, the ‘Wet toezicht
accountantsorganisaties’ (Wta, Audit firms supervision act), the ‘Verordening inzake de
onafhankelijkheid van accountants bij assuranceopdrachten’ (ViO, Code of Ethics for Professional
Accountants, a regulation with respect to independence) and other relevant independence regulations
in the Netherlands. Furthermore, we have complied with the ‘Verordening gedrags- en beroepsregels
accountants’ (VGBA, Dutch Code of Ethics).
Our audit approach
We designed our audit procedures with respect to the key audit matters, fraud and going concern,
and the matters resulting from that, in the context of our audit of the financial statements as a whole
and in forming our opinion thereon. The information in support of our opinion, such as our findings
and observations related to individual key audit matters, the audit approach fraud risk and the audit
approach going concern was addressed in this context, and we do not provide separate opinions or
conclusions on these matters.
Overview and context
Photon Energy N.V. is a joint-stock company that mainly specialises in the development, construction,
and operation of photovoltaic power plants. The consolidated financial statements of the Group
incorporate the financial statements of the Company and entities (including special purpose entities)
controlled by the Company (its subsidiaries); therefore, we considered our group audit scope and
approach as set out in the section ‘The scope of our group audit’. We paid specific attention to the areas
of focus driven by the operations of the Group, as set out below.
As part of the design of our audit, we determined materiality and assessed the risks of material
misstatement in the financial statements. In particular, we considered where management made
important judgements, for example in respect of significant accounting estimates that involved making
assumptions and considering future events that are inherently uncertain. In these considerations,
we paid attention to, among other matters, the assumptions underlying the physical and transition risk
related to climate change.
In note ‘Use of Estimates and Judgments’ of the consolidated financial statements, management
describes the areas of judgement in applying accounting policies and the key sources of estimation
uncertainty. Given the significance of management judgements, estimates and assumptions in the
areas of going concern, valuation of photovoltaic power plants, purchase price allocation accounting in
relation to the Lerta acquisition, and valuation of goodwill, we considered those to be the key audit
matters as set out in the section ‘Key audit matters’ of this report.
Photon Energy N.V. - NLE00023838.1.1
Page 3 of 16
In 2023, Group management continued assessing possible effects of climate change on its financial
position. For more information, please refer to the sections ‘Climate Change-related Risks’ and
‘Sustainability’ of the ‘Directors' Report’ in which management defined potential physical as well as
transitional risks, risk mitigating activities, risk governance and social conduct commitments.
We discussed Photon Energy N.V.’s assessment and governance thereof with management as well as
the supervisory board and evaluated the potential impact on the financial position, including
underlying assumptions and estimates. We concluded the impact of climate change to be an area of
focus that is not a key audit matter.
Apart from key audit matters and the impact from the climate change on our audit, as described above,
other areas of focus in our audit were related to recognition of revenue from construction contracts,
valuation of derivatives and non-traded investments.
We ensured that the audit team included the appropriate skills and competences that are needed for
the audit of a photovoltaic power business. We therefore included experts and specialists in the areas
of, among others, information technology, taxation, business recovery and valuation in our team.
The outline of our audit approach was as follows:
Materiality
•
Overall materiality: €497,500.
Audit scope
•
We conducted audit work at the head office of the Group. Because of
the centralised structure, the entire Group was audited by one
engagement team.
•
All subsidiaries of the Group (components) were included in the scope
of the audit.
•
Audit coverage: we performed the audit of the financial statements for
the Group as a whole and tested all material financial statement line
items.
Key audit matters
•
Going concern.
•
Valuation of the photovoltaic power plants.
•
Purchase price allocation in relation to the Lerta acquisition.
•
Valuation of goodwill.
Materiality
The scope of our audit was influenced by the application of materiality, which is further explained in
the section ‘Our responsibilities for the audit of the financial statements’.
Based on our professional judgement, we determined certain quantitative thresholds for materiality,
including the overall materiality for the financial statements as a whole as set out in the table below.
Photon Energy N.V. - NLE00023838.1.1
Page 4 of 16
These, together with qualitative considerations, helped us to determine the nature, timing and extent
of our audit procedures on the individual financial statement line items and disclosures and to
evaluate the effect of identified misstatements, both individually and in aggregate, on the financial
statements as a whole and on our opinion.
Overall group
materiality
€497,500 (2022: €594,000).
Basis for determining
materiality
We used our professional judgement to determine overall materiality. As a basis for
our judgement, we used 0.7% of Total Revenue. In prior year, we used 2.5% of
EBITDA.
Rationale for
benchmark applied
Given significant fluctuation in EBITDA (benchmark we used in prior year) we
updated our stakeholder analysis and noted that besides EBITDA, revenue is an
appropriate benchmark. Our decision was based on the following considerations:
•
Total revenue is one of the main Key Performance Indicators for management
given the focus on growth of market share.
•
Given that the company is operating in a dynamic renewables energy segment,
investors would normally focus on company growth and respective revenues.
•
Revenue is a common benchmark in the power-generating industry.
Component
materiality
In relation to ISA 600, we did not allocate the overall group materiality but targeted
all material financial statement line items regardless of which component’s
transactions it contains.
We also take misstatements and/or possible misstatements into account that, in our judgement, are
material for qualitative reasons.
We agreed with management and the supervisory board that we would report to them any
misstatement identified during our audit above €49,700 (2022: €59,400) as well as misstatements
below that amount that, in our view, warranted reporting for qualitative reasons.
The scope of our group audit
Photon Energy N.V. is the parent company of a group of entities. The financial information of this
group is included in the consolidated financial statements of Photon Energy N.V. We refer to note
‘Group Entities’ of the consolidated financial statements for the details of the Group structure.
We tailored the scope of our audit to ensure that we, in aggregate, performed sufficient coverage on
the financial statements to enable us to provide an opinion on the financial statements as a whole,
considering the management structure of the Group, the nature of operations of its components, the
accounting processes and controls, and the markets in which the components of the Group operate.
In establishing the overall group audit strategy and plan, we determined the type of work required to
be performed at component level. We conducted audit work over the financial statements as a whole,
including all components and covered all significant financial statement line items and transactions of
the Group.
The Group accounting function is centralised in Prague (Czech Republic) and the Group is managed as
a single operating unit with multiple segments. The Group applies a centralised IT system for its
business processes and financial reporting.
We have been able to obtain sufficient and appropriate audit evidence on the Group’s financial
information, as a whole, to provide a basis for our opinion on the consolidated financial statements.
Photon Energy N.V. - NLE00023838.1.1
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Audit approach fraud risks
As in all of our audits, we identified and assessed the risk of material misstatement of the financial
statements due to fraud. We evaluated fraud risk factors with respect to financial reporting fraud,
misappropriation of assets and bribery and corruption.
During our audit, we obtained an understanding of Photon Energy N.V. and its environment and the
components of the internal control system. This included obtaining understanding over management’s
risk assessment and the processes for identifying and responding to the risk of fraud and the internal
control that management has established to mitigate these risks, including how the supervisory board
exercised oversight, as well as the outcomes thereof. We refer to section ‘Culture and Core Values’ and
‘Assessment of the Internal Control, Internal Audit, Risk Management, Compliance Systems’ of the
Directors’ Report for description of governance structure and policies in place, on which management
relies when managing the risk of fraud.
We evaluated the design and relevant aspects of the internal control system with respect to the risks of
material misstatement due to fraud and in particular the fraud risk assessment, as well as the code of
conduct and ‘whistle-blowing’ procedures, among other things.
As part of our process of identifying fraud risks, we evaluated fraud risk factors with respect to
financial reporting fraud, misappropriation of assets, and bribery and corruption. We assessed
whether these factors indicate that a risk of material misstatement due to fraud is present. In doing
this, we:
•
performed an inquiry of supervisory board members as to fraud risks and related party
transactions to identify the areas of their concerns in relation to fraud;
•
inquired with executive management as to whether they have any knowledge of (suspected)
fraud, their views on overall fraud risks within the Group and their perspectives on the Group's
mitigating controls addressing the risk of fraud. We also discussed management’s process for
identifying fraud risks and process for responding to fraud risks;
•
observed that the entity has implemented a ‘whistle-blowing’ mechanism by inspecting the most
recent employee communication identifying appropriate work of this mechanism;
•
inquired with accounting personnel and other employees about known fraud and error risks in
the entity and the financial statements; management’s communication to employees of its views
on business practices and ethical behaviour, whether they have knowledge of any actual,
suspected, or alleged fraud;
•
assessed the IT environment around key systems. We paid specific attention to the access
safeguards in the IT system and the possibility that these lead to violations of the segregation of
duties.
Photon Energy N.V. - NLE00023838.1.1
Page 6 of 16
We identified the following fraud risks and performed the following specific procedures:
Identified fraud risks
Our audit work and observations
Risk of management override of
controls
It is generally presumed that
management is in a unique position
to perpetrate fraud because of the
available opportunity to manipulate
accounting records and prepare
fraudulent financial statements by
overriding manual controls, such as
those related to journal entries,
related party transactions, significant
accounting estimates, etc.
Management measures performance
of the group through monitoring
EBITDA and revenue, which are
considered key performance
indicators. A focus on meeting
financial targets could provide to
management an incentive for
bypassing of controls.
Where relevant to our audit, we evaluated the design and effectiveness
of controls in the processes of generating and processing journal
entries. We assessed whether deficiencies in controls may create
additional opportunities for fraud and incorporated respective
corroborative procedures in our audit approach. We paid specific
attention to non-routine transactions and areas of significant
management judgement.
We considered the outcome of our audit procedures over the estimates
and significant accounting areas and assessed whether control
deficiencies and misstatements identified could be indicative of fraud.
Where necessary, we planned and performed additional auditing
procedures to ensure that fraud risks are sufficiently addressed in our
audit.
We evaluated key accounting estimates and judgements used in
accounting areas where management judgement is applied (e.g. going
concern, valuation of photovoltaic power plants, valuation of goodwill
and purchase price allocation accounting in relation to investment
transactions) for biases, including retrospective reviews of prior year’s
estimates where available.
We performed data analysis focused on journal entries related to the
fraud risk factors identified during fraud risk assessment. Where we
identified instances of unexpected journal entries, we performed audit
procedures. We evaluated whether the business rationale (or lack
thereof) of the significant transactions concluded in 2023 suggests that
the Group may have entered into those to engage in fraudulent financial
reporting or to conceal misappropriation of assets.
We incorporated an element of unpredictability in the nature, timing,
and extent of audit procedures.
We performed substantive testing procedures on the consolidation
entries.
Our audit procedures did not identify indications of specific fraud or
suspicions of fraud with respect to management override of controls.
Risk of fraud in revenue recognition
As part of our risk assessment and
based on a presumption that there
are risks of fraud in revenue
recognition, we considered the risk
of fraud in revenue recognition.
We discussed and inquired with executive management about the tone
at the top, to assess the extent to which not meeting targets has an
impact on career opportunities or bonuses within the Company, and
whether they have any knowledge of (suspected) fraud. In our
conversations, we addressed their views on overall fraud risks within
the Group and their perspectives on the Group's mitigating controls
addressing the risk of fraud in revenue.
Photon Energy N.V. - NLE00023838.1.1
Page 7 of 16
Identified fraud risks
Our audit work and observations
This relates to the presumed
management incentive that exists to
overstate revenue in order to meet
financial targets or shareholder
expectations.
In this context, we consider this as a
risk of fraud focussed to overstating
revenue through the recording of
non-existent transactions or
premature revenue recognition.
Where relevant to our audit, we have evaluated the design of the
internal control measures that are intended to mitigate the risk of fraud
and error in revenue recognition and assessed the effectiveness of those
measures.
We also paid specific attention to the processes surrounding the
relevant IT systems. Through data analysis, we tested unexpected
journal entries and performed relevant testing on revenue transactions
throughout the year and the receivable balances at year end.
We did not identify specific indications of fraud or suspicion of fraud in
respect of revenue recognition.
We incorporated an element of unpredictability in our audit. We reviewed lawyers’ letters and
correspondence with regulators. During the audit, we remained alert to indications of fraud.
Furthermore, we considered the outcome of our other audit procedures and evaluated whether any
findings were indicative of fraud or non-compliance with laws and regulations.
Audit approach going concern
We refer to key audit matter ‘Going concern’ as included in the section ‘Key audit matters’ for further
information on our audit procedures regarding the going-concern assumption.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
the audit of the financial statements. We have communicated the key audit matters to management
and the supervisory board. The key audit matters are not a comprehensive reflection of all matters
identified by our audit and that we discussed. In this section, we described the key audit matters and
included a summary of the audit procedures we performed on those matters.
In comparison to prior year’s report, the valuation of the call option for the purchase of investments,
related to the investment in the non-traded company Raygen, is no longer considered to be a key audit
matter due to the limited changes in management assumptions and therefore reduced risk for the
financial statements.
We raised a new key audit matter relating to going concern due to deteriorated Group performance in
2023. Given the possible pervasive impact on the financial statements, we deem the going-concern
assumption to be of most significance in the audit of the financial statements. The matter constitutes a
key audit matter due to the judgements and assumptions management applied in their forecast over
their future operating performance. The ‘valuation of goodwill’ associated with the subsidiary
(Lerta S.A.) acquisition is considered a key audit matter due to the size and nature of the balance,
including the judgement and assumptions applied by management.
Photon Energy N.V. - NLE00023838.1.1
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Key audit matter
Our audit work and observations
Going concern
Note
2.1 of the consolidated financial statements
As disclosed in the section ‘Going Concern’ in note
2.1
of the financial statements, management identified
events or conditions that may cast significant doubt on
the entity’s ability to continue as a going
concern
(hereafter: going
-concern risk) such as falling energy
prices and delays in the commissioning of the new
power plant in Romania.
Management is of the opinion that they have
sufficiently mitigated the going
-concern risk with
actions and plans
such as:
•
increasing focus on third-party Engineering,
procurement, and construction (EPC) business
within the one-year period;
•
changing from merchant scheme to Feed in
Tariff scheme in Hungary and the Czech
Republic;
•
investments in innovations;
•
planned rebalancing of the asset portfolio and
selling assets;
•
obtaining new financing agreements.
Management’s most significant assumptions underlying
their actions and plans relate to the ability to:
•
shift the focus on the EPC business;
•
to change from merchant scheme to Feed in
Tariff scheme;
•
generate revenues from the investments in
innovations;
•
sell projects and assets;
•
secure refinance agreements.
Due to the possible pervasive impact on the financial
statements, we considered management’s assumption
that Photo
n Energy N.V. is a going concern and will
continue its operations for at least twelve months from
the date of preparation of the financial statements as a
key audit matter.
Our procedures regarding the evaluation of the
appropriateness of
management’s use of the going-
concern basis of accounting for at least twelve months
from the date of preparation of the financial
statements, including management’s actions and plans
to address the identified going
-concern risk and the
adequacy of the rel
ated disclosures included, among
other
matters the following:
•
based on our knowledge obtained regarding the
entity, its environment and current financial
situation, we assessed whether the information
obtained regarding events or conditions that
may result in going-concern risks has been
included in management’s assessment;
•
we have read the terms of financing agreements
and determined whether any have been
breached and read relevant communication
with lenders;
•
we have performed inquiries of executive
management as to their knowledge of going-
concern risks beyond the period of
management’s assessment;
Regarding management’s actions and plans and
underlying assumptions:
•
we evaluated management’s current budget
including cash flows for at least twelve months
from the date of preparation of the financial
statements taking into account current
developments in the industry and all relevant
information of which we are aware as a result of
our audit, such as contracts with EPC clients,
contracts based on Feed in Tariff schemes and
communication with third parties on the sale of
assets;
•
we analysed whether the current and the
required financing per management’s cash flow
forecast has been secured to enable the
continuation of the entirety of the entity’s
operations, including compliance with relevant
covenants;
•
we analysed the financial position at balance
sheet date in comparison to prior year’s year end
to assess whether events or circumstances exist
that may lead to a going-concern risk;
Photon Energy N.V. - NLE00023838.1.1
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Key audit matter
Our audit work and observations
•
We reviewed management’s sensitivity analysis
over the cash-flow forecasts (pessimistic
scenario) as well as performed our own
sensitivity analysis over the management’s cash-
flow forecasts (worst case scenario).
We evaluated whether the going
-concern risk including
management’s plans to address the identified risk and
the most significant underlying assumptions have been
sufficiently described in the notes to the financial
statements. We found the disclosure in section ‘Going
Concern’ in note 2.1 of the financial sta
tements to be
adequate.
We concluded that management’s use of the going
-
concern basis of accounting is appropriate, and based
on the audit evidence obtained, that no material
uncertainty exists related to events or conditions that
may cast significant dou
bt on the entity’s ability to
continue as a going concern.
Valuation of the photovoltaic power plants
Notes 5.1, 19 and
38 of the consolidated financial
statements
As of 31 December 2023, photovoltaic plants represent
the
biggest part of the total asset value of the Group.
The Group measures photovoltaic power plants at fair
value less depreciation in accordance with IAS 16
‘
Property, plant and equipment’ and IFRS 13 ‘Fair
Value Measurement
’, which are determined by income
approach.
Under this approach, the fair value of ph
otovoltaic
power plants is based on the Discounted Cash Flow
model (DCF). This valuation is significant to our audit
due to complexity and judgement applied within the
assessment process.
As of 31 December 2023, the cash flow projections are
prepared for
the period equalling the estimated useful
life
of power plants and are based on expected
electricity
tariffs (where feed-in-tariffs are applied) or
prices on the relevant markets
(where merchant
pricing
scheme
is applied) discounted at weighted average cost
of capital
.
As part of our audit procedures, we performed an
evaluation of the Group’s accounting policy and
method
s for valuation of photovoltaic power plants.
We
checked the appropriateness of the method used
under IAS 16 Property, plant and equip
ment, IFRS 13
Fair Value Measurement, and industry norms.
We
assessed the competence, capabilities, and
experience of management to prepare the valuation
and
verified their qualifications.
We challenged management’s assumptions with
reference to the inte
rnal and external sources of
information
to verify that assumptions used fall within
an acceptable range.
The expected volume of electricity production for
selected power plants
was agreed upon in the
independent yield studies
, considering a seasonal
factor. We also inspected the technical documentation
for the sampled historic production volumes and
performed look
-back analysis.
On a sample basis, we inspected the technical
documentation for historic operating, maintenance,
an
d capital expenses.
Photon Energy N.V. - NLE00023838.1.1
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Key audit matter
Our audit work and observations
The assumptions used in the DCF model include the
expected production volume, operating and capital
expenditures, discount rates and prices of electricity
and large
-scale green certificates (LGCs) for merchant
models.
Valuation of assets
using the DCF model requires
significant management judgment
. We consider
valuation of photovoltaic power plants to be a key audit
matter
because estimates, and assumptions used in the
DCF model
are inherently susceptible to higher risk of
material
misstatement.
Expected operating and capital expenditures are
compared to external studies and market
practices
considering the size of the selected power plants.
Together with our valuation experts, we evaluated the
reasonableness of the discount
rates based on inputs
independently sourced from market data and
comparable companies.
We tested the sensitivity of changes in the significant
assumptions and evaluated their impact on the DCF
model.
We have evaluated the expected prices and large
-scale
generation certificates (LGCs) together with our
valuation experts to publicly available forwards/futures
prices of electricity in relevant markets.
We considered the appropriateness of relevant
disclosures provided in the consolidated financial
statements.
Our audit procedures did not result in any material
findings with respect to the
valuation of photovoltaic
power plants and related disclosures.
Purchase price allocation in relation to the
Lerta acquisition
Note 8, 21 and 22
of the consolidated financial
statements
During 2022, the
Group
gradually increased its share in
Lerta Spółka Akcyjna to 85.62%, giving it the possibility
to assume control. The total consideration paid for the
acquisition consists of cash and non
-cash
considerations. The transfer of the remaining 14.38%
was completed in 2023.
In accordance with IFRS
3, ‘Business Combinations’,
the accounting for th
is acquisition requires
management to perform a purchase price allocation
that
requires significant judgement by management to
determine the fair value of the identifiable assets and
liabilities
in line
with IFRS 13 ‘Fair Value Measurement’
and the resulting goodwill. As part of the valuation
process,
management involved external valuation
experts to assist in the determination of the
PPA and
valuation of identified assets and liabilities.
We involve auditor’s experts to verify appropriateness
of methodology applied in final purchase price
allocation
. We corroborated the completeness of
intangible assets defined by management.
We agreed transaction details to supporting
documentation such as signed purchase agreements
and proof of payment.
We furthermore evaluated the
competence, capabilities and objectivity of valuation
experts engaged by
management.
We assessed the methodology and key accounting
estimates applied to valuation of intangible assets
identified by management (i.e. capacity market
contracts
and software) and that they are measured as
defined by IFRS 13.
We compared the assumptions and data underlying the
weighted average cost of capital (WACC) with our own
assumptions and publicly available data and tested the
computational accuracy of
the fair value measurement
calculations prepared by management and their
valuation experts.
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Key audit matter
Our audit work and observations
The final purchase price allocation was completed
during 2023 and the fair values of assets were adjusted
together with final value of goodwill
comparing to
preliminary
purchase price allocation prepared during
2022
.
The purchase price allocation requires management to
make discretionary decisions, estimates and
assumptions. Changes in these assumptions may have
a
material impact on the fair values assumed.
Due to the matter described, we consider the
business
combination and in particular the purchase price
allocation as a key audit matter in our audit.
We tested the reasonability of future cash flow forecasts
and underlying management assumptions
applied to
valuation of intangible asset (capacity markets) through
reconciliation to signed
capacity market contracts
existing at acquisition date
on sample basis.
We examined the disclosures on the acquisition made
in the notes in accordance with the requirements of
IFRS
3.
In respect of the audit procedures specified
above, no
material findings were identified.
Valuation of goodwill
Note 21
of the consolidated financial statements
As of 31 December 2023, the Company’s goodwill is
valued at €15.3 million
and fully relates to the
acquisition of Lerta Spółka
Akcyjna. This goodwill
forms a separate cash
-generating unit (CGU) to the
extent that it independently generate
s cash inflows.
If
and to the extent to which this CGU includes
goodwill, or show
s
signs of impairment, the recoverable
amount is assessed.
The key assumptions and
sensitivities are disclosed in note 21 to the consolidated
financial statements.
The annual impairment test for goodwill is significant
to our audit because the assessment process is complex,
involves significant management judg
ements and is
based on assumptions regarding expected future
market and economic conditions, revenue growth,
margin developments, discount rates and terminal
growth rates.
Based on the annual goodwill impairment test,
including sensitivity tests,
management concluded that
no impairment of goodwill and other intangibles with
indefinite useful lives was necessary.
We identified the valuation of goodwill as a key audit
matter due to significant estimates and assumptions
used with respect to, among others, di
scount rates,
cash
-flow forecasts and growth rates.
As part of our audit procedures, we involved auditor’s
expert
s to verify appropriateness of methodology
applied in impairment test
ing and to verify
appropriateness of discount rate used.
We assessed reasonableness of key assumptions used
by management in
their calculation.
We performed analysis to assess the reasonableness of
forecasted revenues and margins and obtained further
expla
nations when considered necessary.
We compared
the long
-term growth rates used in determining the
terminal value with economic and industry forecasts.
We performed retrospective review of
the original
assumptions used
in the budget within the purchase
pri
ce allocation and further challenged management in
case of change
of assumption since the acquisition.
We tested
the mathematical accuracy of the model and
performed sensitivity analysis of
the calculation on key
assumptions.
We verified that goodwill is allocated to
the
appropriate
cash generating unit.
Finally, we assessed the appropriateness of the
disclosure of the key assumptions and sensitivities
underlying the test.
Based on the audit procedures performed, we found the
assumptions to be reasonable and supported by the
available evidence
.
Photon Energy N.V. - NLE00023838.1.1
Page 12 of 16
Report on the other information included in the annual report
The annual report contains other information. This includes all information in the annual report in
addition to the financial statements and our auditor’s report thereon.
Based on the procedures performed as set out below, we conclude that the other information:
•
is consistent with the financial statements and does not contain material misstatements; and
•
contains all the information regarding the Directors’ Report and the other information that is
required by Part 9 of Book 2 and regarding the remuneration report required by the
sections 2:135b and 2:145 subsection 2 of the Dutch Civil Code.
We have read the other information. Based on our knowledge and the understanding obtained in our
audit of the financial statements or otherwise, we have considered whether the other information
contains material misstatements.
By performing our procedures, we comply with the requirements of Part 9 of Book 2 and
section 2:135b subsection 7 of the Dutch Civil Code and the Dutch Standard 720. The scope of such
procedures was substantially less than the scope of those procedures performed in our audit of the
financial statements.
Management is responsible for the preparation of the other information, including the Directors’
Report and the other information in accordance with Part 9 of Book 2 of the Dutch Civil Code.
Management and the supervisory board are responsible for ensuring that the remuneration report is
drawn up and published in accordance with sections 2:135b and 2:145 subsection 2 of the Dutch Civil
Code.
Report on other legal and regulatory requirements and ESEF
Our appointment
We were appointed as auditors of Photon Energy N.V. on 4 December 2020 by the supervisory board.
This followed the passing of a resolution by the shareholders at the annual general meeting held on
4 December 2020. Our appointment has been renewed annually by the shareholders and now
represents a total period of uninterrupted engagement of four years.
European Single Electronic Format (ESEF)
Photon Energy N.V. has prepared the annual report in ESEF. The requirements for this are set out in
the Delegated Regulation (EU) 2019/815 with regard to regulatory technical standards on the
specification of a single electronic reporting format (hereafter: the RTS on ESEF).
In our opinion, the annual report prepared in XHTML format, including the marked-up consolidated
financial statements, as included in the reporting package by Photon Energy N.V., complies in all
material respects with the RTS on ESEF.
Management is responsible for preparing the annual report, including the financial statements in
accordance with the RTS on ESEF, whereby management combines the various components into a
single reporting package.
Photon Energy N.V. - NLE00023838.1.1
Page 13 of 16
Our responsibility is to obtain reasonable assurance for our opinion whether the annual report in this
reporting package complies with the RTS on ESEF.
We performed our examination in accordance with Dutch law, including Dutch Standard 3950N
‘Assuranceopdrachten inzake het voldoen aan de criteria voor het opstellen van een digitaal
verantwoordingsdocument’ (assurance engagements relating to compliance with criteria for digital
reporting).
Our examination included among other matters:
•
Obtaining an understanding of the entity’s financial reporting process, including the preparation
of the reporting package.
•
Identifying and assessing the risks that the annual report does not comply in all material
respects with the RTS on ESEF and designing and performing further assurance procedures
responsive to those risks to provide a basis for our opinion, including:
o
obtaining the reporting package and performing validations to determine whether the
reporting package containing the Inline XBRL instance document and the XBRL
extension taxonomy files have been prepared in accordance with the technical
specifications as included in the RTS on ESEF;
o
examining the information related to the consolidated financial statements in the
reporting package to determine whether all required mark-ups have been applied and
whether these are in accordance with the RTS on ESEF.
No prohibited non-audit services
To the best of our knowledge and belief, we have not provided prohibited non-audit services as
referred to in article 5(1) of the European Regulation on specific requirements regarding statutory
audit of public-interest entities.
Services rendered
The services, in addition to the audit, that we have provided to the Company or its controlled entities,
for the period to which our statutory audit relates, are disclosed in note ‘Fees of the Auditor’ to the
Company financial statements 2023 of Photon Energy N.V.
Responsibilities for the financial statements and the audit
Responsibilities of management and the supervisory board for the
financial statements
Management is responsible for:
•
the preparation and fair presentation of the financial statements in accordance with EU-IFRS
and Part 9 of Book 2 of the Dutch Civil Code; and for
•
such internal control as management determines is necessary to enable the preparation of the
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. Based on the financial reporting frameworks mentioned, management
should prepare the financial statements 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. Management should disclose in the financial statements any event and
circumstances that may cast significant doubt on the Company’s ability to continue as a going concern.
Photon Energy N.V. - NLE00023838.1.1
Page 14 of 16
The supervisory board and audit committee are responsible for overseeing the Company’s financial
reporting process.
Our responsibilities for the audit of the financial statements
Our responsibility is to plan and perform an audit engagement in a manner that allows us to obtain
sufficient and appropriate audit evidence to provide a basis for our opinion. 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 but not absolute level of assurance, and is not a guarantee that an audit
conducted in accordance with the Dutch Standards on Auditing will always detect a material
misstatement when it exists. Misstatements may arise due to fraud or error. They 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 the financial statements.
Materiality affects the nature, timing and extent of our audit procedures and the evaluation of the
effect of identified misstatements on our opinion.
A more detailed description of our responsibilities is set out in the appendix to our report.
Amsterdam, 30 April 2024
PricewaterhouseCoopers Accountants N.V.
Original has been signed by: A.G.J. Gerritsen RA
Photon Energy N.V. - NLE00023838.1.1
Page 15 of 16
Appendix to our auditor’s report on the financial statements
2023 of Photon Energy N.V.
In addition to what is included in our auditor’s report, we have further set out in this appendix our
responsibilities for the audit of the financial statements and explained what an audit involves.
The auditor’s responsibilities for the audit of the financial statements
We have exercised professional judgement and have maintained professional scepticism throughout
the audit in accordance with Dutch Standards on Auditing, ethical requirements and independence
requirements. Our audit consisted, among other things of the following:
•
Identifying and assessing the risks of material misstatement of the financial statements, whether
due to fraud or error, designing and performing audit procedures responsive to those risks,
and obtaining 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 intentional override of internal control.
•
Obtaining 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.
•
Evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
•
Concluding on the appropriateness of management’s use of the going-concern basis of
accounting, and based on the audit evidence obtained, concluding whether a material
uncertainty exists related to events and/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
and are made in the context of our opinion on the financial statements as a whole. However,
future events or conditions may cause the Company to cease to continue as a going concern.
•
Evaluating the overall presentation, structure and content of the financial statements, including
the disclosures, and evaluating whether the financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
Considering our ultimate responsibility for the opinion on the consolidated financial statements,
we are responsible for the direction, supervision and performance of the group audit. In this context,
we have determined the nature and extent of the audit procedures for components of the Group to
ensure that we performed enough work to be able to give an opinion on the financial statements as a
whole. Determining factors are the geographic structure of the Group, the significance and/or risk
profile of group entities or activities, the accounting processes and controls, and the industry in which
the Group operates. On this basis, we selected group entities for which an audit or review of financial
information or specific balances was considered necessary.
Photon Energy N.V. - NLE00023838.1.1
Page 16 of 16
We communicate with management and the supervisory board 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. In this respect, we also issue an
additional report to the audit committee in accordance with article 11 of the EU Regulation on specific
requirements regarding statutory audit of public-interest entities. The information included in this
additional report is consistent with our audit opinion in this auditor’s report.
We provide management and the supervisory board 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, related actions taken to eliminate threats or safeguards applied.
From the matters communicated with management and the supervisory board, 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 auditor’s 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.
Photon Energy N.V.
Barbara Strozzilaan 201
Amsterdam 1083 HN
The Netherlands
Corporate number: 51447126
VAT number: NL850020827B01
+31 20 240 25 70
photonenergy.com