VILVI GROUP
Annual report
2023
Annual report for the year ended 31 December 2023 and
consolidated and the parent company’s financial statements
for the year ended 31 December 2023, prepared in accordance
with International Financial Reporting Standards as adopted by
the European Union.
VILVI GROUP ANNUAL REPORT 2023
2
VILVI GROUP Annual report is an integrated report, including the following reports:
Governance report
The reporting period: 1 January – 31 December 2023.
The report is available:
• on the Group’s website www.vilvigroup.lt.
• on the website of NASDAQ OMX Vilnius stock exchange www.nasdaqbaltic.com.
This report has been issued in Lithuanian and English languages.
Consolidated and the parent
company‘s separate financial
statements
Sustainability report
(Corporate social responsibility
report)
3
CONTENTS
OVERVIEW ................................................................................................................................................................. 4
ABOUT VILVI GROUP .................................................................................................... 5
CEO‘S STATEMENT .......................................................................................................... 6
HIGHLIGHTS 2023 ............................................................................................................ 7
BUSINESS ENVIRONMENT ............................................................................................................................ 8
HISTORY ................................................................................................................................. 9
MARKETS ............................................................................................................................... 11
STRATEGY AND TARGETS ......................................................................................... 12
SOLUTIONS FOR CUSTOMERS .............................................................................. 13
RESULTS ..................................................................................................................................................................... 14
VILVI GROUP RESULTS ............................................................................................... 15
AB VILKYŠKIŲ PIENINĖ RESULTS ........................................................................ 17
RAW MATERIALS ............................................................................................................. 18
BUSINESS SEGMENTS ................................................................................................. 19
SALES ....................................................................................................................................... 21
INFORMATION ON SHARES AND BONDS ................................................... 22
MANAGEMENT REPORT ................................................................................................................................ 23
GOVERNANCE MODEL ............................................................................................... 24
AUTHORIZED CAPITAL STRUCTURE AND SHAREHOLDERS ......... 25
GENERAL MEETING AND SHAREHOLDER RIGHTS …………………...…… 26
SUPERVISORY COMMITTEE ................................................................................... 27
BOARD AND ITS COMMITTEES ............................................................................. 28
KEY MANAGERS ............................................................................................................... 32
GOVERNANCE PRINCIPLES .................................................................................... 34
DIVIDENDS ........................................................................................................................... 35
REMUNERATION REPORT ........................................................................................ 38
RISK MANAGEMENT ..................................................................................................... 40
SUSTAINABILITY REPORT (CSR REPORT) ....................................................................................... 45
ESG CONTENTS ............................................................................................................... 46
SUSTAINABILITY IN THE GROUP ........................................................................ 47
MATERIALITY ASSESSMENT ................................................................................... 49
ESG PRIORITIES ............................................................................................................... 51
POLICIES .............................................................................................................................. 54
TAXONOMY OVERVIEW.............................................................................................. 55
ENVIRONMENTAL PROTECTION ...................................................................... 62
SOCIAL ENVIRONMENT ............................................................................................. 67
ADDITIONAL INFORMATION ...................................................................................................................... 79
ALTERNATIVE INDICATORS ........................................................................................................................... 80
COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE ............................................ 81
FINANCIAL STATEMENTS .............................................................................................................................. 95
COMPANY DETAILS ............................................................................................................................................. 96
MANAGEMENT‘S STATEMENT ON THE CONSOLIDATED AND PARENT
COMPANY‘S SEPARATE ANNUAL FINANCIAL STATEMENTS ............................................... 97
CONSOLIDATED AND SEPARATE STATEMENTS OF FINANCIAL POSITION………..… 98
CONSOLIDATED AND SEPARATE STATEMENTS OF PROFIT OR LOSS ……………….….. 99
CONSOLIDATED AND SEPARATE STATEMENTS OF OTHER
COMPREHENSIVE INCOME …..………………………………………………………………………………………………..… 100
SEPARATE STATEMENT OF CHANGES IN EQUITY ……………………………………………………….….. 101
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ………………………………….……………. 102
CONSOLIDATED AND SEPARATE STATEMENTS OF CASH FLOWS ………………………….. 103
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS …….…. 105
VILVI GROUP ANNUAL REPORT 2023
4
OVERVIEW
ABOUT VILVI GROUP ....... 5
CEO‘S STATEMENT ....... 6
HIGHLIGHTS 2023 ....... 7
VILVI GROUP ANNUAL REPORT 2023
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
AB VILKYŠKIŲ PIENINĖ
AB KELMĖS PIENINĖ
AB KELMĖS PIENAS
SIA BALTIC DAIRY Board
AB MODEST
FERMENTED
CHEESES
MOZZARELLA,
MOLD CHEESE
AND OTHER
CHEESE PRODUCTS
FRESH DAIRY
PRODUCTS
DRY PRODUCTS
– INGREDIENTS
THE PARENT COMPANY OF THE GROUP
Vilkyškiai
Tauragė
Kelmė
Bauskė
5
RENT OF
BUILDINGS,
MILK
COLECTION &
LOGISTICS
AB PIENO LOGISTIKA
The main activity of VILVI GROUP is the
production and sale of dairy products.
The companies of the Group produce:
• various cheeses and cheese
products;
• cream;
• various fresh dairy products (kefir,
sour cream, yogurts, cottage cheese,
glazed cottage cheese bars, etc.);
• dry milk and whey products (whey
protein concentrate, whey
permeate, skimmed milk powder,
sweet whey flour and proteins for
athletes);
• ingredients of high added value
dairy products.
CREAM
INGREDIENTS OF
HIGH ADDED
VALUE DAIRY
PRODUCTS
Founded in 1993
Founded in 1992,
belongs to the Group since 2008.
Founded in 1993,
belongs to the Group since 2008.
A subsidiary company of AB Kelmės pieninė.
Founded in 2020, after the separation of
fresh and dry milk products activities of AB
Kelmės pieninė.
Founded in 2013,
belongs to the Group since 2013.
Founded in 2013, belongs to the
Group since 2021
ABOUT VILVI GROUP
VILVI GROUP ANNUAL REPORT 2023
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
6
Last year was extremely important for the region where
most of the Group’s companies are located. Tauragė was
the capital of culture of Lithuania, and VILVI GROUP was its
main sponsor. We constantly strive to contribute to the
promotion of culture in the region, therefore this
cooperation provided even more opportunities to organize
top-level events and ensure that Tauragė is famous as a
modern city that appreciates its history and is open to
residents and guests from all over the world. Since we are
one of the largest companies in the region, we feel the
responsibility and obligation to contribute to the cultural
growth and development of the community.
Sustainability remains an important measure of our daily
actions, based on which we review, improve our operations,
search for optimal solutions, make changes and
investments. We are proud to be appreciated by our users
and partners for this. In a study conducted by the Swedish
research company SB Insight in 2023, Vilkyškių pieninė
ranked second among the most sustainable brands in the
food and beverage industry in Lithuania. We are leaders
when comparing our positions with other milk producers.
This encourages us not to stop and to achieve even more
ambitious goals.
In 2024, we will focus on operational efficiency – both
organizational and management changes, and automation
of production processes. By maintaining our direction of
sustainability with its main points of support – well-being
for the environment and people – we consistently
implement our strategic promise to partners, customers
and consumers, which is to supply exceptional and
affordable dairy products worldwide.
Gintaras Bertašius
Manager of VILVI GROUP
CEO of AB Vilkyškių pieninė and Chairman of the Board
CEO’S STATEMENT
The year 2023 was a jubilee year for VILVI GROUP, we
celebrated the 30
th
anniversary of our activity, we are very
proud that despite various fluctuations in the markets, it
was a year of development, new projects and good results
for our Group. Good performance indicators allow us to
continue planning investments in advanced technologies
and innovations, maintaining the Group’s future direction,
as well as to focus on modernization, successful
implementation of new projects, and improvement of
conditions for employees.
The year 2023 in the history of VILVI GROUP will mark the
year in which the Latvian company SIA Baltic Dairy Board,
which specializes in the production and trade of
ingredients for dairy products and the separation of milk
and whey, finally joined our family of companies. It was last
year that the final buyout of the company’s shares took
place and a firm step was taken outside the borders of
Lithuania. In 2023, a decision was made to invest EUR 50
million in this Latvian company and to build a new cheese
factory. This is the largest investment project in the entire
31-year history of the operation, and the project is planned
to be implemented until 2027.
We continue to move decisively in the direction of
biotechnology. In 2023, significant investments in new
technologies at Vilkyškių Pieninė will help us to further
expand the range of milk ingredients produced. We are
also actively working to achieve a significant change in
human nutrition and maintaining good health. In
cooperation with the scientists of the Lithuanian University
of Health Sciences, we created an innovative product for
the elderly – a food supplement made from whey protein
concentrate powder. It is a unique multicomponent
composition of whey proteins, macronutrients,
micronutrients, water- and fat-soluble vitamins, which
helps to prevent senile frailty syndrome and insufficient
nutritional status.
VILVI GROUP ANNUAL REPORT 2023
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
EBITDA of 2023
amounts to 21.0
million euros.
Investments of 10
million euros.
Vilkyškių pieninė is
recognized as one of the
most sustainable brands in
Lithuania. In the SB Insight
Sustainable Brand Index
study, it ranked second in
the food and beverage
category for the second
consecutive year (in 2022 –
2
nd
place, in 2021 – 3
rd
place).
VILVI GROUP’s parent
company AB Vilkyškių pieninė
acquired the remaining 30%
share of SIA Baltic Dairy
Board and now owns 100%
of the shares. It is a Latvian
company that specializes in
the production and trade of
ingredients for dairy products
and the separation of milk
and whey.
In order to conserve natural
resources and reduce
greenhouse gas emissions into
the environment, solar power
plants were started to be
installed on the roofs of
factories. In 2023, a solar power
plant was installed on the roofs
of UAB Kelmės pienas with its
own funds, partial EU financing
was received for projects on the
roofs of AB Vilkyškių pieninė and
AB Modest.
The food safety and quality certificates
were updated:
- AB Vilkyškių pieninė and AB Modest had
their Halal and FSSC 22000 certificates
extended.
- AB Kelmės pieninė had its Halal, Kosher
and FSSC 22000 certificates extended;
- UAB Kelmės pienas was awarded the
certificate of organic production and
labeling of organic products, the IFS Food
Version 7 certificate was extended;
- SIA Baltic Dairy Board extended Halal and
organic production certificates;
In order to save water, reduce the
amount of wastewater AB Vilkyškių
Pieninė started implementing a
technology that cleans permeate water
so that it can be used again in
production processes. Due to them, the
amount of wastewater is reduced by
30%. The project is partially financed by
EU funds.
AB Vilkyškių pieninė has
started construction of a new
workshop based on
biotechnology, which will
allow to expand the range of
milk ingredients produced by
VILVI GROUP.
7
HIGHLIGHTS 2023
The long-standing cooperation with the
basketball club Žalgiris was extended
The long-term partnership has become an
integral part of both brands. Vilkyškių
products with a black cat have been
marked with the Žalgiris logo for several
years. By purchasing Vilkyškių black cat
products, the team’s fans directly
contribute to the Lithuanian Champions
Club.
VILVI GROUP – the main
partner of Tauragė – Lithuanian
Capital of Culture 2023.
This cooperation provided even
more opportunities to organize
top-level events and to ensure
that Tauragė is famous as a
modern city that appreciates its
history and is open to residents
and guests from all over the
world. As one of the largest
companies in the region, we
understand our responsibility to
contribute to the cultural growth
and development of the
community.
In cooperation with the scientists of the Lithuanian
University of Health Sciences (LSMU), an innovative
product for the elderly was created – a food
supplement with a unique composition made from
whey protein concentrate powder, which helps
prevent senile weakness syndrome and insufficient
nutritional status.
A decision was made to
invest EUR 50 million in the
construction of a new
cheese factory in Latvia, at
SIA Baltic Dairy Board.
In 2023, VILVI GROUP made a significant
contribution to the activities, sports and
cultural events of communities in the
Tauragė region. Financial support
amounted to more than EUR 30 thousand.
The Vilkyškių less sugar line of
fresh dairy products, introduced
to the market in 2022, has been
supplemented with new products:
yogurt with mango, passion fruit
and Spanish sage Chia seeds as
well as caramelized banana
flavored cottage cheese bar.
VILVI GROUP actively
participated in
international
exhibitions:
Gulfood 2023 and Gulfood
Manufacturing 2023
(Dubai, UAE), Anuga
(Cologne, Germany),
Food Ingredients
(Frankfurt, Germany),
Dubai Muscle Show
(Dubai, UAE).
A step into a new category
with fresh dairy products:
- Vilkyškių cream cheese
was introduced to the
market;
- VILVI yogurt bars were
presented at the Anuga
exhibition.
In order to effectively
manage innovation
implementation projects, a
new investment project
management unit was
created.
VILVI GROUP ANNUAL REPORT 2023
The
Supervisory
board was
formed and
started its
work.
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
8
BUSINESS ENVIRONMENT
VILVI GROUP HISTORY AND STRUCTURE ............ 9
MARKETS AND ACHIEVEMENTS .......... 11
STRATEGY AND TARGETS ......... 12
SOLUTIONS FOR CUSTOMERS ......... 13
VILVI GROUP ANNUAL REPORT 2023
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
1993
2000
2006
2008
2010 2011 2013 2015 2016 2017 2018 2019
2020
AB Vilkyškių
pieninė was
founded
AB Modest
was
acquired
AB Pieno
logistika was
founded
A new factory
for dry milk
products has
started
operations
2021
A 70% share
package of SIA
Baltic Dairy
Board was
acquired
2022
2023
VILVI GROUP HISTORY
AB Kelmės
pieninė was
acquired
ISO 9001 and ISO
22000 certificates
were issued to AB
Vilkyškių pieninė
AB Vilkyškių
pieninė became
a listed company
Participation in
international
exhibitions has
begun
The VILVI brand has
been used for
export
Halal certificates
were issued to AB
Vilkyškių pieninė
and AB Modest for
the first time
FSSC 22000
certificates were
issued to
AB Vilkyškių pieninė
and AB Modest for
the first time
Vilkyškių pieninė
recognized as
Brand of the Year
Lithuanian Export
Prize 2017 was
awarded to AB
Vilkyškių pieninė
ISO 22000/FSSC 22000
and Halal certificates
were issued to AB
Kelmės pieninė for the
first time
AB Vilkyškių pieninė
Corporate Group starts
operating as VILVI GROUP
AB Vilkyškių pieninė
has been granted an
export license to the
EU
UAB Kelmės
pienas was
founded
The remaining
30% of the shares
of SIA Baltic Dairy
Board was
acquired
Vilkyškių pieninė
was recognized for
the first time as one
of the most
sustainable brands
in Lithuania
AB Kelmės
pieninė was
excellently
evaluated in the
social audit
SMETA
9
VILVI GROUP ANNUAL REPORT 2023
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
10
VILVI GROUP STRUCTURE
VILVI GROUP ANNUAL REPORT FOR 2023
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
AB Vilkyškių pieninė
AB Modest
AB Kelmės pieninė
SIA Baltic Dairy Board
AB Pieno logistika
• Parent company.
• Established in 1993.
• Production of hard daily cheeses,
cream, processing of whey.
• Subsidiary.
• Established in 1992,
since 2006 it has been
part of VILVI GROUP.
• Production of moldy,
melted, smoked,
mozzarella cheeses,
cream.
• Subsidiary.
• Established in 1993, since 2008 it
has been part of VILVI GROUP.
• Production of dry milk products
(skimmed milk, permeate,
WPC80 and whey flour).
UAB Kelmės pienas
• Subsidiary of AB Kelmės
pieninė.
• Established in 2020, activities
are carried out from 1 March
2021.
• Production of fresh dairy
products.
• Subsidiary.
• Established in 2008, since 2021
it has been part of VILVI
GROUP.
• Breakdown of milk/whey,
production of dairy
ingredients.
• Subsidiary of UAB Kelmės pienas
since 2022.
• Established in 2013.
• Building rental, milk collection and
transportation.
11
EMPLOYEES
919
MASTERY SINCE
GROUP’S NUMBERS
1934
6
EXPORT COUNTRIES
2023
>300
EPORT SHARE
2023
83%
FACTORIES
5
THE COMPANY WAS
FOUNDED IN
1993
There are numerous places all over
the world where people have limited
access to quality dairy products, well-
rounded nutrition, and taste
experiences, which Lithuanians have
been enjoying for many years.
Together with our products we
spread the belief that ability to enjoy
natural and wholesome foods makes
the world a better place.
EXPERIENCE
30 years
AREA OF
PRODUCTION
AND
ADMINISTRATIVE
PREMISES
>19,000 sq. m.
>60
CUSTOMERS
MARKETS AND ACHIEVEMENTS
VILVI GROUP ANNUAL REPORT 2023
COMPANIES
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
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Our goal is to be a leader in innovation in the dairy sector and to create
maximum value from a drop of milk. We aim at making higher quality dairy
products and ingredients more available around the world to give people
more opportunities to enjoy them wherever they are.
All over the world, there are many places where people have limited access
to quality dairy products, wholesome nutrition and taste experiences, while
Lithuanians have been enjoying it for years. Based on our knowledge and
the latest technologies, we offer solutions to countries and markets where
the need for an affordable and authentic dairy experience is still very
challenging. Our roots remain the basis of our success - lush meadows of
the Nemunas, tasty and high-quality milk and the desire that as many
people as possible can enjoy authentic experiences of dairy products.
Along with our products, we also share the belief that the opportunities
provided to enjoy natural and wholesome foods contribute to the creation of
a better world.
Environment in which we operate
VILVI GROUP is an international market participant, therefore the business
is affected by both the global environment and changes in it, as well as
demand and the competitive environment in local markets.
Environmental challenges of 2023:
• Dairy products remain an important part of the diet, consumption is
growing in Asia and other developing markets;
• Consumption of alternative herbal products is growing in Western
markets;
• The importance of sustainability is increasing in the world, a lot of
attention is paid to climate change in the European Union;
• The rapidly changing legal environment increases business responsibility
in ESG areas and requires rapid changes;
• The expectations and requirements of European customers in the areas
of sustainability are increasing;
• The impact of the war in Ukraine on people’s psychological and
emotional health is still felt;
• New unrest in the world (the war in Israel and the Gaza Strip, the
blockade of the Red Sea logistics routes) encourages us to be constantly
ready for new challenges.
Our vision
We aim at making higher quality dairy products and ingredients more
available around the world to give people more opportunities to enjoy
them wherever they are.
Our goals
Sales of finished milk
products in the nearest
markets
Ingredients and product
solutions for businesses
worldwide
Search for innovation and new
solutions
Challenges in the regions of operation
We operate in Tauragė, Šiauliai and Bauska
(LV) regions. Carrying out activities in the
regions is favorable because we can be closer
to each other, get to know and understand
each other better. But we also face
challenges when we are looking for new
employees, especially highly qualified
specialists. We constantly evaluate the
problems of the operational regions, actively
search for and find solutions for attracting
employees.
For more information, see Recruiting and
retaining employees, p. 75.
Climate change and adaptation challenges
In the European Union, great attention is paid to the Green Course, and
ambitious climate change mitigation goals are set.
The requirements for business are growing and changing very rapidly. This
requires both a quick reaction and additional investments, which will only
increase in the future.
Essential challenges for VILVI GROUP:
• Environmental impact assessment and setting impact reduction goals;
• Assessment of climate change scenarios and adaptation to the possible
impact on places of activity and the Group’s activities;
• Climate change adaptation planning and management. In the short
term, a lot of additional human and financial resources are required to
respond to the changing regulation, but the largest part of the resources
is planned in the long term, i.e. implementing a real change, increasing
the efficiency and circularity of resource use, in order to switch to
renewable energy.
12
OUR STRATEGY AND GOALS
Our values
Responsibility and
respect
Responsiveness to
needs
Curiosity
Better than
yesterday
VILVI GROUP ANNUAL REPORT 2023
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
• Special solutions according to customer needs
• Private labels
VILVI GROUP ANNUAL REPORT 2023
13
SOLUTIONS FOR CUSTOMERS
Products and ingredients for business Brands
Solutions for business
• Cheese and cheese products
Mozzarella / Cagliata / Tilsit / Gouda / Edam
• Dry whey and milk products
Whey protein concentrate 80 / Whey permeate / Sweet whey powder /
Skimmed milk powder / Lactose / Protein for athletes
• Fresh milk products
Butter / Cream / Sour cream / TRM, GRM
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
RESULTS
VILVI GROUP RESULTS ......... 15
AB VILKYŠKIŲ PIENINĖ RESULTS ......... 17
RAW MATERIALS ........ 18
BUSINESS SEGMENTS ........ 19
SALES ........ 21
INFORMATION ON SHARES AND BONDS ….… 22
14
VILVI GROUP ANNUAL REPORT 2023
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
15
OVERVIEW OF VILVI GROUP RESULTS
EUR 210.5 million consolidated sales turnover
EUR 14.7 million consolidated net profit
EUR 21 million in consolidated EBITDA
EUR 17 mln. in taxes paid to the state in 2023 (for 2022)
>350 thousand tons of purchased milk
EUR 10 million in development and supporting
investments during the reporting period
VILVI GROUP ANNUAL REPORT 2023
83% of exports to > 60 countries
Despite a 10,1% decrease in sales turnover in 2023, VILVI GROUP’s consolidated net profit increased to EUR
14.7 million and was 15.4% higher than in 2022. During the reporting period, the Group’s EBITDA increased
by 8,9% and amounted to EUR 21.0 million. The growth of the Group’s EBITDA and net profit was mainly
influenced by the processing activities of purchased whey products, which are not directly related to milk
processing.
See the comparison of other indicators of the Company and the Group in p.16-17 respectively.
Group revenue, million EUR
Group net profit, million EUR
Group EBITDA, million EUR
2019 2020
2021
2022 2023
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
PERFORMANCE RESULTS OF VILVI GROUP
2019 2020 2021 2022 2023
Change in
2023/2022
Change in
2023/2022
Revenue, thousand EUR 114,581 120,873 156,045 234,083 210,536 -10% 50%
Gross profit, thousand EUR 7,096 10,629 17,196 24,274 27,687 14% 41%
Gross profit margin, % 6.2% 8.8% 11.0% 10.4% 13.2% 3 p.p. -1 p.p.
EBITDA, thousand EUR 3,698 8,271 14,122 19,280 21,003 9% 37%
EBITDA margin, % 3.2% 6.8% 9.0% 8.2% 10.0% 2 p.p. -1 p.p.
Operating profit (EBIT), thousand EUR -206 4,332 7,134 14,921 16,778 12% 109%
EBIT margin, % -0.20% 3.60% 4.60% 6.4% 8.0% 2 p.p. 2 p.p.
Profit before tax (EBT), thousand EUR -1,448 3,142 6,156 14,180 15,439 9% 130%
EBT margin, % -1.3% 2.6% 3.9% 6.1% 7.3% 1 p.p. 2 p.p.
Net profit (loss), thousand EUR -446 3,872 5,500 12,699 14,652 15% 131%
Net profit margin, % -0.4% 3.2% 3.5% 5.4% 7.0% 2 p.p. 2 p.p.
Net profit per share, Eur -0.04 0.32 0.46 1.06 1.23 15% 131%
The ratio of the share’s market price and profit per share –
P/E
ratio
- 7.59 7.95 4.50 4.27 -5% -43%
Return on equity (ROE), % -1.4% 11.7% 14.8% 28.4% 26.4% -2 p.p. 14 p.p.
Return on assets (ROA), % -0.6% 5.0% 6.7% 13.6% 14.3% 1 p.p. 7 p.p.
Return on capital employed (ROCE), % -0.4% 10.1% 11.7% 22.0% 20.5% -2 p.p. 10 p.p.
Debt ratio 0.60 0.55 0.55 0.49 0.43 -13% -10%
Debt to equity ratio 0.88 0.62 0.61 0.46 0.33 -28% -25%
Liquidity ratio 0.72 0.64 1.24 1.46 1.77 21% 17%
Asset turnover 1.47 1.57 1.77 2.38 1.97 -17% 34%
Capital to asset ratio 0.40 0.45 0.45 0.51 0.57 12% 13%
Financial debts, thousand EUR 27,483 21,660 24,163 22,929 20,185 -12% -5%
Net debt, thousand EUR 27,185 21,479 23,364 22,308 11,460 -49% -5%
Net debt/EBITDA 7.35 2.60 1.65 1.16 0.55 -53% -30%
VILVI GROUP ANNUAL REPORT 2023
16
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
In addition to the main indicators
defined and applied according to the
International Financial Reporting
Standards (IFRS), AB Vilkyškių pieninė
also presents in its financial
statements financial performance
indicators not provided for by IFRS –
alternative performance indicators
(API), which, in the Company’s
assessment, are important and
provide additional information to
investors and other users of financial
reporting. Alternative performance
indicators should be treated as
additional information prepared on
the basis of IFRS.
Taking into account the guidelines
published by the European Securities
and Markets Authority on alternative
performance indicators
(ESMA/2015/1415), AB Vilkyškių
pieninė presents comparative
historical API data.
Information about the calculation of
AVR and what useful information
they provide is provided in the
section Additional information page
144.
PERFORMANCE RESULTS OF THE PARENT COMPANY AB VILKYŠKIŲ PIENINĖ
2019 2020 2021 2022 2023
Revenue, thousand EUR 140,492 148,738 196,442 288,643 245,072
Gross profit, thousand EUR 325 913 9,031 17,195 9,013
Gross profit margin, % 0.2% 0.6% 4.6% 6.0% 3.7%
EBITDA, thousand EUR -2,504 2,994 13,079 15,530 4,500
EBITDA margin, % -1.8% 2.0% 6.7% 5.4% 1.8%
Operating profit(EBIT), thousand EUR -4,322 1,394 11,450 13,893 2,912
EBIT margin, % -3.1% 0.9% 5.8% 4.8% 1.2%
Profit before tax (EBT), thousand EUR -5,061 640 11,194 13,733 2,574
EBT margin, % -3.6% 0.4% 5.7% 4.8% 1.1%
Net profit (loss), thousand EUR -4,059 1,371 10,774 12,599 2,527
Net profit margin, % -2.9% 0.9% 5.5% 4.4% 1.0%
Net profit per share, Eur -0.34 0.11 0.90 1.05 0.21
The ratio of the share’s market price and profit per share –
P/E ratio
- - - - -
Return on equity (ROE), % -14.6% 5.2% 33.5% 29.9% 5.4%
Return on assets (ROA), % -7.7% 2.8% 19.9% 19.4% 3.6%
Return on capital employed (ROCE), % -15.6% 4.5% 28.3% 27.7% 5.7%
Debt ratio 0.49 0.44 0.37 0.33 0.34
Debt to equity ratio 0.44 0.27 0.19 0.12 0.11
Liquidity ratio 0.83 0.99 1.47 1.87 1.58
Asset turnover 2.77 3.05 3.31 4.10 3.49
Capital to asset ratio 0.51 0.56 0.63 0.67 0.66
Financial debts, thousand EUR 11,287 7,432 6,941 5,665 5,085
Net debt, thousand EUR 11,056 7,277 6,362 5,340 2,231
Net debt/EBITDA -4.42 2.43 0.49 0.34 0,50
VILVI GROUP ANNUAL REPORT 2023
17
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
MAIN RAW MATERIALS
*In 2023, 352 thousand tons of milk were purchased according to the basic indicators, which is 2.6% more
than in 2022.
The price of milk in 2023 decreased by 25.9% compared to 2022 (in 2022, the level of milk purchase prices
was historically high due to the increased selling prices of dairy products in the markets, which was caused
by the increased demand in the export and local markets).
2019 2020 2021 2022 2023
Purchased basic indicators milk*,
in tons
268,555 287,370 314,540 342,953
351,832
Milk price, EUR/t 255.9 246.2 287.9 422.7
313,3
RAW COW’S MILK
Raw cow’s milk is the main raw material for the products produced by AB Vilkyškių pieninė, AB Modest
and UAB Kelmės pienas. According to the calculations of AB Vilkyškių pieninė, the Group occupies about
20% of the domestic market in terms of the amount of milk processed, the third place among producers,
after AB Rokiškio sūris and AB Žemaitijos pienas.
In 2023, Group companies bought this raw material from Lithuanian and Latvian milk suppliers. Almost a
third of the milk was imported.
VILVI GROUP ANNUAL REPORT 2023
18
2019 2020 2021 2022 2023
Purchased whey concentrates
from VILVI GROUP companies, in
tons
28,564 40,641 43,593 60,297
64,692
Purchased whey concentrates
from other suppliers, in tons
20,886 30,999 35,730 37,075
33,908
In 2023, 99 thousand tons of whey concentrates were purchased, which is 1.3% more than in 2022.
MILK WHEY
The main raw material of AB Kelmės pieninė is WPC and whey permeate concentrates, which are
obtained from whey by breaking it down and concentrating it. Whey is a secondary product left over from
cheese production.
Most of the raw materials needed in the production of dry milk products are supplied by VILVI GROUP
companies, the other part is purchased from suppliers in Latvia and Estonia.
Milk purchased by VILVI GROUP:
Raw material purchased by AB Kelmės pieninė:
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
255,9
246,2
287,9
422,7
313,3
-5 0
50
150
250
350
450
2019 2020 2021 2022 2023
thousand tons
Pu rcha sed basic indicators milk, thousand tons Milk price, Eur/tons
0
20
40
60
80
100
120
2019 2020 2021 2022 2023
thousand tons
Whey concentrates were bought
from VILVI GROUP companies from other suppliers
• Cheese, cheese products and other – cheese, cheese products, cream, etc.
produced by the Company and its subsidiaries.
• Fresh milk products – fresh dairy products produced by the subsidiary company
(kefir, yogurts, sour cream, butter, curd products, etc.);
• Dry milk products – WPC, MPC, skimmed milk, permeate and whey flour produced
by subsidiaries;
VILVI GROUP OPERATING SEGMENTS
2019 2020 2021 2022 2023
Change in
2023/2022
Change in
2022/2021
Cheese, cheese
products and other
36,095 39,187 43,970 47,575
48,809 2.6%
8.2%
Fresh milk products
12,277 12,696 14,048 15,174
15,741 3.7%
8.0%
Dry milk products
15,310 19,006 21,416 21,886
22,486 2.7%
2.2%
Volumes of VILVI GROUP’s products for sale by segments, in tons:
In 2023, the production of cheese, cheese products and other increased by 2.6% compared to 2022.
15.7 thousand tons of fresh milk products were produced, i.e. 3.7% more than in 2022.
22.5 thousand tons of dry milk products were produced in 2023 – production increased by 2.7%. compared to 2022.
2019 2020 2021 2022 2023
Chnage in
2023/2022
Change in
2022/2021
Cheese, cheese
products and other
81,909 84,134 109,199 170,589
139,603
-18.2%
56.2%
Fresh milk products
17,803 16,252 18,710 26,864
32,962
22.7%
43.6%
Dry milk products
14,869 20,487 28,136 36,630
37,971
3.7%
30.2%
Total: 114,581 120,873 156,045 234,083 210,536 -10.1%
50.0%
VILVI GROUP income from main products by segments, thousand EUR:
VILVI GROUP ANNUAL REPORT 2023
19
VILVI GROUP revenue
from main products by
segments.
Operting segments:
Cheese,
cheese
products and
other
66%
Fresh milk
products
16%
Dry milk
products
18%
2023
Cheese, cheese
products and other
73%
Fresh milk
products
11%
Dry milk
products
16%
2022
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
Cheese, cheese products and others
The total turnover of the segment in 2023 was 18,2% lower than in 2022. This was influenced
by a sharp drop in export prices at the beginning of the reporting year, which, according to
market experts, was a response to the historically intense price growth in 2022.
In the first quarter of 2023, cheese prices fell by an average of 20%. This level of prices,
fluctuating in short periods, remained until the fourth quarter of the year, when the
markets again observed price growth. The decrease in turnover was partially compensated
by increased sales volume (10% more than in 2022).
The turnover of industrial cream fell the most in this segment (27% lower than in 2022).
Although the amount sold in 2023 increased by 9% compared to the previous year, the
average price of cream in 2023 was 27% or 0.84 EUR/kg lower.
17,8
16,3
18,7
26,9
33,0
turnover, mln. EUR
Fresh milk products
In the reporting period, turnover increased by 22,7% compared to 2022. More than 80% of fresh milk products were sold in
the domestic market, where prices were higher compared to 2022. Also, in 2023, more products were sold, such as curd
cheese bars, yogurts, butter – their added value is higher than other products, so this also affected the overall sales growth.
Dry milk products
In 2023, the volume of production and sales
increased by 19.9% in quantitative terms compared to
2022. However, the sales turnover grew slightly – 3,7%
compared to last year. This was influenced by the
decrease in prices due to the surplus of products in
the market.
VILVI GROUP generates the most revenue in this
segment from the sale of whey proteins - about 60%
(although in quantitative terms it accounts for only
13%). In 2023, whey protein prices on the market fell
by more than 30%, as a result of which whey protein
flour was sold 1.3 thousand tons more than in 2022
(+4 p.p.).
0
5
10
15
20
25
30
35
40
2019 2020 2021 2022 2023
Quantity, thousand tons Turnover, million EUR
ANALYSIS OF CHANGES IN SALES REVENUE IN 2023 BY BUSINESS SEGMENTS
VILVI GROUP ANNUAL REPORT FOR 2023
20
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
0
30
60
90
120
150
180
2019 2020 2021 2022 2023
54,3
57,8
63,3
92,2
84,4
27,6
26,3
43,5
74,8
54,6
2,5
3,6
0,6
million Eur
Ch ees e and c heese products Cream Others
VILVI GROUP’S SALES BY MARKETS
In 2023, VILVI GROUP’s sales revenue in export markets decreased by
16.1% compared to 2022. Exports accounted for 83% of the Group’s total
sales in 2023. This is 6 p.p. lower than in 2022.
The drop in sales revenue both in the European Union and in other
foreign countries is associated with a general decrease in the market
prices of cheese and dry milk products. The structure of sales regions
and sales channels remained stable, sufficiently diversified, not posing
any risk due to economic or political influence.
In 2023, exports took place to more than 60 countries, but the most
important export markets of VILVI GROUP continue to be Poland,
Holland, Italy, Germany, Saudi Arabia.
In 2023, as every year, an active search for new markets was carried
out - successfully launched in the Cuban market.
In 2023, no products were exported to countries subject to EU
sanctions.
In 2023, sales in Lithuania increased by 37% compared to the previous
year. This was influenced both by the increase in the prices of fresh
dairy products in the country and by the larger quantities of
production sold.
2019 2020 2021 2022 2023
Change in
2023/2022
Change
in2022/2021
European Union 61,591 63,745 80,647 132,771 103,079 -22.4% 64.6%
Lithuania 22,526 20,234 21,748 26,751 36,624 36,9% 23.0%
Other countries 30,464 36,894 53,650 74,561 70,833 -5.0% 39.0%
Total revenue 114,581 120,873 156,045 234,083 210,536 -10.1% 50.0%
0
30
60
90
120
150
180
210
240
2019 2020 2021 2022 2023
54%
20%
26%
57%
49%
53%
17%
30%
11%
17%
52%
14%
34%
32%
34%
Million Eur
Other countries
Lithuania
European Union
VILVI GROUP ANNUAL REPORT 2023
21
Sales structure
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
Sales revenues by markets, kEur:
22
INFORMATION ON SHARES
• The name of the securities is AB Vilkyškių pieninė ordinary registered shares.
• The number of securities admitted to trading is 11,943,000 units.
• The nominal value of one share is EUR 0.29.
• The securities issued by the company are included in the Official List of AB NASDAQ OMX
Vilnius.
• Securities ISIN code – LT0000127508, symbol – VLP1L.
• The company’s shares have been included in the trading list since 17 May 2006.
The securities of the company’s subsidiaries are not publicly traded..
Information on shares
AB Vilkyškių pieninė share price change and turnover in 2021-2023.
Comparison of AB Vilkyškių pieninė share prices and AB Nasdaq OMX Vilnius indices in 2021-2023.
0%
50%
100%
150%
200%
250%
2021/01 2021/06 2021/11 2022/04 2022/09 2023/02 2023/07 2023/12
OMX Vilnius VLP1L
VILVI GROUP ANNUAL REPORT 2023
2019 2020 2021 2022 2023
Opening price, EUR 2.09 2.26 2.46 3.67 4,79
Highest price, EUR 3.13 2.48 3.68 4.91 5,36
Lowest price, EUR 2.07 1.39 2.40 3.00 4,12
Average price, EUR 2.47 1.93 2.90 4.12 4,88
Last price, EUR 2.24 2.46 3.66 4.79 5,24
Turnover, units 762,071 1,138,435 1,060,431 637,222 337,974
Turnover, mln. EUR 1.88 2.20 3.08 2.63 1.65
Capitalization, mln. EUR 26.75 29.38 43.71 57.21 62.58
0
20
40
60
80
100
120
0,00
1,00
2,00
3,00
4,00
5,00
6,00
2021/01 2021/08 2022/03 2022/10 2023/05 2023/12
Share price, EUR Turnover, thsd., EUR
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
VILVI GROUP ANNUAL REPORT 2023
23
MANAGEMENT REPORT
MANAGEMENT MODEL ............. 24
AUTHORIZED CAPITAL STRUCTURE AND SHAREHOLDERS .............. 25
GENERAL MEETING OF SHAREHOLDERS ............... 26
SUPERVISORY BOARD ............... 27
BOARD AND ITS COMMITTEES ............... 28
KEY MANAGERS ............... 32
GOVERNANCE PRINCIPLES ............... 34
DIVIDENDS .............. 35
REMUNERATION REPORT .............. 38
RISK MANAGEMENT.............. 40
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
General Meeting of Shareholders
The General Meeting of Shareholders is the
highest body of the parent company, which
makes decisions based on the Law on
Companiesof the Republic of Lithuania and
the company’s articles of association. More
in p. 26.
Supervisory board
The Supervisory board is a collegial
supervisory body of the Company, which
represents the shareholders and performs
the functions of supervision and control of
the Company’s activities. The Supervisory
board of AB Vilkyškių pieninė consists of 3
members, elected for a four-year term. The
Supervisory board is elected by the General
Meeting of Shareholders. More in p. 27.
CEO
The head of the company is the CEO, who organizes the
company’s activities, hires and fires employees, concludes and
terminates employment contracts with them, acts on behalf of
the company and unilaterally concludes transactions, except for
the cases provided by the Company’s articles of association and
legal acts. In his/her activities, the CEO is guided by laws, other
legal acts, the company’s articles of association, the decisions of
the General Meeting of Shareholders, the decisions of the
Supervisory board and the Board. The CEO is elected and
dismissed by the company’s Board.
MANAGEMENT MODEL
Management bodies of VILVI GROUP’s parent company AB Vilkyškių pieninė
General Meeting of Shareholders
Supervisory board
Board
CEO
Committees
Committees
The Board forms the Appointments and
Remuneration Committee and approves the
committee’s regulations. The General
Meeting of Shareholders elects members of
the Audit Committee and approves the
regulations of the Audit Committee. More in
p. 31.
Management bodies of subsidiaries: AB Kelmės pienė, UAB Kelmės pienas, AB Modest and SIA
Baltic Dairy Board:
General Meeting of Shareholders
Board
Head of the Company
The sole management body of AB Pieno logistika is the director.
Implementation of
shareholder rights
Supervision and control
functions
Activity organization
function
Management function
Advisory and supervisory
functions
Board
The Board is a collegial management body of
the Company, which performs the function of
company management. The Board of AB
Vilkyškių pieninė consists of 6 Board
members. Board members. The Supervisory
board elects the members of the Board for a
four-year term. More in p. 28.
VILVI GROUP ANNUAL REPORT FOR 2023
24
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
The total number of shareholders on 31-12-2023 was
1,685.
Swisspartners
Versicherung
AG
Zweigniederlass
ung Österreich
60,4%*
Multi Asset
Selection
Fund
17,0%
Other small
shareholders
22,6%
Distribution of shareholders of AB Vilkyškių
pieninė by legal entity – 18.2% natural
persons, 81.8% - legal entities.
AB Vilkyškių pieninė
99,7%
Other small
shareholders
0.3%
AB Modest
AB Vilkyškių pieninė
AB Vilkyškių pieninė
100%
AB Kelmės pieninė
AUTHORIZED CAPITAL STRUCTURE AND SHAREHOLDERS
*As of 31 December 2023, G. Bertašius did not have shares in Vilkyškių pieninė AB, but he owns 60.4% of the votes in the General Meeting of Shareholders (a joint life
insurance policy was concluded in the insurance company Swisspartners Versicherung AG Zweigniederlassung Österreich, which has taken over ownership rights
to 7,213,680 shares of AB Vilkyškių pieninė).
AB Kelmės pieninė
100%
UAB Kelmės pienas
AB Vilkyškių pieninė
100%
SIA Baltic Dairy Board
VILVI GROUP ANNUAL REPORT 2023
25
Company name Type of shares
Number of
shares
Nominal value
of 1 share, EUR
Total nominal
value, EUR
Largest shareholders owning and controlling
more than 5% of the authorized capital
AB Vilkyškių pieninė
Ordinary registered
shares
11,943,000 0.29 3,463,470
Swisspartners Versicherung AG
Zweigniederlassung Österreich – 60,4%*;
Multi Asset Selection Fund – 17,0%.
AB Kelmės pieninė
Ordinary registered
shares
2,457,070 0.29 712,550 AB Vilkyškių pieninė – 100%.
AB Modest
Ordinary registered
shares
5,617,118 0.29 1,628,964 AB Vilkyškių pieninė – 99.7%.
AB Pieno logistika
Ordinary registered
shares
371,333 0.29 107,687 UAB Kelmės pienas – 58,9%,
UAB Kelmės pienas
Ordinary registered
shares
2,500 1.00 2,500 AB Kelmės pieninė – 100%.
SIA Baltic Dairy Board
Ordinary registered
shares
777,778 1.00 777,778 AB Vilkyškių pieninė – 100%.
AB Pieno logistika
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
UAB
Kelmės
pienas
58,9%
Other small
shareholders
41,1%
The shareholders of AB Vilkyškių pieninė exercise their rights during the General Meeting of Shareholders.
Notices about the convening of the General Meeting of Shareholders, issues to be resolved at the meeting and decisions of the General Meeting of Shareholders are published on the company’s website General
Meeting of Shareholders – VILVI GROUP. Meetings are also reported on the Nasdaq Vilnius stock exchange.
GENERAL MEETING OF SHAREHOLDERS AND SHAREHOLDER RIGHTS
During the reporting period, the Company’s shareholders had equal rights (property and
non-property), provided for by laws, other legal acts and the Company’s articles of association.
Neither shareholder had any special control rights. During the reporting period, the
Company’s management bodies created suitable conditions for the implementation of
shareholders’ rights. There are no restrictions on voting rights in the Company.
Shareholders have the following non-property rights:
• To participate and vote in General Meetings of Shareholders;
• To receive information about the Company, as stipulated in Part 1 of Article 18 of the Law
on Companies of the Republic of Lithuania;
• To apply to the court with a claim for compensation for damage to the Company caused
by the Company’s manager not performing or improperly performing his/her duties, as
well as in other cases established by law;
• Other non-property rights provided for by law.
Shareholders have the following property rights:
• To receive a share of the Company’s profit (dividend);
• To receive a share of the liquidated Company’s assets;
• To receive shares for free if the authorized capital is increased from the Company’s funds,
except for the exceptions established by the Law on Companies;
• With the pre-emption right to purchase shares or convertible bonds issued by the
Company, except for the case when the General Meeting of Shareholders decides to
revoke this right for all shareholders in accordance with the procedure established by the
Law on Companies;
• To transfer all or part of the shares to the ownership of other persons in accordance with
the procedure established by the Law on Companies;
• Other property rights provided for by law.
Competence of the General Meeting of Shareholders
• Changing the articles of association of the parent company;
• Electing and recalling the members of the Supervisory board of the parent company, determining the
remuneration for the independent members of the Supervisory board;
• Making a decision on the approval of the Remuneration Policy;
• Approval of the annual financial statements of the parent company and the set of annual consolidated
financial statements of the Group;
• Approval of the parent company’s annual report and the Group’s consolidated annual report;
• Adoption of a decision on the distribution of profit (losses) and on the allocation of dividends for a period
shorter than the financial year;
• Making a decision on the establishment, use, reduction and destruction of reserves;
• Making a decision on increasing or decreasing the authorized capital of the parent company;
• Adoption of decisions on restructuring, reconversion, reorganization, liquidation of the parent company;
• Making a decision on the acquisition of the company’s own shares;
• Selecting and recalling an auditor or an audit firm to audit a set of annual financial statements, setting
the terms of payment for audit services.
VILVI GROUP ANNUAL REPORT FOR 2023
26
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
Valdyba
SUPERVISORY BOARD
The main functions and competences of the
Supervisory board:
• Consideration and approval of the operating
strategy of the parent company and Group
companies, as well as analysis and evaluation of
information on the implementation of the operating
strategy, presentation of this information to the
ordinary General Meeting of Shareholders;
• Electing and recalling the Board members;
• Adoption of decisions on transactions with related
parties, as stipulated in Part 2 of Article 37 of the
Law on Companies of the Republic of Lithuania;
• Supervision of the activities of the Board and the
manager;
• Providing feedback and suggestions on the set of
annual financial statements, the profit (loss)
distribution project and the company’s annual
report to the General Meeting of Shareholders;
• Submitting proposals to the Board and the
company’s manager to revoke their decisions that
contradict laws and other legal acts, the company’s
articles of association or the decisions of the General
Meeting of Shareholders;
• Providing feedback and proposals on the draft
Remuneration Policy and the draft remuneration
report to the eneral Meeting of Shareholders;
• The Supervisory board also examines other issues
within its competence, specified in the articles of
association of the parent company and the Law on
Companies of the Republic of Lithuania.
Name, Surname, position Education
Information about the main workplace and
participation in the management of other companies:
Owned share of the
company’s capital and
votes as of 31-12-2023, %
Algimantas Lekevičius
Chairman of the Supervisory board since
28 April 2023.
aukštasis, inžinierius
Project Manager of the Issuers Department of the
Markets and Treasury Department of AB Šiaulių bankas
2000/0.02%
Chairman of the Užupis Community Senate
Marijana Juškienė
Member of the Supervisory board since
28 April 2023.
higher education,
engineer-
mathematician
- -
Martynas Bertašius
Member of the Supervisory board since
28 April 2023.
higher education,
economics
He as been working at AB Vilkyškių pieninė since 2016.
-
Manager and actual member of ŪKB „RELI“ (company
code 306286230, address: Kęstučio str. 13, LT-99182
Šilutė)
Supervisory board’s activities in 2023
Two meetings of supervisory board have occurred in 2023. Requires quorum was reached in both meetings. During the meetings head of
supervisory board of AB Vilkyškių pieninė was elected, board’s work regulations and members of management board were approved.
VILVI GROUP ANNUAL REPORT FOR 2023
27
Members of the supervisory board of AB Vilkyškių pieninė
The Supervisory board is a collegial body of the Company, represents the shareholders and performs the functions of supervision and control of the
Company’s activities. The supervisory board is elected by the General Meeting of Shareholders for four years. The Supervisory board elects the
chairman of the Supervisory board from among its members.
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
Other functions of the Board:
• The Board elects and dismisses the CEO, determines working conditions and remuneration, following the Remuneration Policy,
as established in Article 373 of the Law on Companies of the Republic of Lithuania;
• Determines the information that is considered the company’s commercial (production) secret and confidential information;
• Analyzes and evaluates the material provided by the company’s CEO about the organization of the company’s activities, financial
condition, performance results, etc.;
• Analyzes and evaluates the company’s set of annual financial statements, profit (loss) distribution and Remuneration Policy
projects and together with feedback and proposals on them and the company’s annual report submits them to the Supervisory
board and the General Meeting of Shareholders;
• Analyzes and evaluates the project of the decision on the allocation of dividends for a period shorter than the financial year and
for its adoption the compiled set of interim financial statements, which, together with feedback and proposals on them and the
company’s interim report, are submitted to the Supervisory board and the General Meeting of Shareholders;
• Resolves other issues stipulated in the company’s articles of association.
The Board considers and approves the following:
• The company’s interim and annual report;
• The management structure of the company and the positions of employees;
• Positions to which employees are recruited by tender procedure;
• Other issued that provided for in the procedure established by the Law on Companies of the Republic of Lithuania and the
Company’s Articles of Association.
BOARD
The Board is a collegial management body of the Company.
The Board of AB Vilkyškių pieninė consists of 6 Board members.
Members of the Board, Supervisory board are elected for a four-year
term in accordance with the procedure established by the Law on
Companies of the Republic of Lithuania. The chairman of the Board is
elected by the Board from among its members for a four-year term.
The Company does not have rules governing the election of the
members to the Board of the Company. In its activities, the Company
is guided by the Law on Companies of the Republic of Lithuania, the
Company’s Articles of Association and other legal acts. The members
of the Board have not authorized other persons to perform the
functions assigned to the competence of the Board.
Activities of the company’s Board in 2023
In 2023, the meeting of the Board of AB Vilkyškių pieninė were held regularly according to the established schedule. During 2023, twelve regular meetings of the Board took place. At all meetings of the Board, there was
a quorum required by normative acts. The Board approved the Company’s interim financial statements for the twelve months of 2022 and the three, six and nine months of 2023, the annual financial statements and the
annual report for 2022, convened an ordinary General Meeting of Shareholders, proposed the 2022 profit distribution to the ordinary General Meeting of Shareholders.
At regular meetings of the Board, development plans were considered, loan granting/extension and other ongoing issues were examined.
The Board meetings of other VILVI GROUP companies - AB Kelmės pieninė, UAB Kelmės pienas, SIA Baltic Dairy Board ׅ and AB Modest are held regularly, and issues corresponding to the competence of the Board are
considered.
VILVI GROUP ANNUAL REPORT 2023
28
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
MEMBERS OF THE BOARD
VILVI GROUP ANNUAL REPORT 2023
29
Education
Information about the main workplace and participation in the management
of other companies:
Available share of the company’s capital and votes
as of 31-12-2023, %
Gintaras Bertašius
Chairman of the Board
higher education,
engineer
- mechanic
CEO of AB Vilkyškių pien
inė, chairman of the Board of AB Kelmės pieninė, AB
Modest
and UAB Kelmės pienas, member of the Board of SIA Baltic Dairy Board
As of 31 December 2023, G. Bertašius had no shares in AB Vilky
š
kių pieninė,
but he owns 60.4% of the votes at the General Meeting of Shareholders (a
joint life insurance policy was concluded with the insurance company
Swisspartners Versicherung AG Zweigniederlassung Österreich, which has
taken ownership rights to 7,213,680 shares of AB Vilkyškių pieninė).
Vilija Milaševičiutė
Member of the Board
higher education,
finance and credit
AB Vilkyškių pieninė Director of Economics and Finance, member of the Board of
SIA Baltic Dairy Board, AB Modest, AB Kelmės pieninė and UAB Kelmės pienas
9,588
pcs./0.08%
Linas Strėlis
Member of the Board
higher education
Director of
UAB LS Capital (company code 133118295, address: V. Kudirkos str. 9,
Kaunas)
and UAB Biglis (company code 133688345, address: V. Kudirkos str. 9, LT-
50283 Kaunas),
chairman of the board of Socialinių įmonių asociacija (company
code
300542019, address: Raudondvario pl. 107, Kaunas), Board member of AB
Umega (company code
126334727, address: Metalo str. 5, LT-28216 Utena) and AB
East West Agro (company code
300588407, address: Tikslo str. 10, Kumpiai, LT-
54311 Kaun
as district), EISME member of the investment fund committee of UAB
Lords LB Asset Management (company code
301849625, address: Jogailos str. 4,
LT
-01116 Vilnius.). Member of the Supervisory board of SIA Preses nams.
-
Chairman of the Board and members for re-election for a four-year term on 04-29-2022 during the General
Meeting of Shareholders.
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
MEMBERS OF THE BOARD
VILVI GROUP ANNUAL REPORT 2023
30
Education
Information about the main workplace and participation in the management
of other companies:
Available share of the company’s capital and votes as
of 31-12-2023, %
Sigitas Trijonis
Board member
higher education,
engineer
– mechanic.
Director of the Investment Projects Department of AB Vilkyškių pieninė
425,607
pcs./3.56%
Rimantas Jancevičius
Board member
higher education,
zootechnician
Director of Raw Material Purchase of AB Vilkyškių pieninė
339,863
pcs./2.85 %
Andrej Cyba
Board member
higher education,
business
administration and
management
CEO of UAB PEF GP1 (company code
302582709, address: Maironio str. 11, Vilnius),
UAB PEF GP2 (company code
302582716, address: Maironio str. 11, Vilnius), UAB
Piola (company code
120974916, address: Mindaugo str. 16-52, LT-03225 Vilnius),
UAB Ymmalu (company code
305765142, address: Šaltinių str. 24-10, LT-03233,
Vilnius)
and UAB LAMA Capital (company code 306178639, address: Šaltinių str. 24
-
10, LT
-03233, Vilnius), Business Development Manager of UAB INVL Asset
Management (company code
126263073, address: Gynėjų str. 14, LT-01109 Vilnius),
Chairman of the Board of UAB FMĮ INVL Finasta (company code
304049332,
ad
dress: Gynėjų str. 14, LT-01109 Vilnius) and SIA Baltic Dairy Board, Chairman of
the Supervisory board of IPAS INVL Asset Management (company code
40003605043, ad
dress: Smilšu iela 7-1, LV1050, Ryga) and AS Pirmais atklātais
pensiju fonds (company code
40003377918, address: Smilšu iela 7-1, LV1050, Ryga,
Member of the Board and Chairman of the Audit Committee of AB AUGA group
(company code
126264360, address: Konstitucijos pr. 21C, LT08130 Vilnius).
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
Appointment and Remuneration Committee Audit Committee
Members:
Birutė Butkienė (ŪKB Šilgaliai Agro accountant),
Giedrė Krinicina (AB Vilkyškių pieninė employee),
Živilė Žymantaitė (AB Vilkyškių pieninė employee).
All members are not leading employees of the administration, they do not participate in the authorized
capital of the Company.
Forms and approves the regulations of the committee – the Board.
Functions of the committee:
• Provides management bodies with assistance in all matters related to the appointment of candidates
to the positions of the Company’s manager or other managerial employees;
• Recommends to the Board candidates for other Board committees;
• Collects, analyzes and processes all information related to the Company’s employee hiring policy;
• Assesses the possible conflicts of interest of each managing employee of the Company;
• Provides assistance to governing bodies in all matters related to the determination of salaries for
management personnel;
• Resolves other issues necessary for the proper performance of the Committee’s functions.
Members:
Aušra Lobinienė (Head of Internal Audit Service of Tauragė Credit Union),
Vilma Morkaitienė (UAB Bonus modus senior Accountant)
Sigita Montvilaitė (AB Vilkyškių pieninė employee).
All members are not leading employees of the administration, they do not participate in the authorized
capital of the Company.
Forms and approves the regulations of the committee – General Meeting of Shareholders.
Functions of the committee:
• Monitors the process of preparing the Company’s financial statements;
• Provides management bodies with recommendations related to the selection of an audit firm;
• Monitors the effectiveness of the company’s internal control, risk management and internal audit
systems;
• Monitors the audit process;
• Monitors how the auditor and the audit firm adhere to the principles of independence and
objectivity;
• Performs other functions provided for by legislation;
• Immediately informs the head of the Company about the information provided to the Audit
Committee by the audit company about problematic issues that arose during the audit, especially
when significant internal control deficiencies related to financial statements are identified.
Valdyba
COMMITTEES
Activities of the Appointment and Remuneration Committee in 2023
In 2023, two meetings of the committee took place, during which the salaries of the Company’s employees
were reviewed, recommendations were made regarding the company’s internal procedures and
Remuneration Policy, and the appointment of candidates to the positions of Director of Transport and
Logistics and Investment Projects. All committee members attended the meetings.
VILVI GROUP ANNUAL REPORT 2023
31
Committees are not formed in subsidiaries.
Activities of the Audit Committee in 2023
In 2023, three committee meetings were held, during which drafts of the Company’s 2022 financial
statements, 2022 annual report and 2022 profit (loss) distribution were discussed and the 2023 budget
was discussed. Recommendations have been made for selecting audit firms that audit a group of
companies. Revised risk management systems for sales to various countries. All committee members
attended the meetings.
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
KEY MANAGERS
VILVI GROUP ANNUAL REPORT 2023
32
Education
Information about participation in the management of other
companies:
Owned share of the company’s capital
and votes as of 31
-12-2023, %
Gintaras Bertašius
CEO
higher education, engineer
-
mechanic
Chairman of the Board of AB Vilkyškių pieninė, AB Modest, AB Kelmės
pien
inė and UAB Kelmės pienas, member of the Board of SIA Baltic
Dairy Board
No shares owned
/60.40%
Vilija Milaševičiutė
Director of Economics and Finance
higher education, finance and
credit
Member of the Board of AB Modest, AB Kelmės pien
inė, UAB Kelmės
pienas and SIA Baltic Dairy Board
9,588
pcs./0.08%
Sigitas Trijonis
Director of the Investment Projects
Department
higher education, engineer
-
mechanic
Member of the Board of AB Vilkyškių pieninė
425,607
pcs./3.56%
Rimantas Jancevičius
Director of Raw Material Purchase
higher education, zootechnician
Member of the Board of AB Vilkyškių pieninė
339,863
pcs./2.85%
Vaidotas Juškys
Executive Director
higher education, information
technologies
-
17,756
pcs./0.15%
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
KEY MANAGERS
VILVI GROUP ANNUAL REPORT 2023
33
Education
Information about participation in the management of other
companies:
Owned share of the company’s capital
and votes as of 31
-12-2023, %
Arvydas Zaranka
Production Director
AB Kelmė pieninė director
higher education, dairy technology
Member of the Board of
AB Modest
1,933
pcs./0.02 %
Rita Juodikienė
Director of Management and
Quality
master’s degree, business
management
Member of the Board of AB Kelmės pien
inė and UAB Kelmės pienas
2,175
pcs./0.02 %
Paulinas Stanaitis
Director of Transport and Logistics
higher education, Management
and business administration
-
-
Jolita Valantinienė
Director of AB Kelmės pienas
master’s degree, management and
business administration
-
-
Matas Pozingis
Director of AB Modest
higher education, management
and business administration
-
-
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
Governance based on respect and fundamental human rights
VILVI GROUP management is based on fundamental human rights and respect for others. We follow these principles when managing company processes and
communicating both with people within the Group and with business partners and other stakeholders.
Ethical employment provisions
In order for all employees to clearly understand the principles
of respectful communication, the Code of Ethical
Employment was approved in 2022, which sets out the
natural human rights respected by the Group, emphasizing
the intolerance of discrimination, disrespectful or inhumane
behavior.
We apply the principles of ethical employment that we apply
to all of our stakeholders. We also inform our business
partners and suppliers about the principles of ethical
employment that are important to us. We aim not to have
business relations with partners who do not comply with our
established provisions.
Ethical principles of activity and equality and a respectful
approach to every person are also applied when it comes to
shareholders who have equal rights (property and non-
property), provided for in laws, other legal acts and the
company’s articles of association. No shareholder has any
special control rights that can confer privileges. All
shareholders have the same rights.
All key policies and codes are publicly
available on the Group’s website so that all
stakeholders are aware of our ethical
employment principles.
Code of Ethical Employment Code of Ethical Business
Business ethics and intolerance to bribery and corruption
In 2022, the Code of Ethical Business was also approved, which sets out the main principles
and priorities of our activities and the kind of behavior that we identify as undesirable in our
Group.
We do not tolerate any acts of corruption, including bribery and kickbacks, we promote honest
business and transparent cooperation with state institutions and other interested parties.
Transparent, honest and open business activities are one of the most important elements of
an impeccable business reputation and success.
We pay all taxes, keep honest records, and follow a transparent salary policy. We ensure
transparency in the procurement we organize and require potential and existing suppliers to
act transparently and fairly.
We sell our products in accordance with the principle of transparency, we do not participate in
transactions that ask for bribes or offer to act in a non-transparent manner. We have clearly
stated the principles of our activities and cooperation in the Code of Ethical Business and
familiarized our partners and suppliers with it, we also constantly remind our employees what
behavior or agreements are intolerable and what threats may arise when communicating with
stakeholders both in Lithuania and abroad.
The Group has decided to be politically neutral and not to provide any financial support to
political parties, groups or politicians.
We also inform our
partners and suppliers
both in Lithuania and
abroad about the
responsible approach to
people and the
environment in order to
create an honest and
responsible environment
for business development
towards people and
nature – a responsible
supply chain is ensured.
These provisions are established by:
These provisions are established by:
https://vilvigroup.lt/politikos/
34
GOVERNANCE PRINCIPLES
VILVI GROUP ANNUAL REPORT 2023
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
In 2012, AB Vilkyškių pieninė approved a dividend policy. Excerpt from the provisions of the dividend policy:
Dividends and amount of dividends
The Law on Companies of the Republic of Lithuania stipulates that the dividend is a share of the profit
allocated to the shareholder, proportional to the nominal value of the shares owned by the shareholder.
1. During the General Meeting of Shareholders, the Company’s shareholders cannot make a decision to pay
out dividends if: 1) the Company is insolvent; 2) the distributed result of the financial year is negative; 3)
the Company’s equity capital is lower or, after paying dividends, would become lower than the
Company’s authorized capital and the amount of reserves.
2. The Company’s Board should propose the amount of dividends to the General Meeting of Shareholders
depending on the Company’s audited net profit of the relevant financial year.
3. If the Company operates profitably, the Board of the Company allocates a certain part of the income to
the amount of dividends, as determined in point 2.6, and reinvests the remaining income in order to
increase the Company’s capitalization.
4. The Company pays dividends in cash.
5. The Board of the Company has determined the amount of dividends based on the Company’s
consolidated net profit of the previous year. The determined amount of dividends must be at least 25% of
the Company’s consolidated net profit for the previous year, but not more than the Company’s annual
consolidated net profit.
6. The Company reserves the right to deviate from the dividend amount criteria by disclosing the reasons
for such deviation.
2019
(for 2018)
2020
(for 2019)
2021
(for 2020)
2022
(for 2021)
2023
(for 2022)
Dividends (EUR)
- - 955,440 2,388,600 3,164,744
Dividends per share (EUR)
- - 0.08 0.20 0.265
Number of shares
11,943,000 11,943,000 11,943,000 11,943,000 11,943,000
DIVIDENDS
VILVI GROUP ANNUAL REPORT 2023
35
Payment of dividends by AB Vilkyškių pieninė in the last years:
Payment of dividends by AB Kelmės pieninė in the last years:
AB Kelmės pienas in 2023 (for 2022) paid out dividends of EUR 1.2 million.
AB Modest, AB Pieno logistika and SIA Baltic Dairy Board have not paid dividends in the past 5 years.
Payment of dividends in other VILVI GROUP companies
2019
(for 2018)
2020
(for 2019)
2021
(for 2020)
2022
(for 2021)
2023
(for 2022)
Dividends (EUR)
1,719,949 5,651,261 7,371,210 3,931,312 1,523,383
Dividends per share (EUR)
0.70 2.30 3.00 1.60 0.62
Number of shares
2,457,070 2,457,070 2,457,070 2,457,070 2,457,070
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
1. Links to the applicable Corporate Governance Code and all necessary information about corporate governance practices:
The Company’s Management Report for 2023, the Company’s and its Group’s audited financial statements, the consolidated annual report are published on the Company’s website VILVI GROUP and on the page of
the stock exchange AB Nasdaq Vilnius Vilkyškių pieninė | Prekyba — Nasdaq Baltijos birža (nasdaqbaltic.com).
2. Information on transactions with related parties
During 2023, the company did not have transactions with related parties that would meet the criteria specified in Article 372 of the Law on Companies. More detailed information on transactions with related parties
and financial relationships with company managers is provided in Note 28 of the financial statements for 2023.
3. Deviations from the provisions of the applicable Corporate Governance Code
Information on non-compliance with the provisions of the Corporate Governance Code is provided in clauses 1.8 of the Governance Code page 147.
4. Diversity policies apply to the election of the company’s manager, members of the management and supervisory bodies
The Company does not have a diversity policy for the election of the manager, management and supervisory bodies. When nominating candidates for the members of the Company’s management bodies, they are
not discriminated against due to age, gender, education or professional experience. The Company does not set any restrictions for individuals to apply due to gender or age. The main criterion for selecting
members of management bodies is the competence of the candidate.
5. Agreements between shareholders
The Company does not have data on mutual agreements between shareholders. In 2023, the Companies have not entered into agreements with members of their bodies or employees that would provide for
compensation if they resign or are dismissed without reasonable cause or if their employment ends due to a change in control of the issuer. During the reporting period, there were no harmful transactions that did
not meet the goals of the Company or the Group, normal market conditions, violated the interests of shareholders or other groups of persons and had or may have a negative impact on the Company’s activities or
performance results in the future.
VILVI GROUP ANNUAL REPORT 2023
36
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
Valdyba
REMUNERATION REPORT
General information
AB Vilkyškių pieninė remuneration report has been prepared for the reporting financial
period of 2023, which coincides with the calendar year. The preparation of the
remuneration report (hereinafter - the Report) was guided by the Law on Financial
Reporting of Companies of the Republic of Lithuania, VILVI GROUP’s employee
Remuneration Policy (hereinafter - the Remuneration Policy) and other legal acts.
The Remuneration Policy of AB Vilkyškių pieninė group of companies’ employees was
approved at the General Meeting of Shareholders on 28 April 2023. The Remuneration
Report contains information on the remuneration of each member of the management
and supervisory bodies, provides information on other types of (not) received benefits,
other data.
Principles of remuneration determination
The members of the Board of the Company may be paid bonuses, which are allocated
according to the procedure established by legal acts by the decision of the General
Meeting of Shareholders of the Company. After the General Meeting of Shareholders
adopts a decision on the payment of royalties, the share of royalties attributable to a
specific member of the Board is determined by the decision of the Board, taking into
account the contribution of a specific member of the Board to the Company’s activities.
The remuneration for the head of the company – the CEO is determined by the decision of
the Board of the Company. When determining the amount of salary, the level of payment
of managers of companies of similar size is evaluated, taking into account the level of the
position, as well as the manager’s personal competence, experience, knowledge and
abilities.
VILVI GROUP’s remuneration for top-level managers, II-level managers, middle-level
managers and other employees consists of two main parts: fixed and variable. Incentive
payments may also be made.
The company’s employees are paid: fixed part of remuneration (FPR) - the employee’s
basic or hourly monthly monetary wage established in the employment contract, variable
part of remuneration (VPR) - additional monetary remuneration of the employee,
determined taking into account the quality and results of work performance, the goals set
for the company and the individual goals of the employee achievement, level of
competences and compliance with the values of the Company and the Group of
Companies. Other benefits (OB) – other possible benefits given to employees as incentives.
Board members’ remuneration for the year 2022 – 2023
Two members of the Board of AB Vilkyškių pieninė do not work in the company and four members of the Board are
employed under employment contracts. All members were not paid any fixed or additional remuneration for their work on
the Board during the year 2023. Board members working under an employment contract received salary only on the basis
of employment relations.
The wages calculated and paid during 2023 correspond to the amounts provided for in the Remuneration Policy approved
by the Company.
Annual salary before taxes of the Board members working under an employment contract,
thousand EUR
Name, surname, position
2022 2023
Fixed salary
Variable
salary
Total Fixed salary
Variable
salary
Total
Gintaras Bertašius,
CEO
101.4 - 101.4 115,2 1115,2
Vilija Milaševičiūtė,
Director of Economics and
Finance
66.9 11.2 78.1 72,2 12,8 85,0
Sigitas Trijonis,
Director of the Investment
Projects Department
66.6 11.4 78.0 72,7 12,3 85,0
Rimantas Jancevičius,
Director of Raw Material
Purchase
66.0 11.8 77.8 72,3 12,1 84,4
The CEO and members of the Board did not receive any remuneration from the companies belonging to the Corporate
Group. The salary was paid according to the procedure, scope and terms stipulated in the employment contract, no other
financial benefits were received in 2023, including no shares or other transactions concluded for the benefit and interests
of the managers.
During the reporting period (2023), no guarantees or sureties were given to the members of the Board, the head of the
company, no assets or other property rights were transferred.
VILVI GROUP ANNUAL REPORT 2023
37
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
Remuneration for the activity in the Board of the Supervisors, in Audit and Nomination and Remuneration
Committees is paid to a non-attached member, however, it is included into remuneration for attached members and
additional remuneration is not paid. The amounts of annual remuneration for the activity in the Company to the
members of the Company are provided for in Annex of Remuneration Policy.
Valdyba
REMUNERATION REPORT
Remuneration of employees of the parent company and Group companies
The wage fund of the Corporate Group in 2023 was equal to EUR 19,108 million (EUR 15,792 million in 2022)
Average monthly salary before taxes of the employees of VILVI GROU, EUR
Staff group
2019 2020 2021 2022 2023
Number of
employees
Average wage
Number of
employees
Average wage
Number of
employees
Average wage
Number of
employees
Average wage
Number of
employees
Average wage
Managers 28 3,919 29 3,997 30 4,261 30 4,799 31 5,240
Specialists 298 1,258 301 1,311 310 1,434 310 1,711 319 1,961
Workers 502 872 500 924 527 1,020 544 1,209 569 1,435
Total: 828 1,107 830 1,166 867 1,281 884 1,508 919 1,746
Average monthly salary before taxes of the employees of AB Vilkyškių pieninė, EUR
Staff group
2019 2020 2021 2022 2023
Number of
employees
Average wage
Number of
employees
Average wage
Number of
employees
Average wage
Number of
employees
Average wage
Number of
employees
Average wage
Managers 22 4,020 21 4,198 19 4,565 20 5,029 22 5,478
Specialists 170 1,304 155 1,338 147 1,506 150 1,777 150 2,038
Workers 285 930 283 948 274 1,059 292 1,253 252 1,507
Total: 477 1,197 459 1,228 440 1,365 462 1,581 424 1,884
In the period of 2023, the remuneration paid to the members of the Board of AB Vilkyškių pieninė and the employees corresponded to the principles, bases and conditions approved in the Remuneration
Policy. The members of the company’s Audit Committee and Remuneration Committee were not paid any fixed or additional remuneration for their work on the committees.
VILVI GROUP ANNUAL REPORT 2023
38
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
Risk management is an integral part of the Group’s activities. We
identify, analyze and evaluate risks taking into account the Group’s
goals, activities and external environment. The Board is responsible for
approving the Group’s overall risk management model, the Board of
Directors is responsible for supervision.
The Group applies the Committee of Sponsoring Organizations of the
Treadway Commission (COSO) internal control and risk management
model. The risk management process covers all companies and
functions of the Group. It is constantly reviewed, assessing the Group’s
risk appetite and strategic aspirations, adjusted to market conditions
and changes in the Group’s activities. We conduct regular monitoring
of risk management in the Group. Every quarter, the Board of
Directors reviews internal and external risks, assesses risk indicators,
and determines risk management measures as needed.
Stages of risk management:
39
RISK MANAGEMENT
General Meeting of Shareholders of AB Vilkyškių pieninė
Supervisory board
Board
Directors meeting
Validation of a risk management model: risk appetite
and strategic objectives
Risk assessment, review of indicators, plan of measures.
Directors of the companies
of the Group
Directors of functional
divisions of the parent
company
• Internal and external risks arising in management activities.
• Risk management tools.
• Periodic monitoring of risk indicators.
COMBINATION OF
RISK APPETITE AND
STRATEGY
IDENTIFICATION OF
RISKS
RISK ASSESSMENT
RISK MANAGEMENT:
MEASURES AND
ACTIONS
RISK MONITORING
Regular
monitoring
Quarterly
discussion and
reconciliation
Approval of risk
assessment once a
year
Monitoring
Objectives of risk management:
• To ensure the activities of the
Group.
• To manage the impact of risks on
the Group’s objectives.
• To ensure the Group’s reputation.
• To protect the interests of
stakeholders.
Types of risks:
by period:
• Short-term (0-1 y.)
• Medium-term (1-4 y.)
• Long-term (>5 y.)
by source:
• Internal
• External
by ESG area:
• E (Environment) – affecting the
field of environmental protection;
• S (Social) – affecting social factors,
their management;
• G (Governance) – affecting the
field of governance.
Types of risks:
Strategic risks
affecting the Group’s
strategic goals.
Operational risks affecting
the efficient operation of the
Group.
Compliance risks
affecting compliance
with laws and
requirements.
Financial risks affecting the
Group’s financial result.
VILVI GROUP ANNUAL REPORT 2023
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
Audit Committee
Remuneration Committee
RISK MANAGEMENT
40
VILVI GROUP ANNUAL REPORT 2023
TYPE OF RISKS RISK FACTORS RISK SOURCE SOURCE TYPE
(internal/external)
PERIOD
(short-term,
medium-term,
long-term)
INFLUENCE
STRATEGIC
DIRECTION/
AREA OF
INFLUENCE
RISK MANAGEMENT ESG TYPE:
E / S / G
STRATEGIC
RISKS
The risk of strategic
investment projects not
being completed or not
being completed on time
Unplanned external circumstances,
problems in project management.
Internal / external Medium-term FINANCE • A new Investment Projects department has been created for
the management of investment projects, and project
management competence has been raised.
• The project implementation plan and emerging risks are
regularly monitored.
• External professionals and consultants are used as needed.
-
Price jumps of raw
materials and energy
resources
Energy prices: fluctuating production
costs.
external long-term FINANCE • Regular monitoring of price fluctuations.
• Diversification of strategic raw material procurement sources.
• Technological solutions have been implemented that allow
diversification of the energy resources used.
-
Insufficient amount of the
main raw material - milk
Seasonality of raw material supply,
insufficient amount of raw material.
external long-term FINANCE • Regular market monitoring.
• Diversification of purchasing sources.
-
Dependence on the
branch of activity or large
clients
Changes in the branch of activity,
changes in the purchasing power of
customers, competition.
internal long-term FINANCE • Regular market monitoring.
• Diversification of business branches.
• Diversification of the client portfolio.
-
Risk of not selling the
product
Fluctuations in demand and price. external long-term FINANCE • Regular market monitoring.
• Diversification of business branches.
• Diversification of the client portfolio.
• Loyal customer database.
-
Unfair competition Demand and price fluctuations caused
by unfair competition.
external long-term FINANCE • Regular market monitoring.
• Diversification of business branches.
• Diversification of the client portfolio.
• Loyal customer database.
-
The risk of not securing
supply chains, logistics
Disruptions in logistics chains caused
by global political or other unrest.
external long-term FINANCE • Regular market monitoring.
• Diversification of the client portfolio.
• Loyal customer database.
-
Reputational risks Poor quality products, uncontrolled
stakeholder accountability and
uncontrolled communication, unfair
labor practices, corruption and bribery.
internal long-term FINANCE • Implementation of food safety and quality standards.
• Timely and regular reporting to stakeholders.
• The distribution of communication responsibilities and
principles are defined in the Business Ethics Policy.
• Policies and processes defining different areas of sustainability.
• The possibility of confidential and anonymous messages is
ensured.
S, G
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MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
RISK MANAGEMENT
41
VILVI GROUP ANNUAL REPORT 2023
TYPE OF RISKS RISK FACTORS RISK SOURCE SOURCE TYPE
(internal/external)
PERIOD
(short-term,
medium-term,
long-term)
INFLUENCE
STRATEGIC
DIRECTION/
AREA OF
INFLUENCE
RISK MANAGEMENT ESG TYPE:
E / S / G
FINANCIAL
RISKS
Financial liquidity risk The risk that the Group and the
Company can no longer fulfill their
financial obligations on time.
internal long-term FINANCE • Sufficient flow of cash and cash equivalents or have financing
through appropriate credit.
• Maintaining a balance between funding continuity and
flexibility.
-
Credit risk In the course of trading activities, the
Group and the Company sell products
and services with a deferred payment
term, therefore there may be a risk that
customers will not pay the Group’s and
the Company’s receivables from the
sale of products and Services.
external long-term FINANCE • Application of credit limit principles that determine the amount
of credits granted to customers and the corresponding types of
collateral, such as: limit, guarantees, insurance.
• Foreign buyers insurance.
• Customer credit risk assessment.
-
Market risk Changes in market prices, e.g. foreign
currency exchange rates and interest
rate impact on the result of the Group
and the Company or the value of
available financial instruments.
external long-term FINANCE • Management of foreign exchange rates. -
OVERVIEW
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MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
RISK MANAGEMENT
42
VILVI GROUP ANNUAL REPORT 2023
TYPE OF RISKS RISK FACTORS RISK SOURCE SOURCE TYPE
(internal
/external)
PERIOD
(short-term,
medium-term,
long-term)
INFLUENCE
STRATEGIC
DIRECTION/ AREA
OF INFLUENCE
RISK MANAGEMENT ESG
TYPE:
E / S / G
OPERATIONAL
RISKS
Product quality and safety risks. Inadequate assessment and
management of risk factors
(biological, chemical, physical).
Internal long-term FINANCE • Food safety, quality and management standards are implemented
and continuously updated.
• Regular training of employees and maintenance of competence.
• Regular internal and external audit.
S
Attracting and retaining
employees.
Population decline in the region,
lack of highly qualified workers.
Internal /
External
long-term ORGANIZATION /
FINANCE
• Close cooperation with organizations and scientific institutions.
• Search for motivational tools within the organization.
• Training of competence improvement.
• Loyalty incentives.
S
Risk of accidents, incapacity. Failure to manage occupational
risks, safety and health violations.
Internal long-term ORGANIZATION • The Employee Safety and Health Policy has been approved, safety and
health briefings and trainings are conducted regularly.
• Regular assessment of occupational risks.
• Reduction of ergonomic, chemical and other risk factors by
technological means and by implementing internal programs.
S
The risk of compliance of working
conditions and employee well-
being with market conditions and
customer requirements.
Increasing customer standards
for employee well-being.
External long-term FINANCE /
COMPLIANCE
• Regular monitoring of customer requirements.
• Approved Remuneration Policy where remuneration is benchmarked
against market conditions.
• Regular monitoring and improvement of conditions.
S
Human rights violations:
discrimination and failure to
ensure equal opportunities.
Inconsistency of employee
behavior with the Group’s values
and established regulations.
Internal long-term ORGANIZATION • Human Rights, Equal Opportunities, Violence and Harassment at
Work policies and their implementation procedures have been
approved.
• Employee training.
• The possibility of confidential and anonymous messages is ensured.
S
Improper separation of waste
streams, waste reduction rates are
too slow.
Improper separation of waste in
production processes, human
factor, solutions offered by waste
managers.
Internal medium-term ORGANIZATION /
REPUTATION
• Approved waste management procedures and processes.
• Contracts have been signed with waste managers.
• Technical solutions for waste separation and collection.
• Employee education.
E
Risk of data traceability and
correctness of GHG emission
assessment and reduction targets.
Incorrect data collected,
inappropriate data depth, human
factor.
Internal medium-term ORGANIZATION /
COMPLIANCE
• Automation of data collection.
• External consultants are used as needed.
E
Risk of adverse environmental
impact.
The risk of environmental
pollution due to the consumption
and release of large amounts of
natural resources, technology
failures.
Internal long-term ORGANIZATION /
COMPLIANCE
• Approved Environmental Protection Policy, compliance with laws.
• Regular monitoring, impact assessment, pollution monitoring
programs.
• Implementation of mitigation technologies.
E
Failure to ensure data security,
cyber attacks.
Physical and software data
security is not ensured.
External long-term ORGANIZATION /
REPUTATION
• Approved IT security policy.
• GDPR approved.
• Continuous improvement of physical and software data security.
• External consultants are used as needed.
G
OVERVIEW
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MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
RISK MANAGEMENT
43
VILVI GROUP ANNUAL REPORT 2023
TYPE OF RISKS RISK FACTORS RISK SOURCE SOURCE TYPE
(internal/external)
PERIOD
(short-term,
medium-term,
long-term)
INFLUENCE
STRATEGIC
DIRECTION/
AREA OF
INFLUENCE
RISK MANAGEMENT ESG
TYPE:
E / S / G
OPERATIONAL RISKS Risks of non-timely data
management/inaccuracy
Slow digitization processes due to
long-term acquisition of software
and technological solutions,
delayed implementation process.
Internal medium-term ORGANIZACIJA • Implementation of data automation solutions.
• Structural changes are being implemented to speed up
implementation processes.
S
Business continuity risk Compliance with laws, extreme
events caused by climate change,
uncertainty caused by political
and other unrest (e.g. pandemic,
mobilization, civil security, etc.).
External / internal long-term ORGANIZATION /
FINANCE
• Business continuity plans have been approved. S, G
Physical risks of climate
change
Deterioration of factors affecting
activity due to climate change:
deterioration of the environment
(air, water, soil pollution),
deterioration/lack of water,
climate warming.
External long-term ORGANIZATION /
FINANCE
• Regular environmental factor monitoring programs. E
Climate change transition risk The need for financial and human
resources in adapting to climate
change: implementation of low-
emission technological measures,
resources for continuous impact
assessment and mitigation.
External long-term ORGANIZATION /
FINANCE
• Continuous assessment of organizational sustainability.
• Continuous monitoring of EU and LR law and action planning.
• A new Investment Projects department has been created for
the management of innovation projects, which also manages
low-emission technology implementation projects.
G
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MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
RISK MANAGEMENT
44
VILVI GROUP ANNUAL REPORT 2023
TYPE OF RISKS RISK FACTORS RISK SOURCE SOURCE TYPE
(internal/
external)
PERIOD
(short-term, medium-
term, long-term)
INFLUENCE
STRATEGIC
DIRECTION/
AREA OF
INFLUENCE
RISK MANAGEMENT ESG TYPE:
E / S / G
RISKS OF
COMPLIANCE
Untimely reporting to
shareholders / NASDAQ
Uncontrolled internal information and
untimely communication to
shareholders.
internal long-term FINANCE • Regular reporting according to the plan.
• Confirmed responsibilities for providing
information.
G
Climate change transition
compliance risks
Unmanaged adaptation to changing
regulation – failure to meet
stakeholder requirements.
internal long-term FINANCE /
COMPLIANCE
• Continuous assessment of organizational
sustainability.
• Continuous monitoring of EU and LR law and
action planning.
• Impact mitigation strategy, impact mitigation plans
for individual areas.
• Confirmed responsibility for the implementation of
the plan.
• Regular monitoring of mitigation results.
E
Preparation of
SUSTAINABILITY REPORT
according to the CSRD
directive is too slow
Decisions not approved on time and
necessary information and evidence
not collected.
internal medium-term COMPLIANCE • Preparation plan for the implementation of the
directive.
• Confirmed responsibility and regular
communication of readiness.
• Implementation of technological solutions for data
collection.
G
Supply chain sustainability
compliance risks
Growing customer demands on the
supply chain.
internal medium-term COMPLIANCE • Regular monitoring of customer requirements.
• Implementation of sustainability actions in the
Group.
• Bringing sustainability requirements to the supply
chain.
G
Taxonomic investment growth
too slow
Decisions not approved on time and
necessary information and evidence
not collected.
internal long-term FINANCE /
COMPLIANCE
• Taxonomic Information Management Program.
• Implementation of data traceability and storage
solutions.
G
Risk of adverse and unplanned
regulatory changes
Uncontrolled or too slow adaptation to
new regulatory changes.
external medium-term COMPLIANCE • Confirmed responsibilities for different areas of
activity.
• Information management and risk assessment at
the Group level.
G
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SUSTAINABILITY REPORT FINANCIAL STATEMENTS
SUSTAINABILITY REPORT
(Corporate Social Responsibility report)
VILVI GROUP ANNUAL REPORT 2023
45
ESG CONTENTS ................... 46
SUSTAINABILITY IN THE GROUP ................... 47
MATERIALITY ASSESSMENT ................... 49
ESG PRIORITIES .................... 51
POLICIES ................... 54
TAXONOMY OVERVIEW ..................... 55
ENVIRONMENTAL PROTECTION .................... 62
SOCIAL ENVIRONMENT ..................... 67
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
The VILVI GROUP's annual report
discloses environmental, social and
governance information. It includes an
information index for faster reading of
sustainability information.
The Group is preparing for disclosures
under the Corporate Sustainability
Reporting Directive (CSRD) for 2024.
ESG CONTENTS
VILVI GROUP ANNUAL REPORT 2023
46
ESG contents Page
Sustainability governance and priorities 47-53
Taxonomy overview 55-61
Environmental protection 62
Climate risks 39 – 44
Polution 65 – 66
Resources concumption 64
Social environment 67
Employees 69 – 75
Comunities 78
Conusmers 76 – 77
Governance
Policies and report channels 54
Risk management and ESG risks 39 – 44
Business ethics and intolerance to bribery and corruption 34
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
About the report
This report introduces Vilvi Group
(further on – the Group) activities in
the fields of responsible business and
sustainability in 2023. This document
reveals how responsible business
approach and the Group’s
management principles translate into
the company’s daily activities and
future plans. It also presents the
Group’s strategic perspectives, actions
and achievements in terms of social
responsibility and sustainability,
introducing progress-oriented
environmental, social and governance
aspects (further on – ESG areas).
The sustainability (social
responsibility) report is part of the
2023 audited annual report of AB
Vilkyškių pieninė consolidated and
parent company.
This report has been issued according
to NASDAQ environmental, social and
governance guidelines, the United
Nations Global Compact, the United
Nations Sustainable Development
Goals, and the European
Commission's communication on
‘Guidelines for Non-Financial
Reporting’ (2017/C215/01).
SUSTAINABILITY IN THE GROUP
VILVI GROUP ANNUAL REPORT 2023
Sustainability in VILVI GROUP
We aim to make sustainability a core value of our organization, a part of our culture, and be integrated into all business processes. We monitor, measure and assess
the impact of the Group’s activities on the environment and on people. We understand that this is important not only for us, but also for stakeholders, therefore, we
publish a sustainability (social responsibility) report every year. The Group employs a sustainability specialist, therefore, the importance of sustainability is
understood in all staff lines and everyone strives to make their own contribution to building a sustainable organization. Sustainability issues are addressed not only
in the top management team, but also in the Groups’s Board.
Sustainability is integrated into the business processes of VILVI GROUP: from operational activities, work with suppliers and partners, to the implementation of
sustainable innovations. We aim to reduce the negative impact on the environment.
Although the assessment given by consumers and partners allows us to call ourselves the leaders of the country’s milk market, we realize that only the cooperation
of all market players will ensure significant changes in sustainability in the entire sector, therefore, we strive for respectful competition and partnership,
guaranteeing the well-being of society and positive changes towards nature.
Internal responsibility, transparency and accountability to society are the starting points for further sustainable growth of VILVI GROUP, development of employees
and mutually beneficial cooperation with all stakeholders both in Lithuania and abroad.
Sustainable development goals of VILVI GROUP
This is not the first year we have joined the United Nations Organization’s Sustainable Development Goals (SDG https://unglobalcompact.org/sdgs). From the 17
points identified as the biggest global sustainability challenges, we have selected those areas where we believe we can make a positive impact, we aim to turn the
negative impact into a positive one or at least significantly reduce it. The goals we set become our daily push to find sustainable solutions.
47
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SUSTAINABILITY REPORT FINANCIAL STATEMENTS
The Group has a wide variety of
stakeholders both inside and outside
the Group. The concept of
stakeholders refers to natural and
legal entities, also organisations that
could experience positive or negative
impact, caused by the operations of
Vilvi Group and all those who are
interested in the company. The list
has been compiled based on the
company’s internal information.
Interested group Interests
Business clients Partnership, rational product and service prices, precise and relevant information, ensured product and service quality,
responsible supply chain.
End consumers Product safety and quality, variety and availability, complete nutrition, social responsibility (transparency and reducing
environmental impact).
Employees Responsible employment: safe workplace, fair salary, guarantees, employment and social integration, equal opportunities,
improvement opportunities.
Management Development of the Group’s value in the long term, product development perspectives.
Shareholders and investors Fulfilment of financial goals, business efficiency, increasing the company’s value, transparency and accountability.
Suppliers Partnership, rational product and service prices, guaranteed supply of services and settlement, available, precise and
relevant information, ensured product and service quality, efficient cooperation.
Suppliers of raw materials
Partnership, rational production price, responsibility in the supply of products.
National regulatory authorities Consistent compliance with the requirements of the legislation, operations’ control and monitoring, report assessment,
transparent dialogue.
Local communities Responsible employer and active membership in the community, transparency, reduction of environmental impact.
Educational institutions (colleges,
universities, etc.)
Cooperation, sharing experience, career opportunities, investments into scientific research.
Competitors Respect, fair, transparent and ethical business.
Non-governmental organisations Cooperation, transparency, accountability, reduction of environmental impact.
Media Transparency, responsibility and dialogue.
STAKEHOLDERS
VILVI GROUP ANNUAL REPORT 2023
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BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
Importance to stakeholders
Impact on business/importance for Vilvi Group
Low
Medium
High
Very high
Low
Medium
High
Very high
ENVIRONMENTAL PROTECTION
• Reduction of GHG emissions
• Responsible use of water resources
• Responsible use of energy resources
• More sustainable packaging
• Waste reduction and management
• Animal welfare
• Soil protection
• Biodiversity
• Sustainability and responsibility in the supply chain
SOCIAL ENVIRONMENT
• Occupational safety, conditions and staff well-being
• Product safety and quality
• Consumer well-being
• Human rights
• Diversity and equal opportunities at work
• Recruiting and retaining employees
• HELPING COMMUNITIES
• Social standards of the supply chain
GOVERNANCE
• Product innovation
• Supply chain management
• Ethical standards of the supply chain
• Business ethics and anti-corruption
• Transparency and compliance with the legal regulation
• Accountability to stakeholders
The assessment of the significance of ESG aspects was carried out for the first
time in 2022. The purpose of this assessment was to clarify the sustainability
aspects, to be used as the foundation for Vilvi Group sustainability priorities. The
assessment was conducted based on GRI guidelines and SASB and MSCI
recommendations, taking into account the activities and the sector in which we
operate. Targeted stakeholder groups were interviewed, an internal strategic
discussion was conducted and a matrix of significance of the Group's
sustainability aspects was compiled.
VILVI GROUP’S SUSTAINABLE DEVELOPMENT
GOALS CORRESPONDING TO RELEVANT ESG
ASPECTS
RELEVANT ESG ASPECTS OF VILVI GROUP
ASSESSMENT OF SIGNIFICANCE OF SUSTAINABILITY ASPECTS
VILVI GROUP ANNUAL REPORT 2023
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MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
SUSTAINABILITY ASPECT SIGNIFICANCE ESG AREA
Product safety and quality Ensuring safety and quality of the production. SOCIAL ENVIRONMENT
Work safety, conditions and staff
wellbeing
Creating a safe working environment, taking care of the employees’ physical,
psychological and emotional health, ensuring proper working conditions, balanced
work-reset regime, and a proper salary.
SOCIAL ENVIRONMENT
Reducing GHG emissions Assessment of greenhouse gas emissions, and setting and achieving reduction
goals.
ENVIRONMENTAL
PROTECTION
Consumer well-being Proper product marking, indicating product nutritional value, consumer education,
responsible marketing communication.
SOCIAL ENVIRONMENT
Product innovation Introduction of innovation to achieve efficient and modern production and business
processes.
GOVERNANCE
Human rights Ensuring fundamental human rights. SOCIAL ENVIRONMENT
Diversity and equal opportunities
Maintaining diversity and ensuring inclusion of sensitive social groups, social justice.
SOCIAL ENVIRONMENT
Business ethics and anti-corruption Ethical and transparent operation. GOVERNANCE
Transparency and compliance Compliance with the law and legislation. GOVERNANCE
Responsible use of water resources Responsible management of water resources, introducing sustainable technology. ENVIRONMENTAL
PROTECTION
Responsible use of energy resources Responsible management of energy resources, introduction of sustainable
technology, using renewable energy resources.
ENVIRONMENTAL
PROTECTION
HELPING COMMUNITIES Inclusion of the community, cooperation in various projects, and assistance to
community in relevant areas.
SOCIAL ENVIRONMENT
Accountability to stakeholders Transparency and accountability according to the legislation of the Republic of
Lithuania.
GOVERNANCE
Supply chain management Efficient supply chain management, risk diversification. GOVERNANCE
Recruiting and retaining employees Active recruitment action, staff competence improvement, career opportunities,
promotions.
SOCIAL ENVIRONMENT
RELEVANT ESG ASPECTS OF VILVI GROUP
Sustainability aspects, which complied
with the criterion of average, high or
very high significance both to the
stakeholders and Vilvi Group in the
significance assessment. These ESG
aspects receive the greatest attention
in planning and fulfilment of
sustainable business management
on the Group level.
VILVI GROUP ANNUAL REPORT 2023
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ATSA K I N G A V E RSLO P R AKTIKA
Produktų sauga ir kokybė:
Reducing GHG emissions
VILVI GROUP PRIORITIES GOALS ACTIONS IN 2023 EXTERNAL FACTORS
RESPONSIBLE USE OF THE NATURAL
RESOURCES AND ENERGY EFFICIENCY
LONG-TERM DIRECTION:
Development and introduction of new, environmentally-
friendly technology and saving natural resources thus
ensuring a clean environment and a high quality of air,
soil and water.
GOALS FOR 2023-2024:
• natural resource consumption monitoring system on
the Group level;
• renewable energy projects;
• reducing water consumption and wastewater.
• Introduction of the unified VILVI GROUP natural resource use
monitoring system.
• Start of the installation of private solar power plants on the roofs
of factories.
• Local system upgrade works on the sites of operations.
• AB Vilkyškių Pieninė started implementing a technology that
cleans permeate water so that it can be used again in production
processes (reducing water consumption and amounts of
wastewater).
• AB Modest installed heating and cooling regeneration
technologies.
• Installation of own electric vehicle charging stations.
• In 2023, green electricity is significantly
more expensive than non-renewable
energy, which led to the termination of
the purchase of green energy and the
installation of own solar power plants.
REDUCING ENVIRONMENTAL IMPACT LONG-TERM DIRECTION:
reducing GHG emissions by joining the global climate
change agreement goals.
GOALS FOR 2023-2024:
• regular environmental impact assessment;
• assessment of GHG emissions;
• setting environmental impact reduction goals.
• Scope 1, Scope 2 assessment of GHG emissions.
• Internal environmental audit to identify areas of greatest impact.
REDUCING AND CIRCULARITY OF
WASTE
LONG-TERM DIRECTION:
reducing production waste and increasing reusability.
GOALS FOR 2023-2024:
• development of a waste monitoring system on the
Group level;
• adapting to new regulations in the field of chemical
material/waste management;
• adaptation to new regulations in the field of
packaging;
• installation of primary wastewater treatment
equipment.
• A unified VILVI GROUP monitoring system for the use of natural
resources is being prepared.
• Management of the use of chemicals at the Group level.
• Consistent implementation of projects for more sustainable
packaging..
• Preparing to adapt to the EU single-use plastics directive - tying
beverage stoppers to beverage packaging.
• Changing and growing requirements
in the fields of chemicals and
packaging.
ASPECTS SIGNFICANT TO VILVI GROUP IN THE FIELD OF ENVIRONMENTAL PROTECTION:
Sustainable packaging
Reducing and managing waste
Responsible use of energy
resources
Responsible use of water resources
ENVIRONMENTAL PRIORITIES
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ATSA K I N G A V E RSLO P R AKTIKA
Produktų sauga ir kokybė:
Product safety and quality
VILVI GROUP PRIORITIES GOALS ACTIONS IN 2023 EXTERNAL FACTORS
TO ENSURE PRODUCT SAFETY
AND QUALITY
LONG-TERM DIRECTION: ensuring product safety and quality with adherence to the
highest food safety and quality standards, and legal regulation.
GOALS FOR 2023-2024:
• schedule food safety certificate renewal;;
• scheduled internal audits;;
• client and state institution audits according to the need..
• Upgraded all planned food safety and quality standards.
• Scheduled internal audits.
• SFVS and potential client audits according to the need.
SUPPLY THE MARKET WITH
PRODUCTS THAT ENSURE
CONSUMER WELL-BEING
LONG-TERM DIRECTION: Promote healthier nutrition by offering the market healthier
and accessible products (with favourable prices); conduct product marking and
marketing communication with adherence to all legal regulations, and take additional
steps to educate the consumers.
GOALS FOR 2023-2024:
• introducing the market to a dairy line with less sugar content;
• research and development (R&D) project with the Lithuanian University of Health
Sciences;
• educate the consumer in the fields of healthier nutrition and sustainability.
• Development of a product line with less sugar content.
• Completed R&D project with the Lithuanian University of
Health Sciences (LUHS).
• Implementation of continuous educational projects.
ENSURING STAFF WELL-
BEING
LONG-TERM DIRECTION: Ensuring ethical employment with respect to the
fundamental human rights, equality, a right to a fair salary, and safe working conditions
that are favourable to health and personal growth; putting an active effort in recruiting
and retaining employees.
GOALS FOR 2023-2024:
• Ensuring safe working conditions;
• Improvement of processes and tools to ensure the human right and equality;
• Ensuring fair working conditions and qualification improvement opportunities.
• Increased attention on accident prevention.
• Internal qualification management projects.
• Leadership and specialty training.
• Improving financial working conditions.
• Projects for improving ergonomic working conditions.
• Growing customer
demands for
employee well-
being.
STRENGTHENING
COMMUNITIES
LONG-TERM DIRECTION: Developing an open dialogue, creating partnerships and
strengthening local communities.
GOALS FOR 2023-2024:
• An open dialogue with local communities;
• Offering support, based on the established criteria.
• Offering support, based on established selection criteria.
• Active support for regional organizations.
• Sponsorship of Tauragė - Lithuanian capital of culture in 2023.
ASPECTS SIGNFICANT TO VILVI GROUP IN THE SOCIAL FIELD:
Recruiting and retaining
employees
Human rights
Work safety, conditions and
staff well-being
Consumer well-being
Diversity and equal
opportunities
HELPING COMMUNITIES
PRIORITIES IN THE SOCIAL FIELD
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ATSA K I N G A V E RSLO P R AKTIKA
Produktų sauga ir kokybė:
Transparency and compliance
VILVI GROUP PRIORITIES GOALS ACTIONS IN 2023 EXTERNAL FACTORS
TECHNOLOGICAL INNOVATIONS LONG-TERM DIRECTION: Introduce innovations to obtain the maximum
value from each drop of milk and reduce the impact on the environment.
GOALS FOR 2023-2024:
• Innovations, focused on developing the range of products;
• Innovations, increasing energy-independence and the use of
renewable energy;
• Improvement of the project management competence.
• Creation of the investment projects department.
• Execution of innovation implementation projects
according to the plan.
• Biotechnology innovations/investments AB Vilkyškių
pieninė.
• Approved investments in the construction of a new
factory of SIA Baltic Dairy Board, in Latvia.
• Commencement of the installation of own solar power
plants on the roofs of factories.
• Heat regeneration project by AB Modest.
TRANSPARENCY AND COMPLIANCE
TO THE LAW
LONG-TERM DIRECTION: Ethical business in compliance with the law
and legislation.
GOALS FOR 2023-2024:
• To deepen the knowledge and competence of business ethics at the
Group level;
• Adapting to the new requirements regarding the EU Green Deal:
Increasing sustainability disclosure requirements, taxonomy..
• Active exploration of disclosure requirements for non-
financial information.
• The development of an information monitoring system
for taxonomy eligible activities on the group level..
• The Supervisory Board was formed and started its work.
ACCOUNTABILITY TO
STAKEHOLDERS
LONG-TERM DIRECTION: transparent and timely information to
shareholders and investors, trust-based relationship with all stakeholders.
GOALS FOR 2023-2024:
• Timely provision of relevant information to shareholders and investors,
as established by the law;
• Creating a dialogue and trust with stakeholders.
• Regular provision of information to shareholders and
investors..
SUPPLY CHAIN MANAGEMENT LONG-TERM DIRECTION: Resilient and efficient supply chains.
GOALS FOR 2023-2024:
• Increasing energy independence;;
• improvement of the supplier screening system by increasing the
integration of aspects on social responsibility.
• Commencement of the installation of own solar power
plant on factory roofs.
• Improvement of the supplier screening system.
• Growing customer demands for
supply chain management.
ASPECTS SIGNFICANT TO VILVI GROUP IN THE FIELD OF GOVERNANCE:
Business ethics and anti-
corruption
Supply chain management
Product innovation
Accountability to stakeholders
PRIORITIES IN THE FIELD OF GOVERNANCE
VILVI GROUP ANNUAL REPORT 2023
53
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
Policies and codes are certified on the
scale of the entire Group or, if required
the legislation – at each Company
individually.
Each policy has designated responsible
persons at senior management or
department head level.
Policies and codes have::
- An established implementation
procudure (established in the same
policy or individual implementation
procedures);
- Processes of monitoring and
control.
Employees and other stakeholders can
report cases of non-compliance to::
- In case of suspicion of harm to the
public interest – the roup’s
Reporting Channel on the Group’s
website;
- All worrying situations can be
reported to the Group’s Trust Line
on the Group’s website. This channel
also has an anonymous reporting
option.
The Group’s Reporting Channel and
Trust Line has established procedures of
how the persons, responsible for these
channels, should react and what process
applies to the situation analysis and
finding a solution. Confidentiality and
personal data protection are guaranteed.
Policy/procedure Short description
Human Rights Policy The major principles of respect to people, their rights and choices, based on the document of the United Nations, and procedure of
adherence to these principles.
Code of Ethical
Employment
The Group’s established aim to ensure that all employees feel safe, respected and valued, know their rights and opportunities, which are
equal to everyone. Code highlights the position not to employ children or minors, respect and support to the employees’ right to unite
into peaceful associations, and the right to collective negotiations, also taking care of employees’ safety and well-being.
Equal Opportunities
Policy
This policy establishes the fact that the Group has zero tolerance to direct or indirect discrimination, harassment or discriminative orders.
It also lists the equal opportunities at work, applicable to all employees.
Policy for the Prevention
of Violence and
Harassment at Work
We strive to create a safe working environment not only physically, but also emotionally. Therefore, this document clearly lists the cases
and behaviours that cannot and will not be tolerated in the Group, including preventive actions and control measures.
Code of Ethical Business Lists the requirements for everyone working in the Group and those that we work with in order to ensure transparent, ethical and fair
business and cooperation in terms of people and the environment, evading corruption, bribery or other cases of unauthorised
agreements. It also establishes provisions regarding disclosure of information.
Occupational Safety and
Health Policy
This policy reflects our priority of people and their well-being at work, focusing on the aim to provide each of our employees with safe
working conditions that comply with the law, wellness culture development, promotion and support.
Environmental protection
policy
This policy lists the principles, established according to the expectations of all of our stakeholders, and the Groups goals to reduce the
negative and increase the positive impact on the environment.
Food Safety and Quality
Policy
Since the Group aims to produce quality and safe food products, this policy lists all related goals and their implementation measures. This
policy also highlights the efforts of creating a sustainable environment and reducing the impact on nature. Last, but not least, it also
emphasizes the importance of close cooperation with milk suppliers.
Remuneration Policy Establishes the principles of employee remuneration, the major provisions of efficient work pay cost management, at the same time
creating motivational incentives for the employees to contribute to the mission, vision, values and goals of the responsibly managed
Group. It highlights the principle of justice, which means paying equal salaries for employees with the same level of duties.
IT Safety Policy This policy aims to define the necessary procedures and rules, applicable to employees using the Group’s IT infrastructure resources to
maintain their security, integrity and accessibility.
Rules of Personal Data
Processing
Establishes personal data processing compliance with the provisions of the General Data Protection Regulation (GDPR).
GROUP POLICIES THAT HAVE THE GREATEST IMPACT ON ESG AREAS
VILVI GROUP ANNUAL REPORT 2023
54
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
Taxonomy overview process at Vilvi Group:
The analysis of the Group’s activities is based on the following process;:
• identification of taxonomy activities;;
• technical assessment of each of the activities to see compliance to technical and
significant contribution to impact reduction and (or) adaptation goals;;
• assessment if the activities does not pose significant harm to other environmental;
• assessment of the provision of necessary protective measures;;
• final assessment of the activity’s compliance;
• calculation of taxonomy indices for each of the activities;
TAXONOMY OVERVIEW
Delegated Act (EU) 2021/2139
Delegated Act (EU) 2021/2178
Documents used as guidelines:
GENERAL PRINCIPLES OF ACCOUNTING POLICIES:
In 2023, the VILIVI GROUP has set three key performance indicators for Taxonomy:
- Turnover, which is the external revenue in accordance with International Financial Reporting Standards, which corresponds to consolidated sales in the statement of comprehensive income of AB Vilkyškių pieninė.
- CAPEX, which is the increase in the value of property, plant and equipment and intangible assets before depreciation, amortisation and impairment over the previous financial year. The increase is the investment
during the financial year (net of any government grants received), the amount of long-term investments presented in the consolidated financial statements excludes increases due to business combinations and
liabilities related to the write-down of assets, but includes advances and prepayments.
- Operating Expenses (OPEX for the purposes of the Taxonomy), which is the direct non-capitalised expenses relating to research and development, building renewal measures, short-term leases, maintenance and
repairs, and any other direct costs relating to the day-to-day maintenance of property, plant and equipment carried out by the undertaking or by the third party from which the services are procured, and which is
necessary in order to ensure the uninterrupted and efficient operation of such assets.
Double counting:
All disclosed indicators in the Taxonomy avoid double counting as each indicator is attributed to different activities. Intra-Group transactions are eliminated where necessary to avoid double counting. VILVI GROUP's
activities are assessed against the climate change mitigation objective and are therefore disclosed only against this objective.
Internal reporting systems and processes are continuously improved to adapt to Taxonomy reporting requirements
The Group reveals the valuation of taxonomic economic
activities. The Taxonomy Regulation (EU) 2020/852, Delegated
Acts (EU) 2021/2139, (EU) 2021/2178, (EU) 2023/2486 are being
actively studied, the ongoing activities are being analysed,
and the aim is to increase the taxonomy indicators.
The Group's main activity is dairy processing, food production
is not included in Delegated Act (EU) 2021/2178 or the
additional Delegated Acts published in 2022.
55
Delegated Act (EU) 2023/2486
Taxonomy Regulation (EU) 2020/852
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
VILVI GROUP ANNUAL REPORT 2023
Taxonomy-eligible activities Taxonomy-
eligible activity
code
Taxonomy-eligible activity description for Climate change mitigation
objective
Corresponding activity in the Group
Collection and transport of non-hazardous waste in source
segregated fractions
CCM 5.5 Separate collection and transport of non-hazardous waste in single or
comingled fractions aimed at preparing for reuse or recycling.
Collection and transport of non-hazardous
waste in single or comingled fractions aimed
at preparing for reuse or recycling.
Transport by motorbikes, passenger cars and light commercial
vehicles
CCM 6.5 Purchase, financing, renting, leasing and operation of vehicles designated as
category M1, N1, both falling under the scope of Regulation (EC) No 715/2007
of the European Parliament and of the Council, or L (2- and 3-wheel vehicles
and quadricycles).
Purchase and operation of vehicles.
Purchase of EV.
Freight transport services by road CCM 6.6 Purchase, financing, leasing, rental and operation of vehicles designated as
category N1, N2 or N3 falling under the scope of EURO VI, step E or its
successor, for freight transport services by road.
Purchase and operation of vehicles.
Construction of new buildings CCM 7.1 Development of building projects for residential and non-residential
buildings by bringing together financial, technical and physical means to
realise the building projects for later sale as well as the construction of
complete residential or non-residential buildings, on own account for sale or
on a fee or contract basis.
Construction of new buildings.
Renovation of existing buildings CCM 7.2 Construction and civil engineering works or preparation thereof. Renovation of existing buildings.
Installation, maintenance and repair of charging stations for electric
vehicles in buildings (and parking spaces attached to buildings)
CCM 7.4 Installation, maintenance and repair of charging stations for electric vehicles
in buildings and parking spaces attached to buildings.
Installation, maintenance and repair of
charging stations for electric vehicles.
Installation, maintenance and repair of renewable energy
technologies
CCM 7.6 Installation, maintenance and repair of renewable energy technologies, on-
site.
Installation, maintenance and repair of
renewable energy technologies.
Acquisition and ownership of buildings CCM 7.7 Buying real estate and exercising ownership of that real estate. Buing and ownership of real estate.
Professional services related to energy performance of buildings CCM 9.3. Professional services related to energy performance of buildings. Professional services related to energy
performance of buildings
Taxonomy-eligible and -aligned activities of the VILVI Group in 2023:
TAXONOMY OVERVIEW
56
In the list are provided Taxonomy-eligible activities, which were implemented in 2023. The activity 5.4. Renewal of waste water collection and treatment from 2022 is not included into the list of 2023 as it was no longer
active. In case it will be renewed, it will be included in the list.
The main objective of VILVI GROUP activities is to contribute to climate change mitigation, therefore they are not fully assessed for climate change adaptation and disclosed as not aligned.
VILVI GROUP ANNUAL REPORT 2023
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
CCM – Climate Change Mitigation.
TAXONOMY OVERVIEW, REVENUE
57
Revenue under the Taxonomy Regulation
Financial year 2023 Substantial contribution criteria DNSH criteria
Minimum safeguards
Proportion of Taxonomy
-
aligned or eligible revenue
of 2022
Category enebling activity
Category transitional activity
Economic activities under the Taxonomy
Regulation
Taxonomy
code
Revenue
Proportion of Revenue
Climate change
mitigation
Climate change
adaptation
Water
Pollution
Circularity
Biodiversity
Climate change
mitigation
Climate change
adaptation
Water
Pollution
Circularity
Biodiversity
kEur % Y, N,
N/EL
Y, N,
N/EL
Y, N,
N/EL
Y, N,
N/EL
Y, N,
N/EL
Y, N,
N/EL
Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T
A. Taxonomy-eligible activities
A.1 Environmentally sustainable activities (Taxonomy-aligned)
Collection and transport of non-
hazardous waste in source segregated
fractions
CCM 5.5 37,17 0,02 Y N N/EL N/EL N/EL N/EL - Y - - Y - Y 0,03 - -
A.1 Total 37,17 0,02 0,03
of which Enabling 0 0 0
of which Transitional 0 0 0
A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
A. 2 Total 0 0 0
Revenue of Taxonomy-eligible activities
(A.1+A.2)
37,17 0,02 0,,03
B. Taxonomy non-eligible activities
Revenue of Taxonomy-non-eligible
activities
210 499 99,98
Total (A+B) 210 536 100
Taxonomy-eligible activity 5.5. is the only Taxonomy-aligned activity which generated revenues, due to that other activities are not included in the table above.
VILVI GROUP ANNUAL REPORT 2023
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
CCM – environmental objective - Climate Change Mitigation; Y – Yes/ Yes, Taxonomy-eligible and Taxonomy-aligned activity with the relevant environmental objective; ; N – No/ No, Taxonomy-eligible but not Taxonomy-aligned activity with the
relevant environmental objective; ; N/EL– Not eligible, Taxonomy-non-eligible activity for the relevant environmental objective; EL – Taxonomy-eligible activity for the relevant objective.
TAXONOMY OVERVIEW, CAPEX
58
Capital expenditure (Taxonomy CAPEX) under the Taxonomy Regulation
Financial year 2023 Substantial contribution criteria DNSH criteria
Minimum safeguards
Proportion of Taxonomy
-
aligned or
eligible Taxonomy CAPEX of 2022
Category enebling activity
Category transitional activity
Economic activities under the Taxonomy Regulation Taxonomy code
Taxonomy CAPEX
Proportion of Taxonomy
CAPEX
Climate change mitigation
Climate change adaptation
Water
Pollution
Circularity
Biodiversity
Climate change mitigation
Climate change adaptation
Water
Pollution
Circularity
Biodiversity
kEur %
Y, N,
N/EL
Y, N,
N/EL
Y, N,
N/EL
Y, N,
N/EL
Y, N,
N/EL
Y, N,
N/EL
Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T
A. Taxonomy-eligible activities
A.1 Environmentally sustainable activities (Taxonomy-aligned)
Collection and transport of non-hazardous waste in
source segregated fractions
CCM 5.5. 0 0 Y N - - - - - Y - - Y - Y 0 - -
Transport by motorbikes, passenger cars and light
commercial vehicles
CCM 6.5 120,9 0,90 Y N - - - - - Y - Y Y - Y 0 - -
Installation, maintenance and repair of charging
stations for electric vehicles in buildings (and parking
spaces attached to buildings)
CCM 7.4. 0,8 0,01 Y N - - - - - Y - - - - Y 0,04 E -
Installation, maintenance and repair of renewable
energy technologies
CCM 7.6. 18,77 0,14 Y N - - - - - Y - - - - Y 0 E -
A.1 Total 140,47 1,05 0,04
of which Enabling 19,57 0,15
of which Transitional 0 0
VILVI GROUP ANNUAL REPORT 2023
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
CCM – environmental objective - Climate Change Mitigation; Y – Yes/ Yes, Taxonomy-eligible and Taxonomy-aligned activity with the relevant environmental objective; ; N – No/ No, Taxonomy-eligible but not Taxonomy-aligned activity with the
relevant environmental objective; ; N/EL– Not eligible, Taxonomy-non-eligible activity for the relevant environmental objective; EL – Taxonomy-eligible activity for the relevant objective.
TAXONOMY OVERVIEW, CAPEX
59
Capital expenditure (Taxonomy CAPEX) under the Taxonomy Regulation
Financial year 2023 Substantial contribution criteria DNSH criteria
Minimum safeguards
Proportion of Taxonomy
-
aligned or eligible Taxonomy
CAPEX of 2022
Category enebling activity
Category transitional activity
Economic activities under the Taxonomy Regulation Taxonomy
code
Taxonomy CAPEX
Proportion of
Taxonomy CAPEX
Climate change
mitigation
Climate change
adaptation
Water
Pollution
Circularity
Biodiversity
Climate change
mitigation
Climate change
adaptation
Water
Pollution
Circularity
Biodiversity
kEur %
Y, N,
N/EL
Y, N,
N/EL
Y, N,
N/EL
Y, N,
N/EL
Y, N,
N/EL
Y, N,
N/EL
T/N T/N T/N T/N T/N T/N T/N % E T
A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
Collection and transport of non-hazardous waste in source
segregated fractions
CCM 5.5. 0 0 EL EL N/EL N/EL N/EL N/EL 0
Transport by motorbikes, passenger cars and light
commercial vehicles
CCM 6.5. 94,49 0,70 EL EL N/EL N/EL N/EL N/EL
0
Freight transport services by road
CCM 6.6. 1 028,95 7,65 EL EL N/EL N/EL N/EL N/EL 0
Construction of new buildings
CCM 7.1. 1 314,13 9,78 EL EL N/EL N/EL N/EL N/EL 0
Renovation of existing buildings
CCM 7.2. 403,4 3 EL EL N/EL N/EL N/EL N/EL 0
Acquisition and ownership of buildings CCM 7.7
0 0 EL EL N/EL N/EL N/EL N/EL 0
Professional services related to energy performance of
buildings
CCM 9.3 0 0 EL EL N/EL N/EL N/EL N/EL 0
A. 2 Total 2 840,97 21,14 0
CAPEX of Taxonomy-eligible activities (A.1+A.2) 3 121,91 23,23
B. Taxonomy non-eligible activities
Taxonomy CAPEX of Taxonomy-non-eligible activities 10 320 76,77
Total(A+B) 13 442 100
VILVI GROUP ANNUAL REPORT 2023
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
CCM – environmental objective - Climate Change Mitigation; Y – Yes/ Yes, Taxonomy-eligible and Taxonomy-aligned activity with the relevant environmental objective; ; N – No/ No, Taxonomy-eligible but not Taxonomy-aligned activity with the
relevant environmental objective; ; N/EL– Not eligible, Taxonomy-non-eligible activity for the relevant environmental objective; EL – Taxonomy-eligible activity for the relevant objective.
TAXONOMY OVERVIEW, OPEX
60
Operating expenses (Taxonomy OPEX) under the Taxonomy Regulation
Financial year 2023 Substantial contribution criteria DNSH criteria
Minimum safeguards
Proportion of Taxonomy
-
aligned or eligible Taxonomy
OPEX of 2022
Category enebling activity
Category transitional activity
Economic activities under the Taxonomy
Regulation
Taxonomy
code
Taxonomy OPEX
Proportion of Taxonomy
OPEX
Climate change
mitigation
Climate change
adaptation
Water
Pollution
Circularity
Biodiversity
Climate change mitigation
Climate change adaptation
Water
Pollution
Circularity
Biodiversity
kEur %
Y, N,
N/EL
Y, N,
N/EL
Y, N,
N/EL
Y, N,
N/EL
Y, N,
N/EL
Y, N,
N/EL
Y/N Y/N Y/N Y/N Y/N Y/N Y/N %
E T
A. Taxonomy-eligible activities
A.1 Environmentally sustainable activities (Taxonomy-aligned)
Collection and transport of non-hazardous waste in
source segregated fractions
CCM 5.5. 175,95 0,1 Y N - - - - - Y - - Y - Y 0,05 - -
Transport by motorbikes, passenger cars and light
commercial vehicles
CCM 6.5. 1,05 0,00 Y N - - - - - Y - Y Y - Y 0 - -
Installation, maintenance and repair of charging stations
for electric vehicles in buildings (and parking spaces
attached to buildings)
CCM 7.4. 0,1 0,00 Y N - - - - - Y - - - - - 0 E -
Installation, maintenance and repair of renewable energy
technologies
CCM 7.6. 0 0 Y N - - - - - Y - - - - Y 0 E -
A.1 Total 177,1 0,1 0
of which Enabling 0,1 0
of which Transitional 0 0
VILVI GROUP ANNUAL REPORT 2023
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
CCM – environmental objective - Climate Change Mitigation; Y – Yes/ Yes, Taxonomy-eligible and Taxonomy-aligned activity with the relevant environmental objective; ; N – No/ No, Taxonomy-eligible but not Taxonomy-aligned activity with the
relevant environmental objective; ; N/EL– Not eligible, Taxonomy-non-eligible activity for the relevant environmental objective; EL – Taxonomy-eligible activity for the relevant objective.
TAXONOMY OVERVIEW, OPEX
61
Operating expenses (Taxonomy OPEX) under the Taxonomy Regulation
Financial year 2023 Substantial contribution criteria DNSH criteria
Minimum safeguards
Proportion of Taxonomy
-
aligned or eligible
Taxonomy OPEX of 2022
Category enebling activity
Category transitional activity
Economic activities under the Taxonomy
Regulation
Taxonomy code
Taxonomy OPEX
Proportion of
Taxonomy OPEX
Climate change
mitigation
Climate change
adaptation
Water
Pollution
Circularity
Biodiversity
Climate change
mitigation
Climate change
adaptation
Water
Pollution
Circularity
Biodiversity
kEur %
Y, N,
N/EL
Y, N,
N/EL
Y, N,
N/EL
Y, N,
N/EL
Y, N,
N/EL
Y, N,
N/EL
Y/N Y/N Y/N Y/N Y/N Y/N Y/N %
E T
A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
Collection and transport of non-hazardous waste in source
segregated fractions
CCM 5.5.
30,11 0,02
EL EL
N/EL N/EL N/EL N/EL 0,01
Transport by motorbikes, passenger cars and light
commercial vehicles
CCM 6.5.
3,13 0,00
EL EL
N/EL N/EL N/EL N/EL 0
Freight transport services by road CCM 6.6.
10,57 0,01
EL EL
N/EL N/EL N/EL N/EL 0
Construction of new buildings CCM 7.1.
0 0
EL EL
N/EL N/EL N/EL N/EL 0
Renovation of existing buildings CCM 7.2.
0 0
EL EL
N/EL N/EL N/EL N/EL 0
Acquisition and ownership of buildings CCM 7.7
0 0
EL EL
N/EL N/EL N/EL N/EL 0
Professional services related to energy performance of
buildings
CCM 9.3.
4,97 0,00
EL EL
N/EL N/EL N/EL N/EL 0
A. 2 Total 48,78 0,03 0,12
OPEX of Taxonomy-eligible activities (A.1+A.2) 402,98 0,22 0,0,6
B. Taxonomy non-eligible activities
Taxonomy OPEX of Taxonomy-non-eligible activities 182 446 99,78
Total(A+B) 182 849 100
VILVI GROUP ANNUAL REPORT 2023
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
CCM – environmental objective - Climate Change Mitigation; Y – Yes/ Yes, Taxonomy-eligible and Taxonomy-aligned activity with the relevant environmental objective; ; N – No/ No, Taxonomy-eligible but not Taxonomy-aligned activity with the
relevant environmental objective; ; N/EL– Not eligible, Taxonomy-non-eligible activity for the relevant environmental objective; EL – Taxonomy-eligible activity for the relevant objective.
ENVIRONMENTAL PROTECTION
ENVIRONMENTAL MANAGEMENT ....... 63 psl.
ENERGY AND NATURAL RESOURCE USE ....... 64 psl.
ENVIRONMENTAL IMPACT ....... 65 psl.
WASTE REDUCTION ....... 66 psl.
VILVI GROUP ANNUAL REPORT 2023
62
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
Vilvi Group management is based on general principles and values of the
Group, thus, the environmental management is conducted according to the
same principles.
In 2022, the Group certified the Environmental Protection Policy, which
defines the guidelines and principles of implementing a culture and
practice of a sustainable business in all companies of the Group. The policy
lists the major areas of environmental impact and goals of reducing the
negative and increasing the positive impact.
Group companies seek to optimize energy consumption by active
monitoring. Until 2023 VILVI GROUP purchased only green energy, i.e.
derived from renewable sources. Due to the increases price spreads of
green energy, the decision was made to cancel green energy purchases and
invest into internal solar energy generation projects (solar panels on the
roofs of manufacturing facilities). Towards the end of 2024 solar panels will
start generating energy on the majority of manufacturing buildings.
Group actively measures CO2 emissions and environmental impact. In 2023
Scope 1 and Scope 2 measurement of CO2 emissions was implemented. In
2024 Scope 3 measurement will take place.
The business development is based on all applicable environmental
protection legislation requirements, including taking pollution prevention
actions, cooperation with business partners, state institutions, improvement
of staff competence and responsible attitude towards environmental
protection.
Seeking for its strategic goals, the Group is doing its best to reduce the
negative impact on the environment, being on the path of continuous
change towards being a more environmentally-friendly organization.
Policies, certified within the Group:
Environmental Protection Policy
We are aware of our impact on the
environment in the following aspects:
• air pollution with greenhouse gasses;
• using a significant amount of energy
and natural resources;
• generating production waste, surface
wastewater and other waste during our
operations;
• physical environmental pollution: noise,
smells;
• using a significant amount of product
packaging̨ ;
• using chemical substances;
• impact on biodiversity and animal well-
being.
We aim to control and reduce the negative impact on the environment,
and increase the positive impact by adhering to the following principles:
• monitoring our impact on the environment – the use of natural and
energy resources, accumulation of production and surface waste
water, packaging and other wastę;
• we aim to assess the organisation’s carbon footprint, setting targets to
reduce it;
• our goal is to evade, limit or reduce the negative impact on the
climate, protecting the air, water and soil from more pollution, and to
control the physical pollution of the environment;
• we seek to process the waste, accumulating at the company, by
following the ‘reduce, reuse, recycle’ principle;
• we initiate more sustainable packaging choices;
• we aim to increase the use of renewable energy (by reducing the use
of other types of energy);
• we do our best to use high-quality and more environmentally-friendly
materials and measures, applying processes and technology that do
not increase the pollution or other negative impact on the
environment.
How do we do it:
• we conduct our business according to all applicable environmental protection legislation requirements̨ ;
• we cooperate with other environmental improvement stakeholders – business partners, state institutions, authorities, and
communities that we impact;
• we conduct regular reviews of the environmental impact, monitoring and inspecting our efficiency, improving our
environmental protection policy, and informing the society of our advancement̨;
• we take pollution prevention action;
• we develop our staff competence and responsible attitude towards environmental protection̨ .
ENVIRONMENTAL MANAGEMENT
VILVI GROUP ANNUAL REPORT 2023
63
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
Energy resource use
In 2023, the Group’s energy consumption was a little lower than in 2022, while
the energy consumed was used particularly efficiently due to increased
production scope and implemented technology. The amount of energy, used to
produce 1 t of production and attributed to 1 unit of revenue (million Eur) was
significantly lower in 2023 than 2022.
As the circumstances of the war in Ukraine strongly affected the energy sector,
the Group was forced to quickly respond to the situation and adapt to the
market changes. Under enormous energy price differences and in attempts to
maintain stability, wherever technologically possible, plants quickly switched to
using cheaper types of fuel. The boiler rooms of AB Modest and AB Kelmės
Pieninė were equipped with technology, enabling to change the type of fuel.
Changed market conditions in early 2023 enabled to switch back to the
previously used less polluting solutions.
Due to the significant differences in the prices of green energy and electricity
from non-renewable sources, the purchase of green electricity was stopped
after several years of breaks. A decision was made to install our own solar power
plants on the roofs of the factories. UAB Kelmės pienas installed a solar power
plant with its own funds, in 2023 partial EU financing was approved for solar
power plants on the roofs of AB Vilkyškių pieninė and AB Modest factories. After
the implementation of the projects, the Group will produce more than 1000
MWh of electricity per year.
ENERGY AND NATURAL RESOURCE USE
Energy resource use 2021 2022 2023
Total energy consumed, GWh 99.77 98.45 95.23
of which: energy from renewable electricity, GWh 27.99 27.00 0
of which: energy from non-renewable electricity, GWh 0 0 28.43
of which: energy from natural gas, GWh 53.21 48.48 27.33
of which: energy from liquefied petroleum gas, GWh 18.57 21.52 75.14
of which: energy from diesel fuel, GWh 0 1.44 0.17
Most of the natural and petroleum gas is used for the production of
steam used in technological processes.
Intensity of energy consumption 2021 2022 2023
Energy, consumed to produce 1 t of production, MWh 1.25 1.16 1,09
Production, t. 79434 84635 87036
Energy consumption per one unit of revenue, GWh 0.64 0.42 0,45
Turnover, million EUR 156 234 210,5
Energy according to type 2021 2022 2023
Renewable energy, % 28 27 0
Non-renewable energy, % 72 73 100%
Water consumption 2021 2022 2023
Total water consumed, m3 890264 867398 848496
Amount of water to produce 1 t of production, m3 11.21 10.25 9.75
Production, t 79434 84635 87036
Sustainable consumption of water
AB Vilkyškių pieninė has its own water source, where it extracts water. Other companies in the Group are supplied with water by
centralised water production companies. In 2023, Vilkyškių Pieninė started introducing a technology that cleans permeate water so
that it can be reused in production processes. This is aimed at sustainable use of water – to reduce not only the amount of water
consumed, but also the amount of wastewater.
VILVI GROUP ANNUAL REPORT 2023
64
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
Air pollution and waste water management
At AB Vilkyškių pieninė Water is extracted from an underground water well.
The wastewater generated by production processes at AB Vilkyškių Pieninė, is
cleaned by the plant's own mechanical-biological treatment equipment. The
wastewater treatment efficiency amounts to 99%. In 2020, the company
installed an automatic waste water release control system, preventing excess
waste water sludge from entering the environment with cleaned wastewater.
In order to save water, reduce the amount of wastewater and the amount of
pollutants entering the environment, wastewater treatment facilities have
been successfully installed, which enable the reuse of water used in
production processes. Thanks to them, the amount of wastewater is reduced
by 30%. The project is partially financed by EU funds. The activity also involves:
2 boilers using natural gas, underground fuel tanks that release volatile
organic compounds into the air.
UAB Kelmės pienas wastewater generated during the production of fresh
milk products is discharged to UAB Kelmės vanduo treatment facilities. Water
is extracted from an underground water well owned by UAB Kelmės pienas.
AB Kelmės pieninė dry milk products factory produces bulk, dusty products,
therefore it is very important to minimize the entry of solid particles and
pollutants into the air and environment. The air contaminated with solid
particles from the dryers is directed to the cyclones and cleaned in them is
released into the environment. Wastewater generated during production is
discharged to the treatment facilities of UAB Tauragės vandenys.
At AB Modest wastewater generated in the company during production is
discharged into the city's sewage system, which is operated by UAB Tauragės
vandenys. In 2023, a wastewater primary treatment project was prepared,
which will be implemented in 2024.
Pollution permits
AB Vilkyškių pieninė has an integrated pollution prevention and
control (IPPC) permit. TIPK was issued to the company based on its
activities, when more than 200 tons of milk are processed per day.
The amount of carbon monoxide, nitrogen, sulfur oxides, solid
particles, volatile organic compounds and other pollutants emitted
into the air is controlled according to the values set in the IPPC
permit. The pollution of wastewater discharged into the
environment is also controlled.
UAB Kelmės pienas has been issued a pollution permit for the
management of environmental air pollution. According to this
permit, the amount of nitrogen oxides emitted into the ambient air
is controlled..
Pollution permits are not mandatory for other companies of the
Group.
Monitoring programmes
AB Vilkyškių Pieninė developed a monitoring
programme for the impact of their water source on the
groundwater and conducts surveillance. The
monitoring programme is also used to control the
possible impact of the gas station for the groundwater,
and conduct the monitoring of the pollutants emitted
into the air and sources of pollution.
UAB Kelmės pienas has approved a monitoring
program for the impact on groundwater due to the
available water well, and regular observations are
carried out.
GHG emissions
Our priority until 2024 is to determine where in our business cycle we have the greatest impact on the environment, so we use
the latest analysis methods and methods in order to achieve effective solutions. In 2023, GHG emissions of Scopes 1 and 2 were
assessed, in 2024 it is planned to evaluate emissions of Scope 3.
Methodology
ENVIRONMENTAL IMPACT
VILVI GROUP ANNUAL REPORT 2023
65
GHG emissions Unit of measurement 2023
Direct emissions (Scope 1)
Thousand t of CO2 eq.
19 150,59
Indirect emissions (Scope 2) 12 319,13
Total (Scopes 1 and 2) 31 469,73
GHG emission intensity
Amount of emissions per unit of income t CO2 eq./ mln. EUR 82,45
Amount of emissions per ton of purchased raw
material
t CO2 eq./ 0,064
Amount of emissions per ton of manufactured
products
t CO2 eq./ t 0,119
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
More sustainable packaging
The Group keeps investing into environmentally-friendlier solutions with responsible packaging
choices. We’re on a continuous mission of searching for more sustainable packaging. We keep
looking for ways to reduce the consumption of plastic or paper by replacing materials, packaging
size or thickness. We also look for ways to replace our combined packaging with monopackaging.
This is an area of continuous investigation and discovery and we do it in close cooperation with
packaging producers and suppliers.
The packaging waste, generated by Vilvi Group companies is handled and accounted according to
established environmental requirements in product, packaging and waste accounting information
systems – GPAIS.
Our greatest attention is focused on preservation of nature, so we urge our consumers to sort
dairy product packaging by clearly indicating the waste containers they should be placed in We
also make the sorting easier by marking separation points of multilayer packaging with
perforation.
Changing packaging regulations
European Union packaging regulations are changing rapidly, we are constantly monitoring the
changes and preparing for them. In 2023, we prepared for the upcoming changes due to the EU
single-use plastic directive 2019/904/EU. The requirement to attach the beverage lid to the
packaging affects our line of kefir and drinkable yogurts – a new production line is being installed
that will allow this requirement to be implemented. We actively follow discussions and possible
changes regarding the EU Green Deal, which may also be relevant for our packaging solutions.
From 2023, according to the new requirements, we calculate the amount of disposable plastic
products (kefir, drinkable yogurt packages) used.
Sustainable solutions
We invest in solutions that are more environmentally friendly. When manufacturing products, we
responsibly choose packages and packaging materials. Every day we look for more sustainable
choices in our activities, every year we carry out packaging reduction, thinning and replacement
projects that allow us to reduce the amount of raw materials used.
Since 2018, we have been transporting fresh dairy products intended for consumers in reusable
boxes, cardboard secondary boxes have been gradually abandoned. In 2023, a request was
received from Lithuanian retail chains to return to cardboard secondary packaging. Such a
decision again significantly increased the previously effectively reduced amounts of secondary
packaging used.
WASTE REDUCTION
VILVI GROUP ANNUAL REPORT 2023
66
Waste management and accounting
The accounting of pollutants emitted into the air and sources of pollution is carried out in accordance with
the procedure established by the companies. In the entire Group, the waste generated during production is
managed and accounted for in accordance with the established environmental requirements in the product,
packaging and waste accounting information systems – GPAIS and AIVIKS.
Waste is sorted, temporarily stored, collected, transported and processed in such a way that it does not have a
negative impact on public health and the environment. All waste, including hazardous and chemical
substances, is handled in accordance with the laws and regulations of the Republic of Lithuania. Each
company of the Group has entered into contracts with waste managers.
All whey is used for production. Whey is used to obtain energy by transferring it to energy-producing
companies that have permits to engage in such activities.
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
Type of waste 2022 2023
Packaging waste, t 134,09 199,60
Hazardous waste, t 23,54 20,18
Production waste, t 8153,14 8803,57
Other waste, t 35,93 62,17
In total 8346,7 9085,51
SOCIAL ENVIRONMENT
PRODUCT SAFETY AND QUALITY ....... 68 psl.
EMPLOYEES AND THEIR WELL-BEING ....... 69 psl.
RESPECTING HUMAN RIGHTS ........70 psl.
OCCUPATIONAL SAFETY AND HEALTH ........ 71 psl.
REMUNERATION POLICY ....... 72 psl.
INCLUDING SENSITIVE GROUPS ....... 73 psl.
EMPLOYEE GROWTH ....... 74 psl.
RECRUITING AND RETAINING EMPLOYEES ....... 75 psl.
CONSUMER WELL-BEING ....... 76 psl.
HELPING COMMUNITIES ....... 78 psl.
VILVI GROUP ANNUAL REPORT 2023
67
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
Food safety and culture development, as well as ensuring product
safety and quality is one of our major priorities. Our goods are
produced and controlled by adherence to adherence to the highest
food safety and quality standards, and legal regulation. The Group
follows the certified Food Safety and Quality Policy.
The Group is also subject to audits of controlling and certifying
institutions, inspections by current and potential clients or their
representatives, and the State Food and Veterinary Service (SFVS).
Consumer inquiries, feedback and complaints can be submitted to
the quality line and by e-mail. We analyse all consumer complaints,
engaging in a dialogue to clarify the circumstances. We register,
analyse and respond to complaints according to certified Complaint
Guidelines and Non-compliance Management Procedure..
Management of customer expectations
In order to ensure the highest product quality and compliance with
client demands, we actively cooperate by collecting information on
their specific needs and marking requirements. This makes us sure
that we meet their expectations from the selection of raw materials
and production processes. We conduct annual client and consumer
surveys and use this date for further analysis of their needs.
The Group sets new measurable food safety and quality goals every
year. We aim for guaranteed food safety and quality and thus keep
improving our internal processes.
Policies and procedures, certified within the Group:
Food Safety and Quality Policy
Quality lines:
+370 800 20802
Food Safety and Quality System
info@vilvi.eu
ENSURING PRODUCT SAFETY AND QUALITY
VILVI GROUP ANNUAL REPORT 2023
68
Food safety and quality certificates of VILVI GROUP companies:
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
Sertifikatai AB Vilkyškių
pieninė
AB Modest AB Kelmės
pieninė
UAB Kelmės
pienas
AB Pieno
logistika
SIA Baltic Dairy
Board
ISO 22000
FSSC 22000
ISO 50001
HALAL
Kosher
IFS Food Version 7
Certificate of
ecological
production
People, ensuring human rights and equal opportunities – this
is our priority. In 2023, VILVI GROUP's greatest focus was on
employees: their well-being, safety, health, attraction and
retention, competence development and career
opportunities.
The year 2023 was dedicated to the personal and professional
growth of employees. We continue to nurture a culture of
respect and open communication and cooperation within the
Group. We try to create the most favorable conditions for
sharing knowledge and improving skills. We create a
supportive and inspiring environment for employees through
internal and external training, so that everyone can find the
most acceptable way for them to grow and develop. We
encourage the involvement of employees, accept their ideas,
create conditions for active participation in improving the
company's operational processes.
In order to preserve the good physical health of employees,
we are continuing the project of purchasing ergonomic tools
for the production employees of the Group, and the Group’s
administration employees are given additional health
motivational measures.
We take care of not only the physical but also the emotional
health of our employees, continuing to focus on psychosocial
factors. Remdamiesi Based on the data of the risk assessment
of psychosocial factors conducted in 2021, we are continuing
the program for reducing stress at work, implementing
measures and improving solutions.
Good emotional health requires communication and leisure
activities that connect employees, common interests. In order
to foster a close and sincere relationship within the Group, in
2023 we brought back festive events and gatherings to the
lives of VILVI GROUP employees. We continue and their
number is only increasing. In the summer, we invited
employees, their families, residents of the surrounding
community and towns to the 30
th
anniversary celebration of
VILVI GROUP. During it, the long-term employees of VILVI
GROUP were congratulated and honored. 354
employees have been sharing their knowledge and skills for
more than 10 years.
NUMBER OF
EMPLOYEES AS OF
31-12-2023
919
pilnu etatu
OUR EMPLOYEES
Most of the part-time employees are persons with limited working capacity (retired, people with disabilities, who have lost professional or general working capacity). In the
group, they are given the conditions to work and integrate into the team.
VILVI GROUP ANNUAL REPORT 2023
69
Under
30
11%
30-50
44%
> 50
45%
2022
Employees by contract type Part-time Full-time Fixed-term contract Indefinite contract
Women 78 410 17 471
Men 51 380 15 416
Total 129 790 32 887
By age
Men
47%
Women
53%
By gender
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
2021 2022 2023
Women 56% 52% 53%
Men 44% 48% 47%
Distribution of all employees by gender:
Distribution of managers by gender:
2021 2022 2023
Middle-level managers
women 47% 47%
58%
Top-level managers 30%
Middle-level managers
men 53% 53%
42%
Top-level managers 70%
Distribution of members of management bodies by gender:
RESPECT FOR HUMAN RIGHTS AND DIVERSITY
VILVI GROUP ANNUAL REPORT 2023
70
2021 2022 2023
Board women 17% 17% 17%
men 83% 83% 83%
Committees (audit,
remuneration)
women 100% 100% 100%
men 0% 0% 0%
Supervisory board women - - 33%
men - - 67%
We are proud to maintain an excellent gender balance both at the level of all employees and at the management level. Since
the entire personnel management policy of the Group is based on the principle of non-discrimination, both men and women
are provided with equal conditions to work, develop and advance in their careers. Our Remuneration Policy, Pay System and
Equal Opportunities Policy also ensure that equally qualified men and women doing the same job are paid the same wages.
Essential policies have been approved in the Group so that not only within the
Group we know what principles of work and cooperation are most important
to us, but also to inform the communities around us, the partners we work
with and other interested parties. To make sure that our responsible attitude
always reflects on our business, we established the necessary procedures,
appointed responsible persons and certified control mechanisms.
We’ve always emphasized zero tolerance to any forms of violence or any other
attempts of harm. We keep on watch to prevent this in our daily work and
business overall. We’ve also certified the Policy for the Prevention of Violence
and Harassment at Work and initiated employee trainings.
Fundamental policies and codes, certified within the Group:
The Group as reporting channels, where employees and other stakeholders
can report situations that concern them:
Human Rights Policy
Code of Ethical Employment
Trust line
Rules of Personal Data Processing
The number of complaints, received on the Reporting channel: 2021 – 0,
2022 – 0, 2023 – 1.
IT Safety Policy
Reporting channel
Equal Opportunities Policy
Policy for the Prevention of Violence and Harassment at Work
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
The Group adheres to all laws and legislation applicable to occupational
safety and health, has appointed responsible persons and established
processes to ensure adherence to the rules of occupational safety and
health procedures, regular staff instructions, certifications, necessary
training and exercises. Companies of the Group conduct regular risk
assessments, trainings and instructions, while the employees are provided
with all necessary personal safety measures.
Seeking to encourage our employees to take a better care of their health,
the Group conducts various projects and programmes:
• Administrative employees are provided with additional motivational
wellness measures: the opportunity for detailed health
examinations/specialist consultations, use of sports club, dentist,
rehabilitation and other services;
• All employees are welcome to check their eyes and get their flu
vaccinations for free;
• In order to prevent possible chronic occupational diseases and preserve
the health of employees, the project of ergonomic measures is in
progress – employees are provided with ergonomic measures, workplace
improvements are implemented, which will allow to preserve health,
prevent injuries and other consequences for health;
• During the trainings, we urge our employees to take a better care of
their health and acquire the necessary skills.
Each accident is followed by a detailed investigation of the situation,
immediately initiating changes and introducing the necessary measures to
prevent new cases. The Group follows the Implementation Plan for
Prevention Measures to Evade Accidents at Work and Occupational
Diseases, certified every year. 2022 marked the introduction of external
trainings on preventing accidents at work for managers of all levels. The
training will continue in 2023 as well.
2021 2022 2023
Total number of accidents 11 10 13
of which accidents on the way to/from
work
6 5 7
of which accidents at work 5 5 6
TRIR (total recordable employee injury rate) n.a. n.a. 1,8
TRIR, KPI n.a. n.a. <2
Nnumber of accidents:
Policies certified within the Group:
Occupational Safety and Health Policy
2021 2022 2023
Number of employees that have used health
services (health insurance, vaccinations, vision
screening, etc.)
192 214 200
Number of employees vaccinated against flu 110 94 122
Total wellness, EUR 37.000 44.000 38.000
Employees that have used health services:
OCCUPATIONAL SAFETY AND HEALTH
VILVI GROUP ANNUAL REPORT 2023
71
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
Policies and procedures certified within the Group: :
Remuneration Policy
Work Pay System
All employees contribute to the creation of the company’s value, thus, seeking to
remain a competitive employer, we stand for clear, reasonable and fair wages. The
remuneration system is based on the principles of gender equality, non-
discrimination and fair remuneration, and is also based on the LR legislation and Vilvi
Group’s certified Remuneration Policy..
The remuneration system clearly defines the categories of the employees and the
positions, attributed to these categories. The work remuneration provisions,
established in the system and its annexes, are applied in a way to evade any gender
or other types of discrimination. Men and women must receive equal payment for
the same or equal work..
The content of the work, done by the employees, applicable qualification
requirements (if any), compulsory and voluntary qualification improvement
procedures are established in the job description and/or employment contract..
We focus special attention on the internal promotion and professional improvement
of our employees. All vacant positions, subject to higher requirements, are firstly
offered to our company’s employees that comply with the requirements. Employees
may receive benefits for their qualifications obtained and/or premiums for additional
work or fulfilment of additional duties or tasks.
Additional benefits and the welfare package
Due to the difference in the age and education of our employees, our goal is to offer
a balanced package, which meets the needs of different groups.
The employees are offered all kinds of financial assistance and other incentives:
financial assistance in case of a death in the family; shopping centre vouchers for a
birth of a child or weddings; presents for birthdays, anniversaries, Christmas or
retirement; taking care of the employees’ arrival to work; administration employees
are given additional health motivational measures..
At the end of 2023, as in 2022., in view of the inflation that has strongly affected
people's incomes, each employee of the Group was given a shopping center gift
voucher worth EUR 100 as a gift.
We value clarity and transparency, when it comes to
remuneration, so we use the services of Korn Ferry Hay Group
the leading supplier of precise remuneration information and
analysis. Korn Ferry Hay Group remuneration market analysis
enables us to compare Vilvi Group's remuneration policy with
the local market, helping to ensure that our wages are
competitive and reasonable.
2021 2022 2023
Salary median, Eur 1281 1508 1746
MEN : WOMEN 1:0.92
EUR 1,289 : EUR 1,186
1:0.87
1619 Eur. : 1413 Eur.
1 : 0,90
1875 Eur. : 1689 Eur.
Salary median by employee groups, MEN : WOMEN
workers 1 : 0,77 1 : 0,79 1 : 0,83
specialists 1 : 0,89 1 : 0,85 1 : 0,87
managers 1 : 0,9 1 : 0,9 1 : 0,83
Median salary ratio by gender:
The Remuneration Policy and Work Pay System, adopted by the Group ensures that men and women receive equal
payment for the same or equal work. The Group employs a large number of employees with different competencies for
various positions. This complexity is the reason for the median salary ratio.
REMUNERATION POLICY
VILVI GROUP ANNUAL REPORT 2023
72
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
At Vilvi Group we always do our best to create suitable working conditions for people with limited working
capacity. These include persons of retirement age and people that have lost their vocational or general working
capacity, are unable to compete in the labour market under equal conditions and, based on the official statistics,
possible encounter a higher risk of poverty. We value these employees and they have all the conditions to work
according to their abilities and to integrate both into the labour market and in the staff of the Group. In 2022, the
Group employed 48 employees of retirement age and 68 employees with a disability.
The Group enables people of mature age to work as long as they want. Our employees are welcome to continue
their employment and enjoy the community, achievements, and joint work even when they reach retirement
age. Our Group’s employees belong to various age groups. We’re proud of our different generations working
together with the older employees sharing their good practice with the young and newlyhired employees. This
means sharing not only the experience, but also culture and values, cherished by the Group for many years.
Seeking to ensure better conditions for employees with small children, in 2010, with the EU support, one of the
Group’s companies established a childcare room, referred to as the kindergarten by the residents of Vilkyškiai
town. As of 2013, upon the expiry of the project funds, the kindergarten has been further partially funded by the
Group. Children can take part at pre-school education while their parents are at work.
VILVI GROUP also employs employees from other countries. In 2023, 7 citizens of other countries worked. The
group ensures the same working conditions and remuneration for migrant workers as for Lithuanian citizens.
Sharing the experience with the employees and their family members
The offspring of our employees is also welcome to get to know their parents’ workplace. Excursions are held,
during which children can take a closer look at what their mother or father are doing at the plants or the
administrative premises, the processes, manufacturing and creation of the products many of them enjoy every
day. Every year, we show attention to the minor children of employees on the occasion of the biggest holidays of
the year – we give gifts or experiences at events.
In 2023, VILVI GROUP participated in a children's diabetes camp with its low-sugar fresh milk product line.
INCLUDING SENSITIVE GROUPS
VILVI GROUP ANNUAL REPORT 2023
73
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
Our greatest attention is focused not only on maintaining a good physical emotional health of our employees, but also on the
development of their competencies and opening career opportunities. We help people grow and improve, encouraging them and doing
our best to keep an open and safe environment, reflecting the major human values, encouraging cooperation and sharing knowledge.
Targeted employee training is organized in the Group, taking into account the Group’s goals, employee needs and competence
expectations. Both specialized, vocational and general competence trainings are carried out at the organization level. We cooperate with
various scientific and training institutions, employees are provided with opportunities to acquire missing competences both in internal and
external trainings, seminars or conferences. It is important for us that all links improve, achieve the same goals and foster the same values
that are the basis of VILVI GROUP’s activities.
In 2023, great attention was paid to the leadership training of managers, during which the main practices of leading a team were explored
in detail - the development of a leader’s mindset, mobilizing and leading a team through change, time and energy management, and
creating a culture of feedback. Managers also deepened their knowledge and skills during individual sessions with lecturers.
2021 2022 2023
Specialist trainings, h in total 2300 2017 944
Hours per specialist 19
Out of them, 4 hours for the
lowest qualified employees
17
Out of them, 8 hours for the
lowest qualified employees.
12
Out of them, 4 hours for the
lowest qualified employees.
Manager trainings, h in total 2827 2240 3908
Hours per manager 35 22 44
Staff training hours:
SPECIAL ATTENTION TO EMPLOYEE GROWTH
VILVI GROUP ANNUAL REPORT 2023
74
The company has a book library where employees can read
professional, motivational and fiction literature.
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
We remain the major employer in regions, where all of our plants are located.
We are valued for stability, taking care of our employees and the surrounding
communities. One of the advantages of business development in rural areas is
being able to be close to each other, getting to know and understanding each
other better. Yet it also poses certain challenges in finding new staff, because
the population away from the metropolitan areas is shrinking. However, we
find solutions and manage to lure specialists from other, larger cities. We
actively cooperate with vocational and higher schools, organize professional
information, career planning presentations, familiarization tours to factories,
participate in career fairs organized by higher schools. Graduates are
encouraged to do an internship in order to get a better understanding of
working in a manufacturing company and possibly secure a job after
graduation.
Our programme Bring Your Friend has been open for several years, enabling
our employees to recommend the Group as an employer to their friends,
relatives or acquaintances, receiving a monetary bonus. We’re proud of our
people becoming the ambassadors of Vilvi Group, attracting new employees
that they love working with, building the company’s microclimate together. In
2023, this programme brought us 21 new employees (22 in 2022, 9 in 2021).
We keep polishing the systems of introducing new employees into the team
and work. Responding to the changing situation, we also keep improving the
processes of recruiting, screening, introduction and integration. The consistent
introduction of new staff members introduces them to the company’s culture,
improving the efficiency of integration and training, building their motivation
to work.
We have a motivational system not only for the newly-hired, but also
employees that have already been working with us for a while. We do our best
to find out and respond to our employees’ needs, offering them namely what
they need most.
2021 2022 2023
Average length of employment 7
years
8
years
8
years
Employee turnover (voluntary) 23% 16% 18%
VILVI GROUP ANNUAL REPORT 2023
75
By gender New employees
Women 140
Men 131
Total 271
By age New employees
Under 30 81
30-50 120
>50 70
CHALLENGES AND SOLUTIONS IN ATTRACTING NEW EMLOYEES
30
th
anniversary celebration of VILVI GROUP
Employee turnover indices:
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
Responsible development of quality products for Lithuania and the world
We’re proud of the fact that Lithuanian people value our products. We aim
to make our quality products available to enjoy not only for Lithuanians, but
citizens in neighbouring and other countries as well. We believe that the
opportunities to enjoy our whole foods contribute to creating a better world.
Technological improvement in combination with the mastery and traditions
enables us to provide our consumers in the closest foreign markets with
their favourite highest quality goods that meet their expectations.
The experience we have gained and the skills we are developing allow us to
enter larger markets, delivering products to the most distant lands and not
only catering for their people, but also successfully cooperating with local
businesses, supplying them with ingredients and products that later are
turned into delicious dishes.
Dairy products for a healthier daily life
Our goal is to produce healthy and quality products. By constantly updating,
supplementing and reacting to the latest trends in healthy food and
lifestyle, we aim for our consumer to choose what is best for their health. In
the selection of the highest quality products, you can find specialized
products manufactured by VILVI GROUP.
Priority on product safety
Every day, we do our best to supply people with quality, tasty and healthy
products, which supplement their nutrition with the necessary nutrients,
enabling to enjoy a full life. Product safety is our highest priority. We set the
highest standards and monitor our daily processes to ensure the quality and
safety of our goods.
Quality dairy products, available to all
We find it crucial not only to ensure that our products are safe and of high quality, but also to
make dairy products available to be enjoyed by people in a more difficult financial situation
both in Lithuania and abroad. Our products with plant-based fats have been popular both here
and in other countries for a while, thus, responding to an increasing demand, we released the
MILIKO product line. This wide range of products is characterised by excellent flavours and
attractive prices. In 2023, the product range was expanded.
CONSUMER WELL-BEING
VILVI GROUP ANNUAL REPORT 2023
76
Healthier choice every day
Both doctors and nutritionists encourage people to consume as little sugar as possible.
Realizing the importance of such a choice for health, we created the Vilkyškių less sugar
product line, which includes a healthier selection of your favorite dairy products. These cottage
cheese bars contain 40 to 43% less sugar, compared to the average sugar in other cottage
cheese bars sold in Lithuania, and yogurts have 35 to 36% less sugar compared to other yogurts
on store shelves.
Proteins for the active ones
GymON products are dedicated for those who are determined to achieve their goals - to grow
muscles or maintain muscle mass, balance their diet or control body weight. This is a high-
quality whey protein powder for making smoothies. Whey proteins are complete proteins
consisting of essential and replaceable amino acids, including branched-chain amino acids
(BCAAs): isoleucine, leucine, valine. Whey protein concentrate is one of the sources from which
the body absorbs proteins best.
Recent discoveries to supplement the nutrition of the elderly
In 2023, with the help of partial EU funding, together with the Lithuanian University of Health
Sciences (LSMU), we completed a R&D project lasting several years, which will allow us to offer a
line of products with a special composition for the elderly in the future. Together with scientists,
we developed an innovative nutritional supplement for the elderly to prevent geriatric frailty
syndrome and malnutrition or to recover from surgery.
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
Sharing knowledge about healthier choices
We follow scientific innovations and healthy lifestyle tendencies, applying this
knowledge in creating new products or improving the ones that are already enjoyed
by our consumers. We want to share the knowledge accumulated with our
consumers as well.
All products are marked according to the LR legislation requirements. We also add
additional useful information about the health benefits of each product. Shopping
for their food, people find the good qualities, valuable ingredients, and other
important information (e.g. less sugar, a source of protein, more fibre, etc.) listed on
the packaging, and this helps them pick the products that suit their needs best..
During 2023 was implemented marketing campaign for lower sugar products,
which educated consumers about the benefits of lower sugar consumption
when choosing sugar lower products:
CONSUMER WELL-BEING
VILVI GROUP ANNUAL REPORT 2023
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Simple recipes – ideas for healthier daily choices
We seek to demonstrate our care about our consumers’ health by not only producing
highest quality ready-to-use dairy goods, but also offer ideas on enriching their diet with
dishes, containing our dairy products as ingredients. Our social media followers can find
inspiring ideas, offered by popular food bloggers and recipe book authors: Liucina Rimgailė,
Kitchen Julie, Ant Medinės Lentelės, etc. We think it’s important that people include more
healthy food options into their daily diet.
Project for shaping traditions
We produce different types of cheese and want to offer them to as many people as possible.
To make this product a discovery, a healthy choice, and a part of the daily diet, we cooperate
with the blogger Urtė Mikelevičiūtė of myliusuri.lt blog, which offers lots of ideas to unfold
the many flavours cheese can offer. The blog not only offers a number of simple recipes, but
also ideas for lunch, a special dinner or celebrations, brought from abroad. We want our
consumers to not only enjoy a healthy product, but also additional suggestions on how to eat
as healthy as possible and enjoy good health for as long as possible.
A call to join a more sustainable life
Realising the situation and feeling responsible
for the climate change, we not only took the
path of sustainability, but also invite our
consumers join us. We focus special attention
on preserving nature, striving to reduce our
footprint and make our products not only
beneficial to people, but also environmentally-
friendly. We help our consumers with sorting
our product packaging by giving clear
indications on their sorting and disposal. We
also create packaging that is easy to sort and
recycle.
Fair marketing and communication
We highly value, appreciate, cherish and do not abuse our consumers’ positive
feedback and trust. We always clearly list all ingredients of our products, introducing
them to our consumers, never boasting fake facts or using marketing tricks, because
our goal is building a long-term connection rather than attracting short-term
interest. We do our best to respond to our consumer needs, improving our products,
their production technology, and looking for solutions enabling us to produce
highest quality dairy goods to be enjoyed by dairy consumers in Lithuania and
abroad.
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
Vilvi Group is an active community member. Fulfilling the principles of a
responsible business in the social area, the Group has been actively
cooperating with local communities and the society, strengthening the ties
between business and academic community, contributing to youth
employment, and improving career opportunities.
Support to communities and various initiatives based on pre-established
criteria is offered as an additional measure of social responsibility fulfilment,
contributing to building partnerships and implementing the Group’s
priorities. Vilvi Group supports and takes part at cultural, educational events,
featuring educational activities or entertainment for both adults and children,
thus contributing to a more active social life in the region and building
mutual relationships.
We’ve been closely cooperating and offering assistance in both finances or
our goods to the communities of not only Vilkyškiai, but also Pagėgiai,
Tauragė and Kelmė for already a few years. In 2022, we supported cultural,
wellness and sport initiatives, local community celebrations and green
initiatives.
Long-term partnership with Žalgiris basketball team
Supporting the ideas of a healthy lifestyle, movement, sport, and Lithuanian
traditions, Vilvi Group has been sponsoring Kaunas Žalgiris team since 2009.
This long and sustainable partnership has already become an inseparable
part of both of the brands. The cooperation between Vilvi Group and Žalgiris
is also notable during the matches as well with the symbol of Vilkyškiai
brand – the black cat – entertaining the audience during the breaks. We also
organise various partner competitions. The Group contributes to organising
the matches, while our employees support Žalgiris team in every game.
HELPING COMMUNITIES
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VILVI GROUP – the main partner of Tauragė – Lithuanian Capital of Culture
2023
Being one of the largest business companies in the region, we feel obliged and
proud to be able to contribute to such an important project for Tauragė. We
helped to ensure the smooth and meaningful implementation of the year-long
project – we contributed financially, we donated much-needed durable and more
sustainable chairs for outdoor events to the cultural organizers of the district and
the community, we were participants and speakers in the program of
conferences and events of this project, and we treated the event participants with
our products.
The year 2023 was a jubilee year for VILVI GROUP, we celebrated
the 30
th
anniversary of our activity
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
Additional information
ALTERNATIVE INDICATORS .......................... 144
COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE ..........................145
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
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Gross profit is an indicator presented in the company's profit (loss) statement, which is calculated after
subtracting the cost from sales revenue. Usually, this profit is the highest compared to other types of profit.
Gross profit margin shows how much profit is made for each unit of sales revenue. The indicator is
calculated by dividing gross profit by revenue.
EBITDA - earnings before interest, taxes, depreciation, and amortization, which shows the profit earned by
the company before the company’s financing policy, as well as the assessment of the impact of corporate
tax on profit. Vilkyškių pieninė JSC calculates this indicator by adding depreciation and amortization of
fixed assets to the operating result and deducting grants. Elements that are not directly influenced by the
nature of the company’s activities may be eliminated when calculating EBITDA.
EBITDA margin is a profitability indicator that can be used to compare the profitability of companies (in
the same industry) and to monitor changes in the profitability of the same company. The higher the value
of the indicator, the higher the profitability of the company. The indicator is calculated by dividing EBITDA
by revenue.
EBIT (Operating Earnings) – earnings before interest and taxes. It shows the company’s profit earned
during the operating and investment cycle (before assessing the impact of the company’s financing policy
on profit and deducting corporate tax). This indicator reflects the company’s ability to generate cash flow.
The indicator is calculated by adding financial activity costs to pre-tax profit and subtracting financial
activity income.
EBIT margin is an indicator of operational efficiency, calculated by dividing operating profit by revenue.
EBT (Earnings before taxes) is earnings before taxes. The indicator is calculated by adding corporate tax
expenses to net profit.
EBT margin is calculated by dividing earnings before taxes by revenue. Shows the ratio of the company’s
earnings before taxes to sales. The higher value of the indicator the higher the profitability of the company.
Financial debts are the sum of short-term and long-term debts, showing the amount of indebtedness of
the company. The indicator is calculated by adding long-term and short-term rental obligations to long-
term and short-term loans.
Net profit (loss) is a financial indicator calculated by deducting all expenses and taxes from revenue.
Net profit margin is an indicator showing the company’s profitability. It is calculated by dividing net profit
by revenue.
Net profit per share is one of the most popular share valuation indicators, which shows what is a profit of
the company per share. The ratio is calculated by dividing the net profit by the number of shares in
circulation.
Net debt is all financial obligations of the company without available cash and cash equivalents. This
indicator can be used during credit rating review. The indicator is calculated by subtracting cash and cash
equivalents from financial debt.
ALTERNATIVE INDICATORS
Net Debt/EBITDA shows a company’s ability to pay back its debts from profits earned. This indicator can
also be used during a credit rating review. The indicator is calculated by dividing net debt by EBITDA.
The capital-to-asset ratio shows the proportion of total asset financing with equity capital. This indicator
shows the share of equity capital in the capital structure. The lower this ratio, the more dependent the
company is on borrowed funds. The indicator is calculated by dividing equity by total assets.
The liquidity ratio shows the company’s ability to meet short-term obligations by using available short-
term assets. The higher the ratio, the better the liquidity position. The indicator is calculated by dividing
current assets by current liabilities.
Return on equity (ROE) is the ratio of net income to equity. The indicator shows how efficiently the
company uses shareholders' assets to generate profit. This indicator is important for shareholders in
assessing the return of their past period investment in the company. The higher the return on equity, the
more efficient the company's operations, the more profit it earns for its shareholders. The indicator is
calculated by dividing the net profit by the average of equity at the beginning and equity at the end of the
reporting period.
P/E ratio is the ratio of the share’s market price to earnings per share. The indicator shows what is the cost
of company's shares compared to its net profit. The P/E ratio provides information on whether a company is
expensive compared to its earnings. The higher the net profit, the lower the P/E ratio, and in turn, the more
attractive such shares are for investment. The indicator is calculated by dividing the market price of the
share by the net profit per share.
Return on capital employed (ROCE) - the profitability indicator evaluates the profitability of the funds
necessary for the constant operation of the company. It is often compared to the loan interest rates in the
market at that time. A company’s ROCE is required to be greater than the cost of borrowed capital at that
time. The indicator is calculated by dividing EBIT by the difference between total assets and current
liabilities.
Debt ratio reflects how much of the company’s assets are purchased with borrowed funds. The indicator is
calculated by dividing all the liabilities of the company by assets.
Debt to equity ratio. This is one of the main financial indicators of leverage. The debt-to-equity ratio shows
amount of euros of short-term and long-term debt per euro of equity. The indicator is calculated by dividing
financial debt by equity.
Asset turnover. It is an efficiency ratio that shows the ratio of sales revenue to assets. This ratio shows how
efficiently the company uses its capital. The higher the value the higher the degree of overall asset
management efficiency and vice versa. The indicator is calculated by dividing sales revenue by total assets.
Return on assets (ROA) is the ratio of net profit to assets. Return on assets shows how much net profit a
company earns per euro of assets. This value can be used as a measure of the efficiency of the company’s
asset utilization. The higher the value of ROA, the more efficiently the assets are ‘employed’, the more profit
is earned. The indicator is calculated by dividing the net profit by the average of assets at the beginning and
assets at the end of the reporting period.
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80
COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE
AB VILKYŠKIŲ PIENINĖ CORPORATE GOVERNANCE REPORT FORM FOR THE YEAR THAT ENDED ON 31 DECEMBER 2023
The public limited liability company AB ,Vilkyškių pieninė (hereinafter referred to as the “Company”), acting in compliance with Article 22 (3) of the Law of the Republic of Lithuania on
Securities and paragraph 24.5 of the Listing Rules of AB Nasdaq Vilnius, hereby discloses how it complies with the Corporate Governance Code for the Companies listed on Nasdaq Vilnius as
well as its specific provisions or recommendations. In case of non-compliance with this Code or some of its provisions or recommendations, the specific provisions or recommendations that
are not complied with must be indicated and the reasons for such non-compliance must be specified. In addition, other explanatory information indicated in this form must be provided.
1. Summary of the Corporate Governance Report:
According to the Articles of Association of the Company, the bodies of the Company are the General Meeting of Shareholders, the Supervisory Board, the Management Board, and the
Manager of the Company. The Supervisory Board is a collegial supervisory body of the Company, which represents the shareholders and performs the functions of supervision and control of
the Company's activities. The Supervisory Board of AB Vilkyškių pienienė consists of 3 members, elected for a term of four years. The Management Board is a collegial management body of
the Company, which performs the function of company management. The Management Board of AB Vilkyškių pieninė consists of 6 board members. The Management Board elects and
removes the Manager of the Company, determines his/her remuneration and other terms of the employment agreement. The company is managed by the Manager of the Company. The
Company has two committees - Audit Committee and Nomination and Remuneration Committee. The Nomination and Remuneration Committee shall perform the functions of the
Remuneration and Nomination Committees.
The Company does not currently comply with the requirement established by Paragraph 1.8 of the Corporate Governance Code, because does not provide the possibility for the shareholders
to participate and vote in the general meeting of shareholders by means of electronic communication.
More information on the Company’s Governance, shareholders’ rights, activities of the Management Board and Committees, Management Board members, as well as systems of internal
control and risk management is provided in the Company’s Consolidated Annual Report for the year that ended on 31 December 2023.
VILVI GROUP ANNUAL REPORT 2023
81
PRINCIPLES/ RECOMMENDATIONS YES/NO/
NOT APPLICABLE
COMMENTARY
Principle 1: General meeting of shareholders, equitable treatment of shareholders, and shareholders’ rights
The corporate governance framework should ensure the equitable treatment of all shareholders. The corporate governance framework should protect the rights of shareholders.
1.1. All shareholders should be provided with access to the information and/or documents
established in the legal acts on equal terms. All shareholders should be furnished with equal
opportunity to participate in the decision-making process where significant corporate
matters are discussed.
Yes Shareholders are furnished with equal opportunity to access the and documents established in the legal acts, as well as to
participate in the corporate decision-making process.
The Company’s documents and information established in the legal acts are publicly available on the Company’s website and
through the information disclosure system used by Nasdaq Vilnius in Lithuanian and English.
1.2. It is recommended that the company’s capital should consist only of the shares that
grant the same rights to voting, ownership, dividend and other rights to all of their holders.
Yes The capital of the Company consists of ordinary registered shares, which grant their owners equal personal property and non-
property rights. Each share grants one vote at the general meeting of shareholders.
1.3. It is recommended that investors should have access to the information concerning the
rights attached to the shares of the new issue or those issued earlier in advance, i.e. before
they purchase shares.
Yes The Articles of Association of the Company, which set out the rights conferred to the holders of Company’s shares, are publicly
available on the Company’s website.
1.4. Exclusive transactions that are particularly important to the company, such as transfer of
all or almost all assets of the company which in principle would mean the transfer of the
company, should be subject to approval of the general meeting of shareholders.
Yes Transactions shall be approved in accordance with the procedure set forth in the Law on Companies of the Republic of Lithuania and
the Articles of Association of the Company. Where necessary, important transactions are subject to approval of the general meeting of
shareholders, despite the fact that such a procedure is not established in the Articles of Association of the Company.
1.5. Procedures for convening and conducting a general meeting of shareholders should
provide shareholders with equal opportunities to participate in the general meeting of
shareholders and should not prejudice the rights and interests of shareholders. The chosen
venue, date and time of the general meeting of shareholders should not prevent active
participation of shareholders at the general meeting. In the notice of the general meeting of
shareholders being convened, the company should specify the last day on which the
proposed draft decisions should be submitted at the latest.
Yes The Articles of Association of the Company provide that all persons, who on the day of the meeting are the shareholders of the
Company, their authorized representatives, or persons with whom the voting rights transfer agreement has been concluded shall
have the right to participate and vote in the general meeting of shareholders. A shareholder who has the right to vote and is familiar
with the agenda may also inform the general meeting of shareholders in writing about his or her “for” or “against” choice with respect
to each resolution individually. These notifications shall be credited to the quorum of the general meeting of shareholders as well as
the voting results.
Meetings of the Company’s shareholders are held at the registered office of the respective company of the Company Group (during
quarantine/epidemics shareholders are encouraged to vote in writing). Ordinary meetings of shareholders are held in the second half
of April.
The notice convening the general meeting of shareholders shall state that the proposed new draft resolutions must be submitted in
writing at any time before the general meeting of shareholders.
1.6. With a view to ensure the right of shareholders living abroad to access the information, it
is recommended, where possible, that documents prepared for the general meeting of
shareholders in advance should be announced publicly not only in Lithuanian language but
also in English and/or other foreign languages in advance. It is recommended that the
minutes of the general meeting of shareholders after the signing thereof and/or adopted
decisions should be made available publicly not only in Lithuanian language but also in
English and/or other foreign languages. It is recommended that this information should be
placed on the website of the company. Such documents may be published to the extent
that their public disclosure is not detrimental to the company or the company’s commercial
secrets are not revealed.
Yes All documents and information related to the general meeting of shareholders, including notice of the meeting convened, draft
resolutions, resolutions and minutes of the meeting, are announced publicly and at the same time in two languages - Lithuanian and
English - through the Nasdaq regulated notice distribution system and on the Company’s website
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PRINCIPLES/ RECOMMENDATIONS
YES/NO/
NOT APPLICABLE
COMMENTARY
1.7. Shareholders who are entitled to vote should be furnished with the opportunity to vote
at the general meeting of shareholders both in person and in absentia. Shareholders should
not be prevented from voting in writing in advance by completing the general voting ballot.
Yes Shareholders of the Company may exercise the right to participate in the shareholders’ meeting either in person or through a
representative, if the person has a proper Power of Attorney or a voting rights transfer agreement has been concluded in accordance
with the procedure established by legal acts. The Company shall also furnish the opportunity to shareholders to vote by filling out a
general ballot as required by law.
1.8. With a view to increasing the shareholders’ opportunities to participate effectively at
general meetings of shareholders, it is recommended that companies should apply modern
technologies on a wider scale and thus provide shareholders with the conditions to
participate and vote in general meetings of shareholders via electronic means of
communication. In such cases the security of transmitted information must be ensured and
it must be possible to identify the participating and voting person.
No
The Company does not comply with the provisions of this recommendation as the Company does not provide the possibility for the
shareholders to participate and vote in the general meeting of shareholders by means of electronic communication. However, in all
cases, the Company makes it possible for shareholders to vote in writing.
1.9. It is recommended that the notice on the draft decisions of the general meeting of
shareholders being convened should specify new candidatures of members of the collegial
body, their proposed remuneration and the proposed audit company if these issues are
included into the agenda of the general meeting of shareholders. Where it is proposed to
elect a new member of the collegial body, it is recommended that the information about
his/her educational background, work experience and other managerial positions held (or
proposed) should be provided.
Yes
The Company informs about the educational background, work experience, and position of the candidates to the members of the
collegial body during the general meeting of shareholders by submitting the curriculum vitae of the candidates in the material of the
meeting.
The name of the proposed audit firm shall be submitted to the general meeting in advance as a draft resolution.
During the election a new member to the collegial body, the Company will publish the above information on each member in the
draft resolutions of the general meeting.
1.10. Members of the company’s collegial management body, heads of the administration or
other competent persons related to the company who can provide information related to
the agenda of the general meeting of shareholders should take part in the general meeting
of shareholders. Proposed candidates to member of the collegial body should also
participate in the general meeting of shareholders in case the election of new members is
included into the agenda of the general meeting of shareholders.
Yes
Members of the company’s collegial management body, heads of the administration or other competent persons related to the
company who can provide information related to the agenda of the general meeting of shareholders, as well as candidates proposed
to members of the collegial body participate in the general meeting of shareholders.
Principle 2: Supervisory board
Functions and liability of the supervisory board
The supervisory board of the company should ensure representation of the interests of the company and its shareholders, accountability of this body to the shareholders and objective monitoring of the company’s operations and its
management bodies as well as constantly provide recommendations to the management bodies of the company.
The supervisory board should ensure the integrity and transparency of the company’s financial accounting and control system.
2.1.1. Members of the supervisory board should act in good faith, with care and responsibility
for the benefit and in the interests of the company and its shareholders and represent their
interests, having regard to the interests of employees and public welfare.
Yes AB "Vilkyškių pieninė" in 2023 the supervisory board established and elected in April adheres to this principle.
2.1.2. Where decisions of the supervisory board may have a different effect on the interests of
the company’s shareholders, the supervisory board should treat all shareholders impartially
and fairly. It should ensure that shareholders are properly informed about the company’s
strategy, risk management and control, and resolution of conflicts of interest.
Yes
The Supervisory Board ensures that shareholders are properly informed about actions that may affect the interests of the company's
shareholders.
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PRINCIPLES/ RECOMMENDATIONS
YES/NO/
NOT APPLICABLE
COMMENTARY
2.1.3. The supervisory board should be impartial in passing decisions that are significant for
the company’s operations and strategy. Members of the supervisory board should act and
pass decisions without an external influence from the persons who elected them.
Yes
The Supervisory Board adheres to this principle.
2.1.4. Members of the supervisory board should clearly voice their objections in case they
believe that a decision of the supervisory board is against the interests of the company.
Independent members of the supervisory board should: a) maintain independence of their
analysis and decision-making; b) not seek or accept any unjustified privileges that might
compromise their independence.
Yes
The members of the Supervisory Board shall comply with the following provisions.
2.1.5. The supervisory board should oversee that the company’s tax planning strategies are
designed and implemented in accordance with the legal acts in order to avoid faulty
practice that is not related to the long-term interests of the company and its shareholders,
which may give rise to reputational, legal or other risks.
Yes
The Supervisory Board oversees the Company's strategy on tax planning matters.
2.1.6. The company should ensure that the supervisory board is provided with sufficient
resources (including financial ones) to discharge their duties, including the right to obtain
all the necessary information or to seek independent professional advice from external legal,
accounting or other experts on matters pertaining to the competence of the supervisory
board and its committees.
Yes The company adheres to this principle. The Supervisory Board is provided with all necessary resources to perform its functions. The
Supervisory Board is technically served by the Company's administration.
2.2.Formation of the supervisory board
The procedure of the formation of the supervisory board should ensure proper resolution of conflicts of interest and effective and fair corporate governance.
2.2.1. The members of the supervisory board elected by the general meeting of shareholders
should collectively ensure the diversity of qualifications, professional experience and
competences and seek for gender equality. With a view to maintain a proper balance
between the qualifications of the members of the supervisory board, it should be ensured
that members of the supervisory board, as a whole, should have diverse knowledge,
opinions and experience to duly perform their tasks.
Yes The company's 2023 in April the board of supervisors established and elected at the held general meeting of shareholders has the
necessary professional experience and qualifications, it consists of representatives of both sexes.
2.2.2. Members of the supervisory board should be appointed for a specific term, subject to
individual re-election for a new term in office in order to ensure necessary development of
professional experience.
Yes The Supervisory Board consists of 3 members elected for a period of 4 years. The number of terms of office of members of the
Supervisory Board is unlimited.
The company's articles of association provide for the possibility to re-elect an individual member of the supervisory board.
2.2.3. Chair of the supervisory board should be a person whose current or past positions
constituted no obstacle to carry out impartial activities. A former manager or management
board member of the company should not be immediately appointed as chair of the
supervisory board either. Where the company decides to depart from these
recommendations, it should provide information on the measures taken to ensure
impartiality of the supervision.
Yes
The company adheres to this principle.
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PRINCIPLES/ RECOMMENDATIONS
YES/NO/
NOT APPLICABLE
COMMENTARY
2.2.4. Each member should devote sufficient time and attention to perform his duties as a member of the supervisory
board. Each member of the supervisory board should undertake to limit his other professional obligations (particularly
the managing positions in other companies) so that they would not interfere with the proper performance of the
duties of a member of the supervisory board. Should a member of the supervisory board attend less than a half of the
meetings of the supervisory board throughout the financial year of the company, the shareholders of the company
should be notified thereof.
Yes
This principle is followed.
2.2.5. When it is proposed to appoint a member of the supervisory board, it should be announced which members of
the supervisory board are deemed to be independent. The supervisory board may decide that, despite the fact that a
particular member meets all the criteria of independence, he/she cannot be considered independent due to special
personal or company-related circumstances.
Yes When the members of the Supervisory board are elected (appointed), the draft decisions indicate which
members are independent.
2.2.6. The amount of remuneration to members of the supervisory board for their activity and participation in
meetings of the supervisory board should be approved by the general meeting of shareholders.
Yes
The amount of remuneration for the activities of the members of the Supervisory board is approved by the
general meeting of shareholders.
2.2.7. Every year the supervisory board should carry out an assessment of its activities. It should include evaluation of
the structure of the supervisory board, its work organization and ability to act as a group, evaluation of the
competence and work efficiency of each member of the supervisory board, and evaluation whether the supervisory
board has achieved its objectives. The supervisory board should, at least once a year, make public respective
information about its internal structure and working procedures.
Yes
This principle is followed.
Principle 3: Management Board
Functions and liability of the management board
The management board should ensure the implementation of the company’s strategy and good corporate governance with due regard to the interests of its shareholders, employees and other interest groups.
3.1.1. The management board should ensure the implementation of the company’s strategy approved by the
supervisory board if the latter has been formed at the company. In such cases where the supervisory board is not
formed, the management board is also responsible for the approval of the company’s strategy.
Yes
The Management board ensures the implementation of the Company's strategy.
3.1.2. As a collegial management body of the company, the management board performs the functions assigned to it
by the Law and in the articles of association of the company, and in such cases where the supervisory board is not
formed in the company, it performs inter alia the supervisory functions established in the Law. By performing the
functions assigned to it, the management board should take into account the needs of the company’s shareholders,
employees and other interest groups by respectively striving to achieve sustainable business development.
Yes The functions specified (except maintenance) in the recommendation are performed by the management
board (except for AB Pieno logistika of the Company Group, where the management board is not formed),
taking into account the needs of the Company, shareholders, employees, and other interest groups.
The Supervisory board of Vilkyškių pieninė AB performs the supervisory functions provided for in the Law.
The Management Board of LTD ,,Baltic dairy board“ of the Company Group, located in Latvia, performs the
functions provided for by the laws of Latvia and the Articles of Association of this company.
3.1.3. The management board should ensure compliance with the laws and the internal policy of the company
applicable to the company or a group of companies to which this company belongs. It should also establish the
respective risk management and control measures aimed at ensuring regular and direct liability of managers.
Yes The management board ensures that the Company complies with laws, internal policies of the Company
and approved procedures (e.g. Remuneration Policy, Procurement Process and Procedures, Equal
Opportunities Policy, Personal Data Processing Rules, etc.), and, it also ensures the accountability of the
management in accordance with the established internal measures of governance and control.
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PRINCIPLES/ RECOMMENDATIONS
YES/NO/
NOT APPLICABLE
COMMENTARY
3.1.4. Moreover, the management board should ensure that the measures included into the OECD Good Practice
Guidance on Internal Controls, Ethics and Compliance are applied at the company in order to ensure adherence to
the applicable laws, rules and standards.
Yes
The management board ensures compliance with applicable laws, regulations, and standards.
3.1.5. When appointing the manager of the company, the management board should take into account the
appropriate balance between the candidate’s qualifications, experience and competence.
Yes
When appointing the manager of the company, the management board takes into account the candidate’s
qualifications, experience, and competence.
3.2. Formation of the management board
3.2.1. The members of the management board elected by the supervisory board or, if the supervisory board is not
formed, by the general meeting of shareholders should collectively ensure the required diversity of qualifications,
professional experience and competences and seek for gender equality. With a view to maintain a proper balance in
terms of the current qualifications possessed by the members of the management board, it should be ensured that
the members of the management board would have, as a whole, diverse knowledge, opinions and experience to duly
perform their tasks.
Yes
The Company follows the recommendations of this paragraph. The members of the management board
have the necessary variety of knowledge, opinions, and experience to perform their tasks properly (2 board
members have economic education, 2 board members have technical education, 1 board member has
management education and one board member has education related to agriculture.)
There is one woman on the management board of AB Vilkyškių pieninė and one on the management
board of AB Modest and one on the management board of LTD Baltic Dairy Board of the Company Group;
and two women on the management board of AB Kelmės pieninė and on the management board UAB
Kelmės pienas of the Company Group.
3.2.2. Names and surnames of the candidates to become members of the management board, information on their
educational background, qualifications, professional experience, current positions, other important professional
obligations and potential conflicts of interest should be disclosed without violating the requirements of the legal acts
regulating the handling of personal data at the meeting of the supervisory board in which the management board or
individual members of the management board are elected. In the event that the supervisory board is not formed, the
information specified in this paragraph should be submitted to the general meeting of shareholders. The
management board should, on yearly basis, collect data provided in this paragraph on its members and disclose it in
the company’s annual report.
Yes
The curriculum vitae of the candidates to become members of the management board and information on
the candidates‘ participation in the activities of other companies are submitted to the body electing them
without violating the requirements of the legal acts regulating the handling of personal data.
In the annual report, the company indicates the necessary information about the members of the
Management Board: education, qualifications, professional experience, current position, etc.
3.2.3.. All new members of the management board should be familiarized with their duties and the structure and
operations of the company.
Yes
After the election, all members of the management board shall be familiarized with their rights and
obligations under the legal acts of the Republic of Lithuania and the Articles of Association of the Company.
Members of the management board are regularly informed at the Board meetings and individually, as
required or per own request of the members, about the Company’s activities and its changes, material
changes in the legal acts regulating the Company’s activities, and other circumstances affecting the
Company’s activities.
3.2.4. Members of the management board should be appointed for a specific term, subject to individual re-election for
a new term in office in order to ensure necessary development of professional experience and sufficiently frequent
reconfirmation of their status.
Yes
According to the Articles of Association of the Company, the members of the management board are
elected for a term of four years, without limiting the number of their terms.
The Articles of Association of the Company provide for the possibility of re-election of the entire
management board or its individual member.
3.2.5. Chair of the management board should be a person whose current or past positions constitute no obstacle to
carry out impartial activity. Where the supervisory board is not formed, the former manager of the company should
not be immediately appointed as chair of the management board. When a company decides to depart from these
recommendations, it should furnish information on the measures it has taken to ensure the impartiality of
supervision.
Yes
AB Vilkyškių pieninė the chairman of its management board is the manager of the company. The
impartiality of the activity is guaranteed by the Supervisory Board of the Company and five other members
of the Board.
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3.2.6. Each member should devote sufficient time and attention to perform his duties as a member of the management board.
Should a member of the management board attend less than a half of the meetings of the management board throughout the
financial year of the company, the supervisory board of the company or, if the supervisory board is not formed at the company,
the general meeting of shareholders should be notified thereof.
Yes
In 2023, the management board members attended the management board meetings (a
quorum was present during all meetings), with each member devoting sufficient time to perform
the duties of the management board member.
There were no management board members who attended less than half of the management
board meetings during fiscal year of 2023.
3.2.7. In the event that the management board is elected in the cases established by the Law where the supervisory board is not
formed at the company, and some of its members will be independent, it should be announced which members of the
management board are deemed as independent. The management board may decide that, despite the fact that a particular
member meets all the criteria of independence established by the Law, he/she cannot be considered independent due to special
personal or company-related circumstances.
Not applicable
The company has a supervisory board.
3.2.8. The general meeting of shareholders of the company should approve the amount of remuneration to the members of the
management board for their activity and participation in the meetings of the management board.
Yes
Members of the management board of AB Vilkyškių pieninė, AB Modest, AB Kelmės pieninė, UAB
Kelmės pienas and LTD ,,Baltic dairy board“ may be compensated for their work in the
management board with tantiemes approved by the general meeting of shareholders. No
tantiemes were paid to management board members in 2023.
3.2.9. The members of the management board should act in good faith, with care and responsibility for the benefit and the
interests of the company and its shareholders with due regard to other stakeholders. When adopting decisions, they should not
act in their personal interest; they should be subject to no-compete agreements and they should not use the business
information or opportunities related to the company’s operations in violation of the company’s interests.
Yes
According to the information available to the Company, the members of the management board
act in good faith with respect to the Company, following the interests of the Company and not their
own or those of third parties, adhering to the principles of honesty, reasonableness, confidentiality,
and responsibility, trying to remain independent during the decision-making.
3.2.10. Every year the management board should carry out an assessment of its activities. It should include evaluation of the
structure of the management board, its work organization and ability to act as a group, evaluation of the competence and work
efficiency of each member of the management board, and evaluation whether the management board has achieved its
objectives. The management board should, at least once a year, make public respective information about its internal structure
and working procedures in observance of the legal acts regulating the processing of personal data.
Yes
Every year the management board is carry out an assessment of its activities, review the
management board’s annual performance goals and evaluate their achievement. The management
structure of the Company is published annually in the annual report of the Company.
Principle 4: Rules of procedure of the supervisory board and the management board of the company
The rules of procedure of the supervisory board, if it is formed at the company, and of the management board should ensure efficient operation and decision-making of these bodies and promote active cooperation between the company’s
management bodies.
4.1. The management board and the supervisory board, if the latter is formed at the company, should act in close cooperation in
order to attain benefit for the company and its shareholders. Good corporate governance requires an open discussion between the
management board and the supervisory board. The management board should regularly and, where necessary, immediately inform
the supervisory board about any matters significant for the company that are related to planning, business development, risk
management and control, and compliance with the obligations at the company. The management board should inform he
supervisory board about any derogations in its business development from the previously formulated plans and objectives by
specifying the reasons for this.
Yes
The company will follow this principle. If necessary, the management board informs the supervisory
board about all important issues for the Company.
4.2. It is recommended that meetings of the company’s collegial bodies should be held at the respective intervals, according to the
pre-approved schedule. Each company is free to decide how often meetings of the collegial bodies should be convened but it is
recommended that these meetings should be convened at such intervals that uninterruptable resolution of essential corporate
governance issues would be ensured. Meetings of the company’s collegial bodies should be convened at least once per quarter.
Yes
Management board meetings are held at least once a month at the end of the month, and more
frequently if the need arises.
Meetings of the company's supervisory board are organized at least quarterly.
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4.3. Members of a collegial body should be notified of the meeting being convened in advance so that they would have sufficient
time for proper preparation for the issues to be considered at the meeting and a fruitful discussion could be held and appropriate
decisions could be adopted. Along with the notice of the meeting being convened all materials relevant to the issues on the
agenda of the meeting should be submitted to the members of the collegial body. The agenda of the meeting should not be
changed or supplemented during the meeting, unless all members of the collegial body present at the meeting agree with such
change or supplement to the agenda, or certain issues that are important to the company require immediate resolution.
Yes
Members of a collegial body shall be provided in advance with the information of the meeting
convened, the agenda of the meeting, and any material related to the issues to be discussed at the
meeting. Each member of the
collegial body shall have access to the materials of the meeting before the date of the meeting. As a
general rule, the published agenda of a meeting shall not be changed, unless otherwise decided at
a meeting where all the members of the collegial body of the Company are present, and the
material submitted for the meeting shall be sufficient for the additional issue to reach a decision on
the issue that is not announced in the agenda.
4.4. In order to coordinate the activities of the company’s collegial bodies and ensure effective decision-making process, the
chairs of the company’s collegial supervision and management bodies should mutually agree on the dates and agendas of the
meetings and close cooperate in resolving other matters related to corporate governance. Meetings of the company’s supervisory
board should be open to members of the management board, particularly in such cases where issues concerning the removal of
the management board members, their responsibility or remuneration are discussed.
Yes
The chairpersons of the collegial bodies coordinate with each other the dates and issues of the
meetings of the convened bodies.
Principle 5: Nomination, remuneration and audit committees
Purpose and formation of committees
The committees formed at the company should increase the work efficiency of the supervisory board or, where the supervisory board is not formed, of the management board which performs the supervisory functions by ensuring that
decisions are based on due consideration and help organise its work in such a way that the decisions it takes would be free of material conflicts of interest.
Committees should exercise independent judgment and integrity when performing their functions and provide the collegial body with recommendations concerning the decisions of the collegial body. However, the final decision should be
adopted by the collegial body.
5.1.1. Taking due account of the company-related circumstances and the chosen corporate governance structure, the supervisory
board of the company or, in cases where the supervisory board is not formed, the management board which performs the
supervisory functions, establishes committees. It is recommended that the collegial body should form the nomination,
remuneration and audit committees.
Yes
AB Vilkyškių pieninė has 2 committees: Nomination and Remuneration Committee and Audit
Committee.
Prior to the election of the Company's supervisors, the Appointments and Remuneration
Committee was formed by the Board, and now by the Supervisory Board.
5.1.2. Companies may decide to set up less than three committees. In such case companies should explain in detail why they have
chosen the alternative approach, and how the chosen approach corresponds with the objectives set for the three different
committees.
Yes
The members of the Audit Committee and the Regulations of the Committee is approved by the
general meeting of shareholders.
AB Modest, AB Kelmės pieninė, AB Pieno logistika, UAB Kelmės pienas and LTD ,,Baltic dairy board“
have no committees.
The functions of the Nomination and Remuneration Committee shall be carried out by a formed
single Nomination and Remuneration Committee.
5.1.3. In the cases established by the legal acts the functions assigned to the committees formed at companies may be performed by
the collegial body itself. In such case the provisions of this Code pertaining to the committees (particularly those related to their role,
operation and transparency) should apply, where relevant, to the collegial body as a whole.
Not
applicable
5.1.4. Committees established by the collegial body should normally be composed of at least three members. Subject to the
requirements of the legal acts, committees could be comprised only of two members as well. Members of each committee should be
selected on the basis of their competences by giving priority to independent members of the collegial body. The chair of the
management board should not serve as the chair of committees.
Yes
Each committee of AB ,,Vilkyškių pieninė” is composed of 3 members.
All members of the Audit Committee have financial education, and 2 of them are independent
members.
All members of the Nomination and Remuneration Committee shall have managerial experience
and one of them shall be an independent member.
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5.1.5. The authority of each committee formed should be determined by the collegial body itself. Committees should perform their duties
according to the authority delegated to them and regularly inform the collegial body about their activities and performance on a regular
basis. The authority of each committee defining its role and specifying its rights and duties should be made public at least once a year (as
part of the information disclosed by the company on its governance structure and practice on an annual basis). In compliance with the
legal acts regulating the processing of personal data, companies should also include in their annual reports the statements of the existing
committees on their composition, the number of meetings and attendance over the year as well as the main directions of their activities
and performance.
Yes
AB "Vilkyškių pieninė" The activities of the Nomination and Remuneration Committee until
the election of the Supervisory Board were regulated by the committee regulations
approved by the Board, and now by the committee regulations approved by the
Supervisory Board.
Regulations of the Audit Committee of AB Vilkyškių pieninė are approved by the general
meeting of shareholders.
Both committees regularly inform the collegial body about their activities and results.
Information on Committee activities and attendance of Committee meetings is presented
in the consolidated annual report of 2023.
5.1.6. With a view to ensure the independence and impartiality of the committees, the members of the collegial body who are not
members of the committees should normally have a right to participate in the meetings of the committee only if invited by the
committee. A committee may invite or request that certain employees of the company or experts would participate in the meeting. Chair
of each committee should have the possibility to maintain direct communication with the shareholders. Cases where such practice is to
be applied should be specified in the rules regulating the activities of the committee.
Yes
The members of the collegial body, who are not members of the Committee, shall
participate in the meetings of the committees, if necessary, at the invitation of the
respective Committee. If necessary, the Committee may invite relevant Company
personnel, responsible for the matters discussed in the Committee, to attend the meeting.
The chairman of the committee is also provided with the possibility to communicate with
the shareholders as necessary.
5.2. Nomination committee
5.2.1. The key functions of the nomination committee should be the following:
1) to select candidates to fill vacancies in the membership of supervisory and management bodies and the administration and
recommend the collegial body to approve them. The nomination committee should evaluate the balance of skills, knowledge and
experience in the management body, prepare a description of the functions and capabilities required to assume a particular position and
assess the time commitment expected;
2) assess, on a regular basis, the structure, size and composition of the supervisory and management bodies as well as the skills,
knowledge and activity of its members, and provide the collegial body with recommendations on how the required changes should be
sought;
3) devote the attention necessary to ensure succession planning.
Yes
The functions of the Nomination Committee specified in this recommendation are
essentially performed by the Nomination and Remuneration Committee of AB Vilkyškių
pieninė.
5.2.2. When dealing with issues related to members of the collegial body who have employment relationships with the company and the
heads of the administration, the manager of the company should be consulted by granting him/her the right to submit proposals to the
Nomination Committee.
Yes
5.3. Remuneration committee
The main functions of the remuneration committee should be as follows:
1) submit to the collegial body proposals on the remuneration policy applied to members of the supervisory and management bodies and
the heads of the administration for approval. Such policy should include all forms of remuneration, including the fixed-rate remuneration,
performance-based remuneration, financial incentive schemes, pension arrangements and termination payments as well as conditions
which would allow the company to recover the amounts or suspend the payments by specifying the circumstances under which it would
be expedient to do so;
2) submit to the collegial body proposals regarding individual remuneration for members of the collegial bodies and the heads of the
administration in order to ensure that they would be consistent with the company’s remuneration policy and the evaluation of the
performance of the persons concerned;
3) review, on a regular basis, the remuneration policy and its implementation.
Yes
The functions of the Remuneration Committee specified in this recommendation are
essentially performed by the Nomination and Remuneration Committee of AB ,,Vilkyškių
pieninė”.
The Nomination and Remuneration Committee submits proposals to the collegial body on
the remuneration policy, reviews it regularly, and monitors its implementation.
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5.4. Audit committee
5.4.1. The key functions of the audit committee are defined in the legal acts regulating the activities of the audit
committee.
Yes
The functions of the Audit Committee are defined in the Regulations of the Audit Committee approved by
the General Meeting of Shareholders.
5.4.2. All members of the committee should be provided with detailed information on specific issues of the company’s
accounting system, finances and operations. The heads of the company’s administration should inform the audit
committee about the methods of accounting for significant and unusual transactions where the accounting may be
subject to different approaches.
Yes
The members of the Committee shall be provided with all the detailed information necessary for the
performance of its functions.
5.4.3. The audit committee should decide whether the participation of the chair of the management board, the
manager of the company, the chief finance officer (or senior employees responsible for finance and accounting), the
internal and external auditors in its meetings is required (and, if required, when). The committee should be entitled,
when needed, to meet the relevant persons without members of the management bodies present.
Yes
After the members of the Audit Committee decide who must attend the meeting of the Committee, these
persons shall be invited, ensuring possibility that the members of the managerial bodies would not be
present at the same meeting.
5.4.4. The audit committee should be informed about the internal auditor’s work program and should be furnished
with internal audit reports or periodic summaries. The audit committee should also be informed about the work
program of external auditors and should receive from the audit firm a report describing all relationships between the
independent audit firm and the company and its group.
Yes
External auditors shall regularly present their activity plans and reports to the Audit Committee.
5.4.5. The audit committee should examine whether the company complies with the applicable provisions regulating
the possibility of lodging a complaint or reporting anonymously his/her suspicions of potential violations committed
at the company and should also ensure that there is a procedure in place for proportionate and independent
investigation of such issues and appropriate follow-up actions.
Yes
The Audit Committee shall have the opportunity to periodically verify whether employees have the
possibility to lodge a complaint or report anonymously any suspected violations by the Company.
Complaints are filed in the Company through the established complaint/report handling channels.
5.4.6. The audit committee should submit to the supervisory board or, where the supervisory board is not formed, to
the management board its activity report at least once in every six months, at the time that annual and half-yearly
reports are approved.
Yes Reports of the Audit Committee are presented at management board meetings twice a year.
Principle 6: Prevention and disclosure of conflicts of interest
The corporate governance framework should encourage members of the company’s supervisory and management bodies to avoid conflicts of interest and ensure a transparent and effective mechanism of disclosure of conflicts of interest
related to members of the supervisory and management bodies.
The Corporate Governance Framework should recognize the rights of the stakeholders as established by law and promote active cooperation between the company and its stakeholders in the creation of the well-being, jobs, and financial stability of the
Company. Within the context of this principle, the term “stakeholders” includes investors, employees, creditors, suppliers, customers, the local community, and other persons with interests in a particular company.
Any member of the company’s supervisory and management body should avoid a situation where his/her personal
interests are or may be in conflict with the company’s interests. In case such a situation did occur, a member of the
company’s supervisory or management body should, within a reasonable period of time, notify other members of the
same body or the body of the company which elected him/her or the company’s shareholders of such situation of a
conflict of interest, indicate the nature of interests and, where possible, their value.
Yes
Members of the company's supervisory and management boards avoid situations where their personal
interests may be in conflict with the company’s interests.
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Principle 7: Remuneration policy of the company
The remuneration policy and the procedure for review and disclosure of such policy established at the company should prevent potential conflicts of interest and abuse in determining remuneration of members of the collegial bodies and
heads of the administration, in addition it should ensure the publicity and transparency of the company’s remuneration policy and its long-term strategy.
7.1. The company should approve and post the remuneration policy on the website of the company; such policy
should be reviewed on a regular basis and be consistent with the company’s long-term strategy.
Yes Approved remuneration policy is published on the Company’s website and is regularly reviewed.
7.2. The remuneration policy should include all forms of remuneration, including the fixed-rate remuneration,
performance-based remuneration, financial incentive schemes, pension arrangements and termination payments as
well as the conditions specifying the cases where the company can recover the disbursed amounts or suspend the
payments.
Yes
7.3. With a view to avoid potential conflicts of interest, the remuneration policy should provide that members of the
collegial bodies which perform the supervisory functions should not receive remuneration based on the company’s
performance.
Yes
The approved Remuneration Policy does not provide for the possibility to receive remuneration depending
on the Company's performance.
7.4. The remuneration policy should provide sufficient information on the policy regarding termination payments.
Termination payments should not exceed a fixed amount or a fixed number of annual wages and in general should
not be higher than the non-variable component of remuneration for two years or the equivalent thereof. Termination
payments should not be paid if the contract is terminated due to inadequate performance.
Yes
The Company adheres to the requirements of applicable laws (provisions of the Labor Code of the Republic
of Lithuania) regarding termination payments.
7.5. In the event that the financial incentive scheme is applied at the company, the remuneration policy should
contain sufficient information about the retention of shares after the award thereof. Where remuneration is based on
the award of shares, shares should not be vested at least for three years after the award thereof. After vesting,
members of the collegial bodies and heads of the administration should retain a certain number of shares until the
end of their term in office, subject to the need to compensate for any costs related to the acquisition of shares.
Not applicable
The Company has no system of employee incentivisation or remuneration with Company shares.
7.6. The company should publish information about the implementation of the remuneration policy on its website,
with a key focus on the remuneration policy in respect of the collegial bodies and managers in the next and, where
relevant, subsequent financial years. It should also contain a review of how the remuneration policy was implemented
during the previous financial year. The information of such nature should not include any details having a commercial
value. Particular attention should be paid on the major changes in the company’s remuneration policy, compared to
the previous financial year.
Yes
The implementation of the Remuneration Policy is disclosed in the Remuneration Report, which is
published on the Company's website.
7.7. It is recommended that the remuneration policy or any major change of the policy should be included on the
agenda of the general meeting of shareholders. The schemes under which members and employees of a collegial
body receive remuneration in shares or share options should be approved by the general meeting of shareholders.
Yes
In the event of a material change in the remuneration policy, such change shall be included in the agenda
of the general meeting of shareholders.
The Company does not employ schemes under which the remuneration is provided in shares or share
options, or other rights to purchase shares or receive remuneration based on the changes in the share price.
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Principle 8: Role of stakeholders in corporate governance
The corporate governance framework should recognize the rights of stakeholders entrenched in the laws or mutual agreements and encourage active cooperation between companies and stakeholders in creating the company value, jobs and financial
sustainability. In the context of this principle the concept “stakeholders” includes investors, employees, creditors, suppliers, clients, local community and other persons having certain interests in the company concerned.
8.1. The corporate governance framework should ensure that the rights and lawful interests of stakeholders are
protected.
Yes
All stakeholders are provided with the possibility to participate in corporate governance and access to the
necessary information.
8.2. The corporate governance framework should create conditions for stakeholders to participate in corporate
governance in the manner prescribed by law. Examples of participation by stakeholders in corporate governance
include the participation of employees or their representatives in the adoption of decisions that are important for the
company, consultations with employees or their representatives on corporate governance and other important
matters, participation of employees in the company’s authorized capital, involvement of creditors in corporate
governance in the cases of the company’s insolvency, etc.
Yes
All stakeholders are provided with the possibility to participate in corporate governance in the manner
prescribed by law.
8.3. Where stakeholders participate in the corporate governance process, they should have access to relevant
information.
Yes
The stakeholders involved in the corporate governance process shall be granted access to the necessary
information, without prejudice to the interests of the Company and other related parties.
8.4. Stakeholders should be provided with the possibility of reporting confidentially any illegal or unethical practices
to the collegial body performing the supervisory function.
Yes
The Company provides the possibility to confidentially report any illegal or unethical practices to the
collegial body performing the supervisory function.
Principle 9: Disclosure of information
The corporate governance framework should ensure the timely and accurate disclosure of all material corporate issues, including the financial situation, operations and governance of the company.
9.1. In accordance with the company’s procedure on confidential information and commercial secrets and the legal
acts regulating the processing of personal data, the information publicly disclosed by the company should include
but not be limited to the following:
Yes
9.1.1. operating and financial results of the company;
Yes
On a quarterly basis, the Company reports its operating and financial results on the Company’s website and
through the information disclosure system used by Nasdaq Vilnius.
9.1.2. objectives and non-financial information of the company;
Yes
Information on the Company’s activities, objectives and corporate governance is disclosed through press
releases and notifications on material events, as well as on the Company’s website, and the information
disclosure system used by Nasdaq Vilnius.
9.1.3. persons holding a stake in the company or controlling it directly and/or indirectly and/or together with related
persons as well as the structure of the group of companies and their relationships by specifying the final beneficiary;
Yes Information is provided on the Company’s website and in its interim and annual reports.
9.1.4. members of the company’s supervisory and management bodies who are deemed independent, the manager
of the company, the shares or votes held by them at the company, participation in corporate governance of other
companies, their competence and remuneration;
Yes Information is provided on the Company’s website and in its interim and annual reports.
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9.1.5. reports of the existing committees on their composition, number of meetings and attendance of members
during the last year as well as the main directions and results of their activities;
Yes Information on the composition of committees and the number of meetings is provided in the annual
reports.
9.1.6. potential key risk factors, the company’s risk management and supervision policy;
Yes The information is provided in interim and annual reports
9.1.7. the company’s transactions with related parties;
Yes Information is provided on the Company’s website and in its interim and annual reports.
9.1.8. main issues related to employees and other stakeholders (for instance, human resource policy, participation of
employees in corporate governance, award of the company’s shares or share options as incentives, relationships with
creditors, suppliers, local community, etc.);
Yes The information is provided in interim and annual reports.
9.1.9. structure and strategy of corporate governance;
Yes Information is provided on the Company’s website and in its interim and annual reports.
9.1.10. initiatives and measures of social responsibility policy and anti-corruption fight, significant current or planned
investment projects.
This list is deemed minimum and companies are encouraged not to restrict themselves to the disclosure of
information included into this list. This principle of the Code does not exempt companies from their obligation to
disclose information as provided for in the applicable legal acts.
Yes
Information is provided in interim and annual reports, notifications on material events, on the Company’s
website, and in the Company’s social report.
9.2.
When disclosing the information specified in paragraph 9.1.1 of recommendation 9.1, it is recommended that the
company which is a parent company in respect of other companies should disclose information about the
consolidated results of the whole group of companies.
Yes
When disclosing the information specified in paragraph 9.1.1 of recommendation 9.1, the company which is
a parent company in respect of other companies discloses information about the consolidated results of the
whole group of companies in the interim and annual reports.
9.3. When disclosing the information specified in paragraph 9.1.4 of recommendation 9.1, it is recommended that the
information on the professional experience and qualifications of members of the company’s supervisory and
management bodies and the manager of the company as well as potential conflicts of interest which could affect
their decisions should be provided. It is further recommended that the remuneration or other income of members of
the company’s supervisory and management bodies and the manager of the company should be disclosed, as
provided for in greater detail in Principle 7.
Yes
The Company discloses in its consolidated annual report information on the amount of annual
remuneration and other income paid to the Company’s key management and members of the managerial
bodies, as well as education, qualifications and participation in the activities and capital of other companies.
9.4. Information should be disclosed in such manner that no shareholders or investors are discriminated in terms of
the method of receipt and scope of information. Information should be disclosed to all parties concerned at the same
time.
Yes
AB Vilkyškių pieninė submits information via the information disclosure system used by Nasdaq Vilnius in
Lithuanian and English at the same time, thus ensuring simultaneous disclosure of information to everyone.
The Company seeks to publish the information before or after the Nasdaq Vilnius trading session and
simultaneously submit it to all markets where the Company’s securities are traded, and also makes it
publicly available on the website.
93
VILVI GROUP ANNUAL REPORT 2023
PRINCIPLES/ RECOMMENDATIONS YES/NO/
NOT APPLICABLE
COMMENTARY
Principle 10: Selection of the company’s audit firm
The company’s audit firm selection mechanism should ensure the independence of the report and opinion of the audit firm.
10.1. With a view to obtain an objective opinion on the company’s financial condition and financial results, the
company’s annual financial statements and the financial information provided in its annual report should be audited
by an independent audit firm.
Yes
The Company adheres to this recommendation because the Company’s annual consolidated financial
information is audited by an independent audit firm.
10.2. It is recommended that the audit firm would be proposed to the general meeting of shareholders by the
supervisory board or, if the supervisory board is not formed at the company, by the management board of the
company.
Yes
The management board of the Company (AB Vilkyškiu pienine Supervisory board, manager in AB Pieno
logistika of the Company Group) submits the candidacy of the audit company to the meeting of
shareholders. The Audit Company shall be approved by the general meeting of shareholders of the
Company.
10.3. In the event that the audit firm has received remuneration from the company for the non-audit services
provided, the company should disclose this publicly. This information should also be available to the supervisory board
or, if the supervisory board is not formed at the company, by the management board of the company when
considering which audit firm should be proposed to the general meeting of shareholders.
Yes
In 2023, the audit company did not provide non-audit services to the Company.
Should the audit company provide non-audit services, then the Company would inform about it publicly.
94
VILVI GROUP ANNUAL REPORT 2023
Consolidated and the parent company’s
separate financial statements
for the year ended 31 December 2023
VILVI GROUP ANNUAL REPORT 2023
95
OVERVIEW
BUSINESS ENVIRONMENT RESULTS
MANAGEMENT REPORT
SUSTAINABILITY REPORT FINANCIAL STATEMENTS
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
96
Company details
VILKYŠKIŲ PIENINĖ AB
Telephone: +370 441 55330
Company code: 277160980
Registered office address: P. Lukošaičio g. 14, Vilkyškiai, LT-99254 Pagėgiai
Supervisory Board
Algimantas Lekevičius (Chairman)
Marijana Juškienė
Martynas Bertašius
Board
Gintaras Bertašius (Chairman)
Sigitas Trijonis
Rimantas Jancevičius
Vilija Milaševičiutė
Andrej Cyba
Linas Strėlis
Management
Gintaras Bertašius, General Manager
Vaidotas Juškys, Executive Director
Sigitas Trijonis, Director of Investment Project Department
Rimantas Jancevičius, Director for Purchasing Raw Materials
Arvydas Zaranka, Production Director
Vilija Milaševičiutė, Director for Economic and Financial Affairs
Rita Juodikienė, Director for Corporate Governance and Quality
Paulinas Stanaitis, Director for Transport and Logistics
Auditor
PricewaterhouseCoopers UAB
Banks
SEB Bankas AB
Swedbank AB
Luminor Bank AB
Šiaulių Bankas AB
OP Corporate Bank plc Lithuania branch
AS Citadele Banka Lithuania branch
SC Citadele Bank
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
97
Management’s statement on the consolidated and parent
company’s separate annual financial statements
On this day the management has discussed and authorised for issue the following set of separate and
consolidated annual financial statements.
The separate and consolidated annual financial statements have been prepared in accordance with
International Financial Reporting Standards as adopted by the European Union. In our opinion, the
accounting policies applied are appropriate and the separate and consolidated annual financial
statements give a true and fair view, in all material respects, in accordance with International
Financial Reporting Standards as adopted by the European Union.
We recommend that the General Meeting of Shareholders approve the separate and consolidated
annual financial statements.
Vilkyškiai, 5 April 2024
Gintaras Bertašius
General Manager
(The document has been signed by a qualified electronic signature)
Vilija Milaševičiutė
Director for Economic and Financial Affairs
(The document has been signed by a qualified electronic signature)
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
98
Consolidated and separate statements of financial position
EUR ‘000
GROUP | COMPANY | |||||
At 31 December | Note | At 31 December | ||||
2023 | 2022 | Assets | 2023 | 2022 | ||
Investment property | 12,14 | 6,903 | 6,527 | |||
Property, plant and equipment | 12 | 18,370 | 13,052 | |||
Right-of-use assets | 12,13 | 1,483 | 1,050 | |||
Intangible assets | 15 | 2 | 5 | |||
Investments in subsidiaries | 16 | 11,318 | 10,918 | |||
Non-current amounts receivable | 17 | 2,022 | 1,008 | |||
Non-current assets | 40,098 | 32,560 | ||||
Inventories | 18 | 8,988 | 9,188 | |||
Trade and other receivables | 19 | 17,686 | 27,795 | |||
Prepayments | 20 | 527 | 596 | |||
Cash and cash equivalents | 21 | 2,854 | 325 | |||
Current assets | 30,055 | 37,904 | ||||
Total assets | 70,153 | 70,464 | ||||
Equity | ||||||
Share capital | 3,463 | 3,463 | ||||
Share premium | 3,301 | 3,301 | ||||
Reserves | 1,248 | 1,400 | ||||
Retained earnings | 38,610 | 39,096 | ||||
Equity attributable to owners of the Company | 46,622 | 47,260 | ||||
Non-controlling interest | - | - | ||||
Equity | 22 | 46,622 | 47,260 | |||
Liabilities | ||||||
Borrowings | 23 | 2,569 | 1,499 | |||
Lease liabilities | 23 | 728 | 374 | |||
Government grants | 24 | 671 | 520 | |||
Trade and other payables | 26 | - | - | |||
Deferred income tax liabilities | 568 | 518 | ||||
___ | ___ | ____ | ____ | |||
Non-current liabilities | 4,536 | 2,911 | ||||
Borrowings | 23 | 1,356 | 3,483 | |||
Lease liabilities | 23 | 432 | 309 | |||
Income tax payable | 146 | |||||
Trade and other payables | 26 | 17,207 | 16,355 | |||
Current liabilities | 18,995 | 20,293 | ||||
Liabilities | 23,531 | 23,204 | ||||
Total equity and liabilities | 70,153 | 70,464 |
22
The notes on pages 105 to 164 form an integral part of these separate and consolidated financial statements, which were issued and signed on 5 April 2024.
General Manager (the document has been signed by a qualified electronic signature) Gintaras Bertašius
Director for Economic and Financial Affairs (the document has been signed by a qualified electronic signature) Vilija Milaševičiutė
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
99
Consolidated and separate statements of profit or loss
EUR ‘000
The notes on pages 105 to 164 form an integral part of these separate and consolidated financial statements.
GROUP | COMPANY | ||||
2023 | 2022 | EUR ‘000 | Note | 2023 | 2022 |
Revenue | 1 | 245,072 | 288,643 | ||
- | - | Cost of sales | 2 | -236,059 | -271,448 |
Gross profit | 9,013 | 17,195 | |||
Other operating income | 3 | 5,598 | 11,592 | ||
- | - | Distribution expenses | 6 | -4,224 | -3,843 |
- | - | Administrative expenses | 7 | -4,434 | -3,855 |
- | - | Other operating expenses | 4 | -3,264 | -6,951 |
Other gain (loss) – net | 5 | 223 | -245 | ||
Results of operating activities | 2,912 | 13,893 | |||
Finance income | 100 | 193 | |||
- | - | Finance costs | -438 | -353 | |
- | - | Finance costs, net | 9 | -338 | -160 |
Profit (loss) before income tax | 2,574 | 13,733 | |||
- | - | Income tax | 10 | -47 | -1,134 |
Profit (loss) for the reporting year | 2,527 | 12,599 | |||
Attributable to: | |||||
Shareholders of the Company | 2,527 | 12,599 | |||
- | Non-controlling interest | - | - | ||
Profit (loss) for the reporting year | 2,527 | 12,599 | |||
Basic and diluted earnings per share (in EUR) | 11 | 0.21 | 1.05 |
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
100
Consolidated and separate statements of other comprehensive income
EUR ‘000
GROUP | COMPANY | |||
2023 | 2022 | EUR ‘000 | 2023 | 2022 |
Profit (loss) for the reporting year | 2,527 | 12,599 | ||
Other comprehensive income | ||||
Items that will not be reclassified to profit or loss | - | - | ||
Items that are or may be subsequently reclassified to | - | - | ||
profit or loss | ||||
Other comprehensive income for the year, net of | ||||
income tax | - | - | ||
Total comprehensive income for the year | 2,527 | 12,599 | ||
Attributable to: | ||||
Shareholders of the Company | 2,527 | 12,599 | ||
- | Non-controlling interest | - | - | |
Total comprehensive income for the year | 2,527 | 12,599 |
The notes on pages 105 to 164 form an integral part of these separate and consolidated financial statements.
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
101
Separate statement of changes in equity
EUR ‘000
Share
capital
Share
premium
Revaluation
reserve
Legal
reserve
Retained
earnings
Total
Balance at 1 January 2022
3,463
3,301
1,099
346
28,841
37,050
Profit (loss) for the period
-
-
-
-
12,599
12,599
Other comprehensive income
-
-
-
-
-
-
Total comprehensive income
for the year
-
-
-
-
12,599
12,599
Depreciation, write-off of
revalued assets
-
-
-45
-
45
-
Transactions with owners
recognised directly in equity
Dividends
-
-
-
-
-2,389
-2,389
Total transactions with
owners recognised directly in
equity
-
-
-
-
-2,389
-2,389
Balance at 31 December 2022
3,463
3,301
1,054
346
39,096
47,260
Balance at 1 January 2023
3,463
3,301
1,054
346
39,096
47,260
Profit (loss) for the period
-
-
-
-
2,527
2,527
Other comprehensive income
-
-
-
-
-
-
Total comprehensive income
for the year
-
-
-
-
2,527
2,527
Depreciation, write-off of
revalued assets
-
-
-152
-
152
-
Transactions with owners
recognised directly in equity
Dividends
-
-
-
-
-3,165
-3,165
Total transactions with
owners recognised directly in
equity
-
-
-
-
-3,165
-3,165
Balance at 31 December 2023
3,463
3,301
902
346
38,610
46,622
The notes on pages 105 to 164 form an integral part of these separate and consolidated financial statements.
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
102
Consolidated statement of changes in equity
Equity attributable to owners of the Company
EUR ‘000
Non- | |||||||||
con- | |||||||||
Revalua- | Retained | trolling | |||||||
Share | Share | tion re- | Legal | earnings | inte- | ||||
capital premium | serve | reserve | (deficit) | Total | rest | Total equity | |||
At 1 January 2022 | |||||||||
Comprehensive income for the year | |||||||||
Net profit (loss) | |||||||||
Other comprehensive income | |||||||||
Total comprehensive income for the year | |||||||||
Depreciation, write-off of revalued assets | - | ||||||||
Transactions with owners recognised | |||||||||
directly in equity | |||||||||
Dividends | - | - | - | ||||||
Change in fair value of put option | |||||||||
Total transactions with owners | - | - | - | ||||||
recognised directly in equity | |||||||||
Changes in the Group not resulting in a loss of control | |||||||||
Non-controlling interests on acquisition of subsidiary | |||||||||
Total transactions with owners | - | - | - | ||||||
At 31 December 2022 | |||||||||
At 1 January 2023 | |||||||||
Comprehensive income for the year | |||||||||
Net profit (loss) | - | ||||||||
Other comprehensive income | |||||||||
Total comprehensive income for the year | - | ||||||||
Depreciation, write-off of revalued | - | ||||||||
assets | |||||||||
Transactions with owners recognised | |||||||||
directly in equity | |||||||||
Dividends | - | - | - | ||||||
Change in fair value of put option | |||||||||
Total transactions with owners | - | - | - | ||||||
recognised directly in equity | |||||||||
Changes in the Group not resulting in a loss of control | |||||||||
Non-controlling interests on acquisition of subsidiary | - | - | - | - | |||||
Total transactions with owners | - | - | - | - | |||||
At 31 December 2023 | |||||||||
The notes on pages 105 to 164 form an integral part of these separate and consolidated financial statements.
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
103
Consolidated and separate statements of cash flows
EUR ‘000
GROUP | COMPANY | ||||
2023 | 2022 | EUR ‘000 | 2023 | 2022 | |
Cash flows from operating activities | |||||
Profit (loss) for the year | 2,527 | 12,599 | |||
Adjustments for: | |||||
Depreciation of property, plant and equipment | 1,719 | 1,793 | |||
Loss (gain) on change in fair value of investment | |||||
property | -123 | 280 | |||
Amortisation of intangible assets | 3 | 9 | |||
- | - | Amortisation and write-off of grants | -134 | -165 | |
- | Change in inventory write-down allowance | 59 | 521 | ||
Impairment of goodwill | - | - | |||
- | - | Loss (gain) from disposal and write-off of property, | |||
plant and equipment | 12 | 29 | |||
Losses (gain) from disposal of investments | - | 2 | |||
Other operating income | -1,523 | -3,931 | |||
Income tax expenses | 47 | 1,134 | |||
Finance costs, net | 338 | 160 | |||
2,925 | 12,431 | ||||
- | Change in inventories | 141 | -1,663 | ||
- | Change in non-current amounts receivable | -1,014 | 108 | ||
- | Change in trade and other receivables and prepayments | 8,566 | -8,070 | ||
- | Change in trade and other payables | 2,100 | 2,881 | ||
12,718 | 5,687 | ||||
- | - | Interest paid | -287 | -178 | |
- | - | Income tax paid | - | - | |
Net cash flows generated from operating activities | 12,431 | 5,509 | |||
Cash flows from investing activities | |||||
- | - | Payments for acquisition of property, plant and | |||
equipment | -6,773 | -3,384 | |||
Payments for acquisition of intangible assets | - | 1 | |||
Proceeds from sale of property, plant and equipment | 137 | 8 | |||
Proceeds from disposal of investments | - | 63 | |||
Acquisition of ownership interest in subsidiary | -400 | - | |||
- | - | Loans granted | -320 | -800 | |
Government grants | 285 | - | |||
Dividends received | 1,631 | 1,000 | |||
Repayment of loans | 381 | 1,361 | |||
- | Outflow of cash to acquire subsidiary, net of cash | ||||
acquired | - | - | |||
- | - | Net cash flows (used in) investing activities | -5,059 | -1,751 |
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
104
Consolidated and separate statements of cash flows (continued)
EUR ‘000
GROUP | Note | COMPANY | |||
2023 | 2022 | EUR ‘000 | 2023 | 2022 | |
Cash flows from financing activities | |||||
Proceeds from borrowings | 23 | 2,134 | 669 | ||
- | - | Repayments of borrowings | 23 | -3,191 | -1,913 |
- | - | Lease payments | -621 | -379 | |
- | - | Payment of dividends | -3,165 | -2,389 | |
- | - | Net cash flows (used in) financing activities | -4,843 | -4,012 | |
- | Net increase (decrease) in cash and cash | 2,529 | -254 | ||
equivalents | |||||
Cash and cash equivalents as at 1 January | 325 | 579 | |||
Cash and cash equivalents as at 31 December | 21 | 2,854 | 325 |
The notes on pages 105 to 164 form an integral part of these separate and consolidated financial statements.
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
Notes to the consolidated and separate financial statements
| Number of | Nominal value, | ||
Shareholder | shares held | EUR | Total value, EUR |
| Swisspartners Versicherung AG | 7,213,680 | 0.29 | 2,091,968 |
| Zweigniederlassung Österreich | |||
Multi Asset Selection Fund | 2,035,729 | 0.29 | 590,361 |
Other minority shareholders | 2,693,591 | 0.29 | 781,141 |
Total capital | 11,943,000 | 0.29 | 3,463,470 |
| Number of | Nominal value, | ||
Shareholder | shares held | EUR | Total value, EUR |
6,994,316 | 0.29 | 2,028,352 | |
Multi Asset Selection Fund | 2,035,729 | 0.29 | 590,361 |
Mr. Gintaras Bertašius | 219,364 | 0.29 | 63,616 |
Other minority shareholders | 2,693,591 | 0.29 | 781,141 |
Total capital | 11,943,000 | 0.29 | 3,463,470 |
105
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
106
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
107
Notes to the consolidated and separate financial statements
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
108 |
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
109
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
110
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
111
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
112
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
113
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
114
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
115
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
116
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
117
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
118
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
119
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
120
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
121
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
Notes to the consolidated and separate financial statements
Notes
| Cheese, cheese | Dried milk | Fresh milk | ||
EUR ‘000 | products and other | products | products | Total |
Revenue | 139,603 | 37,971 | 32,962 | 210,536 |
Cost of sales | -130,634 | -26,152 | -26,063 | -182,849 |
Gross profit | 8,969 | 11,819 | 6,899 | 27,687 |
Other operating income | 275 | |||
Distribution, administrative and other operating expenses | -11,405 | |||
Other gain (loss) – net | 221 | |||
Operating result | 16,778 | |||
Finance income | 39 | |||
Finance costs | -1,378 | |||
Finance costs, net | -1,339 | |||
Profit (loss) before income tax | 15,439 |
122
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
123
Cheese, cheese | ||||
products and | Dried milk | Fresh milk | ||
other | products | products | Total | |
Revenue | 170,589 | 36,630 | 26,864 | 234,083 |
Cost of sales | -152,498 | -33,414 | -23,897 | -209,809 |
Gross profit | 18,091 | 3,216 | 2,967 | 24,274 |
Other operating income | 313 | |||
Distribution, administrative and other operating expenses | -9,755 | |||
Other gain (loss) – net | 89 | |||
Operating result | 14,921 | |||
Finance income | 127 | |||
Finance costs | -868 | |||
Finance costs, net | -741 | |||
Profit (loss) before income tax | 14,180 |
Assets | ||||
Lithuania | 36,624 | 86,756 | 77,693 | 54,228 |
European Union (excluding Lithuania) | 103,079 | 15,844 | 96,758 | 11,486 |
Other countries | 70,833 | 4,439 | 70,621 | 4,439 |
210,536 | 107,039 | 245,072 | 70,153 |
Revenue | Assets | Revenue | Assets | |
Lithuania | 26,751 | 80,468 | 101,179 | 58,691 |
European Union (excluding Lithuania) | 132,771 | 10,515 | 117,049 | 4,293 |
Other countries | 74,561 | 7,480 | 70,415 | 7,480 |
234,083 | 98,463 | 288,643 | 70,464 |
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
Notes to the consolidated and separate financial statements
Notes (continued)
GROUP | COMPANY | ||||
2023 | 2022 | 2023 | 2022 | ||
-143,805 | -168,220 | Raw materials | -117,098 | -147,779 | |
- | - | Resale cost of goods produced by the subsidiaries | -102,928 | -105,268 | |
-10,817 | -9,916 | Employee expenses, including social security contributions | -3,974 | -3,323 | |
-3,562 | -3,750 | Depreciation and grants’ amortisation | -952 | -1,117 | |
-6,387 | -5,922 | Milk collection and transportation costs | -5,445 | -5,758 | |
-7,758 | -14,186 | Gas, electricity, water | -1,827 | -3,844 | |
-2,109 | -2,205 | Transport costs | -2,109 | -2,205 | |
-8,411 | -5,610 | Other | -1,726 | -2,154 | |
-182,849 | -209,809 | -236,059 | -271,448 |
GROUP | COMPANY | |||
2023 | 2022 | 2023 | 2022 | |
183 | 89 | Income from rendering of services | 3,625 | 7,300 |
- | - | Dividends | 1,523 | 3,931 |
16 | 16 | Income from accounting services | 388 | 197 |
76 | 208 | Other income | 62 | 164 |
275 | 313 | 5,598 | 11,592 |
GROUP | COMPANY | |||
2023 | 2022 | 2023 | 2022 | |
-80 | -82 | Cost of services rendered | -3,260 | -6,950 |
-225 | -97 | Other expenses | -4 | -1 |
-305 | -179 | -3,264 | -6,951 |
GROUP | COMPANY | |||
2023 | 2022 | 2023 | 2022 | |
221 | 89 | Gain (loss) from disposal of raw materials, non-current assets | 98 | 35 |
- | - | Gain (loss) from fair value change of investment property | 125 | -280 |
221 | 89 | 223 | -245 |
124
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
GROUP | COMPANY | |||
2023 | 2022 | Personnel expenses, including social security | 2023 | 2022 |
-3,239 | -2,441 | contributions and change in vacation reserve | -2,374 | -1,822 |
-155 | -140 | Depreciation and amortisation, including amortisation | -99 | -92 |
| of subsidies | ||||
-451 | -393 | Services received | -192 | -175 |
-282 | -242 | Taxes, other than income tax | -201 | -179 |
-131 | -126 | Veterinary services | -82 | -80 |
-198 | -210 | Consultation services | -136 | -151 |
11 | - | Inventory write-down, reversal | 11 | - |
-166 | -142 | Security | -62 | -54 |
-93 | -22 | Fines and interest paid on late payments | -1 | -9 |
-209 | -52 | Write-off of bad debt expenses | -209 | -52 |
-209 | -205 | Computer expenses | -197 | -194 |
-55 | -85 | Fuel | -48 | -46 |
-65 | -66 | Repair expenses | -44 | -55 |
-47 | -44 | Fee for membership in association | -47 | -44 |
-34 | -31 | Stock exchange expenses | -31 | -29 |
-16 | -132 | New product development expenses | - | -98 |
-84 | -99 | Insurance | -36 | -52 |
-65 | -23 | Bank charges | -52 | -18 |
-1,174 | -974 | Other | -634 | -705 |
-6,662 | -5,427 | -4,434 | -3,855 |
125
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
126
GROUP | COMPANY | |||
2023 | 2022 | Finance income | 2023 | 2022 |
34 | 19 | Interest | 98 | 87 |
- | 95 | Foreign exchange gain | - | 95 |
5 | 13 | Other | 2 | 11 |
39 | 127 | Total finance income | 100 | 193 |
Finance costs | ||||
-1194 | -671 | Interest | -257 | -162 |
-37 | -17 | Interest on lease | -32 | -17 |
-129 | -119 | Factoring charges | -129 | -116 |
-18 | - | Foreign exchange loss | -20 | - |
- | -61 | Other | - | -58 |
-1,378 | -868 | Total finance costs | -438 | -353 |
-1,339 | -741 | -338 | -160 |
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
Notes to the consolidated and separate financial statements
Notes (continued)
GROUP | COMPANY | ||||
2023 | 2022 | 2023 | 2022 | ||
Current year income tax expenses | |||||
-647 | -386 | Reporting period | 3 | -146 | |
Deferred income tax expenses | |||||
-140 | -1,095 | Change in deferred income tax | -50 | -988 | |
-787 | -1,481 | -47 | -1,134 |
GROUP | COMPANY | |||
2023 | 2022 | 2023 | 2022 | |
15,439 | 14,180 | Profit for the year | 2,574 | 13,733 |
2,316 | 2,127 | Income tax calculated at a rate of 15% | 386 | 2,060 |
- | - | Gain from inter-company disposal of business | - | - |
- | - | Dividend income | -228 | -589 |
-128 | -27 | Other non-taxable income | -1 | -2 |
- | - | Impairment of goodwill | - | - |
-12 | -17 | Charity expenses deductible twice for tax | -11 | -16 |
| purposes | ||||
-12 | -40 | R&D expenses deductible thrice for tax | - | - |
| purposes | ||||
-107 | -592 | Investment project relief | -87 | -363 |
-67 | -86 | Tax loss utilisation | -67 | - |
151 | 402 | Other expenses not deductible for tax purposes | 55 | 44 |
-1,354 | -286 | Other expenses deductible for tax purposes | - | - |
787 | 1,481 | Income tax expenses (benefit) | 47 | 1,134 |
127
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
Notes to the consolidated and separate financial statements
Notes (continued)
GROUP | COMPANY | |||
2023 | 2022 | Net profit attributable to holders of ordinary shares | 2023 | 2022 |
| 14,666 | 12,511 | of the Parent, EUR ‘000 | 2,527 | 12,599 |
| Number of issued shares calculated based on the | ||||
11,943 | 11,943 | weighted average unit cost method, ‘000 units | 11,943 | 11,943 |
1.23 | 1.05 | Basic earnings (loss) per share (EUR | 0.21 | 1.05 |
| Right-of- | Land and | Plant and | Other | Construction | ||
| EUR ‘000 | use assets* | buildings | machinery | assets | in progress | Total |
Cost/revalued amount | ||||||
Balance at 1 January 2022 | 1,986 | 19,438 | 61,470 | 3,684 | 355 | 86,933 |
Additions | 335 | 26 | 442 | 150 | 3,383 | 4,336 |
Disposals | - | -133 | -114 | -27 | - | -274 |
Reclassifications | -475 | 71 | 710 | 8 | -314 | - |
Balance at 31 December 2022 | 1,846 | 19,402 | 62,508 | 3,815 | 3,424 | 90,995 |
Balance at 1 January 2023 | 1,846 | 19,402 | 62,508 | 3,815 | 3,424 | 90,995 |
Additions | 956 | 1 | 761 | 284 | 11,440 | 13,442 |
Disposals | -155 | -42 | -1,487 | -277 | - | -1,961 |
Reclassifications | -565 | 725 | 1,461 | 47 | -1,668 | - |
Balance at 31 December 2023 | 2,082 | 20,086 | 63,243 | 3,869 | 13,196 | 102,476 |
Depreciation and impairment losses | ||||||
Balance at 1 January 2022 | 878 | 4,025 | 29,675 | 2,476 | - | 37,054 |
Depreciation charge for the year | 211 | 679 | 3,523 | 300 | - | 4,713 |
Disposals | - | -91 | -104 | -24 | - | -219 |
Reclassifications | -325 | - | 325 | - | - | - |
Balance at 31 December 2022 | 764 | 4,613 | 33,419 | 2,752 | - | 41,548 |
Balance at 1 January 2023 | 764 | 4,613 | 33,419 | 2,752 | - | 41,548 |
Depreciation charge for the year | 199 | 631 | 3,586 | 229 | - | 4,645 |
Disposals | -85 | -35 | -1,131 | -186 | - | -1,437 |
Reclassifications | -338 | - | 338 | - | - | - |
Balance at 31 December 2023 | 540 | 5,209 | 36,212 | 2,795 | - | 44,756 |
Net book amount | ||||||
At 1 January 2022 | 1,108 | 15,413 | 31,795 | 1,208 | 355 | 49,879 |
At 31 December 2022 | 1,082 | 14,789 | 29,089 | 1,063 | 3,424 | 49,447 |
At 31 December 2023 | 1,542 | 14,877 | 27,031 | 1,074 | 13,196 | 57,720 |
128
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
COMPANY
Right-of-use
Land and
Plant and
Other
Construct
assets*
buildings
machinery
assets
ion in
Total
EUR ‘000
progress
Cost/revalued amount
Balance at 1 January 2022
2,015
6,792
22,133
1,373
237
32,550
Additions
289
-
248
48
3,157
3,742
Increase in value
-
-
-
-
-
-
Disposals
-
-80
-97
-7
-
-184
Reclassifications
-476
8
487
-
-83
-64
Balance at 31 December 2022
1,828
6,720
22,771
1,414
3,311
36,044
Balance at 1 January 2023
1,828
6,720
22,771
1,414
3,311
36,044
Additions
858
-
452
76
6,414
7,800
Increase in value
72
-
-
-
-
72
Disposals
-171
-41
-985
-131
-
-1,328
(a)
Reclassifications
-565
415
1,115
-
-1,275
-310
Balance at 31 December 2023
2,022
7,094
23,353
1,359
8,450
42,278
Depreciation and impairment losses
Balance at 1 January 2022
886
1,626
16,620
1,199
-
20,331
Depreciation charge for the year
215
274
1,256
48
-
1,793
Impairment
2
-
-
-
-
2
Disposals
-
-80
-97
-7
-
-184
Reclassifications
-325
-
325
-
-
-
Balance at 31 December 2022
778
1,820
18,104
1,240
-
21,942
Balance at 1 January 2023
778
1,820
18,104
1,240
-
21,942
Depreciation charge for the year
194
242
1,227
56
-
1,719
Impairment
-96
-
-
-
-
-96
Disposals
1
-34
-931
-118
-
-1,082
Reclassifications
-338
-58
338
-
-
-58
Balance at 31 December 2023
539
1,970
18,738
1,178
-
22,425
Net book amounts
At 1 January 2022
1,129
5,166
5,513
174
237
12,219
At 31 December 2022
1,050
4,900
4,667
174
3,311
14,102
At 31 December 2023
1,483
5,124
4,615
181
8,450
19,853
* For more details on right-of-use assets, see Note 13.
129
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
GROUP | COMPANY | |||
2023 | 2022 | EUR ‘000 | 2023 | 2022 |
4,426 | 4,517 | Cost of finished products | 1,447 | 1,543 |
219 | 196 | Distribution and administrative expenses | 144 | 131 |
- | - | Other operating expenses | 128 | 119 |
4,645 | 4,713 | 1,719 | 1,793 |
130
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
131
GROUP | COMPANY | |||
2023 | 2022 | 2023 | 2022 | |
199 | 211 | Depreciation of right-of-use assets | 194 | 215 |
- | - | Impairment of right-of-use assets | 1 | 2 |
37 | 18 | Interest expenses (included in finance costs) | 32 | 17 |
39 | 34 | Expenses related to short-term leases (included in cost of | 31 | 27 |
sales and general and administrative expenses) | ||||
Expenses related to leases of low-value assets not | ||||
78 | 67 | included in the above short-term leases (included in cost | 25 | 15 |
of sales, general and administrative expenses, other | ||||
operating expenses) | ||||
Expenses related to variable lease payments not included | ||||
24 | 37 | in lease liabilities (included in cost of sales, general and | 24 | 37 |
administrative expenses, other operating expenses) | ||||
377 | 367 | 307 | 313 |
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
132
Notes to the consolidated and separate financial statements
Notes (continued)
14 Investment property
EUR ‘000 | 2023 | 2022 |
Balance at 1 January | 6,527 | 6,780 |
Additions | 38 | 64 |
Disposals | - | -37 |
Net gain/(loss) on fair value adjustment | 123 | -280 |
Reclassification from/(to) inventories and owner-occupied PP&E | 215* | - |
Balance at 31 December | 6,903 | 6,527 |
(*) Amount of EUR 215 thousand is related to reclassification of investment property from owner-occupied
PP&E.
Investment property is leased out to tenants under operating lease contracts. The costs incurred in relation to
maintenance of investment property are covered by the tenants. The lease payments are fixed. The contracts
do not contain variable lease payments that depend on an index or a rate. Investment property consists of
production facilities leased out to the subsidiaries. Based on the terms and conditions of the lease contracts, the
assets have been leased for the term of 5 to 7 years, and the lease term expires by 31 December 2023-2026.
The fulfilment of lease contracts has not been secured with any collateral, guarantees or other pledges.
Fair value of investment property
Below is allocation of the Company’s investment property to hierarchy levels for fair value measurement
purposes:
EUR ‘000 | 31/12/2023 | 31/12/2022 |
Hierarchy level 2 (a) | 2,821 | 1,614 |
Hierarchy level 3 (b) | 4,082 | 4,913 |
6,903 | 6,527 |
(a) The Company’s investment property, the fair value of which was determined using the market approach,
are attributed to level 2 in the fair value measurement hierarchy. The fair value was determined with reference
to the valuation performed on 1 December 2023 by an independent property valuation corporation Matininkai
UAB (the same approach was applied on 1 December 2022). The market approach was used to evaluate the
general-purpose buildings. The market approach was used to evaluate the differences between the subject asset
and analogous or similar asset to which the subject asset is being compared, and to make adjustments (if
necessary) to the transaction prices of analogous or similar asset in terms of timing, location, and other
circumstances conveying the differences between the subject asset and analogous or similar comparable asset.
For the purpose of valuation, the assets selected were similar to the specific subject asset. The inputs used
included data on the purchase and sale transactions that occurred over the last thirty-six months.
(b) The Company’s buildings leased to produce processed whey products (whey protein concentrate WPC80
and permeate) are evaluated using the income approach and attributed to level 3 in the fair value measurement
hierarchy. The fair value was determined with reference to the valuation performed on 1 December 2023 by
an independent property valuation corporation Matininkai UAB. The valuation of assets encompasses fair
value measurement of a complex of assets of whey processing facilities (including buildings, plant and
machinery, and other assets) constituting a cash-generating unit. The measured fair value is attributed to each
item of property, plant and equipment, and accordingly, the fair value of buildings is known. The value of
assets is determined using a discounted cash flow model.
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
133
Notes to the consolidated and separate financial statements
Notes (continued)
14 Investment property (continued)
The value in use is determined by discounting the post-tax future cash flows to their present value based on a
discount rate that reflects current market conditions, the existing time value of money and the risks specific to
the asset, which was not taken into consideration. The adjusted weighted average cost of capital (pre-tax) was
16.3% (2022: 15.5%). Key assumptions used in calculation of value of in use were as follows:
• Future cash flows are estimated based on historical experience and 2024-2028 business forecasts based on
the existing long-term contracts with the customers of the products, and the expected expansion of sales
(production) in view of growth in demand for whey processing products on the domestic and global markets.
• Forecasts of production costs are estimated on the basis of factual production, including the expected
fluctuations therein due to growth of production. Based on 2024-2028 forecast, the annual average growth of
production and sales is expected to be 2%.
The same approach was applied on 1 December 2022.
Minimum lease payments receivable on lease of investment property:
EUR ‘000 | 31/12/2023 | 31/12/2022 |
Within one year | 330 | 293 |
Between 1 and 5 years | 941 | 878 |
After 5 years | - | - |
1,271 | 1,171 |
In 2023, the Company’s rental income amounted to EUR 330 thousand (2022: EUR 293 thousand). Rental
income is included in other operating income.
There were no direct operating expenses from investment property that generated rental income during 2023
and 2022.
The Company’s investment property with the carrying amount of EUR 5,106 thousand as at 31 December 2023
(31 December 2022: EUR 6,527 thousand) was pledged to the banks as a security for bank borrowings.
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
Notes to the consolidated and separate financial statements
Notes (continued)
| EUR ‘000 | Computer | Other intangible | |||
| Goodwill | software | assets | Total | ||
Cost | |||||
Balance at 1 January 2022 | 6,915 | 546 | 17 | 7,478 | |
Additions | - | - | - | - | |
Disposals | - | - | - | - | |
Reclassifications | - | - | - | - | |
Balance at 31 December 2022 | 6,915 | 546 | 17 | 7,478 | |
Balance at 1 January 2023 | 6,915 | 546 | 17 | 7,478 | |
Additions | - | - | - | - | |
Disposals | - | - | - | - | |
Reclassifications | - | - | - | - | |
Balance at 31 December 2023 | 6,915 | 546 | 17 | 7,478 | |
Amortisation and impairment | |||||
Balance at 1 January 2022 | 2,749 | 533 | 10 | 3,292 | |
Amortisation charge for the year | - | 11 | - | 11 | |
Disposals | - | - | - | - | |
Impairment | - | - | - | - | |
Balance at 31 December 2022 | 2,749 | 544 | 10 | 3,303 | |
Balance at 1 January 2023 | 2,749 | 544 | 10 | 3,303 | |
Amortisation charge for the year | - | 2 | 5 | 7 | |
Disposals | - | - | - | - | |
Impairment | - | - | - | - | |
Balance at 31 December 2023 | 2,749 | 546 | 15 | 3,310 | |
Net book amounts | |||||
At 1 January 2022 | 4,166 | 13 | 7 | 4,186 | |
At 31 December 2022 | 4,166 | 2 | 7 | 4,175 | |
At 31 December 2023 | 4,166 | - | 2 | 4,168 |
134
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
135
Notes to the consolidated and separate financial statements
Notes (continued)
15 Intangible assets (continued)
COMPANY
EUR ‘000
Goodwill
Computer
software
Other intangible
assets
Total
Cost
Balance at 1 January 2022
-
656
17
673
Additions
-
-
-
-
Disposals
-
-
-
-
Reclassifications
-
-
-
-
Balance at 31 December 2022
-
656
17
673
Balance at 1 January 2023
-
656
17
673
Additions
-
-
-
-
Disposals
-
-
-
-
Reclassifications
-
-
-
-
Balance at 31 December 2023
-
656
17
673
Amortisation and impairment
Balance at 1 January 2022
-
646
13
659
Amortisation charge for the year
-
8
1
9
Disposals
-
-
-
-
Balance at 31 December 2022
-
654
14
668
Balance at 1 January 2023
-
654
14
668
Amortisation charge for the year
-
2
1
3
Disposals
-
-
-
-
Balance at 31 December 2023
-
656
15
671
Net book amounts
At 1 January 2022
-
10
4
14
At 31 December 2022
-
2
3
5
At 31 December 2023
-
-
2
2
Amortisation charge for the year was included in administrative expenses.
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
EUR ‘000 | 31/12/2023 | 31/12/2022 |
Kelmės Pienas UAB (fresh milk products)* | 3,867 | 3,867 |
Modest AB (cheese, cheese products) | 299 | 299 |
4,166 | 4,166 |
136
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
137
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
138
Notes to the consolidated and separate financial statements
Notes (continued)
16 Investments in subsidiaries
EUR ‘000 | 31/12/2023 | 31/12/2022 |
Cost of shares of Modest AB | 1,991 | 1,991 |
Cost of shares of Kelmės Pieninė AB | 8,656 | 8,656 |
Cost of shares of Pieno Logistika AB | - | - |
Cost of shares of Baltic Dairy Board SIA | 671 | 271 |
11,318 | 10,918 |
The Company acquired control over Modest AB in 2006. The ownership interest held by the Company was
99.7% as at 31 December 2023 (31 December 2022: 99.7%).
On 30 April 2008, the Company acquired the shares of Kelmės Pieninė AB. The ownership interest held by
the Company was 100% as at 31 December 2023 (31 December 2022: 100%).
On 1 April 2021, Vilkyškių Pieninė AB acquired 70% of shares in Baltic Dairy Board SIA (in total 544,446
shares were acquired for the acquisition cost of EUR 271 thousand. On 14 April 2023, Vilkyškių Pieninė AB
acquired the remaining 30% of shares in Baltic Dairy Board SIA (in total 233,332 shares were acquired for
the acquisition cost of EUR 400 thousand). The transaction price was set in the agreement. As at 31 December
2023, the ownership interest held was 100%, and the total acquisition cost was EUR 671 thousand.
As at 31 December 2023 (and 31 December 2022), there were no indications of impairment for investments
in subsidiaries.
Key financial indicators of Pieno Logistika AB:
EUR ‘000 | 31/12/2023 | 31/12/2022 |
Total assets | 559 | 174 |
Shareholders’ equity | 68 | 105 |
Net profit (loss) | -37 | -4 |
Key financial indicators of Modest AB:
EUR ‘000 | 31/12/2023 | 31/12/2022 |
Total assets | 7,692 | 15,409 |
Shareholders’ equity | 5,664 | 5,053 |
Net profit (loss) | 611 | 1,351 |
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
Notes to the consolidated and separate financial statements
Notes (continued)
GROUP | COMPANY | ||||
31/12/2023 | 31/12/2022 Note | Financial instruments | 31/12/2023 | 31/12/2022 | |
- | - | 28 | Loans granted to related parties (a) | 1,111 | 897 |
600 | - | Loans granted to related parties (b) | 600 | - | |
600 | - | 1,711 | 897 | ||
| Non-financial assets | |||||
- | - | 28 | Prepayments made to related parties | - | - |
311 | 111 | Non-current amounts receivable | 311 | 111 | |
| from farmers (c) | |||||
2 | - | Other non-current amounts receivable | - | - | |
313 | 111 | 311 | 111 | ||
913 | 111 | 2,022 | 1,008 |
139
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
Notes to the consolidated and separate financial statements
Notes (continued)
GROUP | COMPANY | ||||
31/12/2023 | 31/12/2022 | 31/12/2023 | 31/12/2022 | ||
11,343 | 21,063 | Finished products | 5,958 | 7,709 | |
1,650 | - | Products in transit | 1,650 | - | |
12,993 | 21,063 | 7,608 | 7,709 | ||
324 | 449 | Raw materials | 105 | 158 | |
4,016 | 3,661 | Consumables | 1,275 | 1,321 | |
294 | 320 | Work in progress | - | - | |
- | - | Non-current assets held for sale | - | - | |
17,627 | 25,493 | 8,988 | 9,188 |
GROUP | Note | 31/12/2023 | 31/12/ 2022 | |
Trade receivables | 14,815 | 14,133 | ||
Impairment losses | -307 | -99 | ||
Trade receivables from related parties | 88 | 30 | ||
| Loans granted to related parties, including interest | 28 | - | ||
| charged and administration fee | 928 | |||
Financial assets | 14,596 | 14,992 | ||
Taxes receivable (other than income tax) | 2,593 | 2,764 | ||
Other receivables from related parties | - | - | ||
Other receivables | 18 | 119 | ||
Total trade and other receivables | 17,207 | 17,875 |
140
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
COMPANY | 31/12/2023 | 31/12/2022 | ||
Trade receivables | 11,686 | 13,808 | ||
Impairment losses | j | -307 | -99 | |
Trade receivables from related parties | 28 | 499 | 8,762 | |
| Loans granted to related parties, including interest | 28 | - | 928 | |
| charged and administration fee | ||||
Financial assets | 11,878 | 23,399 | ||
Taxes receivable (other than income tax) | 2,283 | 2,665 | ||
Other receivables from related parties | 28 | - | 1,631 | |
Other receivables | 3,525 | 100 | ||
Total trade and other receivables | 17,686 | 27,795 |
GROUP | COMPANY | ||||
31/12/2023 | 31/12/2022 | Note | 31/12/2023 | 31/12/2022 | |
608 | 544 | (a) | Prepayments | 456 | 399 |
71 | - | Advance income tax | 71 | - | |
- | 197 | 28 | Prepayments to related parties | - | 197 |
679 | 741 | 527 | 596 |
GROUP | COMPANY | |||
31/12/2023 | 31/12/2022 | 31/12/2023 | 31/12/2022 | |
8,609 | 596 | Cash at bank | 2,740 | 301 |
116 | 25 | Cash on hand | 114 | 24 |
8,725 | 621 | 2,854 | 325 |
141
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
142
Notes to the consolidated and separate financial statements
Notes (continued)
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
Notes to the consolidated and separate financial statements
Notes (continued)
GROUP | COMPANY | ||||
31/12/2023 | 31/12/2022 | Note | 31/12/2023 | 31/12/2022 | |
15,706 | 12,978 | Non-current borrowings | 27,28 | 2,569 | 1,499 |
775 | 399 | Lease liabilities | 13 | 728 | 374 |
16,481 | 13,377 | Non-current | 3,297 | 1,873 | |
3,235 | 9,238 | Current bank borrowings and other | 1,356 | 3,483 | |
| borrowings | 27,28 | ||||
469 | 314 | Lease liabilities | 13 | 432 | 309 |
3,704 | 9,552 | Current | 1,788 | 3,792 | |
20,185 | 22,929 | Total borrowings and lease | 5,085 | 5,665 |
GROUP | COMPANY | |||
31/12/2023 | 31/12/2022 | 31/12/2023 | 31/12/2022 | |
3,234 | 9,238 | Within 1 year | 1,356 | 3,483 |
15,706 | 12,978 | Between 1 and 5 years | 2,569 | 1,499 |
18,940 | 22,216 | 3,925 | 4,982 |
GROUP | COMPANY | |||
31/12/2023 | 31/12/2022 | 31/12/2023 | 31/12/2022 | |
469 | 314 | Within 1 year | 432 | 309 |
775 | 399 | Between 1 and 5 years | 728 | 374 |
1,244 | 713 | 1,160 | 683 |
143
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
144
Cash flows from financing activities
COMPANY
Liabilities arising from financing activities
Total
Current
portion of
lease
liabilities
Non-
current
portion of
lease
liabilities
Current portion of
non-current
borrowings, current
borrowings
Credit
lines
and
over-
drafts
Non-current
portion of
non-current
borrowings
At 1 January 2023
309
374
1,079
2,404
1,499
5,665
Cash inflows - proceeds from
borrowings
-
278
1,856
2,134
Cash outflows - repayments of
borrowings
-
-787
-2,404
-3,191
Additions - lease
401
697
1,098
Repayments – lease
-621
-621
Other non-cash changes
(reclassification of current/non-
current portion, impairment,
write-offs)
343
-343
786
-786
-
At 31 December 2023
432
728
1,356
-
2,569
5,085
Liabilities arising from financing activities | ||||||
Non- | Credit | |||||
GROUP | Current | current | Current portion of | lines | Non-current | |
portion of | portion of | non-current | and | portion of | ||
lease | lease | borrowings, current | over- | non-current | ||
liabilities | liabilities | borrowings | drafts | borrowings | Total | |
At 1 January 2023 | 314 | 399 | 6,834 | 2,404 | 12,979 | 22,930 |
Cash inflows - proceeds from borrowings | 278 | 1,856 | 2,134 | |||
Cash outflows - repayments of borrowings | -3,006 | -2,404 | -5,410 | |||
Additions - lease | 353 | 828 | 1,181 | |||
Repayments – lease | -650 | -650 | ||||
Other non-cash changes | ||||||
(reclassification of current/non- current portion, impairment, write-offs) | 452 | -452 | -871 | 871 | - | |
At 31 December 2023 | 469 | 775 | 3,235 | - | 15,706 | 20,185 |
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
Liabilities arising from financing activities | ||||||
| Non- | ||||||
COMPANY | Current | current | Current portion of | Non-current | ||
| portion of | portion of | non-current | Credit lines | portion of | ||
| lease | lease | borrowings, current | and over- | non-current | ||
| liabilities | liabilities | borrowings | drafts | borrowings | Total | |
At 1 January 2022 | 301 | 414 | 2,206 | 1,735 | 2,285 | 6,941 |
Cash inflows - proceeds from borrowings | - | - | - | 669 | - | 669 |
Cash outflows - repayments of borrowings | - | - | -786 | -1,127 | - | -1,913 |
Additions - lease | - | 347 | - | - | - | 347 |
Repayments – lease | -379 | - | - | - | - | -379 |
| Other non-cash changes | ||||||
(reclassification of current/non- current portion, impairment, write- offs) | 387 | -387 | 786 | - | -786 | - |
At 31 December 2022 | 309 | 374 | 2,206 | 1,277 | 1,499 | 5,665 |
145
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
146
Notes to the consolidated and separate financial statements
Notes (continued)
COMPANY:
Assets
Liabilities
Net value
EUR ‘000
31/12/2023
31/12/2022
31/12/2023
31/12/2022
31/12/2023
31/12/2022
Property, plant and
equipment
-
-
1,725
1,741
1,725
1,741
Vacation reserve
-252
-174
-
-
-252
-174
Inventories
-92
-84
-
-
-92
-84
Government grants
-62
-78
-
-
-62
-78
Tax loss carry forward
-751
-887
-
-
-751
-887
Deferred income tax
(assets)/liabilities
-1,157
-1,223
1,725
1,741
568
518
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
147
Assets | Liabilities | Net value | ||||
EUR ‘000 | 31/12/2023 | 31/12/2022 | 31/12/2023 | 31/12/2022 | 31/12/2023 | 31/12/2022 |
Property, plant and equipment | - | - | 1,960 | 1,896 | 1,960 | 1,896 |
Vacation reserve | -316 | -214 | - | - | -316 | -214 |
Inventories | -92 | -84 | - | - | -92 | -84 |
Government grants | -62 | -78 | - | - | -62 | -78 |
Tax loss carry forward | -751 | -887 | - | - | -751 | -887 |
Fair value adjustment to assets and liabilities of Baltic Dairy Board SIA | - | - | 191 | 157 | 191 | 157 |
Deferred income tax | ||||||
(assets)/liabilities | -1,221 | -1,263 | 2,151 | 2,053 | 930 | 790 |
COMPANY:
EUR ‘000
01/01/2023
Recognised in
profit or loss
Recognised in
equity
31/12/2023
Property, plant and equipment
1,741
-16
-
1,725
Vacation reserve
-174
-78
-
-252
Inventories
-84
-8
-
-92
Government grants
-78
16
-
-62
Tax loss carry forward
-887
136
-
-751
Deferred income tax (assets)/liabilities
518
50
-
568
EUR ‘000
01/01/2022
Recognised in
profit or loss
Recognised in
equity
31/12/2022
Property, plant and equipment
1,832
-91
-
1,741
Vacation reserve
-117
-57
-
-174
Inventories
-6
-78
-
-84
Government grants
-103
25
-
-78
Tax loss carry forward
-2,076
1,189
-
-887
Deferred income tax (assets)/liabilities
-470
988
-
518
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
| Recognised in | Recognised in | |||
01/01/2023 | profit or loss | equity | 31/12/2023 | |
Property, plant and equipment | 1,896 | 64 | - | 1,960 |
Vacation reserve | -214 | -102 | - | -316 |
Inventories | -84 | -8 | - | -92 |
Government grants | -78 | 16 | - | -62 |
Tax loss carry forward | -887 | 136 | - | -751 |
Adjustment to assets and liabilities of Baltic Dairy Board SIA | 157 | 34 | - | 191 |
Deferred income tax (assets)/liabilities | 790 | 140 | - | 930 |
| Recognised in | Recognised in | |||
01/01/2022 | profit or loss | equity | 31/12/2022 | |
Property, plant and equipment | 1,903 | -7 | - | 1,896 |
Vacation reserve | -145 | -69 | - | -214 |
Inventories | -6 | -78 | - | -84 |
Government grants | -103 | 25 | - | -78 |
Tax loss carry forward | -2,076 | 1,189 | - | -887 |
Adjustment to assets and liabilities of Baltic Dairy Board SIA | 123 | 34 | - | 157 |
Deferred income tax (assets)/liabilities | -304 | 1,094 | - | 790 |
GROUP | COMPANY | |||
31/12/2023 | 31/12/2022 | EUR ‘000 | 31/12/2023 | 31/12/2022 |
Deferred income tax assets/(liability) | ||||
470/-442 | 376/ -404 | Deferred income tax assets (liability), which | 273/ -16 | 382/ -91 |
| will be realised within 12 months | ||||
751/ -1,709 | 887/ -1,649 | Deferred income tax assets (liability), which | 884/ -1,709 | 840/ -1,649 |
will be realised after 12 months | ||||
-930 | -790 | Net deferred income tax assets (liability) | -568 | -518 |
The Group/Company does not recognise deferred income tax assets on investment project relief. | ||||
The amount of unused benefits in the Group and the Company on December 31, 2023 amounts to EUR 626 | ||||
thousand, respectively on December 31, 2022 - there were none. |
148
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
Notes to the consolidated and separate financial statements
Notes (continued)
GROUP | COMPANY | ||||
31/12/2023 | 31/12/2022 | EUR ‘000 | 31/12/2023 | 31/12/2022 | |
Financial instruments | Note | ||||
13,171 | 14,328 | Trade payables | 9,903 | 11,162 | |
- | 8 | Trade payables to related parties | 2 | 3,798 | 2,831 |
13,171 | 14,336 | Non-financial instruments | 13,701 | 13,993 | |
4,684 | 3,319 | Employment-related liabilities | 2,575 | 1,949 | |
781 | 302 | Advance amounts received | 781 | 296 | |
73 | 74 | Dividends payable | - | - | |
1,680 | 2,560 | Taxes payable (other than income tax)* | 77 | 71 | |
394 | 122 | Accrued expenses and provisions | 71 | 45 | |
- | - | Other amounts payable | 2 | 1 | |
7,612 | 6,377 | 3,506 | 2,362 | ||
20,783 | 20,713 | 17,207 | 16,355 |
149
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
150
Notes to the consolidated and separate financial statements
Notes (continued)
GROUP | COMPANY | |||
31/12/2023 | 31/12/2022 | EUR ‘000 | 31/12/2023 | 31/12/2022 |
39,577* | 6,387 | Acquisition of PP&E | 6,353 | 6,353 |
5,692 | 7,251 | Purchase of raw materials | 5,583 | 7,251 |
45,269 | 13,638 | 11,936 | 13,604 |
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
151
GROUP | EUR ‘000 | COMPANY | ||
2023 | 2022 | 2023 | 2022 | |
- | - | Kelmės Pieninė AB | 34,606 | 31,071 |
- | - | Kelmės Pienas UAB | 30,806 | 26,659 |
- | - | Modest AB | 43,579 | 47,724 |
Pieno Logistika AB | 142 | - | ||
- | - | Baltic Dairy Board SIA | 20 | 351 |
1 | - | Management personnel | 1 | - |
1,076 | 3,085 | Other related parties | 1,076 | 3,085 |
1,077 | 3,085 | 110,230 | 108,890 |
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
152
Notes to the consolidated and separate financial statements
Notes (continued)
GROUP | COMPANY | |||
2023 | 2022 | EUR ‘000 | 2023 | 2022 |
- | - | Kelmės Pieninė AB | 5,659 | 14,945 |
- | - | Kelmės Pienas UAB | 12,126 | 14,190 |
- | - | Modest AB | 33,752 | 43,702 |
- | - | Pieno Logistika AB | 143 | 1 |
- | - | Baltic Dairy Board SIA | 4,088 | 5,072 |
- | 1 | Management personnel | - | 1 |
45 | 45 | Other related parties | 45 | 45 |
45 | 46 | 55,813 | 77,956 |
GROUP | COMPANY | |||
31/12/2023 | 31/12/2022 | EUR ‘000 | 31/12/2023 | 31/12/2022 |
- | - | Loan payable (Kelmės Pieninė AB) | - | - |
- | - | Trade and other amounts payable | 3,799 | 2,824 |
- | - | (Kelmės Pieninė AB) | 3,762 | - |
- | - | (Kelmės Pienas UAB) | - | 2,824 |
- | - | (Pieno Logistika AB) | 37 | - |
- | - | Trade and other receivables | 499 | 10,393 |
- | - | (Kelmės Pieninė AB) | - | 2,021 |
(Kelmės Pienas UAB) | 377 | - | ||
- | - | (Modest AB) | 63 | 8,196 |
- | - | (Baltic Dairy Board SIA) | 59 | 146 |
- | - | (From other related parties) | - | 30 |
- | - | Loan receivable (Baltic Dairy Board | 1,111 | 897 |
SIA, including interest) | ||||
- | 13 | Loan receivable (including interest from | - | 13 |
management personnel) | ||||
- | - | Other receivables (from management | - | - |
personnel) | ||||
Trade and other payables (to other | ||||
54 | 8 | related parties) | 54 | 8 |
- | 36 | Trade receivables (from other related | - | 36 |
parties) | ||||
Advance amounts receivable (from | ||||
- | 197 | other related parties) | - | 197 |
Loan receivable (including interest and | ||||
administration fee from other related | ||||
600 | 915 | parties) | 600 | 915 |
Loan payable (including interest to | ||||
- | - | other related parties) | - | - |
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
EUR ‘000 | Net book amount | ||
Note | 31/12/2023 | 31/12/2022 | |
Non-current amounts receivable | 17 | 600 | - |
Trade and other amounts receivable, net of tax | 19 | 14,596 | 14,992 |
Cash and cash equivalents | 21 | 8,725 | 621 |
23,921 | 15,613 | ||
153
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
154
EUR ‘000 | Net book amount | |
31/12/2023 | 31/12/2022 | |
Lithuania | 2,977 | 1,922 |
Great Britain | 140 | 2,009 |
Israel | - | 594 |
Saudi Arabia | 1,400 | 2,871 |
Portugal | 609 | 788 |
Italy | 237 | 640 |
Poland | 2,477 | 1,593 |
Latvia | 219 | 556 |
Estonia | 140 | 56 |
Republic of Korea | 236 | - |
Kazakhstan | - | 76 |
Belgium | - | 81 |
Egypt | - | 141 |
Albania | 336 | 170 |
Denmark | 203 | 433 |
The Netherlands | 1,550 | 254 |
Azerbaijan | 441 | 192 |
Macedonia | 67 | - |
Qatar | - | 91 |
Thailand | - | 237 |
Germany | 787 | 551 |
Libya | 78 | 94 |
Lebanon | - | 58 |
Dominican Republic | 69 | - |
Greece | 157 | 422 |
Bosnia-Herzegovina | 447 | 307 |
Slovakia | 200 | 28 |
Finland | 246 | 186 |
Spain | 203 | - |
Czech | 37 | 2 |
South Africa | 79 | 86 |
Slovenia | 35 | - |
Norway | - | 5 |
UAE | 456 | 299 |
Kosovo | 78 | - |
India | 99 | - |
Vietnam | 580 | 226 |
USA | 11 | 23 |
Other | 2 | 1 |
14,596 | 14,992 |
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
Notes to the consolidated and separate financial statements
29 Financial instruments and risk management (continued)
COMPANY
EUR ‘000
Net book amount
Note
31/12/2023
31/12/2022
Non-current amounts receivable
17
1,711
897
Trade and other receivables
19
11,878
23,399
Cash and cash equivalents
21
2,854
325
16,443
24,621
The table below analyses the maximum exposure to credit risk by geographical region arising from trade
receivables at the reporting date:
EUR ‘000
Net book amount
31/12/2023
31/12/2022
Lithuania
572
10,572
Great Britain
140
2,009
Israel
-
594
Saudi Arabia
1,400
2,871
Portugal
609
788
Italy
237
640
Poland
2,439
1,533
Latvia
59
555
Estonia
47
56
Republic of Korea
236
-
Kazakhstan
-
76
Belgium
-
81
Egypt
-
141
Albania
336
170
Denmark
203
433
The Netherlands
1,550
72
Azerbaijan
441
192
Qatar
-
91
Thailand
-
237
Germany
787
551
Libya
78
94
Lebanon
-
58
USA
11
23
Greece
157
422
Bosnia-Herzegovina
447
307
Slovakia
200
28
Finland
226
186
Spain
203
-
Czech
37
2
South Africa
79
86
Norway
-
5
Sakartvelo
78
-
Kosovo
99
-
India
580
226
Vietnam
456
299
UAE
67
-
Macedonia
35
-
Slovenia
69
-
Dominican Republic
572
10,572
Other
-
1
11,878
23,399
155
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
GROUP | Total amount | Impairment | Total amount | Impairment | |
EUR ‘000 | 31/12/2023 | 31/12/2023 | 31/12/2022 | 31/12/2022 | |
Related parties: | |||||
Not past due | 688 | - | 862 | - | |
Past due 0-30 days | - | - | - | - | |
Past due 31-60 days | - | - | - | - | |
More than 60 days | - | - | 96 | - | |
688 | - | 958 | - | ||
Not past due | 13,059 | - | 9,500 | - | |
Past due 0-30 days | 1,502 | - | 3,935 | - | |
Past due 31-60 days | 82 | - | 479 | - | |
More than 60 days | 172 | -307 | 219 | -99 | |
14,815 | -307 | 14,133 | -99 | ||
15,503 | -307 | 15,091 | -99 |
156
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
157
COMPANY
Total amount
Impairment
Total amount
Impairment
EUR ‘000
31/12/2023
31/12/2023
31/12/2022
31/12/2022
Related parties:
Not past due
2,152
-
10,346
-
Past due 0-30 days
59
-
-
-
Past due 31-60 days
-
-
-
-
More than 60 days
-
-
242
-
2,211
-
10,588
-
Other parties:
Not past due
10,011
-
9,293
-
Past due 0-30 days
1,420
-
3,930
-
Past due 31-60 days
82
-
471
-
More than 60 days
172
-307
113
-99
11,685
-307
13,807
-99
13,896
-307
24,395
-99
GROUP | Net book amount | COMPANY | ||
2023 | 2022 | (EUR ‘000) | 2023 | 2022 |
-99 | -59 | Balance at 1 January | -99 | -59 |
-268 | -75 | Impairment losses recognised | -268 | -75 |
- | 11 | Write-off of bad debts | - | 11 |
60 | 24 | Impairment losses reversed | 60 | 24 |
-307 | -99 | Balance at 31 December | -307 | -99 |
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
158
At 31 December 2023 | Net book | Contractual | Less than | 6-12 | ||
EUR ‘000 | amount | cash flows | 6 months | months | 1-2 years | 2-5 years |
Financial liabilities | ||||||
Bank borrowings | 18,515 | -21,088 | -1,893 | -1,992 | -4,324 | -12,879 |
Other borrowings | - | - | - | - | - | - |
Lease liabilities | 1,244 | -1,390 | -321 | -246 | -386 | -437 |
Factoring | 426 | -443 | -443 | - | - | - |
Trade payables | 13,171 | -13,171 | -13,171 | - | - | - |
33,356 | -36,092 | -15,828 | -2,238 | -4,710 | -13,316 |
EUR ‘000 | ||||||
Financial liabilities | ||||||
Bank borrowings | 21,781 | -22,921 | -1,583 | -7,761 | -2,486 | -11,091 |
Other borrowings | - | - | - | - | - | - |
Lease liabilities | 713 | -747 | -189 | -142 | -219 | -197 |
Factoring | 435 | -448 | -448 | - | - | - |
Trade payables | 14,336 | -14,336 | -14,336 | - | - | - |
37,265 | -38,452 | -16,556 | -7,903 | -2,705 | -11,288 |
COMPANY
At 31 December 2023
Net book
amount
Contractual
cash flows
Less than 6
months
6-12
months
1-2 years
2-5 years
EUR ‘000
Financial liabilities
Bank borrowings
3,499
-3,824
-496
-626
-1,679
-1,023
Lease liabilities
1,160
-1,268
-274
-227
-357
-410
Factoring
426
-443
-443
-
-
-
Trade payables
13,701
-13,701
-13,701
-
-
-
18,786
-19,236
-14,914
-853
-2,036
-1,433
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
Notes to the consolidated and separate financial statements
Notes (continued)
29 Financial instruments and risk management (continued)
At 31 December 2022
| Net book | Contractual | Less than | 6-12 | |||
EUR ‘000 | amount | cash flows | 6 months | months | 1-2 years | 2-5 years |
Financial liabilities | ||||||
Bank borrowings | 4,690 | -4,937 | -414 | -2,945 | -827 | -751 |
Lease liabilities | 683 | -717 | -187 | -139 | -202 | -190 |
Factoring | 292 | -301 | -301 | - | - | - |
Trade payables | 13,993 | -13,993 | -13,993 | - | - | - |
19,658 | -19,948 | -14,895 | -3,084 | -1,029 | -941 |
| EUR ‘000 | USD | PLN | ||
2023 | 2022 | 2023 | 2022 | |
Trade and other receivables, net of tax | 1,451 | 3,211 | 38 | 47 |
Cash and cash equivalents | - | - | - | - |
Trade payables | - | - | - | - |
Net exposure | 1,451 | 3,211 | 38 | 47 |
During the year the exchange rates against the euro were as follows: |
Average | ||
2023 | 2022 | |
USD | 1.0809 | 1.0522 |
PLN | 4.5441 | 4.6856 |
2023 | 2022 | |
USD | 1.1050 | 1.0666 |
PLN | 4.3395 | 4.6808 |
159
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
160
GROUP | COMPANY | |||
Net book amount | EUR ‘000 | Net book amount | ||
31/12/2023 | 31/12/2022 | Financial instruments with fixed interest | 31/12/2023 | 31/12/2022 |
rates | ||||
- | - | Loan granted to Baltic Dairy Board SIA | 980 | 830 |
- | 800 | Current portion of loan granted | - | 800 |
- | 11 | Short-term loan granted to management | - | 11 |
personnel | ||||
- | - | Current borrowings of management | - | - |
personnel | ||||
- | 811 | 980 | 1,641 | |
GROUP | COMPANY | |||
Net book amount | EUR ‘000 | Net book amount | ||
31/12/2023 | 31/12/2022 | Financial instruments with variable | 31/12/2023 | 31/12/2022 |
interest rates | ||||
-18,515 | -21,781 | Bank borrowings | -3,499 | -4,690 |
-426 | -435 | Factoring | -426 | -292 |
-1,244 | -713 | Lease liabilities | -1,160 | -683 |
-20,185 | -22,929 | -5,085 | -5,665 | |
-20,185 | -22,118 | -4,105 | -4,024 | |
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
GROUP | COMPANY | |||
Profit (loss) | Impact (EUR ’000) | Profit (loss) | ||
| 100 bp | 100 bp | 100 bp | 100 bp | |
| increase | decrease | At 31 December 2023 | increase | decrease |
-202 | 202 | Financial instruments bearing variable | -41 | 41 |
| interest rates | ||||
At 31 December 2022 | ||||
-221 | 221 | Financial instruments bearing variable | -40 | 40 |
161
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
| EUR ’000 | Level 1 | Level 2 | Level 3 | Total |
Non-current amounts receivable | - | - | 600 | 600 |
Trade and other receivables | - | - | 14,596 | 14,596 |
Cash and cash equivalents | 8,725 | - | - | 8,725 |
Borrowings and lease liabilities | - | - | -20,185 | -20,185 |
Trade and other payables | - | - | -13,171 | -13,171 |
8,725 | - | -18,160 | -9,435 |
| EUR ’000 | Level 1 | Level 2 | Level 3 | Total |
Non-current amounts receivable | - | - | - | - |
Trade and other receivables | - | - | 14,992 | 14,992 |
Cash and cash equivalents | 621 | - | - | 621 |
Borrowings and lease liabilities | - | - | -20,601 | -20,601 |
Trade and other payables | - | - | -14,336 | -14,336 |
621 | - | -19,945 | -19,324 |
COMPANY
At 31 December 2023
EUR ’000
Level 1
Level 2
Level 3
Total
Non-current amounts receivable-
- 1,711
1,711
Trade and other receivables-
- 11,878
11,878
Cash and cash equivalents2,854
- -
2,854
Borrowings and lease liabilities-
- -5,085
-5,085
Trade and other payables-
- -13,701
-13,701
2,854
-
-5,197
-2,343
At 31 December 2022
EUR ’000
Level 1
Level 2
Level 3
Total
Non-current amounts receivable-
- 897
897
Trade and other receivables-
- 23,399
23,399
Cash and cash equivalents325
- -
325
Borrowings and lease liabilities-
- -5,090
-5,090
Trade and other payables-
- -13,993
-13,993
325
-
5,213
5,538
162
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
163
VILKYŠKIŲ PIENINĖ AB
Consolidated and separate financial statements for the year
ended 31 December 2023
164
Notes to the consolidated and separate financial statements
Notes (continued)
PricewaterhouseCoopers UAB, J. Jasinskio str. 16B, 03163 Vilnius, Lithuania
+370 (5) 239 2300, lt_vilnius@pwc.com, www.pwc.lt
Company code 111473315, registered with the Legal Entities’ Register of the Republic of Lithuania
Independent auditor’s report
To the shareholders of VILKYŠKIŲ PIENINĖ AB
Report on the audit of the consolidated and separate financial statements
Our opinion
In our opinion, the consolidated and separate financial statements give a true and fair view of the
consolidated and separate financial position of VILKYŠKIŲ PIENINĖ AB (the “Company”) and its
subsidiaries (together - the “Group”) as at 31 December 2023, and of the Group’s and of the Company’s
consolidated and separate financial performance and consolidated and separate cash flows for the year
then ended in accordance with International Financial Reporting Standards as adopted by the European
Union.
Our opinion is consistent with our additional report to the Audit Committee dated 5 April 2024.
What we have audited
The Group’s and the Company’s consolidated and separate financial statements comprise:
● the consolidated and separate statements of financial position as at 31 December 2023;
● the consolidated and separate statements of profit or loss and statements of other comprehensive
income for the year then ended;
● the consolidated and separate statements of changes in equity for the year then ended;
● the consolidated and separate statements of cash flows for the year then ended; and
● the notes to the consolidated financial statements, comprising material accounting policy information
and other explanatory information.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of
the financial statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Independence
We are independent of the Group and the Company in accordance with the International Code of Ethics
for Professional Accountants (including International Independence Standards) issued by the
International Ethics Standards Board for Accountants (IESBA Code) and the Law of the Republic of
Lithuania on the Audit of Financial Statements that are relevant to our audit of the separate and
consolidated financial statements in the Republic of Lithuania. We have fulfilled our other ethical
responsibilities in accordance with the IESBA Code and the Law of the Republic of Lithuania on the Audit
of Financial Statements.
To the best of our knowledge and belief, we declare that non-audit services that we have provided to the
Group and the Company are in accordance with the applicable law and regulations in the Republic of
Lithuania and that we have not provided non-audit services that are prohibited under Article 5(1) of
Regulation (EU) No 537/2014 considering the exemptions of Regulation (EU) No 537/2014 endorsed in
the Law of the Republic of Lithuania on the Audit of Financial Statements.
The non-audit services that we have provided to the Group and the Company, in the period from 1
January 2023 to 31 December 2023, are disclosed in note 8 to the financial statements.
Our audit approach
Overview
● Overall Group and Company materiality: Euro 1,480 thousand
and Euro 1,480 thousand respectively
• We conducted audit at 3 Group entities, all operating in Lithuania;
• Our audit addressed 97% of the Group’s revenues and 99% of
the Group’s total assets.
• Impairment testing of goodwill (Group)
• Inventory write-down to net realisable value (Group and
Company)
As part of designing our audit, we determined materiality and assessed the risks of material misstatement
in the consolidated and separate financial statements (together “the financial statements”). In particular,
we considered where management made subjective judgements; for example, in respect of significant
accounting estimates that involved making assumptions and considering future events that are inherently
uncertain. As in all of our audits, we also addressed the risk of management override of internal controls,
including, among other matters, consideration of whether there was evidence of bias that represented a
risk of material misstatement due to fraud.
Materiality
The scope of our audit was influenced by our application of materiality. An audit is designed to obtain
reasonable assurance whether the financial statements are free from material misstatement.
Misstatements may arise due to fraud or error. They are considered material if individually or in
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of the financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality,
including the overall Group and Company materiality for the financial statements as a whole as set out in
the table below. These, together with qualitative considerations, helped us to determine the scope of our
audit and the nature, timing and extent of our audit procedures and to evaluate the effect of
misstatements, if any, both individually and in aggregate on the financial statements as a whole.
Overall Group materiality
EUR 1,480 thousand (in 2022 – EUR 1,750 thousand).
Overall Company materiality
EUR 1,480 thousand (in 2022 – EUR 1,750 thousand).
How we determined it
0.70% of the Group’s and 0.60% of the Company’s total
revenue.
Materiality
Group
scoping
Key audit
matters
Rationale for the materiality
benchmark applied
Significant fluctuations in the Group’s and the Company’s
profit depend on the prevailing trends in global dairy
markets. We have, therefore, chosen revenue as a
benchmark for determining the materiality because, in our
view, it provides the stakeholders consistent information
year-on-year basis, reflecting the Group’s and the Company’s
growth. Revenue and market share are also considered to be
important business performance indicators.
We chose the thresholds of 0.70% and 0.60%, which is within
the range of acceptable quantitative materiality thresholds for
this benchmark.
We agreed with the Audit Committee that we would report to them misstatements identified during our
audit above EUR 74 thousand for the Group and the Company, respectively, as well as misstatements
below that amount that, in our view, warranted reporting for qualitative reasons.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial statements of the current period. These matters were addressed in the context of our
audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
Key audit matter
How our audit addressed the key audit matter
Impairment testing of goodwill (Group)
Refer to accounting policy on impairment
testing on page 114, accounting estimates and
assumptions on page 119 and note 15
‘Intangible assets’ in the financial statements.
We focused on this area because of the
significance of the goodwill balance (the Group
has goodwill balance of EUR 4,166 thousand
as at 31 December 2023) and because the
impairment assessment involved significant
management’s judgements about the future
results and the discount rates applied to future
cash flows forecasts.
Under the requirements of IAS 36 Impairment
of assets goodwill has to be tested for
impairment at least on an annual basis. The
determination of recoverable amount, being
the higher of value in-use and fair value less
costs of disposal, requires judgment from
management and management expert’s when
identifying and valuing the relevant cash-
generating units. Recoverable amounts are
based on management’s view of internal and
market conditions such as future prices and
We focused on goodwill attributable to the cash
generating unit from fresh milk products of Kelmės
pienas UAB, which represents 93% of the entire
goodwill balance of the Group.
We assessed that the Group’s accounting policies
with respect to impairment of goodwill are based
on IFRS.
Our audit procedures included challenging
management on the appropriateness of the
impairment models and the reasonableness of the
assumptions used by performing the following:
- Assessing the reliability of the cash flow forecast
by checking the actual past performance and
comparing to previous forecasts and by inspecting
internal documents, such as budget forecasts for
2024–2028;
- Benchmarking market related assumptions like
discount rate and long-term growth rate against
external data. Where it was considered
necessary, we involved our valuation experts;
- Testing the mathematical accuracy of the model
and assessing the sensitivity of the impairment
test to key inputs.
volume growth rate, the timing of future
operating expenditure and the most
appropriate discount and long-term growth
rates.
As at 31 December 2023, based on the
impairment test performed for that day, no
further impairment was identified for cash
generating unit of Kelmės pienas UAB related
to fresh milk products as recoverable amount
exceeded its carrying amount.
We found the assumptions used by management
in the calculation of discounted cash flows to be
within acceptable range of our expectations.
We also reviewed the disclosures in the financial
statements regarding impairment tests.
Inventory write-down to net realisable value
(Group and Company)
Refer to accounting policy on inventory on
page 110, accounting estimates and
assumptions on page 119 and note 18
‘Inventories’ in the financial statements.
We focused on this area due to the size of the
inventory balance (EUR 17,627 thousand and
EUR 8,988 thousand as at 31 December 2023
at the Group and the Company, respectively),
and because the management’s assessment
of the net realisable value of inventory involved
estimates about the future discounts and sales
of goods below their cost.
As at 31 December 2023 the Group’s and the
Company’s inventory (finished goods) write-
down to net realisable value allowance
amounted to EUR 1,192 thousand and EUR
591 thousand, respectively.
We assessed that the Group’s and the Company’s
policies and methodology in respect of inventory
write-downs to net realisable value are based on
IFRS.
We analysed, on sample bases, sales prices of
the finished goods items sold after the balance
sheet date and compared results with the figures
used in the management’s calculation of inventory
write-down allowance.
We analysed the aging of inventories other than
finished goods, by periods, to identify slow-moving
or obsolete items. We also verified the reliability of
the inventory ageing report and compared our
estimated inventory write-down allowance to the
management’s calculations.
We found the assumptions used by management
in the calculation of inventory write-down to net
realisable value to be within acceptable range of
our expectations.
How we tailored our Group audit scope
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on
the financial statements as a whole, taking into account the structure of the Group, the accounting
processes and controls, and the industry in which the Group operates.
The Group comprises of parent and 5 subsidiaries four of which operate in Lithuania and one in Latvia.
Based on our risk and materiality assessments, we determined which entities were required to be
audited, by taking into account the relative significance of each entity to the Group as a whole and in
relation to each material line item in the consolidated financial statements. We performed full scope audits
of the parent entity VILKYŠKIŲ PIENINĖ AB and its subsidiaries Kelmės Pieninė AB and Modest AB. For
Kelmės pienas UAB and Baltic Dairy Board SIA we have carried audit work on selected balances and
transactions which were assessed by us as material from the Group audit perspective. The remaining
component of the Group was immaterial. Our audit addressed 97% of the Group’s revenues and 99% of
the Group’s total assets.
Reporting on other information including the consolidated annual report
Management is responsible for the other information. The other information comprises the consolidated
annual report, including the corporate governance report, remuneration report and social responsibility
report (but does not include the financial statements and our auditor’s report thereon).
Our opinion on the financial statements does not cover the other information, including the consolidated
annual report.
In connection with our audit of the financial statements, our responsibility is to read the other information
identified above and, in doing so, consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially
misstated.
With respect to the consolidated annual report, including the corporate governance report and
remuneration report, we considered whether the consolidated annual report, including the corporate
governance report and remuneration report, includes the disclosures required by the Law of the Republic
of Lithuania on Consolidated Reporting by Groups of Undertakings, the Law of the Republic of Lithuania
on Reporting by Undertakings.
Based on the work undertaken in the course of our audit, in our opinion:
● the information given in the consolidated annual report, including the corporate governance report
and remuneration report, for the financial year for which the financial statements are prepared, is
consistent with the financial statements; and
● the consolidated annual report, including the corporate governance report and remuneration report,
has been prepared in accordance with the Law of the Republic of Lithuania on Consolidated
Reporting by Groups of Undertakings and the Law of the Republic of Lithuania on Reporting by
Undertakings.
The Group has prepared the social responsibility report that was presented as a separate report.
In addition, in light of the knowledge and understanding of the Group and the Company and their
environment obtained in the course of the audit, we are required to report if we have identified material
misstatements in the consolidated annual report which we obtained prior to the date of this auditor’s
report. We have nothing to report in this regard.
Responsibilities of management and those charged with governance for the financial
statements
Management is responsible for the preparation of the financial statements that give a true and fair view in
accordance with International Financial Reporting Standards as adopted by the European Union, and for
such internal control as management determines is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Group’s and the
Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless management either intends to liquidate
the Group and the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Group’s and the Company’s financial
reporting process.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with ISAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional
scepticism throughout the audit. We also:
● Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting
a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
● Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s and the Company’s internal control.
● Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
● Conclude on the appropriateness of management’s use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s and the Company’s ability to continue as a
going concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or conditions may cause the Group and the
Company to cease to continue as a going concern.
● Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events in
a manner that achieves fair presentation.
● Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and performance of the Group audit. We remain
solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and have communicated with them all relationships and
other matters that may reasonably be thought to bear on our independence, and where applicable,
actions taken to eliminate threats or safeguards applied.
From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the financial statements of the current period and are therefore
the key audit matters. We describe these matters in our auditor’s report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that
a matter should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on other legal and regulatory requirements
Report on the compliance of the format of the consolidated financial statements with the
requirements of the European Single Electronic Reporting Format
We have been engaged based on the amendment to our audit agreement by the management of the
Company to conduct a reasonable assurance engagement for the verification of compliance with the
applicable requirements of the European single electronic reporting format of the Group’s consolidated
financial statements, including the consolidated annual report, for the year ended 31 December 2023 (the
“Single Electronic Reporting Format of the consolidated financial statements”).
Description of a subject matter and applicable criteria
The Single Electronic Reporting Format of the consolidated financial statements has been applied by the
management of the Company to comply with the requirements of art. 3 and 4 of the Commission
Delegated Regulation (EU) 2019/815 of 17 December 2018 supplementing Directive 2004/109/EC of the
European Parliament and of the Council with regard to regulatory technical standards on the specification
of a single electronic reporting format (the “ESEF Regulation”). The applicable requirements regarding the
Single Electronic Reporting Format of the consolidated financial statements are contained in the ESEF
Regulation.
The requirements described in the preceding sentence determine the basis for application of the
Single Electronic Reporting Format of the consolidated financial statements and, in our view, constitute
appropriate criteria to form a reasonable assurance conclusion.
Responsibility of the management and those charged with governance
The management of the Company is responsible for the application of the Single Electronic Reporting
Format of the consolidated financial statements that complies with the requirements of the ESEF
Regulation.
This responsibility includes the selection and application of appropriate markups in iXBRL using ESEF
taxonomy and designing, implementing and maintaining internal controls relevant for the preparation of
the Single Electronic Reporting Format of the consolidated financial statements which is free from
material non-compliance with the requirements of the ESEF Regulation.
Those charged with governance are responsible for overseeing the financial reporting process, which
should also be understood as the preparation of financial statements in accordance with the format
resulting from the ESEF Regulation.
Our responsibility
Our responsibility was to express a reasonable assurance conclusion whether the Single Electronic
Reporting Format of the consolidated financial statements complies, in all material aspects, with the
ESEF Regulation.
We conducted our engagement in accordance with International Standard on Assurance
Engagements 3000 (Revised) ‘Assurance Engagements other than Audits and Reviews of Historical
Financial Information’ (“ISAE 3000 (R)”). This standard requires that we comply with ethical requirements,
plan and perform procedures to obtain reasonable assurance whether the Single Electronic Reporting
Format of the consolidated financial statements complies, in all material aspects, with the applicable
requirements.
Reasonable assurance is a high level of assurance, but it does not guarantee that the service performed
in accordance ISAE 3000 (R) will always detect the existing material misstatement (significant non-
compliance with the requirements).
Summary of the work performed
Our planned and performed procedures were aimed at obtaining reasonable assurance that the
Single Electronic Reporting Format of the consolidated financial statements was applied, in all material
aspects, in accordance with the applicable requirements and such application is free from material errors
or omissions. Our procedures included in particular:
• obtaining an understanding of the internal control system and processes relevant to the application of
the Single Electronic Reporting Format of the consolidated financial statements, including the
preparation of the XHTML format and marking up the consolidated financial statements;
• verification whether the XHTML format was applied properly;
• evaluating the completeness of marking up the consolidated financial statements using the iXBRL
markup language according to the requirements of the implementation of single electronic format as
described in the ESEF Regulation;
• evaluating the appropriateness of the Group’s' use of XBRL markups selected from the ESEF
taxonomy and the creation of extension markups where no suitable element in the ESEF taxonomy
has been identified; and
• evaluating the appropriateness of anchoring of the extension elements to the ESEF taxonomy.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our
conclusion.
Conclusion
In our opinion, the Single Electronic Reporting Format of the consolidated financial statements for the
year ended 31 December 2023 complies, in all material aspects, with the ESEF Regulation.
Report on the compliance of the format of the separate financial statements with the requirements
of the European Single Electronic Reporting Format
The European single electronic reporting format has been applied by the management of the Company to
the Company’s financial statements to comply with the requirements of Article 3 of Commission
Delegated Regulation (EU) 2019/815 of 17 December 2018 supplementing Directive 2004/109/EC of the
European Parliament and of the Council with regard to regulatory technical standards on the specification
of a single electronic reporting format (the “ESEF Regulation”). These requirements specify the
Company’s obligation to prepare its financial statements in a XHTML format. We confirm that the
European single electronic reporting format of the financial statements for the year ended 31 December
2023 complies with the ESEF Regulation in this respect.
Appointment
We were first appointed as auditors of the Group and the Company on 28 April 2017. Our appointment
has been renewed by shareholder resolution representing a total period of uninterrupted engagement
appointment of 7 years. Our appointment for the year ended 31 December 2023 was approved by the
shareholder’s resolution on 28 April 2023.
The key audit partner on the audit resulting in this independent auditor’s report is Rasa Selevičienė.
On behalf of PricewaterhouseCoopers UAB
/signed with electronic signature/
Rasa Selevičienė
Assurance director
Auditor's Certificate No.000504
Vilnius, Republic of Lithuania
5 April 2024
The auditor's electronic signature is used herein to sign only the Independent Auditor's Report