JSC DEVELOPMENT FINANCE INSTITUTION ALTUM

Unaudited interim condensed financial reportfor the year ended 31 December 2022

TABLE OF CONTENTS

Altum
Management ReportPage2
3 - 14

Supervisory Council and Management Board

15

Statement of Management’s Responsibility

16

Financial statements:
Statement of Comprehensive Income

17

Statement of Financial Position

18

Company’s Statement of Changes in Equity

19

Consolidated Statement of Changes in Equity

19

Statement of Cash Flows20

Notes to the Financial Statements
Other Notes to the Interim Condensed Report21- 7677 – 81

AS Attīstības finanšu institūcija Altum
Doma laukums 4, Riga, LV-1050, Latvia
Phone:+ 371 67774010
Fax:+ 371 67820143
Registration No:
50103744891
www.altum.lv

1JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022

Altum
MISSION

We help Latvia grow!

VISION

To be a partner and financial expert in economic development

VALUES

Excellence / Team / Responsibility

AS Attīstības finanšu institūcija Altum (the joint stock company Development Finance Institution Altum) is a Latvian state-owned
company that implements the aid and development programmes by means of financial instruments and grants pursuing thestate’s policy in the national economy and providing for execution of other government assignments stipulated anddelegated by laws and regulations. Eliminating market failures with the help of various support instruments that enhance thedevelopment of national economy is the fundamental purpose of Altum’s activities.

Long-term objectives until 2024
Following strategic development directions and long-term objectives are set in the approved JSC Development FinanceInstitution Altum Strategy for the period 2022 – 2024:▪

In the implementation of the state aid programmes, themain financial objective is to ensure positive return on
Altum’s capital.

expanding the range of the financial instruments
offered, as well as the development of the Latvian Land
Fund as well as.

▪

The main non-financial objective is to support andpromote availability of finances to business and thedevelopment of national economy.

▪ The main target activities embrace support toentrepreneurs, farmers and specific categories of
persons; energy efficiency; management of the Latvian
Land Fund.

▪ Priority directions of Altum are the following: issuing andservicing of guarantees and loans, venture capital
investments, climate change mitigation implementationof energy efficiency programmes in both the residential
and corporate segment, initiation of new projects by▪

Altum will particularly focus on environmental, socialand corporate governance (ESG) considerations, bothin financing decisions and in Altum's internal processes.

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JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Management ReportManagement Report
Activity during the reporting period
In 2022, the Development Finance Institution Altum (hereinafter – the Company) have ensured stable financial results andearned a profit of EUR 11.1 million.
Key financial and performance indicators of the Group
Based on data from audited financial statements for the respective years
Company2022 12M(unaudited)Group /
Company2021(audited)

Net interest income (EUR ’000)

16 97416 717

Operating profit (EUR ’000)

11 13113 829Profit for the period (EUR ’000)

11 13113 829

Cos to income ratio (CIR)

38.83%

39.46%

Employees

234

226

Total assets (EUR ’000)

1 099 829

976 204

Financial debt (EUR ’000)

458 375360 909

Tangible common equity (TCE) / Total tangible managed assets (TMA) *26.90%

33.82%

Equity and reserves (EUR ’000)

395 630440 736

Total risk coverage: (EUR ’000)

297 803285 954

Risk coverage reserve231 125

159 196

Risk coverage reserve used for provisions(38 039)(29 496)

Portfolio loss reserve (specific reserve capital)

109 979

159 700

Portfolio loss reserve used to compensate provisions in the distribution of annual profit(5 262)(3 446)

Liquidity ratio for 180 days **

366%

518%

Net Cash flows from operating activities (EUR ’000)

89 52049 555Net Cash flows from financing activities (EUR ’000)

3 526

43 768Net Cash flow from investing activities (EUR ’000)(8 423)

4 553

Support instruments gross value (EUR ’000), of which

1 064 821

979 130

Loans (excluding sales and leaseback transactions)

311 844315 674

Guarantees

481 013414 978

Venture capital funds

90 27785 973

Land Fund, of which:

80 54279 163- sales and leaseback transactions

27 08932 999- investment properties

53 45346 164963 676895 788

33 97630 978Loans (excluding sales and leaseback transactions)

95 820100 966

Guarantees

153 067

126 997

Venture capital funds

18 52629 158Land Fund, of which:

7 414

10 595- sales and leaseback transactions

3 105

3 254

- investment properties

4 309

7 341

274 827267 716

Number of transactions

6 539

6 579

Leverage for raised private funding

123%

177%

Volume of support programmes funding per employee (EUR ’000)

4 118

3 964

Long-term rating assigned by Moody’s Investors Service

Baa1

Baa1

Key financial data

Financial instruments gross value (EUR ’000) ***Total
Number of transactions
Volumes issued (EUR ’000) (by financial instrument) ***Total* TMA includes the off-balance sheet item, namely, guarantees at net carrying amount.
** The calculation of liquidity ratio takes into account the previous experience and management estimate of the expected amount and timingof guarantee claims.
*** Taking into account the significance of the volume, the Land Fund portfolio, which consists of leaseback transactions and investment
properties, is also presented in the operational volumes for the period. As in compliance with the accounting principles and IFRS the leaseback
transactions are accounted for under the loans, the loan volume in this table has been reduced for the volume of the leaseback transactions
as it is recorded under the Land Fund portfolio.

The figures are explained in the section ‘Key Financial and Performance Indicators’ under Other Notes to the Unaudited interim
condensed financial report.

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JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Management ReportManagement Report (cont’d)
Impact of the Russian military invasion of Ukraine
The ongoing war in Ukraine and the related sanctions targeted against the Russian Federation and to a lesser extent to Belarus
may have impact on the Company as well as the potential social and economic impact in Latvia and the region. This resulted
in assumptions and estimates requiring revisions which have led to material adjustments to the carrying value of assets andliabilities within the 2022.
The Company does not issue loans directly to businesses in Ukraine, the Russian Federation and Belarus. Contracts withcounterparties for the execution of settlements with customers, as well as for the conclusion of financial transactions for theliquidity and asset and liability management of the Company, are concluded with financial institutions established in EU
Member States.
In the guarantee’s portfolio, the direct impact is from the Company's export credit guarantees issued to offset political andbuyer risk losses in trade transactions where the Company's clients' counterparties are residents of Ukraine, the RussianFederation and Belarus. In the 1st quarter of 2022, the Company has created impairment overlay of EUR 1,587 thousand for
expected credit losses for such high-risk exposures of export credit guarantees (31 December 2022: EUR 0 thousand), while
simultaneously taking the necessary measures to reduce the possible impact. Taking The Company has suspended theissuance of new export credit guarantees to Russian Federation and Belarus since February 25, 2022, as well as terminatedcontracts where possible in agreement with counterparties as a result of which the exposure to the Russian Federation andBelarus was gradually reduced. As a result of the mentioned measures, the Company currently has no high-risk exposure,
where clients' business partners are in the Russian Federation or Belarus and which would need to create an impairment
overlay.
To assess the indirect impact of the Russian Federation’s invasion of Ukraine, the Company analyzes quarterly and, in case ofsignificant changes, reviews the forward-looking macroeconomic indicators used to calculate expected losses, putting
forward several scenarios. At the beginning of 2022, it was predicted that geopolitical factors would have a more significant
impact in the second half of 2022, however, in the updated macroeconomic forecasts published by the Ministry of Financeand the Bank of Latvia in the 4th quarter of 2022, it was expected that due to the rapidly growing prices of energy resourceson the world market and the impact of the decline in purchasing power, as consumption decreases, the rate of economic
growth will significantly decrease in early 2023, as a result of which the scenarios used by the Company in the estimation of
expected losses were also revised. Changes in the forecasts of macroeconomic indicators in the 12 months of 2022 resulted
in an increase in impairment allowances for the expected credit losses by EUR 1,944 thousand for loans and loan commitments.
For guarantees, the impact from changes in the forecasts of macroeconomic indicators was small, taking into account that
impairment allowances for guarantees are made at the higher value of the estimated expected credit risk losses and the fairvalue. Changes in macroeconomic forecasts have a smaller impact on the fair value of guarantees.
In order to more fully assess the direct and indirect impact of the geopolitical situation, as well as to identify potential clientsin difficulties and provide a further action plan, as well as apply appropriate risk mitigation methods, the Company closely
monitors and analyzes the large exposures of loans and credit guarantees every quarter. It is assessed whether the increasein the price of energy resources, as well as the imposed sanctions against the Russian Federation and Belarus, has directly or
indirectly affected or can significantly affect the solvency of customers. Along with the aforementioned, in the 4th quarter of2022, the decision-making procedure and the internal information accounting system were improved to ensure theidentification and assessment of these impacts on the loan portfolio at the transaction level. Until sufficient data has been
accumulated at the transaction level, the Company carried out an assessment of the portfolio of loans and guarantees bysector, separately assessing how industries will be directly and indirectly affected by the increase in energy prices and theimposed sanctions against the Russian Federation and Belarus. The industries were divided into 3 groups: heavily affectedindustries, moderately affected industries and less affected industries. The assessment was carried out in the 3rd quarter of2022, using all available data at the time of the assessment. As a result of this assessment, the Company on 31 December 2022
has created an impairment overlay in amount of EUR 1,902 thousand for loans and EUR 856 thousand for guarantees.. Taking
into account the macroeconomic forecasts, including the increase in the prices of energy resources, it is expected thathouseholds' expenses related to housing will increase. Although there is a state support mechanism for mitigating the effectsof cost increases, households may have difficulties covering housing-related expenses in time and in full. It is expected thatsuch a situation can potentially result in higher defaults in the portfolio of housing guarantees and the need to create
additional impairment allowances. If the situation does not stabilize within a reasonable time, claims for warranty
compensation payments may increase in the coming years. No immediate increase in claims for guarantee compensation
payments is expected, given the specific conditions of these exposures, which stipulate that guarantee compensations arepaid after the realization of the collateral, which is carried out over a longer period of time.
For more detailed information see Note 3 (4) to the Financial Statements.
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JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Management ReportManagement Report (cont’d)Operational volumes (cont’d)
The core business lines of the Company include lending, issuing of guarantees, investments in capital instruments, transactionsof the Latvian Land Fund (hereinafter - the Land Fund) and servicing of grants that form the Company’s portfolio of support
instruments.
As at 31 December 2022, the Company's gross portfolio of support instruments amounted to EUR 1,064.7 million (31 December
2021: EUR 979.1 million), of which the gross portfolio of financial instruments totalled EUR 963.6 million and consisted of 33,976
projects (31 December 2021: EUR 895.8 million and 30,978 projects).
In the 12 months of 2022, the Company’s financial instrument portfolio increased by EUR 67.8 million (+7.6%) and by 2,998
projects (+9.7%). The growth of the Company's financial instruments portfolio in the 12 months of 2022 was lower than in the 12months of 2021, when due to a sharp rise in the demand for specialised financial instruments to mitigate the negative impact
of Covid-19 on the business sector it increased by EUR 92.3 million (+11.5%) and by 4,400 projects (+16.6%), while the demandin 2022 for Covid-19 crisis support instruments continues to decline and the repayments of the principal amounts for a largepart of the existing Covid-19 crisis support instruments became due.
Of all the financial instruments, the guarantee portfolio recorded the highest growth in the 12 months of 2022, increasing by
EUR 66 million (+15.9%), which is more than in the 12 months of 2021, when it increased by EUR 55.4 million (+15.4%) and by
2,009 projects (+12.9%), which is less than in the 12 months of 2021, when it increased by 4,080 projects (+21.2%). The increasein the guarantee portfolio in the 12 months of 2022 was ensured by Housing Guarantees for Families with Children and Housing
Guarantees for Young Professionals (+EUR 23.4 million), loan guarantees for entrepreneurs (+EUR 22 million), as well as by
Guarantee Programme for Improving Energy Efficiency in Multi-Apartments Buildings (+EUR 27.4 million). At the same time, ascompanies have been able to successfully adapt to the new conditions and as the pandemic has been on the decline,
demand from companies for Covid-19 crisis support guarantee programmes has fallen sharply, with the portfolio decreasing
by EUR 11.4 million in the 12 months of 2022.
In the 12 months of 2022, the loan portfolio decreased by EUR 3.8 million (-1.2%). The greatest impact was caused by the
reduction of the Covid-19 crisis related loan portfolio by EUR 26.9 million. The largest increase in the loan portfolio in the 12months of 2022 was driven by loans for acquisition of agricultural land intended for agricultural production (+EUR 9.4 million),
SME growth loans issued to companies for implementing energy efficiency projects (+EUR 8.4 million) and loans for newcompanies and startups (+EUR 3.3 million).
The low activity in transactions with the Land Fund observed in 2021 continued in 2022 - in the 12 months of 2022, the Land
Fund’s portfolio increased by EUR 1.4 million (+1.7%) and by 34 projects (+3.7%), which is less than in the respective period of2021, when the Land Fund’s portfolio increased by EUR 10.9 million (+16%) and by 200 projects (+27.7%).
As at 31 December 2022, the balance sheet of the Land Fund included 956 properties with a total land area of 23,888 ha andamounting to EUR 80.5 million, including investment properties with a total area of 14,240 ha and amounting to EUR 53.5 million(31 December 2021: 13,778 ha; EUR 46.2 million), and leaseback transactions for 9,648 ha amounting to EUR 27 million(31 December 2021: 9,661 ha, EUR 33 million).
In the 12 months of 2022, the venture capital funds increased by EUR 3 million (+5%), which is significantly less than in therespective period of 2021, when the volume of the venture capital funds increased by EUR 12.8 million (+17.5%). The small
increase in the venture capital funds can be explained by the lower volumes of new transactions in the 12 months of 2022
compared to the 12 months of 2021, respectively EUR 18.5 million and EUR 29.2 million, as well as the exit of investments of the
2nd and 3rd generation venture capital funds, that relates to the expiration of these venture capital funds.

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JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Management ReportManagement Report (cont’d)Operational volumes (cont’d)
By segment the largest portfolio of the Company is formed in the SMEs and Midcaps segment – 36.6%, while the Agriculture
segment accounts for – 26.2%, Individuals – 27.8% and Financial intermediaries – 9.4%.

Company 31/12/2022
In the 12 months of 2022, the largest volume growth was in the Individuals segment, the portfolio growth remained stable inthe 12 months of 2022 – EUR 56.8 million (+26.9%), exceeding the increase in the 12 months of 2021 – 46.9 million euro (+28.6%)
which was due to the steady demand for state aid programmes for the acquisition and improvement of housing. In the
Agriculture segment, the portfolio increased by EUR 26.9 million (11.9%), which is significantly more than in the 12 months of2021, when the volume of this segment increased by EUR 16.7 million (+8%). There was a slight increase in the 12 months of2022 in the Financial Intermediaries segment – EUR 4.3 million (+5%), which is significantly less than in the respective period of2021, when the portfolio growth in this segment was by EUR 12.7 million (+17.4%). Given that the demand for Covid-19 crisis
support instruments continued to decline and the repayments of the principal amounts for a large part of the existing Covid19 crisis support instruments became due, the SMEs and Midcaps segment volume decreased by EUR 20.1 million (-5.4%),
which is in contrast to the EUR 15.9 million (+4.5%) increase in the 12 months of 2021 influenced by the high demand for Covid19 crisis support instruments from this segment.
Volume of new transactions
In the 12 months of 2022, the total funding disbursed for the implementation of the support programmes amounted to
EUR 274.8 million, breaking down as follows: 55.7% (EUR 153.1 million) for guarantee programmes, 34.9% (EUR 95.8 million) inloan programmes, 2.7% (EUR 7.4 million) in the Land Fund transactions, and 6.7% (EUR 8.5 million) in investments in the venture
capital funds. Totally, 6,539 projects were supported. In the 12 months of 2022, the volume of the new transactions was moreby 2.7% (+EUR 7.1 million) compared to the respective period in 2021 as its increase in the Company's ordinary support
programmes has been slightly higher than the fall in demand for the Covid-19 crisis support programmes. On the other hand,
the impact of the Russian Federation invasion of Ukraine have not yet noticeably affected the volume of new transactions in
the 12 months of 2022 (+EUR 0.9 million), however, its impact will be felt in 2023.
In the 12 months of 2022, the largest volume of the new transactions was recorded in the following segments: SMEs and Midcaps – 47.3%; Individuals – 29.7%; Agriculture –16.2%; and Financial Intermediaries – 6.8%.

6JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Management ReportManagement Report (cont’d)Volume of new transactions (cont’d)
In the 12 months of 2022, new transactions experienced the largest increase in the Individuals segment, where their volume
was by 23.5% (+EUR 15.5 million) higher than in the 12 months of 2021. In the SMEs and Midcaps segment, the volume of newtransactions was by 2.6% (+EUR 3.2 million) higher than in the 12 months of 2021, as the Covid-19 crisis support programmes
were closed in 2022 (issuance of new deals under the Covid-19 crisis support programmes was stopped on 30 June 2022) andwere no more of interest, but with the rapidly changing geopolitical situation, the demand for new support instruments is
growing.

Company 31/12/2022
In the 12 months of 2022, there were issued new guarantees for EUR 153.1 million or by 20.5% (+EUR 26.1 million) more than in
the 12 months of 2021, indicating the increased lending activity of commercial banks that had declined during the Covid-19
pandemic. In the 12 months of 2022, the largest increase in the guarantee portfolio was in the loan guarantees forentrepreneurs (EUR 567 million), Housing Guarantees for Families with Children and Housing Guarantees for Young Professionals(EUR 37.1 million) and in programme for energy efficiency in multi-apartment buildings (EUR 30.9 million).
Taking into account the business specifics, when issuing guarantees for working capital loans, for bank issued guarantees andfor investment loan, a regular review and the extension of the issued guarantee are required for existing customers. This typeof transaction is not attributed to newly issued guarantees because it is considered as an extension of guarantees; however,the volume of such transactions is quite significant, with EUR 69.3 million of guarantees extended in the 12 months of 2022 (inthe 12 months of 2021: EUR 65.3 million).
Up until 31 December 2022, a total of 22,643 guarantees for EUR 179.2 million of the state aid for housing acquisition was
granted within the framework of the Programme for Housing Guarantees for Families with Children. In the 12 months of 2022,
guarantees issued under this programme worth EUR 28.5 million (in the 12 months of 2021: EUR 34.2 million), which is by 16.7%
less against the respective period in 2021. The decrease in volumes is due to the sharp rise in construction costs, creating
considerable uncertainty in the real estate market. Some potential buyers are postponing the purchase of a property, but thisprocess is likely to be short-lived as price increase will continue, so each month of postponement will increase the purchaseprice. The guarantees of the Programme help saving for the first instalment required to obtain a mortgage loan and are usedby families all over Latvia. In turn, a total of 4,297 guarantees worth EUR 43.7 million were issued to young professionals, ofwhich 913 guarantees worth EUR 8.6 million were issued in the 12 months of 2022 (in the 12 months of 2021: EUR 8.8 million).
In the 12 months of 2022, the volume of new loans issued amounted to EUR 95.8 million, which is by 5.1% (-EUR 5.1 million) lessthan in the respective period in 2021, as the demand for Covid-19-related loans decreased and the increase in the volume of
new transactions under the ordinary support programmes has been lower than the fall in demand for the Covid-19 crisis
support programmes. In the 12 months of 2022, the largest amount of new loans was issued under the SME Growth Loan
Programme (EUR 31.9 million), loans for acquisition of agricultural land for the purpose of agricultural production(EUR 17.6 million) and working capital loans for agricultural enterprises (EUR 10.4 million).

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JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Management ReportManagement Report (cont’d)Volume of new transactions (cont’d)Having launched the European Investment Fund (EIF) COSME and EaSI counter guarantees for loans up to EUR 25 thousand
the Company has already supported 445 projects (COSME – 62 projects, EaSI – 383 projects) in total amount of EUR 7.3 million.
If the loan is compatible with COSME or EaSI guarantee terms and conditions, the start-up and micro loans, working capitalloans to farmers or small loans in rural areas are granted without additional collateral, based solely on a personal guarantee
and at a lower interest rate compared to other types of unsecured loans.
In the 12 months of 2022, the Company’s investments made in the venture capital funds amounted to EUR 18.5 million, of
which EUR 7.5 million (in the 12 months of 2021: EUR 8 million) - in the 4th generation venture capital funds, EUR 3 million and
EUR 2.2 million (in the 12 months of 2021: EUR 2.2 million and EUR 1.2 million) in the Baltic Innovation Fund and the Baltic
Innovation Fund 2 respectively, EUR 2.1 million (in the 12 months of 2021: EUR 14.9 million) – in the Altum Capital Fund and EUR
3.8 million (in the 12 months of 2021: EUR 2.9 million) in the Three Seas Initiative Investment Fund.
The volume of new transactions of the Land Fund experienced large fluctuations in the 12 months of 2022 - if at the end of2021 and in the first three months of 2022 an active land market was observed, the number of transactions with investment
properties increased and interest in leaseback transactions gradually returned, then in the 2nd and 3rd quarter, in response to
the geopolitical situation in Europe, the land market became markedly inactive, including demand for leaseback practically
stopped. On the other hand, in the 4th quarter, the volume and number of transactions with investment properties increased
again, while the demand for leaseback transactions continued to remain at a low level, which was also impacted by the
relatively good harvest year for farmers and active lending by banks, as a result, farmers were able to buy available land on
the market by themselves, without involving the Land Fund in transactions. In these circumstances, the Land Fund concluded
land acquisitions and sales and leaseback transactions for the total amount of EUR 7.4 million, down by 30% (-EUR 3.2 million)
compared to the 12 months of 2021.
Non-financial instrument portfolio
In order to make accessing to the support instruments more convenient for its clients, apart from the financial instruments, theCompany services the grant programmes as well, namely, the grants issued under the Energy Efficiency Programme for Multiapartment Buildings (EEPMB), Social Entrepreneurship Programme and European Local Energy Assistance (ELENA) Programme,
the grants under the support program BALSTS for the purchase or construction of housing for families with three or morechildren, grants under the Culture Support Programme, providing support in the form of loans and grants (combined financial
instrument) where the grant does not exceed 40% of the total aid amount as well as grants under the support programme forincreasing the energy efficiency of private houses. Considering the individual’s interest in the support provided under thisprogramme, proposals were developed and, on 8 March 2022, the Cabinet of Ministers approved respective amendments
granting additional funding of EUR 3.27 million for continuing the programme as well as extending the range of potential
beneficiaries and including support for the installation of solar panels in private houses, which is currently attracting a lot ofinterest.
Up until 31 December 2022, the EEPMB programme had awarded a total of 676 grants for EUR 169.95 million, of which 231
grants for EUR 72.2 million were granted in the 12 months of 2022. As of 18 December 2020, the programme was suspended
and no new applications were accepted and currently the evaluation of the projects, awarding of grants and implementationof projects are carried out.
Under the support programme for increasing the energy efficiency of private houses, up until 31 December 2022 a total of
1,288 grant agreements worth EUR 4 million were signed, of which 803 grants worth EUR 2.6 million were signed in the 12 monthsof 2022 (in the 12 months of 2021: 485 grants worth EUR 1.4 million).
Up until 31 December 2022, a total of 200 grants for EUR 12.4 million were granted under the Social Entrepreneurship
Programme, of which 53 grants worth EUR 3.2 million were granted in the 12 months of 2022 (in the 12 months of 2021: 40 grants
worth EUR 2.5 million).
In order to promote and support planning of the energy efficiency projects, the Company, acting in co-operation with theEuropean Investment Bank, provides to companies a supplementary support grant earmarked for covering the costs related
to expertise and drafting of energy efficiency projects. Up until 31 December 2022, there were a total of 69 grants granted for
EUR 0.8 million.
Within the framework of the support programme BALSTS, the Company accepts the applications for the issuance of nonrefundable state subsidies or grants for the purchase or construction of housing for families with three or more children. Up until
31 December 2022, a total of 958 grants for EUR 8 million were granted, of which 389 grants for EUR 3.2 million were granted in
the 12 months of 2022 (in the 12 months of 2021: 508 grants worth EUR 4.2 million).
As at 31 December 2022, the portfolio of grants amounted to EUR 101.1 million.
8

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Management ReportManagement Report (cont’d)
New products and increasing operational efficiency
In order to find solutions at EU level to the current crisis situation and to support businesses in continuing their economic activity
while adapting to new market conditions, including supply chain disruptions, on 23 March 2022 the European Commission
approved the Temporary Crisis Framework for State aid measures. On 2 June 2022, the Saeima adopted the "Law on Support
for Overcoming the Economic Consequences of Sanctions and Countermeasures Applied Due to Russian Federation's MilitaryAggression Against Ukraine", simultaneously approving EUR 94.9 million financing for companies that suffered from theconsequences of Russian Federation's military aggression in Ukraine, which includes EUR 39 million for investment and working
capital loans, EUR 22.5 million for credit guarantees and EUR 1.3 million for export credit guarantees as well as EUR 32.1 million
through the equity fund (the equity fund was not implemented as a separate programme, as funding was reallocated toother support programmes). Funding is available for viable companies for adapting their business model, improving export
capacity, conquering new markets, new technologies and process optimization, product development in the context of thecrisis of Russian Federation military aggression against Ukraine. In cooperation with the Ministry of Economy, the new loan andguarantee support programmes to mitigate the effects of Russian Federation's military aggression against Ukraine on theeconomy and to implement market reorientation. It will provide immediate support to businesses for working capital andliquidity stabilisation through loans and guarantees, while the state ensures conditions for economic stability for long-term
development:▪

On June 14, 2022, the Cabinet of Ministers approved the loan program, within the framework of which it is planned toissue approximately 500 loans, the maximum loan amount will be up to EUR 3 million, maturity for working capital loan
will be up to 3 years, for investment loans - up to 5 years. At the same time, the Cabinet of Ministers approved changes
in the export credit guarantee programme, clarifying the conditions for receiving export credit guarantees, includingthat in the future the possibilities of providing export credit guarantees will not be limited, except that guarantees will not
be provided for transactions with Russian Federation, Belarus and Ukraine, and extended the term for providing
guarantees - short-term export credit guarantees will be available to companies until the end of 2023.

▪

On 21 June 2022, the Cabinet of Ministers approved the guarantee support programme, within the framework of whichapproximately 300-400 guarantees can be issued, the maximum amount of guarantee for one customer will be up to
EUR 10 million, the term of the guarantees - up to 6 years, taking into account the business operations and working capital
cycle.

In the 3rd quarter of 2022, part of the program's funding in amount of EUR 52.5 million was redistributed to the program of large
investment loans with a capital rebate for MidCaps, thus EUR 21.5 million is available for working capital and investment loans,
EUR 12.5 million for guarantees, while the financing of the equity fund will not be implemented. Financing of the loan andguarantee programmes for companies will be available until 31 December 2023. Acceptance of applications for loans andguarantees began in November 2022. Until the end of 2022, as part of the loan programme, the Company has issued newloans for a total amount of EUR 5.3 million.
The Company continues to strengthen its role as the main government partner for the implementation of financial instrument
programmes co-financed by the European Union (hereinafter - the EU). In total, at least EUR 650 million will be available asfinancial instruments under the Recovery and Resilience Facility (RRF) and the EU Cohesion Policy for the programming period2021-2027, of which EUR 223.8 million was allocated to the new RRF support programmes. In cooperation with the Ministry of
Economics, the four new support programmes were developed and approved by the Cabinet of Ministers:▪

On June 7, 2022, the Cabinet of Ministers approved the energy efficiency programme for companies, within theframework of which EUR 80.5 million of the RRF funding will be available to companies for increasing energy efficiency
and wider use of renewable energy technologies. Funding to companies will be available in a form of the Company’s
loan or a parallel loan with a capital rebate for principal repayment, the maximum loan amount is EUR 5 million, loan
term – up to 20 years. The capital rebate will be 30%, but no more than EUR 1.5 million and will be awarded when the
project has been implemented and the target indicators have been achieved. In September 2022, the program was
supplemented with guarantees for the purchase of electric cars for companies, with funding of EUR 5 million for thispurpose. Acceptance of applications for the 1st selection round began on October 4, 2022 and ended on January 4,
2023.

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JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Management ReportManagement Report (cont’d)
New products and increasing operational efficiency (cont’d)▪

On July 5, 2022, the Cabinet of Ministers approved the digitization programme for companies, within the framework ofwhich EUR 45.1 million of the RRF funding will be available to companies for digital transformations of companies, i.e. forpromotion of digitization, automation and robotization. Funding to companies will be available in a form of theCompany’s loan or a parallel loan with a capital rebate for repayment of the principal amount, the maximum loan
amount is EUR 7 million, loan term – up to 10 years. Capital rebate will be up to 35%, but no more than EUR 1.0 million andit will be applied if the preconditions of the digital development roadmap issued by the European Digital Innovation
Center (EDIC) are fulfilled and a positive EDIC post-assessment is received no later than 6 months after the completionof the project. Acceptance of applications for this program will start in the 1st quarter of 2023▪

On July 14, 2022, the Cabinet of Ministers approved the energy efficiency program for multi-apartment buildings, within
the framework of which EUR 57.3 million of the RRF funding will be available to improve the energy efficiency of multiapartment buildings and transition to the use of renewable energy technologies. The programme is intended forapartment owners of multi-apartment residential buildings and its purpose is to make investments in the sector of multiapartment residential buildings in order to promote the resolution of the housing issue in Latvia, help to achieve the set
climate goals in reducing gas emissions and reduce the level of energy poverty. Funding will be available in a form ofloan or guarantee with a capital rebate for repayment of the principal amount of the loan, the maximum loan amountis EUR 3.75 million, loan term – up to 20 years, maximum guarantee amount – up to 80% of the loan, guarantee term – up
to 20 years. Capital rebate will be up to 49% and it will be applied if the project results in at least 30% of primary energy
savings. Acceptance of applications started on November 22, 2022, at the time of preparation of the financial reportapplications from 10 applicants have been received.

▪

On July 14, 2022, the Cabinet of Ministers approved the low-rent housing construction program, within the framework ofwhich EUR 42.9 million of the RRF funding will be available for the construction of residential rental houses in the regions,in order to promote the availability of low-rent housing that meets construction standards and energy efficiency
requirements. Funding to companies will be available in a form of the Company’s loan or a parallel loan with a capital
rebate for repayment of the principal amount, the term of the loan is up to 30 years. The capital rebate will be up to 30%
and will be applied when the building has been put into operation and at least 90% of the apartments have beenrented. Acceptance of applications for the program started on December 8, 2022, at the time of preparation of thefinancial report applications have been received from 6 applicants.

Work continues on the implementation of existing programmes and improvement of conditions of the existing programmes:▪

the Large Investment Loan Programme offering a capital rebate for medium-sized and large enterprises: under the
programme, entrepreneurs will have access to a loan with a capital rebate of up to EUR 10 million The Company will
provide project funding with a loan amounting to the potential capital rebate, the remainder to be raised from otherfunders. The new programme differs from previous business support programmes to the effect that it includes a capital
rebate or a complete or partial reduction (discharge) of the loan principal. A company can qualify for a loan with acapital rebate by achieving the project's objectives and meeting certain criteria. The capital rebate is planned to be
applied gradually over three years after the end of the project implementation and monitoring period. The call for
applications opened on 19 January 2022. At the time of preparing the financial statements, the Company is stillevaluating 16 projects - 3 projects from the first round of project selection (attributable amount of capital rebate EUR
17.9 million) and 13 projects from the closed round of project selection (attributable amount of capital rebate EUR 83.3
million). So far, a positive decision has been made on 5 applications (the amount of the capital rebate EUR 4.932.1
million), 4 project applicants have withdrawn their applications (the amount of the capital rebate EUR 40 million), whilea negative decision on refusal has been made on 6 applications to finance an investment project (relevant amount of
capital rebate EUR 41 million). General interest from applicants exceeded the available funding of the programme morethan 3 times. On October 18, 2022, the Cabinet of Ministers decided to increase the funding of the programme from EUR
99.6 million to EUR 152.1 million, redistributing additional funding EUR 52.5 million from the allocated, but unused funding
for Covid-19 support measures. The first loan in this programme was issued in December of 2022.

10

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Management ReportManagement Report (cont’d)
New products and increasing operational efficiency (cont’d)▪

In 2023, the Company, in cooperation with the Ministry of Economy and the Ministry of Finance, plan to finalize work
started in previous years on the creation of the Baltic Small and Medium Enterprises Initial Public Offering Fund (SME IPO
Fund) with the aim of starting the operation of the SME IPO fund in 2023. The aim of the SME IPO fund is to support anddiversify Baltic SMEs, as well as small mid-caps and innovative mid-caps access to financing and to develop the Baltic
capital market in accordance with the EU capital market goals.

▪

the Energy Efficiency Support Programme for Private Houses: envisages granting portfolio guarantees, technicalassistance and grants for increasing the energy efficiency of private houses. The maximum amount of technicalassistance per beneficiary is EUR 1,000, while a grant for increasing the energy efficiency class of a residential house is
expected in the amount of EUR 5,000 per beneficiary. Considering the individual’s interest in the support provided under
this programme, proposals were developed and, on 8 March 2022, the Cabinet of Ministers approved respective
amendments granting additional funding of EUR 3.27 million for continuing the programme as well as extending therange of potential beneficiaries and including support for the installation of solar panels in private houses, which iscurrently attracting a lot of interest. At the same time, amendments to Cabinet Regulation No 500 "General Construction
Regulations", dated 19 August 2014, were approved to facilitate the installation of solar panels. From now on, privatehouse owners are eligible for support not only for improving energy efficiency, but also for the installation of
microgeneration technologies, i.e., solar panels and small scale wind turbines. The call for applications opened on 27
April 2022.

▪

the Programme for Multi-apartment Building Renovation Loans: under which it is established a Renovation Fund forfinancing renovation and other related costs for Multi-apartment buildings. The programme is open for applications from
8 September 2021 and has a total funding of EUR 31 million, available as a loan. The funding is intended for repairs ofcommon areas and improvement of the surroundings as well as for replacing water pipes or roofs, installing a children
playground or a sports field, renovating the facade of the building and other works that improve the condition of thebuilding and create a more pleasant living environment. On 15 February 2022, applying for the programme was opened
to the owners of rental and historic building as there were found ways to extend support for the renovation of residentialbuildings. Thus, the Repair Fund will also be available for the renovation of historic pre-war tenement houses andrestoration of unoccupied houses, which so far had a limited access to funding.

▪

The programme of small loans in rural areas: Amendments are made to the Cabinet Regulation on the funding from theEuropean Agricultural Fund for Rural Development (EAFRD) amounting to EUR 20 million. The range of beneficiaries has
also been expanded by increasing the applicant's maximum turnover from EUR 100 thousand to EUR 150 thousand.

▪

the Social Entrepreneurship Programme: on 28 February 2022, the Company resumed accepting applications for grants
under the Social Entrepreneurship Programme. The Ministry of Welfare has allocated funding of EUR 3 million for thecontinuation of the programme, both for the implementation of projects that were previously submitted and for new
business projects.

In the 12 months of 2022, proceeding with the centralised reviewing of the applications for micro loans (up to EUR 25 thousand)introduced within the framework of automation and increasing of the Company’s operational efficiency, 22% (in 12 monthsof 2021: 34%) of the total number of the granted loans (excl. Covid-19 crisis related loans) were reviewed remotely without
involving the regional employees in the application reviewing process. The decrease in the number of applications in thecentralised reviewing can be explained by the significant increase in the costs of the applied projects, as a result of which theamount of loan applications exceeds the limit set for the centralised reviewing by EUR 25 thousand. Compared to theperformance indicators for the respective period of 2021, in the 12 months of 2022, the amount of loans granted in the regions
increased by 22% or EUR 12.1 million and the number of loans granted increased by 19%, while the loans granted under thecentralised reviewing (up to EUR 25 thousand) decreased by 19% or EUR 951 thousand, in turn the number of loans granted
decreased by 23%, which is due to a decrease in the total number of loan applications in this segment by 22% in the 12 monthsof 2022 compared to the 12 months of 2021. The average loan amount in the regions increased from EUR 85 thousand in the
12 months of 2021 to EUR 87 thousand in the 12 months of 2022, while the average loan amount reviewed remotely on acentralised basis in the 12 months of 2022 was EUR 14.8 thousand (in 12 months of 2021: EUR 14.1 thousand).

11

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Management ReportManagement Report (cont’d)
Green Funding
In order to diversify the financing structure, already in October 2017, the Company issued the first transferable securities in theform of green bonds with a total value of EUR 20 million. As at 31 December 2021, the total amount of Altum bonds listed on
the Nasdaq Riga stock exchange is EUR 85 million.
In the second half of 2021 Altum Green Bond Framework was updated according to the 2021 edition of Green & Social Bond
Principles published by International Capital Market Association (ICMA) in June 2021. To gain investors’ confidence that funds
derived from the Altum green bonds will be invested in environmentally friendly projects and ensure that certain environmental
targets are met, CICERO (Center for International Climate and Environmental Research, Oslo) issued independent second
party opinion upon the updated Altum Green Bond Framework, which received the Medium Green shading from CICERO
similar the one received in 2017.
In September 2021, the Altum became the first company from Latvia to join the Nasdaq Sustainable Bond Network in the world
with its green bond issue.
RatingOn 16 December 2022 Moody’s Investors Service (Moody’s) affirmed the Company’s Baa1 long-term issuer rating, with outlook
stable, same as affirmed in March 25, 2019. The baseline credit assessment (BCA) is also affirmed at Baa3, together with theshort-term issuer rating at P-2. Soon after on 21 December 2022 Moody’s published an updated credit opinion on the
Company.
In June 2017 for the first time Moody’s assigned to the Company a long-term credit rating Baa1 which is one of the highest
credit ratings assigned to a corporate entity in Latvia.
The assigned rating and being a regular participant in the capital market as well as bond issuance makes it possible for theCompany to implement more successfully the Company’s long-term strategy for fund raising.
Risk Management
In order to have an adequate risk management, the Company has developed the Risk Management System that provides
both preventive risk management and timely implementation of risk mitigation or prevention measures. While assuming risks,
the Company retains the long-term capability of implementing the established operational targets and assignments.
To manage risks, the Company applies various risk management methods and instruments as well as establishes risk limits andrestrictions. The choice of the risk management methods is based on the materiality of the particular risk and its impact on the
Company’s operations.
In view of the Company’s activities in high-risk areas when implementing the state aid programmes, as at 31 December 2022
the Company has the risk coverage of EUR 298 million (31 December 2021: EUR 286 million) to cover the expected credit lossof the State aid programmes. The expected loss is assessed before implementing the respective aid programme and a portionof the public funding received within this programme is earmarked for the Risk Coverage. The Risk Coverage consists of thesum of the Risk Coverage Reserve and Portfolio Loss Reserve (Special Reserve Capital) less provisions for expected credit losses.
In view of the invasion of Ukraine by the Russian Federation, starting from February 2022, the Company has limited all types ofcooperation with citizens of the Russian Federation and the Republic of Belarus and their related companies.
In view of the invasion of Ukraine by the Russian Federation, which resulted in the EU and the rest of the world imposing
sanctions against the Russian Federation and the Republic of Belarus and their right holders and in order to reduce the risk ofsanctions, the Company imposed additional control measures both during the issuance of financial instruments and themonitoring of business relationships, in addition, changes have been made to the Company's policy of legalization ofproceeds of crime and the prevention of terrorist financing and proliferation and compliance with sanctions by determiningthat the Company refrains from cooperation with companies, where the owners, beneficial owners or officers are citizens of
the Russian Federation or Belarus.

12

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Management ReportManagement Report (cont’d)
Risk Management (cont’d)
The Company continuously monitors changes in sanctions and keeps a close eye on developments in Ukraine. The Company
takes measures to minimise the potential direct or indirect impact on the Company’s operations that might be caused bydevelopments in Ukraine or sanctions against Russian Federation and the Republic of Belarus, including, but not limited to,additional monitoring of transactions with clients whose core business could be affected by both by the events in Ukraine andthe sanctions introduced against the Russian Federation and the Republic of Belarus.
In addition to the above, the Company has taken the necessary measures during 2022 to identify potential clients in difficulties
and to assess whether the increase in the price of energy resources, as well as the imposed sanctions against the RussianFederation and the Republic of Belarus, has directly or indirectly affected or may significantly affect the solvency of clients,
as well as to ensure the quantification of direct and indirect impacts and the establishment of appropriate impairment
allowances.
Contribution to Sustainability
Sustainability is a key part of Altum's business and strategy and is becoming an important strategic driver for the banking
industry as well as for development finance institutions in Europe. Altum takes responsibility for the long-term impact of its daily
economic, environmental and social activities and continuously works to reduce it on the environment and with its sustainablestrategy contributes positively to such a development and its business is responsible. Moreover, Altum intends to facilitate andsupport its clients' transition to a sustainable economy.
From the beginning of 2021, Altum's management as one of priorities has set sustainable financing and the integration of ESG
considerations into credit risk management and business processes. It is also one of the objectives of Altum's medium-term
strategy 2022-2024 and is included as one of the five key tasks in the Action Plan for 2022 approved by the General Meetingof Shareholders.
In Q2 2022, work on the development of a detailed Altum roadmap for the integration of sustainable finance and ESG factors
in credit risk management in (i) SMEs and Midcaps and (ii) Agriculture segments was completed. Based on the current stateof events and the set objectives, the roadmap developed as a detailed plan of activities in areas such as new productdevelopment and moving existing products towards sustainable funding, portfolio tagging and monitoring, lending as well as
collateral assessment and sustainability KPI management.
Guided by the compiled ESG road map, in the second half of 2022 work was started on the steps of the road map, which
touch on the integration of ESG aspects in credit risk management for the Company's loan and guarantee portfolios in the
SME, Midcap and farmer segments - both for creating an ESG risk assessment matrix and scoring model, and for creating
customized customer development of a questionnaire to obtain information for ESG risk assessment and regarding
planned/actual customer sustainability KPI's. Work has also been started on identifying current green/sustainable projects in
the SME and farmer segments.
On the other hand, in the AIF “Altum Capital Fund” managed by Altum, investments have been made since the summer of2021, paying due attention to the ESG performance of the target company and the expected impact of related economicchanges on the company's supply and value chains. In compliance with the requirements of The Sustainable Finance
Disclosure Regulation, the Fund policy was published at the end of 2022, which reflects how the Company assesses theprincipal adverse effects of the Company’s investment decisions on sustainability factors (Principal Adverse Impact report), in
accordance with the requirements of Article 4 of SFDR.
On November 16, 2022, Altum joined the initiative of the Institute for Corporate Sustainability and Responsibility and signed the
SUSTAINABILITY CODE (hereinafter - the Code). The purpose of the Code is to promote the provision of truthful information,
including the exclusion of green deception, thus protecting the interests of consumers and promoting fair competition, as well
as reducing the negative impact of business in environmental, social and governance aspects. The principles of this Codeapply to every company and its signatories confirm their readiness to implement them in order to promote the developmentof the business environment and create common value by observing and promoting responsible and ethical behavior.
Currently, a total of 18 organizations from all over Latvia have signed the Code.

13

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Management ReportManagement Report (cont’d)Contribution to Sustainability (cont’d)
For the fourth year in a row, the Company participated in the Sustainability Index organized by the Institute for Corporate
Sustainability and Responsibility, in 2022, for the second year in a row, receiving the high platinum rating.
In September 2022, Altum received the Latvian Corporate Governance Award 2022 in the nomination "Risk Management
Strategist", proving Altum's ability to successfully identify, assess, manage and control potential risks, events or situations,ensuring confidence in the achievement of the company's strategic goals, as well as successfully starting to implement thepriority medium-term strategy direction - sustainable financing and integration of ESG aspects in credit risk management andbusiness processes.
Future Outlook
At the beginning of 2023, the Company, in cooperation with the Ministry of Economy, will start the development ofprogrammes in order to start the implementation of financial instrument support programmes under the new EU Cohesion
Policy programming period 2021-2027. The funding available within the planning period of the new EU Cohesion Policy 20212027 will not only complement the already available RRF funding in areas such as increasing energy efficiency (buildings,
energy-efficient equipment, electric cars) and the use of renewable energy technologies (solar panels, etc.) for companies
and increasing energy efficiency of apartment buildings at home, but the new funding will also be available for new directions
such as technology transfer and prototyping, innovation and digitization.
In order to prepare for the InvestEU Programme 2021–2027, the preparations undertaken already in 2019 for pillar assessmentof the Company was continued. Pillar assessment is a prerequisite for the Company to be able to apply for the InvestEU
implementing partner role and, in the future, also for the role of cooperation partner in the implementation of EU funds thusincreasing the scope of new specialized and customized financial instruments to the companies in Latvia. The Company is
purposefully moving towards the pillar assessment of the Company - an application on the InvestEU pillar assessment was
prepared in Q3 2021, at the beginning of 2023, an independent auditor selected in the selection process will carry out thepillar assessment, while the decision on submitting the application for the InvestEU implementing partner role has not yet been
made.

Reinis Bērziņš
Chairman of the Management Board

27 February 2023

14

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Management ReportSupervisory Board and Management Board
Supervisory Council
Name, Surname

Position

Appointment Date

Date of expiry of the term of
the mandate

Līga Kļaviņa

Chairperson of the Council

28.12.2019.

27.12.2022.

Jānis Šnore

Member of the Council

28.12.2019.

27.12.2022.

Ilze Baltābola

Member of the Council

22.03.2022.

21.03.2023. ** For the time (up to 1 year) until a new candidate is selected in line with the procedures of nominating supervisory board members,
according to the Law on Governance of Capital Shares of a Public Person and Capital Companies.

There were no changes in the Supervisory Council of the Company in Q1 2022.

Management Board
Name, Surname

Position

Appointment Date

Date of expiry of the term of
the mandate

Reinis Bērziņš

Chairman of the Board

27.05.2021.

26.05.2024.

Jēkabs Krieviņš

Member of the Board

27.05.2021.

26.05.2024.

Inese Zīle

Member of the Board

27.05.2021.

26.05.2024.

Aleksandrs Bimbirulis

Member of the Board

26.06.2020.

31.03.2022.

Ieva Jansone-Buka

Member of the Board

18.03.2021.

17.03.2024.

Juris Jansons

Member of the Board

09.01.2023

08.01.2026

There were changes in the Management Board of the Company during the reporting period. Aleksandrs Bimbirulis has left
the position of a Member of the Management Board on 31 March 2022. The Council approved Juri Jansons as a member ofthe Board on 9 January 2023.

15

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Management ReportStatement of Management’s responsibility
Riga

27 February 2023

The Management Board (the Management) is responsible for preparing the financial statements. The Management confirmsthat suitable accounting policies were used and applied consistently and reasonable and prudent judgments and estimates
were made in the preparation of the financial statements on pages 17 to 76 for the period 1 January 2022 to 31 December
2022. The Management confirms that the Company’s financial statements were prepared on a going concern basis inaccordance with International Accounting Standard 34 “Interim Financial Reporting”.
During the reporting period appropriate accounting policies have been applied on a consistent basis. The Management is
responsible for keeping proper accounting records, for taking reasonable steps to safeguard the assets of the Company andto prevent and detect fraud and other irregularities.

Reinis Bērziņš
Chairman of the Management Board

16

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Management ReportStatement of Comprehensive Income
All amounts in thousands of euro
Notes

Company

Company

Group

01.01.2022.31.12.2022.
(unaudited)

01.01.2021.31.12.2021.
(audited)

01.01.2021.31.12.2021.
(audited)

Interest income

4

19 93418 85718 857

Interest expense

5(2 960)(2 140)(2 140)16 97416 71716 717

Net interest income

Income for implementation of state aid programmes

6

6 093

4 446

5 718

Expenses to be compensated for implementation of state aid programmes

7(5 091)(3 829)(5 101)

1 002

617

617

Net income for implementation of state aid programmes

Gains from trading securities and foreign exchange translation

97

51

51

Share of (losses) of investment in associate and other investments

12(1 539)(1 382)(1 382)Remeasurement gain of investment in associate at fair value through profit or loss

12

48

2 817

2 817

Gains less losses from liabilities at fair value through profit or loss

20

2 339

1 321

1 591

Other income

8

6 207

3 221

3 221

Other expense9(1 427)(1 509)(1 509)Operating income before operating expenses

23 70121 85321 853

Staff costs(6 511)(5 795)(5 795)Administrative expense(1 829)(1 893)(1 893)

Amortisation of intangible assets and depreciation of property, plant and equipment

(863)

(935)

(935)

(3 367)599

599

Profit before corporate income tax

11 13113 82913 829Profit for the period

11 13113 82913 829Other comprehensive income:(1 197)

(515)

(515)

Items to be reclassified to profit or loss in subsequent periods
Net loss from financial assets measured at fair value through other comprehensive income(1 197)

(515)

(515)

Total comprehensive income for the period

9 934

13 31413 314

Owners of the Company

-

-

5 539

Non-controlling interest

-

-

-

Profit for the period

-

-

5 539

Owners of the Company

-

-

4 113

Non-controlling interest

-

-

-

Total comprehensive income for the period

-

-

4 113

Impairment gain / (loss), net

10Profit is attributable to:Total comprehensive income is attributable to:

The accompanying notes on pages 21 through 76 form an integral part of these financial statements.

Reinis Bērziņš
Chairman of the Management Board

Olga Alksne
Chief Accountant

27 February 2023

17

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Management ReportStatement of Financial Position
All amounts in thousands of euro
Notes

Company

Group /
Company

31.12.2022.

31.12.2021.

(unaudited)(audited)

571 667455 006

9 515

14 051

AssetsDue from credit institutions and the State Treasury

11

Financial assets at fair value through other comprehensive income - investment securities
Financial assets at amortised cost:
Investment securities

39

37

14

317 859

330 530

15

58 28045 397

Deferred expense

344

642

Accrued income

927

1 424

13

15 246

8 936

Investments accounted for using the equity method

12

51 14951 727

Investments accounted for using the FVTPL method

12

14 23213 22216

53 45346 164

Property, plant and equipment

4 448

4 570

Intangible assets

1 140

1 256

1 530

3 242

1 099 829

976 204

Loans and receivables
GrantsOther investments
Investments in associates

Investment property

Other assets

17

Total assets

Liabilities
Due to credit institutions18

36 29053 416

Due to general government entities19

153 784

121 348

Financial liabilities at amortised cost - Issued debt securities

85 51385 558Deferred income

5 052

5 747

Accrued expense

661

806

Provisions

21

43 27034 466

Support programme funding

20

375 874

230 287

Other liabilities

3 755

3 840

Total liabilities

704 199535 468

EquityShare capital

204 862

204 862

Reserves

22

180 136

221 347

Revaluation reserve of financial assets measured at fair value through other comprehensive income

22

(499)

698

Retained earnings

11 13113 829Net assets attributable to the Company’s owners

395 630440 736

Total equity

395 630440 736

Total equity and liabilities

1 099 829

976 204

The accompanying notes on pages 21 through 76 form an integral part of these financial statements.

Reinis Bērziņš
Chairman of the Management Board

Olga Alksne
Chief Accountant

27 February 2023

18

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Management ReportCompany’s Statement of Changes in Equity
All amounts in thousands of euro
Share capital

Reserves

Revaluation reserve offinancial assets measured
at fair value through othercomprehensive income

Retainedearnings

Total equity

As at 1 January 2021 (audited)

204 862

170 319

1 213

5 539

381 933

Profit for the period

-

-

-

13 82913 829Other comprehensive income

-

-

(515)

-

(515)

Total comprehensive income

-

-

(515)

13 82913 314

Increase of reserve capital (Note 22)-

45 489--45 489

-

6 429

-

-

6 429

-

(6 429)--(6 429)Distribution of 2020 profit

-

5 539

-

(5 539)-As at 31 December 2021 (audited)

204 862

221 347698

13 829440 736

Profit for the period

-

-

-

11 131

11 131Other comprehensive income--(1 197)-(1 197)

Total comprehensive income--(1 197)

11 131

9 934

Increase of reserve capital (Note 22)

-

3 525

-

-

3 525

-

(58 565)--(58 565)

-

3 446

-

-

3 446

-

(3 446)--(3 446)

Distribution of 2021 profit-

13 829-(13 829)-

As at 31 December 2022 (unaudited)

204 862

180 136(499)

11 131395 630

Distribution of Specific Reserves to General reserve
capital at distribution of the profit for year 2020
Distribution of Specific Reserves to General reserve
capital at distribution of the profit for year 2020

Decrease of reserve capital by increasing financing
of support programs
Distribution of Specific Reserves to General reserve
capital at distribution of the profit for year 2021
Distribution of Specific Reserves to General reserve
capital at distribution of the profit for year 2021

Consolidated Statement of Changes in Equity
All amounts in thousands of euroAttributable to owners of the Company
Share capital

Reserves

Revaluation
reserve of financial
assets measured atfair value throughothercomprehensive
incomeRetainedearnings

Noncontrollinginterest

Total equity

As at 1 January 2021 (audited)

204 862

170 321

1 213

5 539

659

382 594

Profit for the period

-

-

-

13 82913 82913 829Other comprehensive income

-

-

(515)

-

(515)

(515)

Total comprehensive income

-

-

(515)

13 82913 31413 314

Increase of reserve capital (Note 22)-

45 489---45 489

-

6 429

-

-

-

6 429

-

(6 429)---(6 429)Distribution of 2020 profit of the Company

-

5 539

-

(5 539)--Non-controlling interest

-

(2)

-

-

(659)

(661)

As at 31 December 2021 (audited)

204 862

221 347698

13 829-440 736

Distribution of Specific Reserves to General reserve
capital at distribution of the profit for year 2020
Distribution of Specific Reserves to General reserve
capital at distribution of the profit for year 2020

As the consolidated financial statements for 2022 are no longer prepared, but the unaudited interim condensed financial
statements for 2022 also include comparatives for 2021, the Statement of Changes in Equity for 2021 to 31 December 2021
was also prepared for the Group. For more information see Note 1.

The accompanying notes on pages 21 through 76 form an integral part of these financial statements.

19

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Management ReportStatement of Cash FlowsAll amounts in thousands of euro
Notes

Company

Company

Group

01.01.2022.31.12.2022.

01.01.2021.31.12.2021.

01.01.2021.31.12.2021.

(unaudited)(audited)(audited)

455 007359 949359 949

Profit before taxes

11 13113 82913 829Amortisation of intangible assets and depreciation of property, plant and equipment

863

935

935

(19 934)(18 857)(18 857)

19 87216 33416 334

2 960

2 140

2 140

(2 951)(1 297)(1 297)

3 367

(599)

(599)

15 308

12 485

12 485

Cash and cash equivalents at the beginning of period

Cash flows from operating activities

Interest income

4Interest received
Interest expenses

5Interests paid
(Decrease) / Increase in impairment allowances10(Decrease) of cash and cash equivalents from operating activities before changes in assets
and liabilities(Increase) / Decrease of loans

14

9 986

(17 262)(17 262)(Increase) of grants

15(12 985)(14 447)(14 447)

Increase of due to credit institutions and general government entities

18,19

15 257

5 388

5 388

Demand deposits with credit institutions (increase)(32 000)--

Increase / (Decrease) in deferred income and accrued expense

(840)

626

626

(Increase) / Decrease in deferred expense and accrued income

795

(545)

(545)

1 903

394

394

Increase in other liabilities

92 09662 91662 916

Net cash flows from operating activities

89 52049 55549 555

Sale of investment securities

3 603

23 50023 500Acquisition of property, plant and equipment and intangible assets

(636)

(824)

(824)

Decrease of other assets

17

Cash flows from investment activities

Purchase of investment properties

16(5 758)(7 150)(7 150)

Sale of investment properties

16

954

211

211

Other investments

13(6 194)(4 723)(4 723)

Investments in associates, net(392)(6 355)(6 355)Investments of subsidiaries in underlying undertakings-(2 924)-

Investments in subsidiaries--(2 924)

Net cash flows from investing activities(8 423)

1 735

1 735

-

20 84520 8453 526

22 92322 923

Net cash flow from financing activities

3 526

43 76843 768

Increase in cash and cash equivalents

84 62395 05895 058Cash and cash equivalents at the end of period

539 630455 007455 007

Cash flows from financing activities
Issued debt securities
Increase of reserve capital

22

The accompanying notes on pages 21 through 76 form an integral part of these financial statements.

20

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

Approval of the Financial Statements
The Management of the Company has approved these unaudited interim condensed financial statements on 27 February
2023.

1 General Information(1) Corporate Information
These unaudited interim condensed financial statements contain financial information on the joint stock company“Development Financial Institution Altum” (hereinafter - the Company), as well as comparatives on the Company and its
subsidiaries (hereinafter - the Group).
As at 31 December 2021, the Company's subsidiaries are not classified as subsidiaries based on the annual assessment of
whether there is control or significant influence over the subsidiaries. In accordance with the Company's accounting policies,
the subsidiary is included in the consolidated financial statements until the date that control ceases. Thus, the consolidated
financial statements for 2022 are no longer prepared and the Statement of Financial Position as at 31 December 2021 is only
the financial position of the Company. The company consolidated its financial statements until December 30, 2021. The data
as of 31 December 2021 are the same as the consolidated ones, so they are combined in one column.
Comparatives on the Group's financial performance for the 12 months of 2021 are included in the Statement ofComprehensive Income, Statement of Changes in Equity and the Cash Flow Statement, respectively, as well as in the relevant
notes to the financial statements.
JSC Development Finance Institution Altum is a Latvia state-owned company that ensures access of the enterprises andhouseholds to the financial resources by means of support financial instruments - loans, guarantees, investments in venture
capital funds - in the areas defined as important and to be supported by the state, thus developing the national economy
and enhancing mobilization of the private capital and financial resources. On 16 December 2022, the international credit
rating agency Moody's Investors Service reaffirmed the Company's long-term credit rating of Baa1 with a stable outlook, which
is at the same level as it was approved on 25 March 2019. The baseline credit assessment (BCA) has also been approved at
Baa3, along with a short-term rating of P-2. The rating assigned to the Company by Moody's is one of the highest credit ratings
assigned to Latvian capital companies.
JSC Development Finance Institution Altum was established on 27 December 2013 by a decision of the Cabinet of Ministers.
The mission of the Company’s establishment is by merging three prior independently operating companies providing state
support into a single institution and further allocate the state funds for implementation of financial instrument state supportand development programmes in one place. The Company’s operations are governed by its specific law – Development
Finance Institution Law. The Company’s Article of Association has been approved by the Cabinet of Ministers. All voting sharesof the Company are owned by the Republic of Latvia. The holders of the shares are ministries of the Republic of Latvia as
stipulated by the Development Finance Institution Law with following split of the shares – the Ministry of Finance 40%, theMinistry of Economics 30% and the Ministry of Agriculture 30% respectively.
The Company does not perform any regulated activities related to the financial and capital markets as financial institution,
therefore the Company is not required to comply with capital adequacy requirements. However, the Company operates inaccordance with the best financial and capital market practices regarding internal control, risk management andcompliance.
The Company holds investment in alternative investment fund “Altum Capital Fund” (the Fund) registered on 31 July 2020. The
Fund is created with the aim to support well-managed, perspective Mid-cap companies to overcome the effect of Covid-19
that as a result of the virus impact are ready to adjust their operations by changing their business model, adjusting productdevelopment, introducing new technology and expanding to new export markets. The Fund’s committed capital was fully
subscribed on September 16, 2020, reaching EUR 100 million, of which the majority (EUR 51.1 million or 51.1%) were largest
private pension funds and EUR 48.9 million consists of public funding invested by the Company. The Company is also the
manager of the Fund registered with the Financial and Capital Market Commission on 26 May 2020. The investment period
agreed with the EC ended on 30 June 2022, after its end, new investments were no longer approved, but investments in theportfolio’s companies approved until 30 June 2022 continued. The amount of the Fund's investments in existing portfolio
companies amounted to EUR 34.4 million on 31 December 2022., while the total amount of the Fund's investments will reach
EUR 41.8 million after making all the investments.

21

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

1 General Information (cont’d)
The below listed venture capital funds - associates - are treated as associates during the reporting period only for purposes offinancial accounting.
Legal Tittle

Legal Address

Investment % in share capital

KS Overkill Ventures Fund I

Dzirnavu iela 105, Rīgas, Latvija, LV-1011

100

KS Buildit Latvia Pre-Seed Fund

Elizabetes iela 20, Rīga, Latvija, LV-1050

100

KS Commercialization Reactor Pre-seed Fund

Brīvības gatve 300 -9, Rīga, Latvija

100

KS INEC 1

Vīlandes iela 3 - 7, Rīga, Latvijas, LV-1010

75

KS INEC 2

Vīlandes iela 3 - 7, Rīga, Latvija, LV-1010

90

KS Overkill Ventures Fund II

Dzirnavu iela 105, Rīgas, Latvija, LV-1011

80

KS Buildit Latvia Seed Fund

Elizabetes iela 20, Rīga, Latvija, LV-1050

80

KS Commercialization Reactor Seed Fund

Brīvības gatve 300 -9, Rīga, Latvija

80

KS ZGI-4

Daugavgrīvas iela 21, Rīga, Latvija, LV-1048

60

FlyCap Mezzanine Fund IIMatrožu iela 15A, Rīga, LV-1048

60

KS Baltcap Latvia Venture Capital FundJaunmoku iela 34, Rīga, Latvija, LV-1046

67

KS Imprimatur Capital Technology Venture FundŠčecinas iela 4, Rīga, Latvija, LV-1014

67

KS Imprimatur Capital Seed Fund (fund is in theprocess of liquidation)Ščecinas iela 4, Rīga, Latvija, LV-1014

100

KS ZGI-3

Daugavgrīvas iela 21, Rīga, Latvija, LV-1048

95

KS FlyCap investment Fund

Matrožu iela 15A, Rīga, Latvija, LV-1048

95

KS Expansion Capital fundVīlandes iela 3 - 7, Rīga, Latvija, LV-1010

95

Baltic Innovation Fund

European Investment Fund, 37B, avenue J.F. Kennedy, L-2968
Luxembourg

20

KS AIF “Altum capital fund”

Doma laukums 4, Rīga, Latvija, LV-1050

48.9

Venture capital funds that were classified as
Subsidiaries until 31 December 2021, following acontrol assessment as of 31 December 2021 andthereafter, classified as Associates

Venture capital funds classified as Associates

22

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

2 Accounting Policies(1) Basis of presentation
These unaudited interim condensed financial statements for the year ended 31 December 2022 were prepared inaccordance with International Accounting Standard (IAS) 34 “Interim Financial Reporting”, as adopted in the European Union.
These financial statements are to be used together with the complete financial statements for the year 2021 prepared inaccordance with International Financial Reporting Standards (IFRS), as adopted in the European Union.
All amounts in the interim condensed financial statements are presented in the national currency of Latvia – the euro (EUR).
(2) Application of new and/or amended IFRS and the interpretations issued by the International Financial Reporting
Interpretations Committee (IFRIC)
Several new standards and interpretations have been published, adopted by the EU and become effective for the financial
reporting periods beginning on or after 1 January 2022:▪ Amendments to IFRS 4 Insurance Contracts “Extension of the Temporary Exemption from Applying IFRS 9” adopted by the
EU on 16 December 2020 (the expiry date for the temporary exemption from IFRS 9 was extended from 1 January 2021 toannual periods beginning on or after 1 January 2023),▪ Amendments to IFRS 9 “Financial Instruments”, IAS 39 “Financial Instruments: Recognition and Measurement”, IFRS 7“Financial Instruments: Disclosures”, IFRS 4 “Insurance Contracts” and IFRS 16 “Leases” - Interest Rate Benchmark Reform —Phase 2 adopted by the EU on 13 January 2021 (effective for annual periods beginning on or after 1 January 2021).
▪ IFRS 14 “Regulatory Deferral Accounts” (effective for annual periods beginning on or after 1 January 2016) - the European
Commission has decided not to launch the endorsement process of this interim standard and to wait for the final standard,▪ Amendments to IAS 1 “Presentation of Financial Statements” - Classification of Liabilities as Current or Non-Current (effective
for annual periods beginning on or after 1 January 2023),▪ Amendments to IAS 1 “Presentation of Financial Statements” - Disclosure of Accounting Policies (effective for annual periods
beginning on or after 1 January 2023),▪ Amendments to IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors” - Definition of Accounting
Estimates (effective for annual periods beginning on or after 1 January 2023),▪ Amendments to IAS 16 “Property, Plant and Equipment” - Proceeds before Intended Use (effective for annual periods
beginning on or after 1 January 2022),▪ Amendments to IAS 37 “Provisions, Contingent Liabilities and Contingent Assets” - Onerous Contracts — Cost of Fulfilling aContract (effective for annual periods beginning on or after 1 January 2022),▪ Amendments to IFRS 3 “Business Combinations” - Reference to the Conceptual Framework with amendments to IFRS 3(effective for annual periods beginning on or after 1 January 2022),▪ Amendments to IFRS 10 “Consolidated Financial Statements” and IAS 28 “Investments in Associates and Joint Ventures” Sale or Contribution of Assets between an Investor and its Associate or Joint Venture and further amendments (effective
date deferred indefinitely until the research project on the equity method has been concluded),▪ Amendments to various standards due to “Improvements to IFRSs (cycle 2018-2020)” resulting from the annual
improvement project of IFRS (IFRS 1, IFRS 9, IFRS 16 and IAS 41) primarily with a view to removing inconsistencies and clarifying
wording (The amendments to IFRS 1, IFRS 9 and IAS 41 are effective for annual periods beginning on or after 1 January 2022.
The amendment to IFRS 16 only regards an illustrative example, so no effective date is stated.).
The Company makes further assessment on the impact of these new standards and amendments, but the Company
anticipates that the adoption of these new standards and amendments to the existing standards will have no material impact
on the financial statements of the Company in the period of initial application.

23

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

3 Risk Management
The major risks that the Company is exposed to are credit, liquidity and operational risks. These unaudited interim condensed
financial statements do not include all information on risk management and disclosures required in the annual financial
statements. They are to be viewed together with the complete financial statements for the year 2021.
(1) Credit Risk
Breakdown of the Company’s financial assets, off-balance sheet items and contingent liabilities by their qualitative
assessment, in thousands of euro:Stage 1

Financialassets atAC
Due from
creditinstitutions
and theTreasury
Impairment
allowances
Total netdue from
creditinstitutions
and theTreasury
Investment
securities
Impairment
allowances
Total net
investment
securities
Loans andreceivables
Impairment
allowances*
Total netloans andreceivables
GrantsImpairment
allowances
Total net
grantsOther
financialassetsImpairment
allowances
Total netotherfinancialassetsTotalfinancialassets at
AC
Impairment
allowances
Total net
financialassets at
AC

Stage 2

Stage 3

POCI

Total

31.12.2022.

31.12.2021.

31.12.2022.

31.12.2021.

31.12.2022.

31.12.2021.

31.12.2022.

31.12.2021.

31.12.2022.

31.12.2021.

(unaudited)(audited)(unaudited)(audited)(unaudited)(audited)(unaudited)(audited)(unaudited)(audited)

571 682455 007

-

-

-

-

-

-

571 682455 007

(15)

(1)

-

-

-

-

-

-

(15)

(1)

571 667455 006

-

-

-

-

-

-

571 667455 006

-

-

-

-

3 927

3 704

-

-

3 927

3 704

-

-

-

-

(3 888)(3 667)--(3 888)(3 667)

-

-

-

-

39

37

-

-

39

37

250 575

256 865

56 89567 09131 061

24 717402-

338 933

348 673(4 106)(3 545)(4 751)(4 425)(11 815)(10 173)(402)-(21 074)(18 143)

246 469

253 32052 14462 66619 24614 544--317 859

330 530

58 71645 729

-

-

-

-

-

-

58 71645 729

(436)

(332)

-

-

-

-

-

-

(436)

(332)

58 28045 397

-

-

-

-

-

-

58 28045 397

1 393

2 531

-

-

2 138

2 634

-

-

3 531

5 165

-

(21)

-

-

(2 029)(1 930)--(2 029)(1 951)

1 393

2 510

-

-

109

704

-

-

1 502

3 214

882 366

760 132

56 89567 09137 12631 055402-

976 789858 278(4 557)(3 899)(4 751)(4 425)(17 732)(15 770)(402)-(27 442)(24 094)877 809756 233

52 14462 666

19 39415 285--949 347

834 18424

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

3 Risk Management (cont’d)(1) Credit Risk (cont’d)Breakdown of the Company’s financial assets, off-balance sheet items and contingent liabilities by their qualitative
assessment, in thousands of euro: (cont’d)Stage 1

Financialassets at
FVOCI
Investment
securities
Impairment
allowances
Total net
investment
securities
Total
financialassets at
FVOCI
Impairment
allowances
Total net
financialassets at
FVOCI
Off-balance
sheet items
andcontingent
liabilities
Outstanding
guarantees
Impairment
allowances *Total net
outstanding
guarantees
Loan
commitments
Impairment
allowances *Total net loan
commitments
Grantcommitments
Impairment
allowances
Total net
grant
commitments
Total offbalance
items andcontingent
liabilities
Impairment
allowances
Total net offbalance
items andcontingent
liabilities

Stage 2

Stage 3

POCI

Total

31.12.2022.

31.12.2021.

31.12.2022.

31.12.2021.

31.12.2022.

31.12.2021.

31.12.2022.

31.12.2021.

31.12.2022.

31.12.2021.

(unaudited)(audited)(unaudited)(audited)(unaudited)(audited)(unaudited)(audited)(unaudited)(audited)

9 515

14 051

-

-

-

-

-

-

9 515

14 051

-

-

-

-

-

-

-

-

-

-

9 515

14 051

-

-

-

-

-

-

9 515

14 0519 515

14 051

-

-

-

-

-

-

9 515

14 051

-

-

-

-

-

-

-

-

-

-

9 515

14 051

-

-

-

-

-

-

9 515

14 051

443 277

378 876

29 81132 885

7 925

3 217

-

-

481 013414 978(32 768)(28 088)(4 046)(3 505)(5 004)(2 010)--(41 818)(33 603)410 509

350 788

25 76529 380

2 921

1 207

-

-

439 195

381 375

60 106

21 730

1 125

3 755

2

87

-

-

61 23325 572(1 014)

(484)

(61)

(287)

(1)

(19)

-

-

(1 076)(790)

59 09221 246

1 064

3 468

1

68

-

-

60 15724 78247 82411 089

-

-

-

-

-

-

47 82411 089

(376)

(73)

-

-

-

-

-

-

(376)

(73)

47 44811 016

-

-

-

-

-

-

47 44811 016551 207411 695

30 93636 640

7 927

3 304

-

-

590 070451 639(34 158)(28 645)(4 107)(3 792)(5 005)(2 029)--(43 270)(34 466)

517 049

383 050

26 82932 848

2 922

1 275

-

-

546 800

417 173* Includes net impairment allowances of EUR 5,262 thousand covered by Portfolio Loss Reserve (Special Reserve Capital) upon approval of the2022 annual report. In the distribution of the 2022 profit, it will be directly attributed to the Portfolio Loss Reserve, thus the 2022 result which will beallocated to Reserves will improve. Additional information available in Note 22.

25

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

3 Risk Management (cont’d)(1) Credit Risk (cont’d)Changes in the Company’s credit loss allowance and gross carrying amount for loans, in thousands of euro:
Credit loss allowanceStage 1

Stage 2

Stage 3

3 545

4 425

10 173from Stage 1 to Stage 2

(394)

833

-

to credit impaired (from Stage 1
and Stage 2 to Stage 3)

(179)

(242)

3 943

from Stage 3 to Stage 2-

25

to 12-months ECL (from Stage 2 andStage 3 to Stage 1)

53

New originated or purchased

1 020

Derecognised during the period

Gross carrying amount
Total

Stage 1

Stage 2

Stage 318 143256 865

67 091

24 717-439(25 457)

22 493--(2 964)-3 522(6 062)(9 308)12 559-(2 811)

(264)

-

(239)

-

1 074

(1 310)

-

(236)

(315)

-

-

(262)

12 618(16 152)--(3 534)

378

264

413

2 075

63 610

6 704

412

413

71 139

(276)

(490)

(541)

-

(1 307)(29 630)(6 205)(1 613)-(37 448)

(141)

(202)

(277)

-

(620)

-

-

-

-

-

822

687

122

-

1 631

-

-

-

-

-

Other movements

174

696

-

-

870

-

-

-

-

-

Write-offs--(1 117)-(1 117)--(1 117)-(1 117)

Change of outstanding balance **(518)(1 044)

(488)

(11)

(2 061)(21 369)(8 802)(2 587)(11)(32 769)

As at 31 December 2022
(unaudited)

4 106 *

4 751

11 815402

21 074250 575

56 89531 061402

338 933

As at 31 December 2021 (audited)

POCI

POCI

Total
348 673

Transfers between stages:

Changes to ECL measurement
model assumptions (PD, LGD)
Changes to ECL measurement
model assumptions(macroeconomic factors)* Includes the impairment overlay EUR 2,170 thousand that represents an additional loss reserve for SME and Midcaps portfolio** Change of outstanding balance includes cash flows from repayment of principal

Changes in the Company’s credit loss allowance and gross carrying amount for outstanding guarantees, in thousands of euro:
Credit loss allowance

Gross carrying amountStage 1

Stage 2

Stage 3

Total

Stage 1

Stage 2

Stage 3Total

28 088

3 505

2 010

33 603378 876

32 8853 217

414 978from Stage 1 to Stage 2(1 512)

1 852

-

340

(16 631)

15 843-(788)

to credit impaired (from Stage 1 and Stage 2
to Stage 3)

(76)

(702)

3 012

2 234

(967)

(4 732)

5 023

(676)

from Stage 3 to Stage 2

-

17

(87)

(70)

-

88

(136)

(48)

to 12-months ECL (from Stage 2 and Stage 3
to Stage 1)

583

(929)

(8)

(354)

6 052

(5 982)(8)

62

New originated or purchased

10 739316

265

11 320131 066

1 620

469

133 155

Derecognised during the period(2 594)

(630)

(314)

(3 538)(47 566)(8 021)(410)(55 997)

207

45

251

503

-

-

-

-

70

11

2

83

-

-

-

-

Other movements

(954)

856

-

(98)

-

-

-

Paid-out guarantees

(4)

(19)

(55)

(78)

(270)

(216)

(94)

(580)

Write-offs

-

-

-

-

-

-

-

-

Change of outstanding balance **(1 779)

(276)

(72)

(2 127)(7 283)(1 674)(136)(9 093)As at 31 December 2022 (unaudited)

32 768 *

4 046

5 004

41 818443 277

29 811

7 925

481 013

As at 31 December 2021 (audited)
Transfers between stages:

Changes to ECL measurement model
assumptions (PD, LGD)
Changes to ECL measurement model
assumptions (macroeconomic factors)* includes the impairment overlay EUR 856 thousand that represents an additional loss reserve for SME and Midcaps portfolio** Change of outstanding balance includes cash flows from repayment of principal of underlying loan

26

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

3 Risk Management (cont’d)(1) Credit Risk (cont’d)Aging analysis of the loans issued by the Company, in thousands of euro:
Company

Group /
Company

31.12.2022.

31.12.2021.

(unaudited)(audited)

Performing

314 185326 852

Past due up to 30 days

11 577

10 540

Past due from 31 to 60 days

2 136

2 346

Past due from 61 to 90 days

503

727

Past due over 90 days

10 532

8 208

Total gross loans, without interest accrued on the loans

338 933

348 673

Impairment allowances(21 074)(18 143)

Total net loans

317 859

330 530

In calculating the ECL due to default on loan principal or interest payments or other loss events the following is taken into
account collateral, including real estate and commercial pledges measured at market value. The value of collateral is basedon the valuations performed by independent valuers.

Information on the value of collateral assessed at fair value and position against net loan portfolio, in thousands of euro :Company

Group /
Company

31.12.2022.

31.12.2021.

(unaudited)(audited)

Real estate (loans)

196 417

189 991

Real estate (leaseback)

27 08932 993

Movable property

47 17143 239

Guarantees

3 534

4 974

Total collateral274 211271 197

Loan portfolio, gross *338 933

348 673

Impairment allowances(21 074)(18 143)

Loan portfolio, net

317 859

330 530

Exposed13.73%

17.95%* includes loans in amount of EUR 31,218 thousand to mitigate the impact of Covid-19 for which no real estate or movable property is required as collateral
while credit risk is covered by risk coverage (Portfolio Loss Reserve).

27

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

3 Risk Management (cont’d)(1) Credit Risk (cont’d)
The Company’s maximum credit risk exposures of the balance and off-balance sheet items (not including collateral held orother security), in thousands of euro:
Company

Group /
Company

31.12.2022.

31.12.2021.

(unaudited)(audited)

Due from credit institutions and the Treasury

571 667455 006

Financial assets at fair value through other comprehensive income - investment securities

9 515

14 051

Investment securities

39

37

Loans and receivables

317 859

330 530

Grants58 28045 397

Other investments

15 246

8 936

Investments in associates

65 38164 949Other assets

1 530

3 242

Total

1 039 517

922 148

Contingent liabilities (Note 21)

481 013414 978

Financial commitments (Note 21)

214 255

161 276

Total

695 268

576 254

Assets exposed to credit risk

Financial assets at amortised cost:

Off-balance sheet items exposed to credit risk

As at 31 December 2022, part of the Company’s assets in amount of EUR 187,053 thousand (31 December 2021: EUR 152,296
thousand) were pledged. Detailed information on the Company’s outstanding loan agreement as at 30 September 2022 isprovided in Note 18 and Note 19.
Article 31 of the Law on State Budget 2022 provides that guarantees issued by Altum in amount of EUR 270 000 thousand isbacked by the state according to Agriculture and Rural Development Law and Development Finance Institution Law. Actual
amount of issued guarantees issued under these conditions as at 31 December 2022 was EUR 236,350 thousand (31 December
2021: EUR 268,256 thousand).

28

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

3 Risk Management (cont’d)(2) Liquidity Risk
Maturity profile of the Company’s expected undiscounted future cash flows of financial liabilities, off-balance liabilities andliquid assets as at 31 December 2022, in thousands of euro:
Up to 1year *

1 to 5 years

5 to 10 years

10 to 15
years

Over 15
years andw/o maturity

Total

Due to credit institutions

14 44321 881---36 324Due to general governments

11 64938 052

88 83426 534141 889

306 958

Issued debt securities

1 605

86 226---

87 831

Support programme funding **68 07630 127

211 91446 57119 186375 874

Other liabilities

2 966

789

-

-

-

3 755

Total financial liabilities

98 739177 075

300 748

73 105161 075

810 742

Off-balance sheet items and contingent liabilities

453 774

87 645

153 849--695 268

Total financial liabilities, off-balance items and contingent
liabilities ***552 513264 720454 597

73 105161 075

1 506 010

Due from credit institutions and the Treasury

571 667

-

-

-

-

571 667

Investment securities

76

9 478

-

-

-

9 554

Liquid assets

571 743

9 478

-

-

-

581 221* According to IAS 7 “Financial Instruments: Disclosures” requirements the major part of the guarantee portfolio issued by the Company
has been classified within maturity “Up to 1 year”. The exception is the housing guarantees for families with children and housing
guarantees for young specialists – these guarantees with remaining contractual maturity exceeding 3 years, counting from thereporting date, are classified within maturity “1 to 5 years”, because the compensation mechanism for housing guarantee for families
with children and housing guarantee for young specialists stipulates that compensation for the declared guarantee cases is paid
within 3 years from the date the guarantee case is declared. In turn, the housing guarantees for families with children and housing
guarantees for young specialists with remaining contractual maturity shorter than 1 year, counting from the reporting date, arepresented in accordance with the remaining contractual maturity.
Maturity profile of the Company’s expected undiscounted future cash flows of financial liabilities, off-balance liabilities and liquid assets“Up to 1 year” as at 31 December 2022 and supporting analysis is presented in table below.
** After expiring of the support programme its funding remains on the Company’s balance sheet since any repayment from the existingsupport programme accumulates and are used to finance new support programmes.
*** Since part of off-balance sheet items and contingent liabilities is backed by funding recognized as financial liabilities, EUR 117,443
thousand are included in both the Company’s financial liabilities and the Company’s off-balance sheet items and contingent liabilities.

29

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

3 Risk Management (cont’d)(2) Liquidity Risk (cont’d)Maturity profile of the Company’s expected undiscounted future cash flows of financial liabilities, off-balance liabilities andliquid assets “Up to 1 year” as at 31 December 2022, in thousands of euro:
Up to 1month

1 to 3months3 to 6months6 to 12monthsTotal up to 1
year

Due to credit institutions

-

1 615

5 631

7 197

14 443Due to general governments

2 055

366

2 821

6 407

11 649Issued debt securities

721

161

241

482

1 605

Support programme funding

1 404

5 078

-

61 59468 076

Other liabilities

2 946

11

-

9

2 966

Total financial liabilities

7 126

7 231

8 693

75 68998 739Off-balance sheet items and contingent liabilities *417 734

6 970

10 01519 055453 774

Total financial liabilities, off-balance items and contingent liabilities

424 860

14 20118 70894 744552 513

Due from credit institutions and the Treasury

539 667--

32 000571 667

Investment securities

39

-

-

37

76

Liquid assets

539 706--

32 037571 743* Split of off-balance sheet items and contingent liabilities by type of financial instrument – outstanding financial guarantees, loan
commitments and grant commitments as well as commitments to AIF “Altum capital fund”, investments in associates and otherinvestments, are presented in Note 23.
Contingent liabilities and financial commitments are funded from various funding sources available to the Company.
Outstanding financial guarantees in amount of EUR 305,468 thousand (up to 1 year) – from respective guarantee support programmefunding (see Note 20) and Specific reserve capital (see Note 22). Track records of claimed guarantee compensations presents thatthe volume of guarantees claimed within such terms are considerably less than the amount of the commitment disclosed in the above
maturity analyses.
Loan commitments in amount of EUR 61,233 thousand (up to 1 year) – from financial facilities (either received by the Company oravailable to the Company upon request) concluded with financial institutions and the Treasury (see Notes 18 and 19) and respective
loan support programme funding (see Note 20).
Grant commitments in amount of EUR 47,824 thousand (up to 1 year) – from respective grant support programme funding (see Note
20).
Commitments to investments in associates in amount of EUR 29,228 thousand (up to 1 year) – from respective venture capital fundsupport programme funding (see Note 20).
Commitments to AIF “Altum capital fund” in amount of EUR 3,121 thousand (up to 1 year) – from specific reserve capital (see Note 22)
and additional funding from shareholders expected in 2021.
Commitments to other investments in amount of EUR 6,900 thousand (up to 1 year) – for Baltic Innovation Fund 2 from support
programme funding and repayments on different support programmes (see Note 20) and the Group’s / Company’s own funding for
Three Seas Initiatives Investment Fund.
As a consequence, the liquidity of the Company is not deteriorated.

30

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

3 Risk Management (cont’d)(2) Liquidity Risk (cont’d)Maturity profile of the Company’s expected undiscounted future cash flows of financial liabilities, off-balance liabilities andliquid assets as at 31 December 2021, in thousands of euro:
Up to 1year *

1 to 5 years

5 to 10 years

10 to 15
years

Over 15
years andw/o maturity

Total

Due to credit institutions

13 44339 997---53 440Due to general governments

6 547

30 63431 21918 78136 605

123 786

Issued debt securities

854

87 623---88 477

Support programme funding **2 895

62 750126 94227 087

10 613230 287

Other liabilities

3 000

840

-

-

-

3 840

Total financial liabilities

26 739221 844

158 161

45 86847 218499 830

Off-balance sheet items and contingent liabilities

350 748

79 640145 866--

576 254

Total financial liabilities, off-balance items and contingent
liabilities ***377 487

301 484

304 02745 86847 2181 076 084

Due from credit institutions and the Treasury

455 006

-

-

-

-

455 006

Investment securities

3 592

10 496---14 088Liquid assets

458 598

10 496---469 094* According to IAS 7 “Financial Instruments: Disclosures” requirements the major part of the guarantee portfolio issued by the Company
has been classified within maturity “Up to 1 year”. The exception is the housing guarantees for families with children and housing
guarantees for young specialists – these guarantees with remaining contractual maturity exceeding 3 years, counting from thereporting date, are classified within maturity “1 to 5 years”, because the compensation mechanism for housing guarantee for families
with children and housing guarantee for young specialists stipulates that compensation for the declared guarantee cases is paid
within 3 years from the date the guarantee case is declared. In turn, the housing guarantees for families with children and housing
guarantees for young specialists with remaining contractual maturity shorter than 1 year, counting from the reporting date, arepresented in accordance with the remaining contractual maturity.
Maturity profile of the Company’s expected undiscounted future cash flows of financial liabilities, off-balance liabilities and liquid assets“Up to 1 year” as at 31 December 2021 and supporting analysis is presented in table below.
** After expiring of the support programme its funding remains on the Company’s balance sheet since any repayment from the existingsupport programme accumulates and are used to finance new support programmes.
*** Since part of off-balance sheet items and contingent liabilities is backed by funding recognized as financial liabilities, EUR 70,980
thousand are included in both the Company’s financial liabilities and the Company’s off-balance sheet items and contingent liabilities.

31

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

3 Risk Management (cont’d)(2) Liquidity Risk (cont’d)Maturity profile of the Company’s expected undiscounted future cash flows of financial liabilities, off-balance liabilities andliquid assets “Up to 1 year” as at 31 December 2021, in thousands of euro:
Up to 1month

1 to 3months3 to 6months6 to 12monthsTotal up to 1
year

Due to credit institutions

-

4 381

3 750

5 312

13 443Due to general governments

84

354

2 531

3 578

6 547

Issued debt securities

-

505

-

349

854

Support programme funding

77

-

-

2 818

2 895

Other liabilities

2 983

8

-

9

3 000

Total financial liabilities

3 144

5 248

6 281

12 066

26 739Off-balance sheet items and contingent liabilities *299 718

14 01023 605

13 415350 748

Total financial liabilities, off-balance items and contingent liabilities

302 862

19 25829 88625 481

377 487

Due from credit institutions and the Treasury

455 006---455 006

Investment securities

1 072

-

-

2 520

3 592

Liquid assets

456 078

-

-

2 520

458 598* Split of off-balance sheet items and contingent liabilities by type of financial instrument – outstanding financial guarantees, loan
commitments and grant commitments as well as commitments to AIF “Altum capital fund”, investments in associates and otherinvestments, are presented in Note 23.
Contingent liabilities and financial commitments are funded from various funding sources available to the Company.
Outstanding financial guarantees in amount of EUR 261,119 thousand (up to 1 year) – from respective guarantee support programmefunding (see Note 20) and Specific reserve capital (see Note 22). Track records of claimed guarantee compensations presents thatthe volume of guarantees claimed within such terms are considerably less than the amount of the commitment disclosed in the above
maturity analyses.
Loan commitments in amount of EUR 25,572 thousand (up to 1 year) – from financial facilities (either received by the Company oravailable to the Company upon request) concluded with financial institutions and the Treasury (see Notes 18 and 19) and respective
loan support programme funding (see Note 20).
Grant commitments in amount of EUR 11,089 thousand (up to 1 year) – from respective grant support programme funding (see Note
20).
Commitments to investments in subsidiaries in amount of EUR 13,977 thousand (up to 1 year) – from respective venture capital fundsupport programme funding (see Note 20).
Commitments to AIF “Altum capital fund” in amount of EUR 32,124 thousand (up to 1 year) – from specific reserve capital (see Note22) and additional funding from shareholders expected in 2022.
Commitments to other investments in amount of EUR 5,867 thousand (up to 1 year) – for Baltic Innovation Fund 2 from support
programme funding and repayments on different support programmes (see Note 20) and the Group’s / Company’s own funding for
Three Seas Initiatives Investment Fund.
As a consequence, the liquidity of the Company is not deteriorated.

32

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

3 Risk Management (cont’d)(2) Liquidity Risk (cont’d)Breakdown of the Company’s assets and liabilities by maturity profile as at 31 December 2022 based on the time remaining
from the reporting date to their contractual maturity, in thousands of euro:
Up to 1month

1 to 3 months

3 to 6 months

6 to 12months1 to 5 years

Over 5 years
and w/omaturity

Total

Due from credit institutions and theTreasury

539 667--

32 000--571 667

Investment securities

39

-

-

37

9 478

-

9 554

Loans *

13 07516 06318 60631 364125 886

112 865

317 859

Grants871

220

10 0402 014

44 569566

58 280

Deferred expense and accrued income

-

143

-

1 128

-

-

1 271

Other investments

-

-

-

-

-

15 24615 246

Investments in associates

3 733

-

-

11 45321 29928 89665 381

Investment property

-

-

-

-

-

53 45353 453

Property, plant and equipment

-

-

-

-

-

4 448

4 448

Intangible assets

-

-

-

-

-

1 140

1 140

Other assets

981

99

21

45

384

-

1 530

Total assets

558 366

16 52528 66778 041

201 616

216 614

1 099 829

Due to credit institutions

-

1 605

5 625

7 187

21 873-36 290Due to general governments

1 428

366

1 773

4 300

42 019103 898

153 784

Issued debt securities

(1)

505

2

38

84 969-85 513

Deferred income and accrued expense

251

652

802

534

2 631

843

5 713

Provisions

43 270

-

-

-

-

-

43 270Support programme funding

1 404

5 078

-

61 59430 127277 671375 874

Other liabilities

2 946

11

-

9

789

-

3 755

Total liabilities

49 298

8 217

8 202

73 662

182 408382 412704 199

Net liquidity

509 068

8 308

20 4654 379

19 208(165 798)

395 630

AssetsLiabilities* With regard to loans and advances to customers, the Group uses the same basis of expected repayment behaviour as used for
estimating the effective interest rate. Investments in securities reflect their contractual coupon amortisations.

33

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

3 Risk Management (cont’d)(2) Liquidity Risk (cont’d)Breakdown of the Company’s assets and liabilities by maturity profile as at 31 December 2021 based on the time remaining
from the reporting date to their contractual maturity, in thousands of euro:
Up to 1month

1 to 3 months

3 to 6 months

6 to 12months1 to 5 years

Over 5 years
and w/omaturity

Total

Due from credit institutions and theTreasury

455 006

-

-

-

-

-

455 006

Investment securities

1 072

-

-

2 520

10 496-14 088Loans *

11 48514 34816 80139 439147 944

100 513330 530

Grants93

12 642370377

31 075840

45 397

Deferred expense and accrued income

2 066

-

-

-

-

-

2 066

Other investments

-

-

-

-

-

8 936

8 936

Investments in associates

-

-

6 130

10 4739 924

38 42264 949Investment property

-

-

-

-

-

64 94946 164

Property, plant and equipment

-

-

-

-

-

4 570

4 570

Intangible assets

-

-

-

-

-

1 256

1 256

Other assets

1 004

96

279

1 306

557

-

3 242

Total assets

470 726

27 086

23 58054 115

199 996

200 701

976 204

Due to credit institutions

-

4 357

3 750

5 312

39 997-53 416

Due to general governments

-

354

2 374

3 448

29 94985 223

121 348

Issued debt securities

-

505

(2)

59

84 996-85 558Deferred income and accrued expense

186

401

418

2 233

2 492

823

6 553

Provisions

34 466

-

-

-

-

-

34 466

Support programme funding

77

-

-

2 818

62 750164 642230 287

Other liabilities

2 983

8

-

9

840

-

3 840

Total liabilities

37 712

5 625

6 540

13 879221 024

250 688535 468

Net liquidity

433 01421 461

17 04040 236(21 028)(49 987)

440 736

AssetsLiabilities* With regard to loans and advances to customers, the Group uses the same basis of expected repayment behaviour as used for estimating
the effective interest rate. Investments in securities reflect their contractual coupon amortisations.

34

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

3 Risk Management (cont’d)(3) Covid-19 impact(i) Covid-19 impact on loan portfolio
Analysis of the Company’s loan portfolio by client segments as at 31 December 2022, in thousands of euro:Stage 1

Stage 2

Stage 3

Total gross
loans

Total
impairment
allowance

-

46

1

2 073

159 5092 926

22 3339 813

147 369

15 630

-

-

-

Gross
loans

Impairment
allowance

Gross
loans

Impairment
allowance

Gross
loans

Impairment
allowance

Financial Intermediaries*

46

1

-

-

-

Agriculture*

139 654540

12 913313

6 942

SME and Midcaps

81 2552 077

43 781

3 740

of which,
Covid-19 crisis related working
capital loans

11 234498

12 902

874

7 082

4 525

31 2185 897

Daily loan products

70 021

1 579

30 8792 866

15 251

5 288

116 151

9 733

Private individuals

3 318

12

201

3

1 401

328

4 920

343

Land Fund

26 302

2

-

-

787

3

27 0895

Total segments, gross

250 575

2 632

56 8954 056

31 463

12 217338 933

18 905

Impairment overlay **

-

269

-

-

-

-

-

269

Total segments, net

250 575

2 901

56 8954 056

31 463

12 217338 933

19 174* In 2022, the classification of customer segments is changed, determining that loans with the support program code "Agricultural Credit Fun dLoans", classified as Financial Intermediaries in 2021, are assigned to the segment Agriculture.

** The impairment overlay represents an additional loss reserve for SME and Midcaps portfolio over the modelled ECL amounts toaccount for other economic uncertainties.

Analysis of the Company’s loan portfolio by client segments as at 31 December 2021, in thousands of euro:Stage 1

Stage 2

Stage 3

Total gross
loans

Total
impairment
allowance

337

1 535

341

1 534

132 556

1 995

15 466

7 646

175 070

13 841

720

3 247

2 485

58 832

4 205

3 509

12 2195 161

116 238

9 636

302

2

1 897

654

6 513

660

3

1 220

-

777

2

32 9995

256 8652 244

67 091

4 425

24 717

10 173

348 673

16 842

Impairment overlay *

-

1 301

-

-

-

-

-

1 301

Total segments, net

256 865

3 545

67 091

4 425

24 717

10 173

348 673

18 143

Gross
loans

Impairment
allowance

Gross
loans

Impairment
allowance

Gross
loans

Impairment
allowance

Financial Intermediaries

881

2

77

2

577

Agriculture

115 778

269

10 778192

6 000

SME and Midcaps

104 890

1 966

54 714

4 229

Covid-19 crisis related working
capital loans

36 922

1 000

18 663

Daily loan products

67 968966

36 051

Private individuals

4 314

4

Land Fund

31 002

Total segments, grossof which,* The impairment overlay represents an additional loss reserve for SME and Midcaps portfolio over the modelled ECL amounts toaccount for other economic uncertainties.

35

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

3 Risk Management (cont’d)(3) COVID-19 impact (cont’d)(i) Covid-19 impact on loan portfolio (cont’d)Loans issued by the Company to SME and Midcap client segment are split between specific Covid-19 related support
instrument – working capital loans and daily (ordinary) loan product portfolio.
Split of specific Covid-19 related support instrument - working capital loans – portfolio for the SME and Midcap client segment
by industries as at 31 December 2022, in thousands euro:
Gross
loans

Changes to
31.12.2021.

Grantedin 2022
12M

Grantedin 2021
12M

Impairment
allowance

Changes to
31.12.2021.

Net loans% of Total
Gross loans,
SME &MidcapRetail2 053(2 142)

555

1 768

393

84

1 660

1.4%

Tourism services

1 711

(861)

572

521

194

(68)

1 517

1.2%

Land transport services

1 468

(572)

250

1 625

91

16

1 377

1.0%

Hotels and restaurants

1 259(1 562)

344

600

265

58

994

0.9%

Art, entertainment and leasure

1 224

(366)

2 676

1 518

152

10

1 072

0.8%

Beauty

64

(36)

-

100

4

(1)

60

0.0%

Total Covid-19 more exposed industries

7 779(5 539)

4 397

6 132

1 099

99

6 680

5.3%

Manufacturing

6 714(8 163)

426

5 596

915

(98)

5 799

4.6%

Construction

5 491(2 364)

617

2 906

2 197

1 435

3 294

3.7%

Wholesale

5 164(5 614)

245

1 771

972

38

4 192

3.5%

2 247

(844)

759

1 040

372

202

1 875

1.5%

1 041

(1 342)

30

640

44

(11)

997

0.7%

Covid-19 more exposed industries

Covid-19 less exposed industries

Transport, warehousing andcommunications
Information technologies andcommunication
Professional, science and technicalservices857(1 004)

-

547

162

89

695

0.6%

Municipal authorities

598

(301)

-

305

30

(5)

568

0.4%

Real estate

357

(133)

-

100

17

3

340

0.2%

Electricity, gas and water utilities

108

(349)

-

34

25

8

83

0.1%

Health and social care

52

(106)

-

45

2

(2)

50

0.0%

Forestry-(1 432)

-

218

-

(94)

-

0.0%

Other industries

810

(423)

250

310

62

28

748

0.5%

Total Covid-19 less exposed industries

23 439(22 075)

2 327

13 512

4 798

1 593

18 641

15.9%

Total Covid-19 crisis related working
capital loans

31 218(27 614)6 724

19 644

5 897

1 692

25 321

21.2%

The support instruments related to the mitigation of the consequences of Covid-19 were issued in Latvia until 30 June 2022, incompliance with the regulatory framework established by the EU. It should be noted that the portfolio of the Covid loan
product is amortizing rapidly, as the average remaining loan term is 1.4 years.

36

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

3 Risk Management (cont’d)(3) COVID-19 impact (cont’d)(i) Covid-19 impact on loan portfolio (cont’d)
Split of daily (ordinary) loan product portfolio for the SME and Midcap client segment by industries as at 30 September 2022,
in thousands euro:
Gross loans

Changes to
31.12.2021.

Grantedin 2022
12M

Grantedin 2021
12M

Impairment
allowance

Changes to
31.12.2021.

Net loans% of Total
Gross loans,
SME &MidcapHotels and restaurants

3 510(1 090)

767

1 947

259

(76)

3 251

2.4%

Retail

2 722

843

1 781

604

126

16

2 596

1.8%

Art, entertainment and leasure

2 083

242

985

598

444

149

1 639

1.4%

Beauty and sports

639

(5)

186

55

273

22

366

0.4%

Land transport services

530

(5)

339

264

27

6

503

0.4%

Tourism services

310

(23)

-

-

83

(23)

227

0.2%

Total Covid-19 more exposed industries

9 794

(38)

4 058

3 468

1 212

94

8 582

6.6%

Manufacturing

48 811(3 686)15 64920 815

3 604

(490)

45 207

33.1%

Real estate

15 321

2 091

5 167

5 387

1 475

(472)

13 846

10.4%

Electricity, gas and water utilities

8 527

2 865

3 967

596

869

17

7 658

5.8%

Health and social care

7 189

1 451

3 099

2 420

494

306

6 695

4.9%

Wholesale

6 134(1 255)

1 476

3 008

579

22

5 555

4.2%

Municipal authorities

5 073

35

1 570

1 577

110

90

4 963

3.4%

Construction

4 473

141

1 949

2 344

225

12

4 248

3.0%

2 723

1 533

2 010

792

280

89

2 443

1.8%

2 547

(506)

770

1 143

73

37

2 474

1.7%

Fishery

1 680

(404)

36

761

342

223

1 338

1.1%

Information technologies andcommunication

945

369

517

196

278

214

667

0.6%

Forestry-(2 691)

-

1 320

-

(54)

-

0.0%

Other industries

2 934

8

1 258

1 648

192

7

2 742

2.0%

Total Covid-19 less exposed industries

106 357(49)

37 46842 0078 521

197 836

72.2%

Total daily (ordinary) loan products

116 151(87)

41 52645 4759 733

95

106 418 *78.8%

Covid-19 more exposed industries

Covid-19 less exposed industries

Transport, warehousing andcommunications
Professional, science and technicalservices* excludes impairment overlay in amount of EUR 269 thousand represents an additional loss reserve for SME and Midcaps portfolio over the modelled ECL
amounts to account for other economic uncertainties

The situation caused by Covid-19 has not eased the credit application evaluation process applicable to the daily support
product portfolio, including the accepted credit risk level, the applicable credit rating, the expected debt servicing capacity,collateral evaluation processes. Such a process also applies to specific support instruments related to the mitigation of theconsequences of Covid-19 - working capital loans.
It should be noted that as a result of the credit relief provided to the SME segment (Covid-19 moratorium), the quality of thecredit portfolio has not deteriorated when customers return to the usual payment schedule after the end of the credit relief.
The largest exposures of the Company's loan portfolio by segments/sectors in 2022 and the impact of Covid-19 on them:▪

In the agricultural segment, in 2022, there was an increase in the prices of raw materials and energy resources, andthis was followed by an increase in sales prices. The companies of the agricultural segment have concluded the2022 season with reasonably good financial results. It should also be mentioned that the agricultural segment isheavily subsidized and loans to this segment are mostly secured by agricultural land, which is conservatively valued.
Therefore, the Company does not see a deterioration in the quality of the credit portfolio of this segment, which
would have been affected by the Covid-19 crisis.

37

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

3 Risk Management (cont’d)(3) COVID-19 impact (cont’d)(i) Covid-19 impact on loan portfolio (cont’d)▪

Manufacturing in the SME segment. Taking into account the restrictions on the entertainment, catering, tourism andother service industries, public consumption trends were significantly affected, and a larger part of income was
directed to the purchase of various goods, which strengthened the sales volumes of processing companies. The subsector of the manufacturing industry, which experienced the sharpest fluctuations during 2022, is woodworking - on
the one hand, the trend continued in 2022 with rapidly growing sales prices, but on the other hand, the economic
sanctions against Belarus and Russian Federation have created new challenges in the availability of raw materials
and additional risks for companies in the sector , including possible sharp changes in product prices following
demand corrections. The manufacturing industry shows reasonably good results. Therefore, it can be concluded thatthe negative impact of Covid-19 on the operations of companies in the sector has been insignificant.

▪

The second largest industry in terms of loan portfolio volume in the SME segment is real estate operations. The mostaffected were real estate portfolios, where the hotel business is located, as well as shopping centers. Positive trends
were observed in the 2nd and 3rd quarters of 2022, as the Covid restrictions were significantly reduced. On the other
hand, in the office segment, the majority of office workers have had to work remotely and for many, working fromhome is still everyday, therefore the question of the need for offices in the future has become relevant in the realestate industry. Covid restrictions had an insignificant impact on the warehouse segment, as thanks to the boom in
e-commerce, the volume of delivered goods has increased significantly. At the same time, the demands of buyers
to ensure the speed of delivery of goods create an additional demand for warehouse space.

▪

The third largest sector by the size of the loan portfolio is energy. Recently, a transformation of the industry has been
observed, with more and more investments being diverted to electricity and heat generation projects fromrenewable resources. In 2022, the industry experienced large price fluctuations both in raw material purchases andsales prices. In the summer of 2022, there was great uncertainty about the availability of fossil fuels, thus the record
price of oil, natural gas, electricity and energy wood was reached. Thanks to the rapid diversification of supply chains
and the relatively warm weather conditions, the prices of raw materials started to fall in the 4th quarter of 2022. In
the near future, a stable flow of investments in new energy projects is predicted, thanks to which the prices ofelectricity and thermal energy could stabilize in the long term. It should be noted that the negative impact of Covid19 on the operations of companies in the sector has been insignificant and the sharp fluctuations experienced by
the sector in 2022 are related to the Russian Federation invasion of Ukraine and the sanctions against RussianFederation.

▪

In the wholesale sector, similarly to the manufacturing sector, the impact of the Covid-19 crisis has been different
depending on the sub-sector. For example, lumber wholesalers have similar challenges to manufacturers in the
woodworking industry. Fuel and fuel traders have been able to take advantage of the positive effect of rising prices,
however, additional rising prices could have a negative impact on demand in the long term. On the positive side,most companies in this industry have reasonably high equity ratios and the owners were able to financially support
the companies.

▪

The relatively largest exposures of the loan portfolio from the sectors most affected by Covid-19 are in the
Accommodation and catering services and retail trade sectors. In the summer of 2022, companies in theaccommodation and catering services sector were able to promptly respond to the growing demand, thus ensuring
a significant increase in turnover, which, however, did not reach pre-pandemic levels. In the retail sector, thereporting period was challenging for all sub-sectors, especially in the 2nd and 3rd quarter of 2022, rapidly rising prices,which continued in the 4th quarter as well, could have a negative impact on consumer demand in the long term,
but this trend has not been formed under the influence of Covid-19.

Basically, with the end of the restrictions of Covid-19 and the recovery of supply chains that were disrupted during Covid-19,
it can be considered that the negative impact of Covid-19 on the economic activity of companies has ended. Regarding
the Russian Federation invasion of Ukraine, the sanctions directed against Russian Federation, their indirect impact oncompanies through the rapid increase in energy resource prices, the shortage of raw materials and changes in supply chains,see below in detail Annex 3 (4) note Impact of the Russian Federation invasion of Ukraine.

38

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

3 Risk Management (cont’d)(3) COVID-19 impact (cont’d)(ii) Covid-19 impact on guarantee portfolio
Analysis of the Company’s guarantees portfolio by client segments as at 31 December 2022, in thousands of euro:Stage 1

Stage 2

Stage 3Total
outstanding
guarantees

Total
impairment
allowance130

12 801

1 811

4 645

205 385

17 929

3 842

2 544

16 433

3 573

Outstanding
guarantees

Impairment
allowance

Outstanding
guarantees

Impairment
allowance

Outstanding
guarantees

Impairment
allowance

Agriculture

10 409

1 568

2 213

113

179

SME and Midcaps

170 602

10 25127 271

3 033

7 512

Covid-19 crisis related
guarantees *

3 933

271

8 658

758

Daily guarantees productsof which,

166 669

9 980

18 613

2 275

3 670

2 101

188 952

14 356

Private individuals

262 266

20 949

327

44

234

229

262 827

21 222

Total segments, gross

443 277

32 76829 811

3 190

7 925

5 004

481 01340 962

Impairment overlay

-

-

-

-

-

-

-

-

Total segments, net

443 277

32 76829 811

3 190

7 925

5 004

481 01340 962* Includes SME loan credit holiday guarantees and portfolio guarantees.

Analysis of the Company’s guarantees portfolio by client segments as at 31 December 2021, in thousands of euro:Stage 1

Stage 2

Stage 3Total
outstanding
guarantees

Total
impairment
allowance

6

12 698

1 741

1 824

197 818

14 367212124

27 861

3 189

2 806

1 700

169 957

11 178

26

189

180

204 462

16 54132 885

3 505

3 217

2 010

414 978

32 649

954

-

-

-

-

-

954

28 08832 885

3 505

3 217

2 010

414 978

33 603

Outstanding
guarantees

Impairment
allowance

Outstanding
guarantees

Impairment
allowance

Outstanding
guarantees

Impairment
allowance

Agriculture

11 479

1 587

1 209

148

10

SME and Midcaps

163 4169 212

31 384

3 331

3 018

Covid-19 crisis related
guarantees *10 874

1 047

16 775

2 018

Daily guarantees products

152 5428 165

14 6091 313

Private individuals

203 981

16 335292

Total segments, gross

378 876

27 134

Impairment overlay **-Total segments, net

378 876of which,* Includes SME loan credit holiday guarantees, portfolio guarantees and SME and Midcap companies loan holiday guarantees** Includes impairment overlay that represents an additional loss reserve for SME and Midcaps portfolio over the modelled ECL amounts toaccount for other economic uncertainties.

Guarantees issued by the Company to SME and Midcap client segment are split between specific Covid-19 related support
instrument – SME loan credit holiday guarantees and portfolio guarantees and daily (ordinary) guarantee product portfolio.

39

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

3 Risk Management (cont’d)(3) COVID-19 impact (cont’d)(ii) Covid-19 impact on guarantee portfolio (cont’d)
Split of specific Covid-19 related support guarantee instruments for the SME and Midcap client segment guarantee portfolio
by industries as at 31 December 2022, in thousands euro:Grossoutstanding
guarantees

Changesto31.12.2021.

Issued in
2022 12M

Issuedin 2021
12M

Impairment
allowance

Changesto31.12.2021.

Net
outstanding
guarantees% of Total
gross
outstanding
guarantees,
SME &MidcapHotels and restaurants

3 780(1 379)

-

-

446

(204)

3 334

1.8%

Passenger transport services

1 344(1 696)

-

1 457

162

(263)

1 182

0.7%

Retail

996

-

-

304

30

(31)

966

0.5%

Art, entertainment and leasure

323

(29)

-

-

29

(2)

294

0.2%

Total Covid-19 more exposedindustries

6 443(3 104)

-

1 761

667

(500)

5 776

3.1%

Wholesale

6 012(1 118)

-

4 735

2 607

1 650

3 405

2.9%

Manufacturing

1 547(6 011)

-

2 794

77

(555)

1 470

0.8%

Municipal authorities

1 381

(580)

-

1 352

185

(100)

1 196

0.7%

Construction

778

(12)

-

-

10

(29)

768

0.4%

Health and social care

206

(16)

-

-

12

(8)

194

0.1%

Forestry

33

(339)

-

-

10

(45)

23

0.0%

Information technologies andcommunication

33

(8)

-

32

5

(2)

28

0.0%

Electricity, gas and water utilities

-

(239)

-

-

-

(27)

-

0.0%

9 990

(8 323)

-

8 913

2 906

884

7 084

4.9%

16 433(11 427)-

10 6743 573

384

12 860

8.0%

Covid-19 more exposed industries

Covid-19 less exposed industries

Total Covid-19 less exposedindustries
Total specific COVID-19 related
guarantee products ** Includes SME loan credit holiday guarantees and portfolio guarantees.

The support instruments related to the mitigation of the consequences of Covid-19 were issued in Latvia until June 30, 2022, incompliance with the regulatory framework established by the EU. It should be noted that the product portfolio of Covid
guarantees is depreciating rapidly, as the average remaining guarantee period is 1.6 years.

40

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

3 Risk Management (cont’d)(3) COVID-19 impact (cont’d)(ii) Covid-19 impact on guarantee portfolio (cont’d)
Split of daily (ordinary) guarantee product portfolio of the SME and Midcap client segment by industries as at 31 December
2022, in thousands euro:Grossoutstanding
guarantees

Changesto31.12.2021.

Issued in
2022 12M

Issued in
2021
12M

Impairment
allowance

Changesto31.12.2021.

Net
outstanding
guarantees% of Total
gross
outstanding
guarantees,
SME &MidcapRetail

8 792

3 132

1 971

1 766

945

256

7 847

4.3%

Passenger transport services

1 558

332

106

441

(122)

(146)

1 680

0.8%

Hotels and restaurants

517

(6)

8

45

95

34

422

0.3%

Art, entertainment and leasure

216

(84)

24

182

18

(5)

198

0.1%

Total Covid-19 more exposedindustries

11 083

3 374

2 109

2 434

936

139

10 147

5.4%

Manufacturing

56 630694

6 403

20 7134 345

265

52 285

27.6%

Wholesale

47 671

4 446

4 637

13 921

2 670

761

45 001

23.2%

Construction

40 874

9 630

2 994

5 361

4 092

1 857

36 782

19.9%

Forestry

10 874

1 902

-

1 977

297

(81)

10 577

5.3%

Transport, warehousing andcommunications

5 426

(947)

-

396

569

19

4 857

2.6%

Real estate

3 418(1 608)

40

1 704

393

(14)

3 025

1.7%

5 623

1 084

1 575

1 242

489

174

5 134

2.7%

Covid-19 more exposed industries

Covid-19 less exposed industries

Professional, science and technicalservices
Information technologies andcommunication

2 488

(368)

92

1 059

176

23

2 312

1.2%

Municipal authorities

2 229

57

359

1 006

229

6

2 000

1.1%

Electricity, gas and water utilities

1 610

802

726

386

74

39

1 536

0.8%

Health and social care

639

45

137

164

61

(2)

578

0.3%

Other industries

387

(115)

20

89

25

(8)

362

0.2%

177 869

15 62216 98348 01813 4203 039

164 449

86.6%

188 952

18 996

19 09250 45214 3563 178

174 596

92.0%

Total Covid-19 less exposedindustries
Total daily (ordinary) guarantee
products

The situation caused by Covid-19 has not eased the process of evaluating the guarantees applicable to everyday guarantee
products, including the assumed level of credit risk, the credit rating applied to customers, the expected ability to service
debt. This process also applies to specific support instruments related to mitigating the consequences of COVID-19 - credit
holiday guarantees, portfolio guarantees.
The largest exposures of the Company's guarantee portfolio by segments/sectors in 2022 and the impact of Covid-19 on them:▪

Manufacturing industry in the SME segment is the largest sector not only in the SME loan portfolio, but also in the SME
guarantee portfolio. For a description of this sector, see the loan portfolio sector analysis above.

▪

The second largest sector in terms of the volume of the guarantee portfolio is wholesale. For a description of this
sector, see the loan portfolio sector analysis above.

41

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

3 Risk Management (cont’d)(3) COVID-19 impact (cont’d)(i) Covid-19 impact on loan portfolio (cont’d)▪

Construction, which is the third largest sector in the SME guarantee portfolio, was affected both directly and indirectlyby the Covid-19 crisis. Due to restrictions on movement and illness of employees, the construction process wasdelayed in many companies and the cash flow of the company suffered accordingly. In 2022, the easing of travel
conditions allows Latvian companies to return to the Scandinavian market. Many industries that were directly
affected by Covid-19 refused to implement construction projects or postponed them to a later period. However, ingeneral, the industry shows good results in 2022. In the near term, the main challenges are adapting to changes inmaterial supply chains and new payment conditions, which disrupt the usual project financing balance, as well as
the challenge will be the rising costs of construction materials, which can cause significant losses to those
construction companies whose projects the customers refuse to revise estimates and increase project financing.

▪

Regarding the retail sector, which has the largest exposure of the guarantee portfolio among the sectors mostaffected by Covid-19, see above under the analysis of the loan portfolio sectors.

Basically, with the end of the restrictions of Covid-19 and the recovery of supply chains that were disrupted during Covid-19,
it can be considered that the negative impact of Covid-19 on the economic activity of companies has ended. Regarding
the Russian Federation invasion of Ukraine, the sanctions directed against Russian Federation, their indirect impact oncompanies through the rapid increase in energy resource prices, the shortage of raw materials and changes in supply
chains, see below in detail Annex 3 (4) note Impact of the Russian invasion of Ukraine.
(4) Impact of the Russian military invasion of Ukraine
The ongoing war in Ukraine and the related sanctions directed against the Russian Federation, as well as against Belarus,
create social and economic effects in Latvia and the region, as well as affect the Company. This leads to significant
adjustments to the accounting value of assets and liabilities during 2022.
The Company does not issue loans directly to companies in Ukraine, the Russian Federation and Belarus. Contracts withbusiness partners for the execution of settlements with clients, as well as for concluding financial transactions to ensure theCompany's liquidity and asset and liability management, are concluded only with financial institutions registered in the
Republic of Latvia.
In the guarantee portfolio, there is a direct impact from the export credit guarantees issued by the Company for thecompensation of losses of political and buyer risks in trade transactions where the business partners of the Company's clientsare residents of Ukraine, the Russian Federation and Belarus. In the 1st quarter of 2022, impairment overlay of 1,587 thousand
euros was established for expected credit losses for such high-risk exposures of export credit guarantees , while simultaneously
Company was taking the necessary measures to reduce the possible impact. Since 25 February 2022, the company
suspended the issuance of new export guarantees to the Russian Federation and Belarus, as well as in agreement withcustomers, where possible, terminated contracts, as a result of which the amount of risk transactions to the Russian Federation
and Belarus was gradually reduced. As a result of the above-mentioned measures, the Company currently has no high-risk
exposure where the customer's business partners are in the Russian Federation or Belarus and for which it would be necessary
to create impairment overlay Of the exposures for which an impairment overlay was made, only one case resulted in acompensation of EUR 262 thousand.
The Company has made investments in AIF Altum Capital Fund. In the context of the Russian Federation war in Ukraine, theAltum Capital Fund's investment portfolio is diversified both by sectors and by the regions in which the portfolio companies
generate revenues, which is seen as a loss mitigating factor. The impact of the Russian Federation war in Ukraine on each of
the five portfolio companies is therefore different.
Direct impact - cutting off cooperation with Russia and Belarus as well as scaling back activities in war-torn Ukraine haveaffected two portfolio companies. Both companies used to generate a significant part of their revenues in these countries
and have applied measures to sever their links with the aggressor countries and to develop or stabilise their activities in the
new reality.

42

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

3 Risk Management (cont’d)(4) Impact of the Russian military invasion of Ukraine (cont’d)
The value of the Company's investment in AIF Altum Capital Fund decreased by EUR 234 thousand in 12 months of 2022 as aresult of the portfolio revaluation.
To assess the indirect impact of the Russian Federation invasion of Ukraine, the Company analyses and in case of significant
changes revises the forward-looking forecasts of macroeconomic indicators in a number of scenarios used to calculate
expected losses on a quarterly basis.
At the beginning of 2022, it was forecasted that geopolitical factors would have a stronger impact in the second half of 2022.
However, in Q4 2022, the Ministry of Finance and the Bank of Latvia published updated macroeconomic forecasts predicting
a slowdown in economic growth in early 2023 due to the sharp increase in global energy prices and the significant decreasein consumption due to the fall in purchasing power, as a result, there were revised the scenarios the Company used for
estimating expected losses. In parallel to the revision of the macroeconomic forecasts, the Company improved its expected
loss methodology by including three economic scenarios in the forecasts used to estimate expected losses starting fromQ3 2022:▪

a baseline scenario, which forecasts the most likely future economic development, taking into account the impact of
the Russian Federation invasion of Ukraine and the sharp increase in commodity and energy prices, as well as the impact
on Latvia's economic growth rates of sanctions imposed against Russian Federation and Belarus,▪

an adverse scenario, which foresees a less likely but potentially negative change, reflecting the larger and more persistentimpact of the geopolitical crisis and sanctions, commodity and energy price increases compared to the baseline
scenario,▪

an optimistic scenario, which is less likely but potentially more favourable than the baseline scenario.

Summarised below are the annual GDP growth rates derived from external macroeconomic forecasts, which are among the
key input variables in the expected loss model:
2022

2023

2024

2025

Base case scenario *

2.90

0.40

3.70

3.40

Adverse scenario

1.20

-2.00

3.70

3.40

Optimistic scenario

4.40

2.50

3.70

3.40

2.70

0.10

3.70

3.40

GDP annual growth rate, in %Weighted average *** The baseline scenario combines two external scenarios:(i) the macroeconomic development scenario of the Ministry of Finance (published on 6 December 2022) projects GDP slower growth – thesanctions imposed against Russian Federation and Belarus, the difficulties in doing business with Ukraine, and sharp price increase, especially ofenergy prices, will result in GDP growth falling to 1.6% in 2022 and in 2023 in GDP falling by 0.6% (the December 2021 forecast was 5.4% growth in2022 and GDP growth 3.5% in 2023). The GDP growth in 2024 and 2025, is forecasted to 3% per year;(ii) the Bank of Latvia's macroeconomic scenario (published on 16 December 2022) projects that the Russian Federation invasion of Ukraine andsanctions and the associated fall in exports, disruptions to imports of raw materials and supplies, an intensification of global price increase forenergy and other commodities and supplies, and a fall in business and consumer confidence will reduce Latvia's GDP growth rate in 2022 to 2.1%
(in December 2021, GDP growth was forecast to be 4.2%). In 2023, a moderate GDP slowdown is forecast -0.3% (the December forecast for 2023
was a growth of 4.0%). In 2024 and 2025, economic growth is projected to recover more rapidly, by 4.4% and 3.5%, respectively, as confidence
improves. A 50% probability of the scenario was applied to each of the external scenarios, those of the Ministry of Finance and the Bank of Latvia.

** A weight of 70% was applied to the baseline scenario, 20% to the adverse scenario and 10% to the optimistic scenario.

Changes in the forecasts for macroeconomic indicators in the first 12 months of 2022 resulted in an increase in the ECL
allowances for loans and loan commitments by EUR 1,944 thousand. Changes in macroeconomic forecasts had negligible
impact on guarantees, given that allowances for them are made at the higher of the estimated ECL and fair value. Changes
in macroeconomic forecasts have less impact on the fair value of the guarantees.

43

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

3 Risk Management (cont’d)(4) Impact of the Russian military invasion of Ukraine (cont’d)
In order to better assess the direct and indirect impact of the geopolitical situation as well as to identify potential distressedclients and provide a roadmap for further action and appropriate risk mitigation techniques, the Company closely monitors
and analyses key loan and credit guarantee exposures on a quarterly basis. An assessment is made of whether the increasein energy prices and the sanctions imposed against the Russian Federation and Belarus have had, or are likely to have, asignificant direct or indirect impact on client’s ability to pay.
In addition to the above, the decision-making procedure and the internal information accounting system were improved
during the year to ensure the identification and assessment of these impacts on the loan portfolio at the transaction level.
Until sufficient historical data has been accumulated at the transaction level, the Company carried out an assessment of theportfolio of loans and guarantees by industries, separately assessing how the industries will be directly and indirectly affectedby the increase in the prices of energy resources and how the industries will be directly or indirectly affected by the imposed
sanctions against the Russian Federation and Belarus. The industries were divided into 3 groups: heavily affected industries,
moderately affected industries and less affected industries. The assessment was carried out in the 3rd quarter of 2022, using all
available data at the time of the assessment. The possible impact of the increase in the prices of energy resources wasassessed based on the assessment of the Company's experts on energy-intensive industries and industries that are mostaffected by rising costs, as well as by evaluating the financial data of the largest customers in the portfolio of industry. The
possible impact of the sanctions against the Russian Federation and the Republic of Belarus was assessed taking into accountthe data of the Central Statistical Office on foreign trade with the Russian Federation and the Republic of Belarus, as well as
data on the business specifics of the customers in the portfolio of industry (including, but not limited to, analysing the export
markets, markets of raw materials, supply chains, opportunities to reorient operations, etc.). As a result of this assessment, as of
31 December 2022, the Company has made impairment overlay for loans of 1,902 thousand euros and for guarantees of 856
thousand euros.
Potential impact upon loan portfolio triggered by interest rate increase due to steep rise of Euribor rates is covered by changes
in the forecasts for macroeconomic indicators. Changes in amortisation terms of respective financial instruments due toincreasing interest rates are considered when estimated ECL allowances. For key loan and guarantee exposures the client’s
capacity for debt service when interest rates are increasing is analysed by the Company on a quarterly basis. Particularattention is paid to such exposures where concerns for not meeting debt service in respective terms and at full amount due
to increasing debt burden are in place based on clients’ reported operational ratios.
In the light of macroeconomic projections, including rising prices of energy resources, households are expected to face higher
housing-related expenditure. Although there is a public support mechanism to cushion the impact of rising costs, households
may find it difficult to cover their housing costs in full and on time. This is expected to potentially result in higher defaults in the
housing guarantee portfolio and the need to make additional allowances. If the situation does not stabilise in the foreseeable
future, claims for guarantee indemnities may increase in the coming years. We do not expect an immediate increase in claims
for guarantee indemnities, given the specific terms of these exposures, which require that guarantee indemnities are paid
upon the realisation of collateral that is carried out over an extended period of time.
Investments of venture capital funds have both direct and indirect effects as a result of the war in Ukraine. The venture capitalfunds co-financed by Altum operate in accordance with the current sanctions regulation and actively monitor changes inthe binding regulatory acts. According to the estimates of fund managers, the impact on the investments of venture capitalfunds and their value due to the Ukrainian war is currently evaluated as negative, but relatively low.

44

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

3 Risk Management (cont’d)(4) Impact of the Russian military invasion of Ukraine (cont’d)
In the medium and long term, under the influence of macroeconomic changes (including factors such as inflation, supply
disruptions, lack of raw materials, etc.), changes in the investment values of venture capital funds may be significant and may
require a reorientation of the company's operations, at the same time, together with changes in the market situation,
macroeconomic changes may open up new opportunities for individual companies and stimulate faster growth. Altum's
assessment of venture capital fund investments is based on Altum's conservative approach on a quarterly basis, performing
an individual assessment of all venture capital fund investments, taking into account the specific situation of each investment.
During the initial risk assessment in the first quarter of 2022 due to the consequences of the war in Ukraine, the initial estimatesfrom fund managers and Altum's calculations indicated that the impact on the portfolio's fair value could be within -5%. During2022, risk capital funds co-financed by Altum have experienced a drop in value at the fund level of 3,886 thousand euro, or 11.0% of the total portfolio value. Based on the quarterly investment reports of the fund managers and the additional
information provided, Altum's estimate of the decrease in fair value as a result of the war between the Russian Federation andUkraine at the fund level is 2,073 thousand euro, or -5.9% of the total portfolio value in the same period of time, which results ina decrease in fair value recognized at the Altum level of 1,960 thousand euro. Since Altum's internal venture capital evaluation
procedures and policy have historically been more conservative in evaluating the valuations submitted by fund managers
and their assumptions, the impact of the fair value of the portfolio is not as significant as for fund managers.
Both the fund managers and Altum do not expect additional significant economic disruptions in the near future due to theconsequences of the Ukrainian war, which would significantly affect the fluctuations in the fair values of the portfolios in the
future. Under the management of fund managers, portfolio company teams have been able to adapt to the global
geopolitical situation, which has been achieved by redeploying suppliers from war-torn areas, as well as vertical integrationin the supply chain, which significantly reduces geographic risks and helps companies achieve higher profitability in the longterm. When evaluating investments, Altum already takes into account future perspectives, and the fair value of companies
that have not been able to adapt to the new reality is already adjusted accordingly in time.
The biggest risk that both the fund managers and Altum anticipate in 2023 is the geopolitical risk attributed to the Baltic andEastern European countries in connection with the relatively nearby war in Ukraine and the possibility that this war may spreadbeyond the borders of Ukraine. This risk mainly affects venture capital funds co-financed by Altum in two ways - in therealization of investments and in attracting new rounds of financing. With the start of the war in Ukraine, investors are more
carefully and in detail evaluating the possibilities of participating in financing rounds and buying companies in Latvia andelsewhere in the region. Signs of this risk were already visible starting from the 2nd quarter of 2022, when investors suddenly
became more cautious, either wanting to extend the period of in-depth research, or immediately refusing to makeinvestments. Although the leading mood among investors was pessimistic, the risk materialized only for several early-stage
investments, which usually have low free liquidity to cover project implementation expenses (runway). At the same time,several investment realizations have been carried out, where the fair value was not affected, taking into account Altum's
conservative investment evaluation approach.
While there is still uncertainty in the venture capital market due to the war in Ukraine, not knowing when it might end, andcompanies facing various types of challenges, this is also a time of opportunity. The best business ideas and the strongest
teams will survive this time - as weaker teams and ideas disappear, stronger teams and ideas have the opportunity to attract
new talent to their companies. In addition, as there is particular pressure on price increases and supply shortages, it also
creates a need for new ideas, which can also attract venture capital. Altum's co-financed venture capital funds, when making
investment choices and making decisions, have also placed a strong emphasis on the sustainability of companies in the lastyear, so that the risks of external factors could not shake them.

45

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

4 Interest income
All amounts in thousands of euro

01.01.2022.31.12.2022.

Group /
Company
01.01.2021.31.12.2021.

Company(unaudited)(audited)

Interest on loans and guarantees *19 62418 475Interest on securities at fair value

258

370

Interest income from deposits

52-Interest on securities at amortised cost-

12

Total interest income

19 93418 857* The Company’s sub-item Interest income on loans and guarantees does not include interest income from loans and premiumincome on issued guarantees as well as commissions which, in accordance with the program agreements concluded with
the Ministry of Economics, stipulates that the funding allocated by the Ministry of Economics (recognized in balance sheet
item Support Programs Funding) must be increased by the respective program income. Accordingly, this type of income is
not recognized as interest income, but is recognized as an increase in Support Programs Funding which in the 12 months of2022 amounts to EUR 2,651 thousand (12 months of 2021: EUR 1.280 thousand).

5 Interest expense
All amounts in thousands of euro

01.01.2022.31.12.2022.

Group /
Company
01.01.2021.31.12.2021.

Company(unaudited)(audited)

Interest on balances due to credit institutions

1 659

760

Interest on issued debt securities

896

844

Allocation of state support programmes profit to support programme funding *

348

504

Other commission expense

57

32

Total interest expense

2 960

2 140

* For particular state support programmes according to respective agreements concluded with the Ministry of Economics the net profit of the
programme should be split between the Company and the Ministry of Economics by increasing public funding given by the Ministry of
Economics (recognised as Support programme funding in the Balance sheet).

6 Income for implementation of state support
programmes
All amounts in thousands of euro

01.01.2022.31.12.2022.

Group /
Company
01.01.2021.31.12.2021.

Company(unaudited)(audited)

Compensation of expenses for management of state support programmes

2 458

2 088

Compensation of venture capital fund management fees

2 629

1 711

Compensation of expenses for management of state support programmes of the previous years

582

316

Compensation of expenses of capital congestion

424

331

Total income from implementation of state support programmes

6 093

4 446

46

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

7 Expenses to be compensated for implementationof state support programmes
All amounts in thousands of euro

01.01.2022.31.12.2022.

Group /
Company
01.01.2021.31.12.2021.

Company(unaudited)(audited)

Compensated staff costs

1 814

1 675

Compensated administrative expense

644

413

Compensated venture capital fund management fees

2 633

1 741

Total compensated expense for implementation of state support programmes

5 091

3 829

8

Other income

All amounts in thousands of euro

01.01.2022.31.12.2022.

Group /
Company
01.01.2021.31.12.2021.

Company(unaudited)(audited)

Income from lease payments for operating leases

1 853

1 393

Income from payments for financial leases

35Profit from investment property revaluation

2 321

804

Profit from sale of investment property

474

191

Profit from sale of repossessed collateral

7

8

Other commission income

422Income from management of the AIF “Altum capital fund”

485

620

Other operating income

1 060

178

Total other income

6 207

3 221

* Other operating income includes EUR 1,000 thousand, profit from 1st generation venture capital fund realization.

9

Other expense

All amounts in thousands of euro

01.01.2022.31.12.2022.

Group /
Company
01.01.2021.31.12.2021.

Company(unaudited)(audited)

Maintenance and service costs of Land Fund

477

330

Debt collection costs

211

167

Maintenance costs of repossessed collateral1

1

Depreciation of right-of-use assets

157

145

Commission expense on investments in securities

93

92

AIF “Altum capital fund” management costs

485

620

Other commission expense

3

2

Financing fair value discount-152

Total other expense

1 427

1 509

47

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

10 Impairment losses, net
All amounts in thousands of euro
01.01.2022.31.12.2022.
(unaudited)Group /
Company
01.01.2021.31.12.2021.
(audited)

Impairment losses on:

17 54013 907Loans, net

8 775

Company

7 523

impairment losses

6 252

impairment losses covered by Portfolio Loss Reserve

3 947

3 559

impairment losses covered by Risk Coverage Reserve(1 424)(2 108)Grants258

199

impairment losses

255

impairment losses covered by Portfolio Loss Reserve3

Other assets

6 072

-

199

479

impairment losses

67

impairment losses covered by Risk Coverage Reserve

(67)

479
-

Due from credit institutions and the Treasury

15-

Financial assets related to loan agreements

69

107

Guarantees, net

7 376

4 735

impairment losses

19 777

impairment losses covered by Portfolio Loss Reserve

4 287

2 841

impairment losses covered by Risk Coverage Reserve(16 688)(11 336)

Loan commitments, net

672

13 230792

impairment losses

1 472

impairment losses covered by Portfolio Loss Reserve

87

239

impairment losses covered by Risk Coverage Reserve

(887)

(563)

1 116

Grant commitments

375

72

Reversal of impairment on:(13 172)(13 746)

Loans, net(5 117)(8 037)reversal of impairment(5 376)(10 114)reversal of impairment covered by Portfolio Loss Reserve(1 971)(1 881)

reversal of impairment covered by Risk Coverage Reserve

2 230

Disbursed guarantee compensations

(2)

3 958
(59)

reversal of impairment

(107)

(83)

reversal of impairment covered by Portfolio Loss Reserve

(2)

(3)

reversal of impairment covered by Risk Coverage Reserve

107

Grants(156)
impairment loss

(156)

reversal of impairment covered by Portfolio Loss Reserve-

Other assets

27
(101)
(101)
-

(21)

(13)

(88)

(13)

67

-

Financial assets related to loan agreements

(238)

(15)

Debt securities

(8)

(16)

Guarantees, net(7 324)reversal of impairment
compensation of decrease in value from Risk Coverage Reserve(4 943)reversal of impairment(13 608)(11 407)

reversal of impairment covered by Portfolio Loss Reserve(1 706)(1 509)reversal of impairment covered by Risk Coverage Reserve

7 990

Loan commitments, net

(236)

7 973
(547)

reversal of impairment

(303)

(542)

reversal of impairment covered by Portfolio Loss Reserve

(143)

(162)

reversal of impairment covered by Risk Coverage Reserve

210

157

Grant commitments

(70)

(15)

Total impairment losses / (reversal), net

4 368

161

Recovery of loans written off in previous periods(1 001)(760)

Total impairment losses and (income) from recovery of loans written-off

3 367

(599)

Additional information Including on impairment allowances used to increase / decrease Portfolio Loss Reserve (Special Reserve Capital) upon
approval of the 2022 annual report available in Note 3 (1).

48

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

11 Due from credit institutions and the Treasury
All amounts in thousands of euroDue from credit institutions and State Treasury

Company

Group /
Company

31.12.2022.

31.12.2021.

(unaudited)(audited)

571 682455 007

cash and cash equivalent

539 630455 007

Impairment allowances

(15)

(1)

Net due from credit institutions and State Treasury

571 667455 006

The increase in the Company's Due from credit institutions and the Treasury is due to the financing received by the Company
from the Ministry of Economy, the Central Finance and Contracting Agency (CFCA) and the Treasury for the implementationof state support programmes and the launch of a new state support programme (Investment Loans with Capital Allowance).
Breakdown of the Company’s balances due from credit institutions and the Treasury by credit rating categories based on
Moody's ratings or their equivalent, in thousands of euro:
Ratings

Due from credit institutions registered in the
Republic of Latvia and the Treasury
Total gross as at 31 December 2021
(audited)
Due from credit institutions registered in the
Republic of Latvia and the Treasury
Total gross as at 31 December 2022
(unaudited)

Aaa

Aa1Aa3

A1-A3Baa1Baa3

Ba1-Ba3

B1-B3

Caa-C

Withdrawn
rating
(WR)

Total

-

-

437 249

17 757----455 006--437 249

17 757----455 006--

559 156

12 511----

571 667--559 156

12 511----

571 667

As at 31 December 2022, the Company held accounts with 4 banks and the Treasury of the Republic of Latvia. The averageinterest rate on balances of position Due from credit institutions and the Treasury as at 31 December 2022 was 0.08% (31December 2021: -0.01%).

12 Investments in Associates
Investments in associates based on information provided by venture capital fund managers, in thousands of euro:
Equity of venture capital fundCompany or venture capital fund generation

Country of incorporation

Carrying AmountCompany

Group /
Company

Company

Group /
Company

31.12.2022.

31.12.2021.

31.12.2022.

31.12.2021.

(unaudited)(audited)(unaudited)(audited)

The 2nd generation VCFs

LV

9 794

16 9296 855

11 885

The 3rd generation VCFs

LV

9 815

13 3108 331

10 473

The 4th generation VCFs

LV

27 45620 07319 07514 371

AIF “Altum capital fund”

LV

34 52919 00816 88814 998

Baltic Innovation Fund *LU

91 28785 54414 23213 222172 881154 864

65 38164 949Total investments in associates* Investments in Associates are stated under the equity method, except for investments in Baltic Innovation Fund that are valued using the FVTPL
method.

49

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

12 Investments in Associates (cont’d)
As at 31 December 2022 the total venture capital fund’s portfolio value at cost value was EUR 74,858 thousand (31 December
2021: EUR 85,973 thousand).
Movement in the Company’s investments in associates, in thousands of euro:
Investments in venture
capital funds

Investments in AIF “Altum
capital fund”

Investments in Baltic
Innovation Fund

Total

31.12.2022.

31.12.2021.

31.12.2022.

31.12.2021.

31.12.2022.

31.12.2021.

31.12.2022.

31.12.2021.

(unaudited)(audited)(unaudited)(audited)(unaudited)(audited)(unaudited)(audited)

Carrying amount at the beginningof period

36 72932 96914 998-13 22215 01964 94947 988Invested

7 489

4 233

2 240

14 918

2 700

1 817

12 42920 968

Refunded(9 293)(7 431)

(945)

(282)

(1 799)(6 900)(12 037)(14 613)

-

6 563

-

-

-

-

-

6 563

1 675

1 730

945

282

-

-

2 620

2 012

-

-

-

-

61

469

61

469

(2 339)(1 335)

(350)

80

-

-

(2 689)(1 255)

-

-

-

-

48

2 817

48

2 817

34 26136 72916 88814 99814 23213 22265 38164 949Reclassified (increase of support
programme funding, see Note 20)
Mezzanine interest received andrealised gain on exit
Realised gain from refunded
Share of net gain / (loss) ofinvestment in associate *Loss from investment in associate
at fair value through profit or loss
Net carrying amount at the period
ended at 31 December (audited)* includes changes in revaluation of investment.

The Company’s share of gain / (loss) of investment in associates and other investments, in thousands of euro:

Net share of gain / (loss) ofinvestment in associates
Net income / (expense),
excluding revaluation gain /(loss)
Share of net gain / (loss) ofinvestment in Three Seas
Initiatives Investment Fund
Total on 31 December 2021
(audited)

Investments in VCF

Investments in AIF “Altum
capital fund”

Investments in Three Seas
Initiative Investment Fund

Total

31.12.2022.

31.12.2021.

31.12.2022.

31.12.2021.

31.12.2022.

31.12.2021.

31.12.2022.

31.12.2021.

(unaudited)(audited)(unaudited)(audited)(unaudited)(audited)(unaudited)(audited)(2 339)(1 335)

(350)

80

-

-

(2 689)(1 255)

-

-

945

(75)

-

-

945

(75)

-

-

-

-

205

(52)

205

(52)

(2 339)(1 335)

595

5

205

(52)

(1 539)(1 382)50

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

12 Investments in Associates (cont’d)
In the 12 months of 2022, the Company’s expenses included:▪ Management fees for the 2nd and 3rd generation venture capital funds amounted EUR 425 thousand (12 months of 2021:
EUR 522 thousand) which were compensated from the risk coverage reserve (see Note 20);
▪ Management fees for the 4th generation venture capital funds amounted EUR 1,820 thousand (12 months of 2021: EUR
834 thousand) which were compensated from the risk coverage reserve (see Note 20);
▪ Management fees for the Baltic Innovation Fund amounted EUR 141 thousand (12 months of 2021: EUR 198 thousand) whichwere compensated from the risk coverage reserve (see Note 20);
▪ Management fees for the AIF “Altum capital fund” amounted EUR 298 thousand (12 months of 2021: EUR 404 thousand)(see Note 22).
Part of the investments of the 4th generation VCF until 31 December 2021 were classified as participation in the share capitalof subsidiaries, after the control assessment as of 31 December 2021 such investments were classified as investments inassociates and the management fee of such VCFs for 12 months of 2022 is reflected in the above breakdown.

13 Other Investments
Total cost of other investments on 31 December 2022 was EUR 15,419 thousand (31 December 2021: EUR 8,793 thousand).
The initial cost of the investment also includes the fund management fee in the amount of EUR 913 thousand (31 December
2021: EUR 250 thousand), which is later recognized as an expense, and thus is not included in the investment's book value atthe end of the reporting period.
All amounts in thousands of euro
Company

Group /
Company

31.12.2022.

31.12.2021.

(unaudited)(audited)

Baltic Innovation Fund 2

4 478

1 982

Three Seas Initiatives Investment Fund

10 768

6 954

Total other investments

15 246

8 936

Baltic Innovation Fund 2 (BIF 2) is a EUR 156,000 thousand Fund-of-Funds initiative launched by the European Investment Fund
(EIF) in co-operation with the Baltic national promotional institutions – KredEx (Estonia), Altum (Latvia) and Invega (Lithuania).
BIF 2 continues to sustain investments into private equity and venture capital funds focused on the Baltic States to boost equity
investments into SMEs with high growth potential. The Company signed agreement on BIF 2 on 16 August 2019. The total capitalcommitted by the Company to the BIF2 is EUR 26,500 thousand thus arriving at the ownership rate 16.99% of the totalcommitted capital of the BIF 2 (EUR 156,000 thousand).
The Three Seas Initiative Investment Fund is a new financial instrument for financing and developing infrastructure projects in
12 countries, including Latvia, aimed at reducing infrastructure development gaps between different European regions. The
Three Seas Initiative Investment Fund is a new financial instrument to support transport, energy and digitalization infrastructure
projects in Central and Eastern Europe. The Company signed the subscription agreement on 16 September 2020. The total
capital committed by the Company to the Three Seas Initiative Investment Fund is EUR 20,000 thousand thus arriving at theownership rate of 2.15% on 31 December 2022 (31 December 2021: 2.17%) of the total committed capital the Three Seas
Initiative Investment Fund (31 December 2022: EUR 928,100 thousand, 31 December 2021: EUR 923,000 thousand).
In the 12 months of 2022, the Company’s expenses included:▪ Management fees for the Baltic Innovation Fund II amounted EUR 222 thousand (12 months of 2021: EUR 112 thousand)which were compensated from the risk coverage reserve (see Note 20);
▪ Management fees for the Three Seas Initiatives Investment Fund amounted EUR 281 thousand (12 months of 2021: EUR 225
thousand) which were compensated from the risk coverage reserve.

51

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

14 Loans
The loans granted constitute the Company’s balances due from residents of Latvia.
Loans by the borrower profile, in thousands of euro:
Company

Group /
Company

31.12.2022.

31.12.2021.

(unaudited)(audited)

SME and Midcaps

147 369

175 016

Agriculture

159 509

134 079

Private individuals

4 920

6 513

Financial Intermediaries

46

66

Land Fund

27 08932 999Total gross loans

338 933

348 673

Impairment allowances(21 074)(18 143)

Total net loans

317 859

330 530

Company

Group /
Company

31.12.2022.

31.12.2021.

(unaudited)(audited)

Agriculture and forestry

173 937

170 808

Manufacturing

58 51167 635Retail and wholesale

16 96824 241

Real estate

15 79013 719Construction

10 55412 238Municipal authorities

8 744

6 120

Hotels and restaurants

7 767

8 843

Transport, warehousing and communications

7 408

5 896

Electricity, gas and water utilities

7 025

6 856

Health and social care

5 910

7 498

Professional, science and technical services

3 592

4 914

Information technologies and communication

2 095

2 084

Fishing

1 986

2 959

Other industries

13 7248 344

Private individuals

4 922

6 518

Total gross loans

338 933

348 673

Impairment allowances(21 074)(18 143)

Total net loans

317 859

330 530

Breakdown of loans by industries, in thousands of euro:

Analysis of the loan amount, equalling to or exceeding EUR 1,000 thousand, issued to one customer:
Company

Group /
Company

31.12.2022.

31.12.2021.

(unaudited)(audited)

Number of customers

40

42

Total credit exposure of customers (EUR ‘000)

59 41667 623

Percentage of total gross portfolio of loans

17.53%

19.39%

52

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

14 Loans (cont’d)
Movement in impairment allowances, in thousands of euro:
Company
01.01.2022.31.12.2022.

Group /
Company
01.01.2021.31.12.2021.

(unaudited)(audited)

Impairment allowances at the beginning of the period

18 14320 713

Increase in impairment allowances (Note 10)

10 199

9 631

Decrease in impairment allowances (Note 10)(7 347)(11 995)

Write-off of loans(1 117)(1 080)Reclassification (increase of impairment allowances due to changes in off-balance sheet and balance sheet)

1 196

874

Impairment allowances at the end of the period ended 31 December (audited)

21 07418 143Company’s share of impairment allowances

10 497

9 334

Impairment allowances covered by Portfolio Loss Reserve

5 999

4 144

Impairment allowances covered by Risk Coverage Reserve

4 578

4 665

As at 31 December 2022 the average annual interest rate for the loan portfolio of the Company was 5.59% (31 December
2021: 4.05%).

15 Grants
All amounts in thousands of euro
Company

Group /
Company

31.12.2022.

31.12.2021.

(unaudited)(audited)

Energy Efficiency Programme for Multi-apartment Buildings

55 58243 153Social Entrepreneurship Programme

892

1 290

Grants for development of energy efficiency projects

188

41

Housing grant programme “Balsts”

1 384

1 042

Grants for private house renovation-

167

Grants for energy efficiency improvement of family buildings

1-

Grants for cultural industry support programme *

669

36

Total grants, gross

58 71645 729Impairment allowances

(436)

(332)

Total grants, net

58 28045 397* The grant component of the combined financial instrument.

53

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

15 Grants (cont’d)
Movement in the Company’s net book value of grants in 12 months of 2022, in thousands of euro:
Company

Group /
Company

31.12.2022.

31.12.2021.

(unaudited)(audited)

Carrying amount at the beginning of period

45 72931 282

Changes

12 98714 447

Carrying amount at the end of period

58 71645 729At the beginning of period

(332)

(175)

Changes

(102)

(215)

Reclassification (increase of impairment allowances due to changes in off-balance sheet and balance sheet)

(2)

58

Carrying amount at the end of period

(436)

(332)

Grants net book at the beginning of the period

45 39731 107

Grants net book value at the end of the period ended 31 December

58 28045 397Company

Group /
Company

31.12.2022.

31.12.2021.

(unaudited)(audited)

Carrying amount at the beginning of period

46 16436 759Acquired during the reporting period *

5 758

7 150

Recognized on termination of reverse leases

164

1 662

Disposals during the reporting period

(954)

(211)

Net gain from fair value adjustment

2 321

804

Carrying amount at the end of the period

53 45346 164

Carrying amount

Impairment allowances

16 Investment Properties
All amounts in thousands of euro

* All acquisitions of investment properties made were related to the activities of the Land Fund programme.

The Land Fund was established on 1 July 2015. According to the Cabinet of Ministers decree dated March 11, 2015, theCompany is the manager of the Land Fund. The Law “On Land Privatisation in Rural Areas” stipulated establishment of theLand Fund. The Land Fund of Latvia is one of the tools used to ensure that agricultural land is preserved and used for agricultural
purposes.

54

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

17 Other Assets
All amounts in thousands of euro
Company

Group /
Company

31.12.2022.

31.12.2021.

(unaudited)(audited)

Financial assets

3 531

5 165

Other assets (repossessed collateral)28

28

Total other assets, gross

3 559

5 193

Impairment allowances for financial assets(2 029)(1 951)Company’s share of provisions

(582)

(786)

Impairment allowances covered by Portfolio Loss Reserve

(273)

(186)

Provisions covered by risk coverage(1 174)(979)

Total financial assets, net

1 502

3 214

Total other assets, net

1 530

3 242

The Company’s sub-item Other assets (repossessed collateral) includes assets that have been taken over in the debt collection
process and are held to be sold in the ordinary course of business.
Movement in the Company’s net book value of financial assets in 12 months of 2022, in thousands of euro:
Disbursed
guarantee
compensations

Financial assets
related to loan
agreements

Other financial
assetsTotal

At the beginning of period

1 590

870

2 705

5 165

Changes

279

(622)

(1 291)(1 634)As at 31 December 2022 (unaudited)

1 869

248

1 414

3 531

At the beginning of period(1 590)

(330)

(31)

(1 951)

Changes in impairment allowances

(279)

179

22

(78)

As at 31 December 2022 (unaudited)(1 869)

(151)

(9)

(2 029)Net book value at the beginning of period (audited)

-

540

2 674

3 214

Net book value as at 31 December 2022 (unaudited)

-

97

1 405

1 502

Financial assets

Impairment provision

Movement in the Company’s net book value of financial assets in 2021, in thousands of euro:
Disbursed
guarantee
compensations

Financial assets
related to loan
agreements

Other financial
assetsTotal

At the beginning of period

1 624

280

3 664

5 568

Changes

(34)

590

(959)

(403)

As at 31 December (unaudited)

1 590

870

2 705

5 165

At the beginning of period(1 624)

(169)

(167)

(1 960)Changes in impairment allowances

34

(161)

136

9

As at 31 December (unaudited)(1 590)

(330)

(31)

(1 951)

Net book value as at 31 December (audited)

-

111

3 497

3 608

Financial assets

Impairment provision

55

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

18 Due to Credit Institutions
All amounts in thousands of euro
Company

Group /
Company

31.12.2022.

31.12.2021.

(unaudited)(audited)

Due to credit institutions registered in OECD countries

36 29053 416

Total due to credit institutions

36 29053 416

Balances due to credit institutions registered in the OECD countries include loan received by the Company from the European
Investment Bank (EIB) of EUR 36,290 thousand (31 December 2021: EUR 53,416 thousand), of which EUR 40 thousand constitutes
accrued interest expenses (31 December 2021: EUR 14 thousand).
On October 2, 2009, an agreement was signed with the European Investment Bank for a loan of EUR 100,000 thousand tofinance projects under the SMEs Growth Loan Programme. As at 31 December 2022 the principal amount of the loan EUR
6,250 thousand (31 December 2021: EUR 12,153 thousand), the accrued interest on the loan amounts to EUR 40 thousand (31December 2021: EUR 14 thousand), the final repayment date 20 August 2024. The Ministry of Finance of the Republic of Latvia
has issued a guarantee for the loan, as a collateral serves the commercial pledge to the right of the Company’s claims. As at
31 December 2022, the amount of the secured claim was EUR 6,290 thousand (31 December 2021: EUR 12,166 thousand).
On July 8, 2020, Altum signed an agreement with the European Investment Bank for a loan of EUR 80,000 thousand to financeworking capital and investment loans to small and medium-sized enterprises, including those affected by the Covid-19. As at
31 December 2022 the principal amount of the loan EUR 30,000 thousand (31 December 2021: EUR 41,250 thousand), the final
repayment date 20 November 2025. As at 31 December 2022, according to the loan agreement the Company is available
the financing in the amount of EUR 35,000 thousand, utilization deadline is 5 January 2024. On 10 December 2021, Altum signed
an agreement with the European Investment Bank for an additional loan of EUR 40,000 thousand to finance working capitaland investment loans to small and medium-sized enterprises, the absorption of which had not been started until December 31,
2022, utilization deadline is 10 December 2023. The volume and pace of drawdown under both agreements is subordinatedto the further volume of new lending transactions. The loans are unsecured.
As at 31 December 2022, the average interest rate for the balances Due to credit institutions was 0.30% (31 December 2021:
0.08%).

19 Due to General Governments
All amounts in thousands of euro
Company

Group /
Company

30.09.2022.

31.12.2021(unaudited)(audited)

Loans received from Rural Support Service

3 318

3 321

Loans received from the Treasury

152 517

118 027

Total due to general governments

155 835

121 348

Item Loans from Rural Support includes the financing to the Loan Fund, which was established in 2010 for the purpose to issue
the loans to the agricultural and fisheries beneficiaries via financial intermediaries. As at 31 December 2022 the Company
liabilities to Rural Support Service consist of the principal amount of EUR 3,072 thousand (31 December 2021: EUR 3,104
thousand) and accrued interest – EUR 246 thousand (31 December 2021: EUR 217 thousand). The final repayment date is 31
December 2025. The loan from Rural Support Service is unsecured.
Loans received from the Treasury includes the loans received by the Company for the implementation the following loan
programmes:▪

Agricultural land acquisition programme: as at 31 December 2022 the principal amount of the loan EUR 81,718
thousand (31 December 2021: EUR 69,077 thousand), the final repayment date 20 January 2058. As a collateral serves
the commercial pledge to the right of the Company’s claims resulting from loans granted by the Company under
the programme. As at 31 December 2022, according to the loan agreement the Company is available the financing
in the amount of EUR 18,282 thousand, the size and pace of its drawdown relates to the further volume of new loantransactions. As at 31 December 2022, the amount of the secured claim was EUR 98,070 thousand (31December
2021: EUR 82,893 thousand).
56

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

19 Due to General Governments (cont’d)▪

SME development programme: as at 31 December 2022 the principal amount of the loan EUR 53,555 thousand (31December 2021: EUR 32,103 thousand), the final repayment date 20 December 2043. As a collateral serves thecommercial pledge to the right of the Company’s claims resulting from loans granted by the Company under the
programme. As at 31 December 2022, according to the loan agreement the Company still is available the financing
in the amount of EUR 1,445 thousand, the size and pace of its drawdown relates to the further volume of new loantransactions. As at 31 December 2022, the amount of the secured claim was EUR 64,271 thousand (31 December
2021: EUR 38,524 thousand).

▪

Parallel loan programme: as at 31 December 2022 the principal amount of the loan EUR 4,600 thousand(31 December 2021: EUR 4,600 thousand), the final repayment date 20 January 2039. As a collateral serves thecommercial pledge to the right of the Company’s claims resulting from loans granted by the Company under the
programme. As at 31 December 2022, according to the loan agreement the Company still is available the financing
in the amount of EUR 15,400 thousand, the size and pace of its drawdown relates to the further volume of new loantransactions. As at 31 December 2022, the amount of the secured claim was EUR 5,521 thousand (31 December 2021:
EUR 5,520 thousand).

▪

Programme of Small Loans for Rural Areas: as at 31 December 2022 the principal amount of the loan EUR 2,079
thousand (31 December 2021: EUR 2,327 thousand), the final repayment date 31 January 2039. As a collateral serves
the commercial pledge to the right of the Company’s claims resulting from loans granted by the Company under
the programme. As at 31 December 2022, according to the loan agreement the Company still is available thefinancing in the amount of EUR 3,921 thousand, the size and pace of the drawdown the loan relates to the further
volume of new loan transactions. As at 31 December 2022, the amount of the secured claim was EUR 2,495 thousand(31 December 2021: EUR 2,792 thousand).

▪

Latvian Land Fund (the financing for the Fund’s transactions): the loan amount has been used in 2020 and as at 31
December 2022 the principal amount of the loan EUR 8,502 thousand (31 December 2021: EUR 9,919 thousand), thefinal repayment date 29 December 2028. As a collateral serves the mortgage on the real estate purchased with thefinancing received under the loan. As at 31 December 2022, the amount of registered mortgage was EUR 10,406
thousand (31 December 2021: EUR 10,400 thousand).

As at 31 December 2022 the accrued interest on the loans received from the Treasury amounts to EUR 11,4 thousand(31 December 2021: EUR 2,2 thousand).
The Company has also concluded the following loan agreements with the Treasury, the absorption of which has not been
started until December 31, 2022:▪

Micro Loans and Star-up Loans programme: the amount of the loan agreement EUR 23,000 thousand, the final
repayment date 20 January 2039, commercial pledge on the Company’s claims for the loans under the programme.
The size and pace of the drawdown the loan relates to the further volume of new loan transactions. The maximum
amount of the secured claim is EUR 27,600 thousand.

▪

Working capital loan programme for farmers: the amount of the loan agreement EUR 25,612 thousand, the final
repayment date 30 June 2025, commercial pledge on the Company’s claims for the loans under the programme.
The size and pace of the drawdown the loan relates to the further volume of new loan transactions. The maximum
secured claim is EUR 30,734 thousand.

▪

Loan program for construction works of apartment houses and improvement of their territories: the amount of theloan agreement EUR 30,000 thousand, the final repayment date January 20, 2044, commercial pledge on the
Company's claims for the loans under the program. The size and pace of the drawdown the loan relates to thefurther volume of new loan transactions. The maximum secured claim is EUR 36,000 thousand.

57

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

20 Support programme funding
The Company’s information on the risk coverage reserve included in the support programme funding and state aid, which
can be used for covering the Company’s credit risk losses as at 31 December 2022, in thousands of euro:
Financial Instrument / Programme

Programme
funding

Of which,
Risk
Coverage
Reserve

Fair Value
Correction

Provisions
covered byriskcoverageNet
programme
funding

ERDF II

8 265

1 275

(1 000)

(102)

7 163

ESF II

851

30

-

(9)

842

Microcredits of Swiss programme (closed programme)

565

35

-

(2)

563

ERDF I

414

-

-

-

414

ESF I

316

5

-

(2)

314

ERDF II (second round)

2 252

115

-

(34)

2 218

Incubators (from ESF II)

83

2

-

-

83

ERDF II 2 Public fund

226

-

-

-

226

Fund of Funds programme – Start-up loans

2 698

1 830

(439)

(187)

2 072

Fund of Funds programme – Microcredits

291

53

(9)

(7)

275

Fund of Funds programme – Parallel loans

4 012

4 012

(433)

(1 205)

2 374

Energy Efficiency Loans for Multi-apartment Buildings (I)

7 245

7 245

(12)

(80)

7 153

Start-up State Aid Cumulation Lending Programme

1 888

1 888

(387)

(407)

1 094

Other loans to start-ups

1 800

116

-

(38)

1 762

Mezzanine Programme – Loans

3 630

3 558

-

(837)

2 793

Guarantees and interest grants programme

4 287

4 287

(1 256)-3 031

SME energy efficiency loans

3 723

3 723

(175)

(365)

3 183

ERAF SME growth loans

15 000

900

-

(213)

14 787

ERAF loans for business sustainability

15 000

3 263

-

(269)

14 731

Parallel loans

2 000

2 000

(28)

(297)

1 675

Parallel loans 2

3 286

1 216

-

(424)

2 862

Loans for enterprises in rural territories

7 803

1 707

(196)

(149)

7 458

Start-up loans to innovative entrepreneurs

6 000

1 200

-

(155)

5 845

Multi-apartment building improvement loans*

750

750

-

(8)

742

Rental multi-apartment building improvement loans

4 074

244

-

(36)

4 038

Energy Efficiency Loans for Multi-apartment Buildings (II)

250

250

-

-

250

ERDF Multi-apartment building improvement loans

500

14

-

-

500

Cultural industry support programme **

2 220

-

-

-

2 220

ELFLA Agricultural and rural development loans

4 996

1 199

-

(31)

4 965

Investment Loans with a capital rebate *99 56550 778--99 565

Total loans

203 990

91 695(3 935)(4 857)

195 198

Loans* Combined financial instrument.
** Combined financial instrument. Risk coverage (Portfolio Loss Reserve) of EUR 809 thousand has been included in the reserve for mitigation of the consequences of
Covid-19, which is part of the specific reserves attributable to support programs (see Note 22).

58

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

20 Support programme funding (cont’d)
The Company’s information on the risk coverage reserve included in the support programme funding and state aid, which
can be used for covering the Company’s credit risk losses as at 31 December 2022, in thousands of euro (cont’d):Financial Instrument / Programme

Programme
funding

Of which,
Risk
Coverage
Reserve

Fair Value
Correction

Provisions
covered byriskcoverageNet
programme
funding

Fund of Funds programme – Guarantees

45 19945 199-(8 385)36 814

Energy Efficiency Guarantees for Multi-apartment Buildings

8 238

8 214

-

(1 486)

6 752

Housing Guarantee Programme

22 11422 114(2 875)(16 033)

3 206

Housing Guarantee Programme for NAF soldiers

160

160

-

-

160

Portfolio guarantees for renovation of family buildings

502

502

-

-

502

Guarantee Programme for Clients of State Aid Accumulation, Grace Periodand Large Economic Operators

8 753

8 753

(1 261)(1 049)6 443

Mezzanine Programme – Guarantees

865

848

-

(278)

587

Portfolio Guarantee Fund

9 994

9 664

(237)

(3 399)6 358

Export credit guarantees

3 390

3 390

(1 841)

(697)

852

Study and student portfolio guarantees ***

658

-

-

-

658

ELFLA Agricultural and rural development guarantees

2 500

2 500

-

-

2 500

Agricultural Guarantees

2 741

2 741

(827)

(1 501)

413

Total guarantees

105 114104 085(7 041)(32 828)

65 245

Energy Efficiency Grants for Multi-apartment Buildings

60 783---60 783

Housing grant programme “Balsts”

4 465

-

-

-

4 465

Grants for energy efficiency improvement of family buildings

1 142

-

-

-

1 142

Social Entrepreneurship Programme

1 657

-

-

-

1 657

Grants for development of energy efficiency project

1 596

-

-

-

1 596

Grants for improving energy efficiency of family buildings

810

-

-

-

810

Grants for Cultural industry support *

1 089

-

-

-

1 089

Total grants

71 542--Fund of Funds and venture capital funds

35 54630 326--35 546

Investment Fund Activity

4 887

3 910

-

(354)

4 533

Baltic Innovation Fund

1 794

538

(508)

-

1 286

Baltic Innovation Fund II

1 902

571

(641)

-

1 261

Total venture capital funds

44 12935 345(1 149)(354)

42 626

Energy Efficiency Fund

580

-

-

-

580

Regional Creative Industries Alliance

-

-

-

-

-

Total other activities

580

-

-

-

580

Funding allocated to increase reserve capital

683 ****

-

-

-

683

Total support programme funding

426 038 *****

231 125(12 125)(38 039)375 874

Guarantees

Grants71 542

Venture Capital Funds

Other Activities* Combined financial instrument.
*** Risk coverage (Portfolio Loss Reserve) of EUR 3,308 thousand has been included in the reserve for non-Covid-19 programmes, which is partof the specific reserves attributable to support programs (see Note 22)**** The financing included in the reserve capital is intended for guarantees of the Housing Guarantee Program for NAF soldiers in
the amount of 320 thousand euro and for the Housing Guarantee Support Program in the amount of 363 thousand euro.
***** Support programme funding contains EUR 13,135 thousand allocated for management costs of the Company to be compensated fromsupport programme funding.

59JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

20 Support programme funding (cont’d)
The Company’s information on the risk coverage reserve included in the support programme funding and state aid, which
can be used for covering the Company’s credit risk losses as at 31 December 2021, in thousands of euro:
Financial Instrument / Programme

Programme
funding

Credit risk
coverage

Provisions
covered by risk
coverageNet
programme
funding

ERDF II

1 805

1 655

(226)

1 579

ESF II

1 020

132

(51)

969

Microcredits of Swiss programme (closed programme)

82

82

(5)

77

ERDF I

122

24

(3)

119

ESF I

316

7

(2)

314

ERDF II (second round)

5 801

249

(39)

5 762

Incubators (from ESF II)

82

5

-

82

ERAF II 2 Public fund (programme closed)

226

-

-

226

Fund of Funds programme – Start-up loans

2 705

2 705

(226)

2 479

Fund of Funds programme – Microcredits

295

295

(13)

282

Fund of Funds programme – Parallel loans

4 298

4 298

(2 584)

1 714

Energy Efficiency Loans for Multi-apartment Buildings (I)

5 293

5 142

(11)

5 282

Start-up State Aid Cumulation Lending Programme

1 875

1 875

(269)

1 606

Other loans to start-ups

1 517

197

(49)

1 468

Mezzanine Programme – Loans

3 484

3 310

(1 046)2 438

Guarantees and interest grants programme

4 269

4 269

-

4 269

SME energy efficiency loans

3 723

3 723

(350)

3 373

Parallel loans

2 000

2 000

(155)

1 845

Loans for enterprises in rural territories

7 810

1 709

(72)

7 738

Start-up loans to innovative entrepreneurs

1 500

300

(26)

1 474

Multi-apartment building improvement loans **

1 000

1 000

-

1 000

Rental multi-apartment building improvement loans

1 000

60

-

1 000

Cultural industry support programme ***

2 717

-

-

2 717

Total loans

52 940 ****

33 037(5 127)47 813Fund of Funds programme - Guarantees

29 90929 909(6 183)23 726

Energy Efficiency Guarantees for Multi-apartment Buildings

8 294

7 985

(1 015)

7 279

Housing Guarantee Programme

21 53021 530(11 971)

9 559

Portfolio guarantees for renovation of family buildings

502

502

-

502

Guarantee Programme for Clients of State Aid Accumulation, Grace Period andLarge Economic Operators

7 753

7 753

(996)

6 757

Mezzanine Programme - Guarantees

892

847

(190)

702

Portfolio Guarantee Fund

3 913

3 446

(2 358)

1 555

Export credit guarantees

2 477

2 477

(636)

1 841

Study and student portfolio guarantees *****

549

-

-

549

Agricultural Guarantees

2 741

2 741

(1 020)

1 721

Total guarantees

78 56077 190(24 369)

54 191Loans

Guarantees* The IFRS 9 implementation adjustment of EUR (7,645) thousand incorporated in 2018 (for details see financial report of 2021 Note 2(15)) consisting of Accrued liabilities of state aid of EUR 4,876 thousands and Fair value correction of EUR 12,341 thousands previously
disclosed in this note as separate columns reconciling Programme funding and Net programme funding are netted off vs Programmefunding as at 31 December 2021. That disclosure treatment is the same as was presented in the audited financial statements for theyear ended 31 December 2018. Net decrease of Fair value correction for the year 2021 of EUR 152 thousands has been also netted
off vs Programme funding as at 31 December 2021.
** Combined financial instrument.
*** Combined financial instrument. Risk coverage (Portfolio Loss Reserve) of EUR 816 thousand has been included in the Specific reserve
capital for mitigating of impact of Covid-19, which is part of the Specific Reserves attributable to support programmes (see Note 22).
**** Support programme funding includes funding that had to be reallocated between the programmes, partly done in 2021 (fromthe Microcredits of Swiss programme), to be continued in 2022.
***** Risk coverage of EUR 2,141 thousand has been included in the Specific reserve for non-Covid-19 programmes (Portfolio Loss
Reserve), which is part of the Specific reserves attributable to support programmes (see Note 22)60

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

20 Support programme funding (cont’d)
The Company’s information on the risk coverage reserve included in the support programme funding and state aid, which
can be used for covering the Company’s credit risk losses as at 31 December 2021, in thousands of euro (cont’d):Financial Instrument / Programme

Programme
funding *Credit risk
coverage

Provisions
covered by risk
coverageNet
programme
funding

Energy Efficiency Grants for Multi-apartment Buildings

48 826--48 826

Housing grant programme “Balsts”

7 350

-

-

7 350

Grants for energy efficiency improvement of family buildings **

1 872

-

-

1 872

Social Entrepreneurship Programme

1 849

-

-

1 849

Grants for Cultural industry support **

1 849

-

-

1 849

Total grants

61 746--61 746

Fund of Funds and venture capital funds

52 08443 230-52 084

Investment Fund Activity

5 008

4 507

-

5 008

Baltic Innovation Fund

1 939

582

-

1 939

Baltic Innovation Fund II

2 166

650

-

2 166

Total venture capital funds

61 19748 969-61 197

Energy Efficiency Fund

3 888

-

-

3 888

Regional Creative Industries Alliance

-

-

-

-

Total other activities

3 888

-

-

3 888

Funding allocated to increase reserve capital ******

1 452

-

-

1 452

Total support programme funding

259 783 *******

159 196(29 496)

230 287

GrantsVenture Capital Funds

Other Activities* The IFRS 9 implementation adjustment of EUR (7,645) thousand incorporated in 2018 (for details see financial report of 2021 Note 2(15)) consisting of Accrued liabilities of state aid of EUR 4,876 thousands and Fair value correction of EUR 12,341 thousands previously
disclosed in this note as separate columns reconciling Programme funding and Net programme funding are netted off vs Programmefunding as at 31 December 2021. That disclosure treatment is the same as was presented in the audited financial statements for theyear ended 31 December 2018. Net decrease of Fair value correction for the year 2021 of EUR 152 thousands has been also netted
off vs Programme funding as at 31 December 2021.
** Combined financial instrument.
****** It is expected that the financing will be transferred to the Group's reserve capital following the decision of the shareholders'meeting, which is planned in the 2nd quarter of 2022.
******* Support programme funding contains EUR 19,355 thousand allocated for management costs of the Group / Company to becompensated from support programme funding.

61JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

20 Support programme funding (cont’d)Based on the concluded programme implementation contracts, the funding received could be reduced by the outstanding
principal amount of the loans classified as lost, non-repaid loan principal amount and / or disbursements of guarantee
compensations. The Company need not have to repay the reductions of funding to the funding provider.
Movement in the Company’s support programme funding in 12 months of 2022, in thousands of euro:
Financial Instrument /Programme

Financing,net

Financingreceived

Reallocatedfunding
betweenprogrammesCompensatedgrantsCompensatedincomeandexpense

Revaluation of
liabilities

Programmes’
income/profitdistribution

Otherchanges

Changesin provisions
coveredby riskcoverage

31.12.2021.

Financing,net

31.12.2022.

Loans
ERDF II

1 579-(2 000)

-

-

-

29

7 490

65

7 163

ESF II969-(1 450)

-

-

-

24

1 321

(22)

842

Microcredits of Swiss
programme (closed
programme)

77

-

-

-

-

-

-

484

2

563

ERDF I

119

-

-

-

-

-

(35)

327

3

414

ESF I

314

-

-

-

-

-

-

-

-

314

ERDF II (second round)

5 762

-

(4 800)

-

-

-

33

1 223

-

2 218

Incubators (from ESF II)

83

-

-

-

-

-

-

-

-

83

ERDF II 2 Public fund

226

-

-

-

-

-

-

-

-

226

2 479

-

-

-

-

-

-

(440)

33

2 072

282

-

-

-

-

-

-

(9)

2

275

1 714

-

(286)

-

-

-

-

(433)

1 379

2 374

5 282

5 000

(3 000)

-

(176)

-

128

(12)

(69)

7 153

1 606

-

-

-

-

-

-

(371)

(141)

1 094

1 468

-

-

-

-

-

32

254

8

1 762

2 438

-

47

-

-

-

98

-

210

2 793

Fund of Funds programme –Start-up loans
Fund of Funds programme –Microcredits
Fund of Funds programme –Parallel loans
Energy Efficiency Loans forMulti-apartment Buildings (I)Start-up State Aid
Cumulation Lending
Programme
Other loans to start-ups
Mezzanine Programme –Loans
Guarantees and interest
grants programme

4 269

-

-

-

-

-

18

(1 256)-3 031

SME energy efficiency loans

3 373

-

-

-

-

-

-

(175)

(15)

3 183

ERDF SME growth loans--

15 000

-

-

-

-

-

(213)

14 787

ERDF loans for businesssustainability--

15 000

-

-

-

-

-

(269)

14 731

Parallel loans

1 845

-

-

-

-

-

-

(28)

(142)

1 675

Parallel loans 2

-

-

3 286

-

-

-

-

-

(424)

2 862

7 738

-

-

-

-

-

-

(196)

(84)

7 458

1 474

-

4 500

-

-

-

-

-

(129)

5 845

1 000

-

(250)

-

-

-

-

-

(8)

742

1 000

-

3 000

-

-

-

74

-

(36)

4 038

-

-

250

-

-

-

-

-

-

250

-

-

500

-

-

-

-

-

-

500

2 717

-

(364)

-

(63)

-

-

(70)

-

2 220

-

5 000

-

-

(63)

-

59

-

(31)

4 965

-

99 565

-

-

-

-

-

-

-

99 56547 814 **109 565

29 433

-

(302)

-

460

8 109

119

195 198

Loans for enterprises in rural
territories
Start-up loans to innovative
entrepreneurs
Multi-apartment building
improvement loans*
Rental multi-apartmentbuilding improvement loans
Energy Efficiency Loans forMulti-apartment Buildings (II)ERDF Multi-apartmentbuilding improvement loans
Cultural industry support
programme *ELFLA Agricultural and ruraldevelopment loans
Investment Loans with acapital rebate *Total loans* Combined financial instrument.
** Support programme funding includes funding that had to be reallocated between the programmes, partly done in 2022 (from theMicrocredits of Swiss programme), to be continued in 2023

62

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

20 Support programme funding (cont’d)
Movement in the Company’s support programme funding in 12 months of 2022, in thousands of euro: (cont’d)Financial Instrument /Programme

Financing,net

Financingreceived

Reallocatedfunding
betweenprogrammesCompensatedgrantsCompensatedincomeandexpense

Revaluation of
liabilities

Programmes’
income /profitdistribution

Otherchanges

Changesin provisions
coveredby riskcoverage

31.12.2021.

31.12.2022.

Guarantees
Fund of Funds programme Guarantees
Energy Efficiency Guarantees
for Multi-apartment Buildings
Housing Guarantee
Programme
Housing Guarantee
Programme for NAF soldiers
Portfolio guarantees forrenovation of family buildings*
Guarantee Programme for
Clients of State Aid
Accumulation, Grace Periodand Large Economic
Operators
Mezzanine Programme Guarantees

Financing,net

23 725-15 300

-

-

-

-

-

(2 211)36 814

7 279

-

-

-

(285)

-

230

-

(472)

6 752

9 559

737

-

-

-

-

-

(3 028)(4 062)

3 206

-

160

-

-

-

-

-

-

-

160

502

-

-

-

-

-

-

-

-

502

6 757

-

1 000

-

-

-

-

(1 261)

(53)

6 443

702

-

(47)

-

-

-

21

-

(89)

587

Portfolio Guarantee Fund

1 555

-

6 250

-

(137)

-

-

(237)

(1 073)

6 358

Export credit guarantees

1 841

-

1 000

-

-

-

-

(1 841)

(148)

852

549

156

-

-

(47)

-

-

-

-

658

Study and student portfolio
guarantees
ELFLA Agricultural and ruraldevelopment guarantees

-

2 500

-

-

-

-

-

-

-

2 500

Agricultural Guarantees

1 721

-

-

-

-

-

-

(827)

(481)

413

Total guarantees

54 1903 553

23 503

-

(469)

-

251

(7 194)(8 589)65 24548 82633 582-(20 631)

(994)

-

-

-

-

60 783

7 350

-

-

(2 885)

-

-

-

-

-

4 465

1 872

-

-

(730)

-

-

-

-

-

1 142

1 849

3 172

-

(3 205)

(159)

-

-

-

-

1 657

-

-

3 269

(1 537)

(136)

-

-

-

-

1 596

-

810

-

-

-

-

-

-

-

810

1 849

-

364

(1 051)

(63)

-

-

(10)

-

1 089

61 74637 5643 633(30 039)(1 352)

-

-

(10)

-

71 542Fund of Funds and venture
capital funds

52 08440 000(53 300)-(3 200)***(2 278)2 240 *****--

35 546

Investment Fund Activity

5 008

-

-

-

(616)****(1 382)

1 097******

780********

(354)

4 533

Baltic Innovation Fund

1 939

-

-

-

(206)

-

61 *******

(508)

-

1 286

Baltic Innovation Fund II

2 166

-

-

-

(264)

-

-

(641)

-

1 261

Total venture capital funds

61 19740 000(53 300)-(4 286)(3 660)

3 398

(369)

(354)

42 626

Energy Efficiency Fund

3 888

46

(3 269)

-

(85)

-

-

-

-

580

Regional Creative Industries
Alliance

-

3

-

-

(3)

-

-

-

-

-

Total other activities

3 888

49

(3 269)

-

(88)

-

-

-

-

580

1 452

683

-

-

-

-

-

(1 452)

-

683

-

(30
039)

(6 497)(3 660)

4 109

(916)

(8 824)375 874

GrantsEnergy Efficiency Grants forMulti-apartment Buildings
Housing grant programme“Balsts”
Grants for energy efficiency
improvement of family
buildings *Social Entrepreneurship
Programme
Grants for development ofenergy efficiency project
Grants for improving energy
efficiency of family buildings
Grants for Cultural industry
support *Total grants
Venture Capital Funds

Other Activities

Funding allocated to increase
reserve capital
Total support programmefunding

230 287

191 414* Combined financial instrument.
*** include EUR 1,820 thousand management fees for the 4th generation venture capital funds (see Note 12).
**** include EUR 446 thousand management fees for the 2nd and 3rd generation venture capital funds (see Note 12).
***** include EUR 536 thousand mezzanine interest received and EUR 42 thousand realised gain on investments in 4th generation venture capital funds in 12 months of2022 (see Note 12).
****** include EUR 225 thousand mezzanine interest received and EUR 872 thousand realised gain on investments in 2nd and 3rd generation venture capital funds in
12 months of 2022 (see Note 12).
******* include EUR 48 thousand realised gain on investment in Baltic Innovation Fund in 12 months of 2022 (see Note 12).
******** include deferred payments in amount of EUR 12 thousand (deferred income) from exited investments in 2nd and 3rd generation venture capital funds.

63

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

20 Support programme funding (cont’d)Gains less losses from liabilities at fair value through profit or loss, in thousands of euro: (cont’d)Company
01.01.2022.31.12.2022.

Group /
Company
01.01.2021.31.12.2021.

(unaudited)(audited)

Revaluation of investments in 2nd and 3rd generation venture capital funds(2 559)(1 805)

Realised gain on investments in 2nd and 3rd generation venture capital funds

863

(429)

Mezzanine interest received from investments in 2nd and 3rd generation venture capital funds

234

489

Revaluation of investments in 4th generation venture capital funds(1 455)(65)

Realised gain on investments in 4th generation venture capital funds

42

313

BIF realised gain-

153

Mezzanine interest received from investments in 4th generation venture capital funds

536

24

Gains less losses from liabilities at fair value through profit or loss

(2 339)(1 320)21 Provisions
Breakdown of the Company’s provisions for financial guarantees and off-balance sheet items, in thousands of euro:

Provisions for financial guarantees

Company

Group /
Company

31.12.2022.

31.12.2021.

(unaudited)(audited)

41 81833 603Company’s share of provisions

2 683

Provisions covered by Portfolio Loss Reserve

7 481

4 719

Provisions covered by Risk Coverage Reserve

31 65423 390

Provisions for loan commitments

1 076

5 494

790

Company’s share of provisions

431

140

Provisions covered by Portfolio Loss Reserve

12

188

Provisions covered by Risk Coverage Reserve

633

Provisions for grant commitments

376
Company’s share of provisions

376

Provisions covered by risk coverage-

Total provisions

462
73

43 27073
34 466Company’s share of provisions

3 490

Provisions covered by Portfolio Loss Reserve

7 493

5 707
4 907

Provisions covered by Risk Coverage Reserve

32 28723 852

Movement in the Company’s provisions for financial guarantees, in thousands of euro:
Company
01.01.2022.31.12.2022.

Group /
Company
01.01.2021.31.12.2021.

(unaudited)(audited)

Provisions at the beginning of the period

33 60331 413

Increase in provisions (Note 10)

24 06416 071

Decrease in provisions (Note 10)(15 312)(12 916)

Reclassification (Disbursed guarantee)

(537)

(965)

Provisions at the end of the period ended 31 December (unaudited)

41 81833 603Company’s share of provisions

2 683

Provisions covered by Portfolio Loss Reserve

7 481

5 494
4 719

Provisions covered by Risk Coverage Reserve

31 65423 39064

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

22 Reserves
Analysis of the Company’s reserves movements, in thousands of euro:

Reserves as of 1January 2021 (audited)(Decrease) in revaluation reserve of financial assets
measured at fair value through other comprehensive
incomeDecrease of Specific Reserves to General reserve capital at
allocation of the profit for year 2020

Specific reserves
for support
programmes

Other specificreservesdifference
recognised inGroup’sreorganisation
reserve

Generalreserve
capital

Revaluation reserve offinancial assets measured atfair value through othercomprehensive income

Total
reserves

161 133(15 935)

25 121

1 213

171 532

-

-

-

(515)

(515)

(6 429)

-

6 429

-

-

Distribution of 2020 year profit of the Company

-

-

5 539

-

5 539

Increase of reserve capital

45 489---45 489Reserves as of 31 December 2021 (audited)

200 193(15 935)

37 089698

222 045(Decrease) in revaluation reserve of financial assets
measured at fair value through other comprehensive
income---(1 197)(1 197)

Distribution of 2021 year profit of the Company--

13 829-13 829Decrease of Specific Reserves to General reserve capital at
allocation of the profit for year 2021

(3 446)

-

3 446

-

-

Increase of reserve capital

3 525

-

-

-

3 525

Decrease of reserve capital(58 565)

-

-

-

(58
565)

Reserves as of 31 December 2022 (unaudited)

141 707(15 935)

54 364(499)

179 637

Subitem Reserve capital for non-Covid-19 programmes includes the following increases in the Specific Reserve capital for nonCovid-19 programmes in 2022 12 months:▪

▪

An increase of EUR 1,452 thousand for housing guarantees in accordance with the decision of the Extraordinary
General Shareholders’ Meeting of 27 June 2022, adopted on the basis of the Cabinet of Ministers Regulations No.95
of 20 February 2018" Regulations on state aid for the purchase or construction of a dwelling" and concluded on 22
December 2021 Agreement on dwelling guarantee support program funding No.2/2021 with the Ministry of
Economics
An increase for study and student portfolio guarantees for the total amount of EUR 2,073 thousand in accordancewith the decision of the Extraordinary General Shareholders’ Meeting of 27 June 2022, adopted on the basis of the
Cabinet of Ministers Regulations No.231 of 21 April 2020 "Regulations on study and student lending for studies in Latvia
from the resources of credit institutions, which are guaranteed by the state budget" and the agreement concluded
on 10 August 2020 (with the amendments of 27 December 2021) on the financing, implementation, cooperation,
supervision and mutual exchange of information of the study and student loan guarantee program with the Ministryof Education and Science.

Item Reserve capital for mitigation of impact of Covid-19 includes a decrease in the Special Reserve capital of EUR 58,565
thousand in accordance with the decision of the Extraordinary General Meeting of Shareholders of the Company of 1 April
2022, adopted on the basis of the clauses 2 and 3 of the Cabinet of Ministers Order as of 6 July 2021 (Meeting Minutes No.51).
A decrease in the reserve capital consists of:▪

Decrease of Special Reserve Capital by EUR 22,565 thousand for loans to large companies (MidCap Loans)▪

Decrease of Special Reserve Capital by EUR 16,000 thousand for portfolio guarantees to mitigate impact of theCovid-19 crisis (were included in Credit Holiday Guarantees)▪

Decrease of Special Reserve Capital by EUR 20,000 thousand for guarantees to large companies (MidCap
Guarantees) whose activities have been affected by the spread of Covid-19

As result of reduction of the Special Reserve Capital, redistributed funding will be diverted to finance the new Investment Loan
with a capital rebate programme. Thus, the expected reduction of the Special Reserve Capital by reducing the funding for
certain support programs and the transfer of the respective funding in the amount of EUR 58,565 thousand to finance a new
support programme is maintained, maintaining the same funding - financing for a new support programme and expected
losses. By transferring financing from the Special Reserve Capital, the Portfolio Loss Reserve will decrease by EUR 49,800
thousand.
The funding included in the Specific Reserves will be used to cover the expected credit losses of the programmes at full extent
as well as management fees for AIF Altum Capital Fund and as such are disclosed separately as Portfolio Loss Reserve within
respective reserve capital.
65

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

22 Reserves (cont’d)Breakdown of the Company’s “Specific reserves for support programmes”:

Specific
reserves as of 1
January 2021
(audited)Reserve capital for non-Covid-19 guarantees programmes

Reserve capital for mitigating of impact of Covid-19

Housing
Guarantee
Programme

Study andstudent
portfolio
guarantees

Guarantees
foragriculture,
fisheries andruraldevelopment

Guarantee
Programme
for Clients ofState Aid
Accumulation,
Grace Periodand Large
Economic
Operators

Loans to
MidCaps

Guarantees
to
MidCaps

Working
capitalloans

Loan holiday
guarantees

Reserve
capitalfor AIF“Altumcapital
fund”

Total
specific
reserves
for support
programm
es

15 507

626

-

-

-

20 00050 00050 00025 000161 133

15 507

626

-

-

-

20 00029 00030 0007 131

102 264

-

(392)

-

-

-

-

(2 668)(3 184)(185)(6 429)

-

(392)

-

-

-

-

(2 668)(3 184)(185)(6 429)

-

-

-

2 179

2 141

5 788

2 500

-

-

-

(2 500)

-

-

2 000

22 565-

10 816--45 489of which:
Portfolio Loss
Reserve(Specific
Reserves)
Portfolio Loss
Reserve(Specific
Reserves) to be
used to covercredit loss upon
approval of the2020 annual
reportPortfolio Loss
Reserve(Specific
Reserves) used
to cover credit
loss upon
approval of the2020 annual
reportReallocation ofreserve capital
Increase of
specific reserves

66JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

22 Reserves (cont’d)Breakdown of the Company’s “Specific reserves for support programmes” (cont’d):Specific
reserves as of
31 December
2021 (audited)

Reserve capital for non-Covid-19 guarantees programmes

Reserve capital for mitigating of impact of Covid-19

Housing
Guarantee
Programme

Study andstudent
portfolio
guarantees

Guarantees
foragriculture,
fisheries andruraldevelopment

Guarantee
Programme
for Clients ofState Aid
Accumulation,
Grace Periodand Large
Economic
Operators

Loans to
MidCaps

Guarantees
to
MidCaps

Working
capitalloans

Loan holiday
guarantees

Reserve
capitalfor AIF“Altumcapital
fund”

Total
specific
reserves
for support
programm
es

17 686

2 375

5 788

4 500

22 56520 00058 14844 31624 815200 193

17 686

2 375

5 788

4 500

13 800

20 00042 38544 3168 850

159 700-(1 140)

-

-

-

-

(1 683)

(186)

(437)

(3 446)-(1 140)

-

-

-

-

(1 683)

(186)

(437)

(3 446)

1 452

2 073

-

-

-

-

-

-

-

3 525

-

-

-

-

(22 565)(20 000)-(16 000)-(58 565)

19 138

3 308

5 788

4 500

-

-

56 46528 13024 378

141 70719 138

3 308

5 788

4 500

-

-

40 70228 1308 413

109 979-(1 906)

-

(482)

-

-

(1 930)

(473)

(471)

(5 262)of which:
Portfolio Loss
Reserve(Specific
Reserves)
Portfolio Loss
Reserve(Specific
Reserves) to be
used to covercredit loss upon
approval of the2021 annual
reportPortfolio Loss
Reserve(Specific
Reserves) used
to cover credit
loss upon
approval of the2021 annual
reportIncrease ofreserve capital
Decrease ofreserve capital,
directing funds
to risk coverageof program
Loans withcapital discountSpecific
reserves as of
31 December
2022(unaudited)of which:
Portfolio Loss
Reserve(Specific
Reserves)
Portfolio Loss
Reserve(Specific
Reserves) to be
used to covercredit loss upon
approval of the2022 annual
report67

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

22 Reserves (cont’d)Analysis of the Company’s portfolio loss reserve movements, in thousands of euro:

Portfolio Loss
Reserve as of 1
January 2021
(audited)

Portfolio loss reserve for non-Covid-19 guarantees
programmes
Housing
Study
Guarantees
Guarantee
Guarantee
andforProgramme
Programme
student
agriculture,
for Clients ofportfolio
fisheries andState Aid
guarant
rural
Accumulation,eesdevelopGrace Period
ment
and Large
Economic
Operators

Portfolio loss reserve for mitigating of impact of Covid19
Loans to
Guarantees
Working
Loan holiday
MidCapsto MidCaps
capitalguarantees
loans

Reserve
capitalfor AIF“Altumcapital
fund”

Total
portfolio
loss
reserve

15 507

626

-

-

-

20 00029 00030 0007 131

102 264

-

(392)

-

-

-

-

(2 668)(3 184)(185)(6 429)

2 179

2 141

5 788

4 500

13 800-

16 05317 500-61 961

-

(392)

-

-

-

-

(2 668)(3 184)(185)(6 429)

-

-

-

-

-

-

-

-

2 060

2 060

-

-

-

-

-

-

-

-

(156)

(156)

17 686

2 375

5 788

4 500

13 800

20 00042 38544 3168 850

159 700-(1 140)

-

-

-

-

(1 683)

(186)

(437)

(3 446)

-

-

-

-

-

-

-

-

-

-

-

(1 140)

-

-

-

-

(1 683)

(186)

(437)

(3 446)

1 452

2 073

-

-

-

-

-

-

-

3 525

19 138

3 308

5 788

4 500

-

-

40 70228 1308 413

109 979-(1 906)

-

(482)

-

-

(1 930)

(473)

(471)

(5 262)of which:
Portfolio Loss
Reserve (SpecificReserves) to be used
to cover credit loss
upon approval of
the 2020 annual
reportIncrease /reclassification ofPortfolio Loss Reserve
Reallocation offunding within
Portfolio Loss Reserve– funding for
management fee
Reallocation offunding within
portfolio loss reserve– funding for
management fee
Decrease of Portfolio
Loss Reserve
according to the Listof the Partners andtheir Commitments
Portfolio Loss
Reserve as of 31
December 2021
(audited)of which:
Portfolio Loss Reserve(Specific Reserves)to be used to covercredit loss upon
approval of the 2021
annual report
Reallocation offunding within
Portfolio Loss Reserve– funding for
management fee
Increase of reserve
capitalDecrease of reserve
capital, directing
funds to capital
discount of program
Loans with capital
discount
Portfolio Loss
Reserve as of 31
December 2022
(unaudited)of which:
Portfolio Loss Reserve(Specific Reserves)to be used to covercredit loss upon
approval of the 2022
annual report68JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

23 Off-balance sheet items and contingent liabilities
All amounts in thousands of euro
Company

Group /
Company

31.12.2022.

31.12.2021.

(unaudited)(audited)

481 013414 978

Loan commitments

61 23325 572Grant commitments

47 82411 089Commitments to AIF “Altum capital fund” *31 20933 450Commitments to investments in associates

44 13054 426

Commitments to other investments

29 85936 739695 268

576 254

Contingent liabilities:
Outstanding guarantees
Financial commitments:

Total contingent liabilities and financial commitments* Taking into account the investments made by AIF "Altum capital fund" as of December 31, 2022 (EUR 34.4 million) and the planned
investments of EUR 7.4 million for existing portfolio companies as well as with the end of the investment period (June 30, 2022), theposition "Liabilities for investment in AIF "Altum capital fund"" could decrease by EUR 22.5 million.

Impairment allowances for loan commitments, in thousands of euro:
Company

Group /
Company

31.12.2022.

31.12.2021.

(unaudited)(audited)

Unutilised loan facilities

61 23325 572

Impairment allowances(1 076)(790)

Total unutilized loan facilities, net

60 15724 782Company

Group /
Company

31.12.2022.

31.12.2021.

(unaudited)(audited)

Grant commitments

47 82411 089Impairment allowances

(376)

(73)

Total grant commitments, net

47 44811 016

Impairment allowances for grant commitments, in thousands of euro:69

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

23 Off-balance sheet items and contingent liabilities(cont’d)Breakdown of the Company’s off-balance sheet assets and contingent liabilities by remaining contractual maturities as at
31 December 2022, in thousands of euro:
Up to 1month

1 to 3months3 to 6months6 to 12months1 to 5 years

Over 5 years
and w/omaturityTotal

305 461 *--7

30 835

144 710481 013

Loan commitments

61 233

-

-

-

-

-

61 233Grant commitments

47 824

-

-

-

-

-

47 824

Commitments to AIF “Altum capitalfund”**

19

577

596

1 929

28 088-31 209Commitments to investments in associates

2 622

5 243

7 694

13 66913 461

1 441

44 130Commitments to other investments

575

1 150

1 725

3 450

15 2617 698

29 859Total financial commitments

112 273

6 970

10 01519 04856 8109 139

214 255

Total contingent liabilities and financial
commitments

417 734

6 970

10 01519 05587 645

153 849695 268

Contingent liabilities
Outstanding guarantees
Financial commitments* Outstanding financial guarantees are presented “Up to 1 month” as these guarantees can be claimed on demand and the Company has tomake a decision on payment of guarantee claim within one month.
** Taking into account the investments made by AIF "Altum capital fund" as of December 31, 2022 (EUR 34.4 million) and the planned investmentsof EUR 7.4 million for existing portfolio companies as well as with the end of the investment period (June 30, 2022), the pos ition "Liabilities forinvestment in AIF "Altum capital fund"" could decrease by EUR 22.5 million.

Breakdown of the Company’s off-balance sheet assets and contingent liabilities by remaining contractual maturities as at
31 December 2021, in thousands of euro:
Up to 1month

1 to 3months3 to 6months6 to 12months1 to 5 years

Over 5 years
and w/omaturity

Total

262 115 *--4

18 488134 371

414 978

Loan commitments

25 572

-

-

-

-

-

25 572Grant commitments

11 089

-

-

-

-

-

11 089Commitments to AIF “Altum capital fund”

164

11 73819 961

261

1 002

324

33 450Commitments to investments in associates

415

1 787

2 796

8 979

35 0065 443

54 426

Commitments to other investments

363

485

848

4 171

25 1455 727

36 739Total financial commitments

37 60314 01023 605

13 41161 153

11 494161 276

Total contingent liabilities and financial
commitments

299 718

14 01023 605

13 41579 641

145 865576 254

Contingent liabilities
Outstanding guarantees
Financial commitments* Outstanding financial guarantees are presented “Up to 1 month” as these guarantees can be claimed on demand and theCompany has to make a decision on payment of guarantee claim within one month.

Subitem Commitments to AIF “Altum capital fund” are contingent liabilities based on a limited partnership agreement
between the Company as a general partner and the members of the AIF “Altum capital fund” as limited partners which put
an obligation on the Company to allocate financial resources to the fund.
Subitem Commitments to venture capital funds are contingent liabilities, which are based on agreements between the
Company and the venture capital fund which put an obligation on the Company to allocate financial resources to the fund.

70

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

24 Related party transactions
Related parties include members of the Supervisory Council and the Management Board of the Company, their close family
members, as well as companies under their control.
In accordance with International Accounting Standard (IAS) 24 “Related Party Disclosures”, the key management personnel,
directly or indirectly authorised and responsible for planning, management and control of the Company’s operations aretreated as related parties to the Company. The powers granted to the heads of the structural units of the Company do notentitle them to manage the operations of the Company and decide on material transactions that could affect theCompany’s operations and/or result in legal consequences.
The Company has entered into a number of transactions with other public authorities. The most significant were obtaining
financing from the Investment and Development Agency of Latvia, Ministry of Finance, Ministry of Economics, Rural Support
Service and Central Finance and Contracting Agency, which co-finance the development programmes of the Company.
Balances from transactions with related parties, including off-balance sheet financial liabilities, in thousands of euro:
Transactions withshareholders
Company
Group /
Company

Associates
Company

Group /
Company

Other companies owned by
the Group’s shareholders
Company
Group /
Company

31.12.2022.

31.12.2021.

31.12.2022.

31.12.2021.

31.12.2022.

31.12.2021.

(unaudited)(audited)(unaudited)(audited)(unaudited)(audited)

Investments in venture capital funds--

47 68050 077--

Investments in AIF “Altum capital fund”--

17 70114 871--

Due to general governments

-

-

-

-

3 318

3 321

Support programme funding

288 737

222 774--

86 32751 559Off-balance sheet financial liabilities for venture capital funds--

44 13054 426--Off-balance sheet financial liabilities for AIF “Altum capital
fund”

-

-

31 20933 450--Transactions with related parties, in thousands of euro:
Received State aid funding

01.01.2022.31.12.2022.
(unaudited)Group /
Company
01.01.2021.31.12.2021.
(unaudited)

Issued State aid funding or funding
paid backCompany
Group /
Company
01.01.2022.01.01.2021.31.12.2022.
31.12.2021.
(unaudited)(unaudited)

Ministry of Finance of the Republic of Latvia

32 70335 931(13 054)(17 378)

Ministry of Agriculture of the Republic of Latvia

-

7 000

-

-

Ministry of Economics of the Republic of Latvia

42 14633 744-(2 435)

12 42920 968(10 362)(14 613)

Rural Support Service

7 500

-

-

-

Central Finance and Contracting Agency of the Republic of Latvia

78 58251 559--

Ministry of Education and Science of the Republic of Latvia

2 245

2 003

-

-

Ministry of Culture of the Republic of Latvia

3 003

3 815

(3 070)(2 185)

Ministry of Wealth Fair of the Republic of Latvia

3 172

2 454

-

-

Company

Transactions with shareholders

Associates
Venture capital funds
Other companies owned by the Group’s shareholders

The remuneration of the members of the Supervisory Council, Audit Committee and the Management Board of the Company
in the 12 months of 2022 amounted to EUR 776 thousand (12 months of 2021: EUR 713 thousand), incl. social insurance
contributions.

71

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

25 Fair values of assets and liabilities
The fair values of the Company's financial assets and financial liabilities and their differences to their carrying amount arepresented below, in thousands of euro:
Carrying Amount

Fair Value

Company

Group /
Company

Company

Group /
Company

31.12.2022.

31.12.2021.

31.12.2022.

31.12.2021.

(unaudited)(audited)(unaudited)(audited)

Due from credit institutions and the Treasury

571 667455 006

571 724455 006

Financial assets at fair value through other comprehensive income - investment
securities

9 515

14 0519 515

14 051

Investment securities

39

37

91

90

Individuals

317 859

330 530

325 250

AssetsFinancial assets at amortised cost:

321 991

Companies

30 73525 47531 22724 897Loans

287 124305 055

294 023

297 094

58 28045 39758 28045 397

Investments in associates (investments in Baltic Innovation Fund)

Grants

14 23213 22214 23213 222

Investment properties

53 45346 16453 45346 164

Financial assets

1 502

3 214

1 502

3 214

Total assets

1 026 547

907 621

1 034 046

899 136

Due to credit institutions

36 29053 41636 29053 416

Due to general governments

153 784

121 348

153 784

121 348

Financial liabilities at amortised cost - Issued debt securities

85 51385 55885 51385 558Support programme funding

375 874

230 287

375 874

230 287

Total liabilities

651 461490 609651 461490 609

Liabilities

The hierarchy of financial assets and liabilities measured and disclosed at fair value, in thousands of euro:
Level 1

Level 2

Level 3

Total

Company

Group /
Company

Company

Group /
Company

Company

Group /
Company

Company

Group /
Company

31.12.2022.

31.12.2021.

31.12.2022.

31.12.2021.

31.12.2022.

31.12.2021.

31.12.2022.

31.12.2021.

(unaudited)(audited)(unaudited)(audited)(unaudited)(audited)(unaudited)(audited)

-

3 516

9 515

10 535

-

-

9 515

14 051----

14 23213 22214 23213 222----53 45346 16453 45346 164--571 724455 006--

571 724455 006

Investment securities

-

-

90

91

-

-

90

91

Loans

-

-

-

-

325 250

321 991

325 250

321 991

Grants----58 28045 39758 28045 397

Financial assets

-

-

-

-

1 502

3 214

1 502

3 214

Total assets

-

3 516

581 329465 632452 717429 988

1 034 046

899 136

-

-

-

-

375 874

230 287

375 874

230 287

Due to credit institutions

-

-

-

-

36 29053 41636 29053 416

Due to general governments

-

-

-

-

153 784

121 348

153 784

121 348

Financial liabilities at amortised cost Issued debt securities

-

-

-

-

85 51385 55885 51385 558

Total liabilities

-

-

-

-

651 461490 609651 461490 609

Assets measured at fair value
Financial assets at fair value throughother comprehensive income investment securities
Investments in venture capital funds –associates (investments in BIF)
Investment properties
Assets with fair values disclosed
Due from credit institutions and theTreasury
Financial assets at amortised cost:

Liabilities measured at fair value
Support programme funding
Liabilities with fair value disclosed

72

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

25 Fair values of assets and liabilities (cont’d)Assets
Where possible, the fair value of securities is estimated on the basis of quoted market prices. For determining the fair value ofother securities, the Management has applied the discounted cash flow method where the cash flow forecasts are based onassumptions and up-to-date market information available at the time of measurement. The fair value of loans with interest
payable at fixed rates by specified dates was determined by applying the discounted cash flow method, whilst in regard to
the fair value of loans with their basic interest rate tied to variable market rates, the Company have assumed that the carrying
amount of such loans corresponds to their fair value.
Liabilities
The fair value of financial liabilities stated at amortised cost, for example, the fair value of balances due to credit institutions,is estimated using the discounted cash flow method and the interest rates applied to similar products at the end of the year.
The fair value of financial liabilities (for example, balances due to credit institutions) repayable on demand or subject to avariable interest rate, approximately corresponds to their carrying amount.
Fair value hierarchy of financial assets and liabilities
The Company classify the fair value measurements based on the fair value hierarchy, reflecting the significance of the input
data. The fair value hierarchy of the Company has 3 levels:▪ Level 1 includes listed financial instruments for which an active market exists, if in determining their fair value the Company
use unadjusted quoted market prices, obtained from a stock-exchange or reliable information systems;▪ Level 2 includes balances due from other credit institutions and the Treasury as well as financial instruments traded over thecounter (OTC) and financial instruments having no active market or a declining active market whose fair value
measurement are based to a significant extent on observable market inputs (e.g., rates applied to similar instruments,
benchmark financial instruments, credit risk insurance transactions, etc.);▪ Level 3 includes financial instruments whose fair value measurements rely on observable market inputs requiring significant
adjustment and have to be supported by unobservable market inputs, and financial instruments whose fair value
measurements are based to a significant extent on data that cannot be observed on the active market and assumptions
and estimates of the Company that enable a credible measurement of the financial instrument’s value.
Debt securities
Debt securities are measured applying quoted prices or valuation techniques using observable or unobservable market inputs
or combination of the two. The majority of investments in debt securities recognised at fair value are investments in Latvian
treasury bills with a quoted price, but not traded on the active market. The Management has estimated that it is reasonable
to presume the fair value of these securities to be equal to their quoted price.
Derivatives
The derivatives, measured using valuation techniques which rely on observable market inputs, are mainly currency swaps andforwards. The most frequently applied valuation techniques include discounted cash flow calculations, where inputs include
foreign exchange spot and forward rates as well as interest rate curves.
Investments in venture capital funds
The Company have a number of investments in venture capital funds. The Company’s investments in venture capital funds
are classified as Associates or Investments in subsidiaries depending on existence of significant influence or control.
Investments in venture capital funds, classified as Associates, except for investment in Baltic Innovation Funds, are measured
using the equity method both at the Company level. Investments in Baltic Innovation Funds are measured at fair value throughprofit or loss statement.

73

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

25 Fair values of assets and liabilities (cont’d)Investment properties
The fair value of the Company’s investment property is determined based on reports of independent appraisers, who hold arecognised and relevant professional qualification, and who have had recent experience of the valuation of property insimilar locations and of similar category.
Investments in property are measured at fair value applying one or complex of the following three methods: (a) ,market
approach, (b) income approach and (c) cost approach.
The appropriate valuation method is selected depending on the nature of property and acquisition purpose. Investment
property represents agricultural land, which average selling price per hectare is 2,5 thousand euro.
Assets held for saleNon-current assets or disposal groups classified as held for sale are measured at the lower of their carrying amount and fairvalue less costs to sell. Non-current assets and disposal groups are classified as held for sale if their carrying amount is recovered
through a sale transaction rather than through continuing use. This condition is regarded to be met only when the sale is highly
probable and the asset or disposal group is available for immediate sale in its present condition. Management must be
committed to the sale, and the sale transaction must be classified as a completed sale within one year from the date ofclassification. The fair value of assets held for sale is based on selling price of underling investment properties.

26 Segment Information
The Company’s management considers that the Company’s operations are performed in 7 operational segments:
▪
▪
▪
▪
▪
▪
▪

Loan service
Guarantee service,
Venture capital fund service,
Grant service,
Land Fund service,
Management of AIF “Altum capital fund”
Other services.

Other services include transactions with repossessed collaterals taken over in the debt collection process and developmentof new support programmes as well as transactions, which cannot be attributed to support programmes.
Segment information is prepared in a manner consistent with the internal management information provided to the chief
operating decision maker. The chief operating decision maker is the person or group that allocates resources to and assesses
the performance of the operating segments of an entity. The Management board of the Company is the chief operating
decision maker. The Company doesn’t provide detailed information on the type of transaction since all the transactions are
external.

74

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

26 Segment Information (cont’d)Analysis of the operating segments of the Company for the period from 1 January 2022 till 31 December 2022, in thousands ofeuro:Interest income

Loan
service *Guarantee
service *Venturecapitalfund
serviceGrant
serviceLand Fund
service

Managementof AIF “Altum
capital fund”

Other
services

Total

13 780

3 218

12

1

2 851

-

72

19 934of which, interest on loans andguarantees (Note 4)

13 641

3 060

-

-

2 851

-

72

19 624

Interest expense(2 147)

(96)

(4)

-

(713)

-

-

(2 960)Net interest income

11 633

3 122

8

1

2 138

-

72

16 974

818

1 195

3 405

587

-

-

88

6 093

(735)

(530)

(3 151)

(587)

-

-

(88)

(5 091)

83

665

254

-

-

-

-

1 002

43

50

4

-

-

-

-

97

-

-

(1 539)

-

-

-

-

(1 539)

-

-

48

-

-

-

-

48

Income for implementation of state
aid programmes
Expenses to be compensated for
implementation of state aid
programmes
Net income for implementation ofstate aid programmes
Gains from debt securities andforeign exchange translation
Share of (losses) of investment inassociates
Share of gain of investment inassociates at fair value through profit
or loss
Gains less losses from liabilities at fairvalue through profit or loss

-

-

2 339

-

-

-

-

2 339

Other income

-

-

1 007

5

4 650

485

60

6 207

Other expense

(285)

(84)

(42)

(36)

(485)

(485)

(10)

(1 427)

Operating income / (loss) before
operating expenses

11 474

3 753

2 079

(30)

6 303

-

122

23 701

Staff costs(3 627)

(875)

(46)

(1 400)

(246)

-

(317)

(6 511)

Administrative expense

(996)

(331)

9

(324)

(107)

-

(80)

(1 829)Amortisation of intangible assets anddepreciation of property, plant andequipment

(350)

(168)

(84)

(172)

(52)

-

(37)

(863)

(Impairment) gain, net(3 230)

92

-

(407)

13

-

165

(3 367)

Profit or (loss) from assets held forsale revaluation

-

-

-

-

-

-

-

-

Total segment profit/(loss)

3 271

2 471

1 958

(2 333)

5 911

-

(147)

11 131

Financial assets at fair value throughprofit or loss--

51 149----51 149Other investments--

14 232----14 232

Investments in associates--

15 246----15 246

Additions of property andequipment, intangible assets andinvestment property

319

98

24

133

5 779

-

23

6 376

Total segment assets

555 335

151 112162 674

74 25289 970-66 486

1 099 829

Total segment liabilities

403 951

112 089

39 42773 83574 088-809

704 199

Assets under management (AUM)

-

-

-

-

-

34 629-34 629* The financial result of the segment also includes the financial result of the combined financial instruments, which are not disclosed separately
in the segment analysis, but which include the component of financial instrument (such as a loan or guarantee) and the component of thecapital rebate.

75

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Notes to the Financial statements

26 Segment Information (cont’d)Analysis of the operating segments of the Company for the period from 1 January 2021 till 31 December 2021, in thousands ofeuro:Interest income

Loan
service

Guarantee
service

Venturecapitalfund
service

13 4393 125

26

of which, interest on loans andguarantees (Note 4)

13 269

2 939

Grant
service-Land Fund
service

Management of AIF“Altumcapital
fund”

2 256

-

-

2 256

Other
services

Total

11
-

18 85711

18 475Interest expense(1 446)

(30)

-

-

(664)

-

-

(2 140)Net interest income

11 993

3 095

26

-

1 592

-

11

16 717

216

1 102

2 006

1 056

-

-

66

4 446

(215)

(476)

(2 016)(1 056)

-

-

(66)

(3 829)

1

626

(10)

-

-

-

-

617

23

24

4

-

-

-

-

51

-

-

(1 382)

-

-

-

-

(1 382)

-

-

2 817

-

-

-

-

2 817

Income for implementation of state aid
programmes
Expenses to be compensated for
implementation of state aid
programmes
Net income for implementation of state
aid programmes
Gains from debt securities and foreignexchange translation
Share of (losses) of investment inassociates
Share of gain of investment inassociates at fair value through profit or
loss
Gains less losses from liabilities at fairvalue through profit or loss

-

-

1 321

-

-

-

-

1 321

Other income

-

-

158

21

2 389

620

33

3 221

Other expense

(273)

(198)

(9)

(32)

(368)

(620)

(9)

(1 509)Operating income / (loss) before
operating expenses

11 744

3 547

2 925

(11)

3 613

-

35

21 853

Staff costs(3 408)

(951)

(214)

(778)

(242)

-

(202)

(5 795)Administrative expense

(992)

(337)

(96)

(337)

(84)

-

(47)

(1 893)

Amortisation of intangible assets anddepreciation of property, plant andequipment

(447)

(198)

(45)

(174)

(36)

-

(35)

(935)

(Impairment) gain, net

983

299

-

(155)

14

-

(542)

599

Profit or (loss) from assets held for salerevaluation

-

-

-

-

-

-

-

-

Total segment profit/(loss)

7 880

2 360

2 570

(1 455)

3 265

-

(791)

13 829Financial assets at fair value throughprofit or loss--

51 727----51 727

Other investments--

13 222----13 222

Investments in associates

-

-

8 936

-

-

-

-

8 936

Additions of property and equipment,
intangible assets and investment
property

161

61

14

75

2 179

-

12

2 502

Total segment assets

465 460

157 082

160 81163 10187 226456

42 068976 204

Total segment liabilities

235 612

94 11563 14262 81975 576-4 204

535 468

Assets under management (AUM)

-

-

-

-

-

30 772-30 77227 Events after the reporting date
There are no other subsequent events since the last day of the reporting year, which would have a significant effect on thefinancial position of the Company.

76

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Other Notes

OTHER NOTES TO UNAUDITED INTERIM CONDENSEDREPORT
Key financial and performance indicators

78 - 79

Definitions of indicators

80 - 8177

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Other Notes

OTHER NOTES TO THE INTERIM CONDENSED REPORTKEY FINANCIAL AND PERFORMANCE INDICATORS
Based on data from financial statements for the respective reporting period2022 12M(unaudited)2022 9M(unaudited)2022 6M(unaudited)

Net interest income (EUR ’000)

16 97412 4588 391

Operating profit (EUR ’000)

11 131

6 741

6 333

Profit for the period (EUR ’000)

11 131

6 741

6 333

Cos to income ratio (CIR)

38.83%

43.22%

38.97%

Employees

234

232

230

Total assets (EUR ’000)

1 099 829

1 107 972

1 044 930

Financial debt (EUR ’000)

458 375

467 818438 447

Tangible common equity (TCE) / Total tangible managed assets (TMA) *26.90%

24.11%

25.06%

Equity and reserves (EUR ’000)

395 630

391 303391 059

Total risk coverage: (EUR ’000)

297 803307 793279 029

Risk coverage reserve231 125

234 831202 272

Risk coverage reserve used for provisions(38 039)(33 992)(31 963)

Portfolio loss reserve (specific reserve capital)

109 979

109 979

109 979

Portfolio loss reserve used to compensate provisions in the distribution of annual profit(5 262)(3 025)(1 259)Liquidity ratio for 180 days **

366%

567%

402%

Net Cash flows from operating activities (EUR ’000)

89 520115 21662 081Net Cash flows from financing activities (EUR ’000)

3 526

2 941

2 659

Net Cash flow from investing activities (EUR ’000)(8 423)(6 540)(8 078)Support instruments gross value (EUR ’000), of which

1 064 821

1 048 653

1 021 659

Loans (excluding sales and leaseback transactions)

311 844322 528319 742

Guarantees

481 013459 627443 277

Venture capital funds

90 27786 38386 316

Land Fund, of which:

80 54284 13584 216- sales and leaseback transactions

27 08934 38434 477- investment properties

53 45349 75149 739963 676952 673933 551

33 97633 57932 813Loans (excluding sales and leaseback transactions)

95 82073 17748 126

Guarantees

153 067

111 059

70 401

Venture capital funds

18 526

10 3448 400

Land Fund, of which:

7 414

6 788

6 108

- sales and leaseback transactions

3 105

2 847

2 353

- investment properties

4 309

3 941

3 755

274 827

201 368

133 035

Number of transactions

6 539

4 914

3 198

Leverage for raised private funding

123%

179%

128%

Volume of support programmes funding per employee (EUR ’000)

4 118

4 106

4 059

Long-term rating assigned by Moody’s Investors Service

Baa1

Baa1

Baa1

Key financial data

Financial instruments gross value (EUR ’000) ***Total
Number of transactions
Volumes issued (EUR ’000) (by financial instrument) ***Total* TMA includes the off-balance sheet item, namely, guarantees at net carrying amount.
** The calculation of liquidity ratio takes into account the previous experience and management estimate of the expected amount and timing of guarantee claims.
*** Taking into account the significance of the volume, the Land Fund portfolio, which consists of leaseback transactions and investment properties, is also presented in
the operational volumes for the period. As in compliance with the accounting principles and IFRS the leaseback transactions are accounted for under the loans, theloan volume in this table has been reduced for the volume of the leaseback transactions as it is recorded under the Land Fund portfolio.

78

JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Other Notes

OTHER NOTES TO THE INTERIM CONDENSED REPORT(cont’d)
KEY FINANCIAL AND PERFORMANCE INDICATORS (cont’d)Based on data from audited financial statements for the respective years
2022(unaudited)

2021

2020

2019

2018

2017
(corrected) *Key financial data
Net interest income (EUR ’000)

16 97416 717

14 572

11 56911 302 **11 602

Operating profit (EUR ’000)

11 13113 829

5 539

8 131

4 092

8 709

Profit for the period (EUR ’000)

11 13113 829

5 539

8 131

4 092

8 709 *

Cos to income ratio (CIR)

38.83%

39.46%

47.51%

52.58%

74.84% ***50.30% *Employees

234

226

211

203

222

230

Total assets (EUR ’000)

1 099 829

976 204

850 704

560 061495 939453 668 *Financial debt (EUR ’000)

458 375360 909342 490

217 943

177 249

146 157

Tangible common equity (TCE) / Total tangible managed
assets (TMA) ****

26.90%

33.82%

33.56%

29.40%

31.70%

35.10% *Equity and reserves (EUR ’000)

395 630440 736382 594

232 738

221 590

222 848 *Total risk coverage: (EUR ’000)

297 987285 954

180 205

87 45677 81567 593 *Risk coverage reserve231 125

159 196

112 567

99 77885 27662 651

Risk coverage reserve used for provisions(38 039)(29 496)(28 197)(27 829)(19 268)(4 753)

Portfolio loss reserve (specific reserve capital)

109 979

159 700

102 264

15 507

11 8079 695(6 429)---Portfolio loss reserve used tocompensate provisions upon
approval of the annual report(5 078)(3 446)

Liquidity ratio for 180 days *****

366%

464%

582%

227%

482% *Net Cash flows from operating activities (EUR ’000)

92 12849 555518%

21 96639 8137 997(10 146)

Net Cash flows from financing activities (EUR ’000)

2 593

43 768165 800

18 70012 01322 299Net Cash flow from investing activities (EUR ’000)(10 098)

4 553(4 016)(11 230)

8 307

3 891

Support instruments gross value (EUR ’000), of which

1 064 821

979 130

872 302

667 649553 628465 724

Financial instruments gross value (EUR ’000) ***Loans (excluding sales and leaseback transactions)

311 844315 674

302 481225 144210 208

207 065

Guarantees

481 013414 978359 605

284 232

236 895

182 376

Venture capital funds

90 27785 97373 16568 33159 69862 299Land Fund, of which:

80 54279 16368 25839 63421 717

11 328- sales and leaseback transactions

27 08932 99931 50015 2686 923

520- investment properties

53 45346 16436 75824 36614 79410 808963 676895 788

803 509617 341528 518463 068

33 97630 97826 57822 43718 60314 655Loans (excluding sales and leaseback transactions)

95 820100 966

138 238

64 32059 60851 349

Guarantees

153 067

126 997

137 425

98 24088 76568 615

Venture capital funds

18 52629 15814 014

9 022

4 149

2 638

Land Fund, of which

7 414

10 59528 191

16 38410 823

6 359- sales and leaseback transactions

3 105

3 254

16 796

7 239

6 835

520

- investment properties

4 309

7 341

11 395

9 145

3 988

5 839

274 827267 716317 868

187 966

163 345

128 961

Number of transactions

6 539

6 579

6 147

5 559

5 590

4 839

Leverage for raised private funding

123%

177%

114%

142%

162%

185%

Volume of support programmes funding per employee (EUR
’000)

4 118

3 964

3 808

3 041

2 381

2 013

Long-term rating assigned by Moody’s Investors Service

Baa1

Baa1

Baa1

Baa1

Baa1

Baa1

Total
Number of transactions
Volumes issued (EUR ’000) (by financial instrument) ******

Total* Due to change of accounting policy on investments in venture capital funds and adoption of IFRS 9 requirements that effects the accounting of public funding risk coverage the comparatives for2017 and 2016 have been restated.
** Due to reclassification of fees and commission related to lending activities following the industry practise, excludes fees and commission not related to lending activities, the comparatives for 2018
have been reclassified with subsequent ratio recalculation.
*** Due to reclassification of staff and administrative costs to be compensated as well as respective income on compensation, the comparatives for 2018 have been reclassified with subsequent ratio
recalculation.
**** TMA includes off-balance sheet item outstanding guarantees.
***** Liquidity ratio calculation takes into account the previous experience and management estimate of expected amount and timing of guarantees claims****** Taking into account the significance of the volume, the Land Fund portfolio, which consists of sales and leaseback transactions and investment properties, is also presented in the outstanding
volumes and in volumes issued in the period. Since according to the accounting principles and IFRS the sales and leaseback transactions are accounted for under the loans, the volume of loanspresented in this table has been reduced for the volume of the sales and leaseback transactions as it is recorded under the Land Fund portfolio.

79JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Other Notes

Definitions of ratios

Net income from interest“Net income from interest, fees and commission” is equal to the item “Net interest income” in the Statementof Comprehensive Income. Until 2018 this ratio included the following items of the Statement ofComprehensive Income: “Net interest income” and “Net income from fees and commissions”. In 2019
following the industry practise Fee and commission income from lending activities is reclassified to Interest
income from “Net income from fees and commissions”. Subsequently the fee and commission income notrelated to lending activities is reclassified within Other income and as such is not included in this ratio. The item
“Net income from fees and commissions” is not applicable in The Statement of Comprehensive Income
anymore. The comparatives have been reclassified accordingly. Altum uses this indicator as the key financial
metric for profitability by evaluating Altum net income amount generated by the portfolio of financial
instruments and recognised in the Statement of Comprehensive income. Altum management measures andmonitors the actual performance of this indicator on a quarterly basis compared to the approved level in
Altum budget.

Operating profit“Operating profit” is calculated by deducting “Operating expenses” from “Operating income before
operating expenses” included in the Statement of Comprehensive Income. “Operating expenses” iscalculated as the sum of “Staff costs”, “Administrative expense”, “Amortisation of intangible assets anddepreciation of property, plant and equipment” and “Impairment gain / (loss), net” included in the Statementof Comprehensive Income.

Cost to income ratio (CIR)“Cost to income ratio” (CIR) is calculated by dividing the amount of “Staff costs”, “Administrative expense”,“Amortisation of intangible assets and depreciation of property, plant and equipment” by “Operating income
before operating expenses” included in the Statement of Comprehensive Income. Altum uses CIR to evaluate
the operational efficiency. This is one of the measures of operational efficiency which Altum management
assesses on a quarterly basis in the management reports to evaluate the outputs from different operational
activities and efficiency improving measures.

Financial debt

“Financial debt” is calculated as the sum of “Due to credit institutions”, “Due to general government entities”,“Financial liabilities at amortised cost – issued debt securities” and “Support programme funding” included in
the Statement of Financial Position less difference between “Risk Coverage Reserve” and “Risk Coverage
Reserve Used for Provisions”.
“Risk Coverage Reserve” is disclosed in the Note on Support Programme Funding to the Financial statementsof Altum. “Risk Coverage Reserve Used for Provisions” is the amount of “Risk Coverage Reserve” allocated toand used for provisioning for impairment loss on loan portfolio and guarantees which in its turn is disclosed in
the Note on Support Programme Funding to the Financial statements of Altum.
“Tangible Common Equity” (TCE) is calculated by subtracting the revaluation reserve of available for saleinvestments from total equity.

Tangible common equity(TCE) / Tangible managed
assets (TMA)

Total risk coverage

The amount of “Total managed assets” (TMA) is calculated by adding the guarantees shown as off-balance
sheet items to the total assets of Altum taking into account provisions for these guarantees and subtracting“Deferred expense”, “Accrued income”, “Property, plant and equipment”, “Intangible assets”, “Other assets”
and “Assets held for sale”.
Data for the calculation of both indicators (TCE, TMA) are obtained from Altum Financial statements:
Statement of Financial Position and Consolidated Statement of Changes in Equity, notes - Off balance sheet
items and contingent liabilities and Provisions. ALTUM uses the ratio “TCE/TMA” to evaluate Altum capital
position adequacy and to measure Altum tangible common equity in terms of Altum tangible managed assets
including the off-balance sheet item Guarantee portfolio. The Risk and Liquidity Management Committee of
Altum monitors its level on a quarterly basis.
“Total Risk Coverage” is the net funding available for covering the expected credit losses of the State aid
programmes implemented by Altum. “Total Risk Coverage” is calculated as the total of “Risk Coverage
Reserve” and “Portfolio Loss Reserve” (Specific Capital Reserves) less “Risk Coverage Reserve Used for
Provisions” and “Portfolio loss reserve used to compensate provisions upon approval of the annual report”. The
expected losses are estimated before implementation of the respective State aid programme and part of the
public funding received under respective State aid programme for coverage of expected losses on credit risk
is transferred either to “Portfolio Loss Reserve” as Altum specific capital reserve or accounted separately as
provisions for risk coverage under liabilities item “Risk Coverage Reserve”. “Portfolio Loss Reserve” (specificcapital reserve) is disclosed in the Note on Reserves to the Financial statements of the Altum. “Risk Coverage
Reserve” is disclosed in the Note on Support Programme Funding to the Financial statements of Altum. “RiskCoverage Reserve Used for Provisions” is the amount of “Risk Coverage Reserve” allocated to and used forprovisioning for impairment loss on loan portfolio and guarantees which in its turn is disclosed in the Note on
Support Programme Funding to the Financial statements of Altum. “Portfolio loss reserve used to compensate
provisions upon approval of the annual report” is disclosed in the Note on Reserves to the Financial statementsof the Altum.
“Total Risk Coverage” is key indicator to be used for assessment of Altum risk coverage on implemented
programmes and long-term financial stability.

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JSC Development Finance Institution Altum
Unaudited interim condensed report for the 12 months period ended 31 December 2022
Other Notes

Definition of ratios (cont’d)

180-day liquidity ratio“180-days-liquidity ratio” is calculated by dividing the amount of the balances “Due from other credit
institutions and the Treasury” with a maturity of up to 1 month and “Financial assets at fair value through othercomprehensive income and Investment securities” by the amount of the total liabilities maturing within 6months and total financial commitments maturing within 6 months (off-balance sheet items). The datarequired for the calculation of the “180-days liquidity ratio” is disclosed in the following Altum Financial
statements: Statement of Financial Position and notes – Maturity profile of assets and liabilities under the sectionof Risk Management, Off-balance sheet items and contingent liabilities. Altum uses the “180-days-liquidity
ratio” to assess and monitor Altum ability to fulfil Altum contractual and/or contingent liabilities during 6 (six)month with the currently available liquidity resources. “180-days-liquidity ratio” helps to manage Altum Group’s
liquidity risk in line with Altum funding management objectives and risk framework. Risk and Liquidity
Management Committee of Altum monitors its level on a quarterly basis.

Support instruments grossvalue“Support instruments gross value” is calculated as the sum of the gross values of the portfolios of grants, loans,guarantees, venture capital funds and Land Fund

Total contribution to theeconomy, including theparticipation of the final
recipients, by volumes
issued in the period

The 'Total contribution to the economy, including the participation of the final recipients, by volumes issued in
the period’ is calculated by adding to the volumes issued by Altum the financing provided by the private cofinancier and the project promoter.

Leverage for raised private
funding“Leverage for raised private funding” indicates the amount of additional private funds invested in a project inaddition to Altum financing. “Leverage for raised private funding” is determined considering the financing
invested by a private co-financier and a project’s implementer, which, on average, makes up to 50 per centfor loans, up to 70 per cent for guarantees and venture capital (except for housing loan guarantees’
programme for the first instalment with a ratio of 795 per cent) in addition to Altum funding.

Employees

Average number of employees in the report period excluding members of the Council and the Audit
Committee.

Volume of support
programmes funding per
employee"Support programmes funding per employee" is calculated by dividing the gross value of the Financial
Instruments Portfolio by the average number of employees during the period, excluding members of theSupervisory Council and the Audit Committee.

Venture capital

The Venture Capital Funds presented at their gross value.

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