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Annual reporting
Consolidated management report and consolidated and parent company financial
statements for the year ended 31 December 2024, prepared in accordance with the
International Financial Reporting Standards adopted for application in the European
Union.
2024
VILVI GROUP ANNUAL REPORTS
2024
1
CONTENT
MANAGEMENT REPORT
1. Overview.........................................................................................3
1.1. About VILVI Group...............................................................3
1.2. CEO’S statement................................................................4
1.3. Strategy and goals.............................................................6
1.4. VILVI Group short history...............................................7
1.5. Solutions for customers.................................................8
1.6. Highlights 2024...................................................................9
1.7. Information on shares...................................................10
2. Results.............................................................................................11
2.1. Overview of VILVI Group results..............................12
2.2. Results of Vilkyškių pieninė AB...............................13
2.3. Results of VILVI Group..................................................14
2.4. Main raw materials.........................................................15
2.5. VILVI Group operating segments..........................16
2.6. VILVI Group‘s sales by markets...............................18
3. Governance..............................................................................20
2.1. Management model......................................................21
2.2. Authorized capital structure and
shareholders...............................................................................22
2.3. General Meeting of Shareholders........................23
2.4. Supervisory board..........................................................24
2.5. Board......................................................................................26
2.6. Committees.......................................................................30
2.7. Key managers................................................................... 31
2.8. Governance principles................................................33
2.9. Dividends.............................................................................34
2.10. Other information about management........35
2.11. Risk management........................................................36
4. Remuneration.......................................................................42
4.1. Board members’ remuneration............................43
4.2. Remuneration of employees of Company
and VILVI Group......................................................................44
5. Sustainability Statement..........................................45
5.1. General information.......................................................47
5.2. Environment.....................................................................58
5.3. Social......................................................................................84
5.4. Governance......................................................................103
5.5 Annexes...............................................................................108
5.6. Independent practitioner’s limited assurance
report on Vilkyškių pieninė AB consolidated
Sustainability Statement..................................................118
Additional information:
Alternative indicators.........................................................122
Compliance with the Corporate Governance
Code..............................................................................................123
FINANCIAL STATEMENTS
1. Management’s statement..................................................143
2. Consolidated and the parent company’s
separate financial statements:
2.1. Statements of financial position........................................144
2.2. Statements of profit or loss...................................................145
2.3. Statements of other comprehensive income..........146
2.4. Separate statement of changes in equity..................147
2.5. Consolidated statement of changes in equity.......148
2.6. Statements of cash flows.......................................................149
2.7. Notes to financial statements……………………………………..151
3. Independent auditor’s report........................................197
VILVI GROUP ANNUAL REPORTS
2024
2
MANAGEMENT
REPORT
− RESULTS | 11
− GOVERNANCE | 20
− REMUNERATION | 42
− SUSTAINABILITY STATEMENT | 45
− COMPLIANCE WITH THE CORPORATE
GOVERNANCE CODE | 123
VILVI GROUP ANNUAL REPORTS
2024
3
ABOUT VILVI GROUP
The main activity of VILVI Group is the production and sale of dairy products.
The Group consists of six companies (five factories) that produce:
• various cheeses and cheese products;
• industrial ceam;
• various fresh milk 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.
The parent company has not established branches or representative offices.
VILVI GROUP ANNUAL REPORTS
2024
4
CEO’S STATEMENT
VILVI Group is committed to making the
highest quality dairy products and
ingredients easily accessible worldwide.
Our goal is to enable people to enjoy these
products anywhere on the globe. In 2024,
products made by the Group's companies
reached over 60 countries.
We are operating during a period marked
by intense geopolitical challenges and
uncertainties. We have witnessed growing
competition in the market, as well as an
increase in raw material prices that has even
surpassed the European Union average.
However, the years of experience
accumulated by VILVI Group teamwork,
and, of course, a refined and competitive
product portfolio allow us to operate flexibly
and efficiently.
We are proud of the year 2024, which
became an example of stable growth,
successfully implemented projects, and
consistent performance improvement. The
Group's EBITDA increased by 59.8%,
reaching EUR 33.6 million.
Gintaras Bertašius
Manager of VILVI GROUP
CEO of Vilkyškių pieninė AB
and Chairman of the Board
VILVI GROUP ANNUAL REPORTS
2024
5
VILVI GROUP ANNUAL REPORTS
2024
6
OUR STRATEGY AND GOALS
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.
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.
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 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.
For more information, see the Sustainability Statement, pages 65-69.
Responsiveness to
needs
Curiosity
Better than
yesterday
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 milk products in
the nearest markets
Ingredients and product
solutions for businesses
worldwide
Search for innovation and new
solutions
Our values
Responsibility and
respect
VILVI GROUP ANNUAL REPORTS
2024
7
VILVI GROUP SHORT HISTORY
VILVI GROUP ANNUAL REPORTS
2024
8
SOLUTIONS FOR CUSTOMERS
•
Special solutions according
to customer needs
• Private labels
Products and ingredients
B2B
Products with VILVI
brands B2C
Solutions for business
Mozzarella/Cagliata/Tilsit/Gouda/Edam
• Dry whey and milk products
•
• Fresh milk products
•
Butter / Cream / Sour cream / etc.
Whey protein concentrate 80 (WPC80) /
Whey permeate / Sweet whey powder /
Skimmed milk powder/ Lactose / Protein for
athletes
• Cheese and cheese products
•
VILVI GROUP ANNUAL REPORTS
2024
9
HIGHLIGHTS 2024
VILVI Group has launched the largest
investment project in its 31-year history. It is
planned to invest over EUR 50 million to new
cheese production capacity in Bauska, Latvia, in
the territory of the Group's company Baltic Dairy
Board SIA. The project is planned to be completed
by 2026.
The project is financed with own funds and
„Citadele” Bank loans. The Latvian Government,
through the Latvian State Development Finance
Institution, will contribute more than EUR 10
million to the project, EUR 1.2 million in support
from EU funds will also be received.
For this purpose, Vilkyškių pieninė AB the sole
shareholder of Baltic Dairy Board SIA, increased
the authorized capital of Baltic Dairy Board SIA.
31/12/2024 authorized capital is EUR 16,847,778.
Guided by the brand strategy, we aim to shape and grow a single
brand across all product categories. We started the changes in the
cheese category. We are consistently transitioning to a single
product brand VILVI in the fresh dairy product categories.
Therefore, the brand “Vilkyškių pieninė“ becomes the international
VILVI, while “Vilkyškių“ remains in the name of the black cat
product line.
Along with changes in the brand, packaging design has also
changed. They have become brighter, but they are well-known.
At Sustainable Brand Index 2024 by “SB Insight“,
Vilkyškių pieninė AB ranked 3rd among the most
sustainable brands of the food and beverage
industry in Lithuania. We are the leaders of other
dairy producers.
Among all 84 rated brands Vilkyškių pieninė AB
took 16th place.
Kelmės pienas UAB has been
issued IFS Food Version 8 and
Rainforest Alliance certificates.
VILVI Group products have been presented at four
international exhibitions: “Gulfood 2024“ in
Dubai, UAE, “SIAL 2024“ in Paris, France, “Gulfood
Manufacturing“ in Dubai, UAE and “Food
Ingredients Europe“ in Frankfurt, Germany.
VILVI GROUP ANNUAL REPORTS
2024
10
INFORMATION ON SHARES
− The name of the securities is Vilkyškių pieninė AB 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
2020
2021
2022
2023
2024
Opening price, EUR
2.26
2.46
3.67
4.79
5.26
Highest price, EUR
2.48
3.68
4.91
5.36
8.24
Lowest price, EUR
1.39
2.40
3.00
4.12
5.02
Average price, EUR
1.93
2.90
4.12
4.88
6.36
Last price, EUR
2.46
3.66
4.79
5.24
8.14
Turnover, units
1,138,435
1,060,431
637,222
337,974
498,359
Turnover, MEUR
2.20
3.08
2.63
1.65
3.17
Capitalization, MEUR
29.38
43.71
57.21
62.58
97.22
Vilkyškių pieninė AB share price change and turnover in 2022-2024.
Comparison of Vilkyškių pieninė AB share prices and Nasdaq OMX Vilnius, AB indices in 2022-2024.
0
20
40
60
80
100
120
140
0,00
1,00
2,00
3,00
4,00
5,00
6,00
7,00
8,00
9,00
2022-01 2022-06 2022-11 2023-04 2023-09 2024-02 2024-07 2024-12
Share price, EUR Turnover, thsd EUR
0%
50%
100%
150%
200%
250%
2022-01 2022-06 2022-11 2023-04 2023-09 2024-02 2024-07 2024-12
OMX Vilnius VLP1L
VILVI GROUP ANNUAL REPORTS
2024
11
RESULTS
− OVERVIEW OF VILVI GROUP RESULTS | 12
− PERFORMANCE RESULTS OF
VILKYŠKIŲ PIENINĖ AB |13
− PERFORMANCE RESULTS OF VILVI GROUP | 14
− MAIN RAW MATERIALS |15
− VILVI GROUP OPERATING SEGMENTS | 16
− VILVI GROUP’S SALES BY MARKETS | 18
VILVI GROUP ANNUAL REPORTS
2024
12
OVERVIEW OF VILVI GROUP RESULTS
EUR 245.4 million
consolidated sales
turnover
EUR 25.7 million
consolidated net profit
EUR 33.6 million in
consolidated EBITDA
87% of exports to > 60
countries
EUR 19.6 million in taxes
paid to the state 2024
>350 thousand tons of
purchased milk
EUR 38.8 million in
development and
supporting investments
during the reporting
period
In 2024, sales turnover increased by 16.6% compared to 2023. VILVI Group’s consolidated net profit increased to EUR
25.7 million and was 75.2% higher than in 2023. During the reporting period, the Group’s EBITDA increased by 59.8%
and amounted to EUR 33.6 million. The growth of the Group’s EBITDA and net profit was mainly influenced by
increased sales prices for exports of dry milk products and fats, operational efficiency improvements, and results-
driven investments had an impact.
See the comparison of other indicators of the Company and the Group in p. 13-14 respectively.
120,9
156,0
234,1
210,5
245,4
2020 2021 2022 2023 2024
Group revenue, MEur
8,3
14,1
19,3
21,0
33,6
3,9
5,5
12,7
14,7
25,7
2020 2020 2020 2020 2020
Group EBITDA, MEur Group net profit, MEur
VILVI GROUP ANNUAL REPORTS
2024
13
PERFORMANCE RESULTS OF THE PARENT COMPANY VILKYŠKIŲ PIENINĖ AB
In addition to the main indicators defined and applied according to the International Financial Reporting Standards
(IFRS), Vilkyškių pieninė AB 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), Vilkyškių pieninė AB presents comparative historical API data.
2020
2021
2022
2023
2024
Change in
2024/2023
Change in
2023/2022
Revenue, thousand EUR
148,738
196,442
288,643
245,072
262,079
6.9%
-15.1%
Gross profit, thousand EUR
913
9,031
17,195
9,013
16,342
81.3%
-47.6%
Gross profit margin, %
0.6%
4.6%
6.0%
3.7%
6.2%
2.5 p.p.
-2.3 p.p.
EBITDA, thousand EUR
2,994
13,079
15,530
4,500
19,216
327.0%
-71.0%
EBITDA margin, %
2.0%
6.7%
5.4%
1.8%
7.3%
5.5 p.p.
-3.6 p.p.
Operating profit(EBIT), thousand EUR
1,394
11,450
13,893
2,912
17,512
501.4%
-79.0%
EBIT margin, %
0.9%
5.8%
4.8%
1.2%
6.7%
5.5 p.p.
-3.6 p.p.
Profit before tax (EBT), thousand EUR
640
11,194
13,733
2,574
17,057
562.6%
-81.3%
EBT margin, %
0.4%
5.7%
4.8%
1.1%
6.5%
5.4 p.p.
-3.7 p.p.
Net profit (loss), thousand EUR
1,371
10,774
12,599
2,527
16,359
547.4%
-79.9%
Net profit margin, %
0.9%
5.5%
4.4%
1.0%
6.2%
5.2 p.p.
-3.4 p.p.
Net profit per share, Eur
0.11
0.9
1.05
0.21
1.37
547.5%
-79.8%
The ratio of the share’s market price and
profit per share – P/E ratio
-
-
-
-
-
-
-
Return on equity (ROE), %
5.2%
33.5%
29.9%
5.4%
30.8%
25.4 p.p.
-24.5 p.p.
Return on assets (ROA), %
2.8%
19.9%
19.4%
3.6%
19.1%
15.5 p.p.
-15.8 p.p.
Return on capital employed (ROCE), %
4.5%
28.3%
27.7%
5.7%
25.3%
19.6 p.p.
-22.0 p.p.
Debt ratio
0.44
0.37
0.33
0.34
0.41
22.7%
1.6%
Debt to equity ratio
0.27
0.19
0.12
0.11
0.16
46.7%
-9.1%
Liquidity ratio
0.99
1.47
1.87
1.58
1.35
-14.7%
-15.4%
Asset turnover
3.05
3.31
4.1
3.49
2.59
-25.9%
-14.8%
Capital to asset ratio
0.56
0.63
0.67
0.66
0.59
-11.2%
-0.8%
Financial debts, thousand EUR
7,432
6,941
5,665
5,085
9,353
83.9%
-10.2%
Net debt, thousand EUR
7,277
6,362
5,340
2,231
-3,933
-276.3%
-58.2%
Net debt/EBITDA
2.43
0.49
0.34
0.50
-0.20
-140.3%
45.8%
p.p. – percentage points
Information about the calculation of AVR and what useful information they provide is provided in the section
Additional information page 122.
VILVI GROUP ANNUAL REPORTS
2024
14
PERFORMANCE RESULTS OF VILVI GROUP
2020
2021
2022
2023
2024
Change in
2024/2023
Change in
2023/2022
Revenue, thousand EUR
120,873
156,045
234,083
210,536
245,429
16.6%
-10.1%
Gross profit, thousand EUR
10,629
17,196
24,274
27,687
41,781
50.9%
14.1%
Gross profit margin, %
8.8%
11.0%
10.4%
13.2%
17.0%
3.8 p.p.
2.8 p.p.
EBITDA, thousand EUR
8,271
14,122
19,280
21,003
33,556
59.8%
8.9%
EBITDA margin, %
6.8%
9.0%
8.2%
10.0%
13.7%
3.7 p.p.
1.8 p.p.
Operating profit(EBIT), thousand EUR
4,332
7,134
14,921
16,778
29,043
73.1%
12.4%
EBIT margin, %
3.6%
4.6%
6.4%
8.0%
11.8%
3.8 p.p.
1.6 p.p.
Profit before tax (EBT), thousand EUR
3,142
6,156
14,180
15,439
27,680
79.3%
8.9%
EBT margin, %
2.6%
3.9%
6.1%
7.3%
11.3%
4.0 p.p.
1.2 p.p.
Net profit (loss), thousand EUR
3,872
5,500
12,699
14,652
25,669
75.2%
15.4%
Net profit margin, %
3.2%
3.5%
5.4%
7.0%
10.5%
3.5 p.p.
1.6 p.p.
Net profit per share, Eur
0.32
0.46
1.06
1.23
2.15
74.8%
16.0%
The ratio of the share’s market price and profit per
share – P/E ratio
7.59
7.95
4.5
4.27
3.79
-11.2%
-5.1%
Return on equity (ROE), %
11.7%
14.8%
28.4%
26.4%
35.3%
8.9 p.p.
-2.0 p.p.
Return on assets (ROA), %
5.0%
6.7%
13.6%
14.3%
19.8%
5.5 p.p.
0.7 p.p.
Return on capital employed (ROCE), %
10.1%
11.7%
22.0%
20.5%
23.2%
2.7 p.p.
-1.5 p.p.
Debt ratio
0.55
0.55
0.49
0.43
0.45
4.7%
-12.2%
Debt to equity ratio
0.62
0.61
0.46
0.33
0.46
39.4%
-28.3%
Liquidity ratio
0.64
1.24
1.46
1.77
2.09
18.1%
21.2%
Asset turnover
1.57
1.77
2.38
1.97
1.61
-18.3%
-17.2%
Capital to asset ratio
0.45
0.45
0.51
0.57
0.55
-3.5%
11.8%
Financial debts, thousand EUR
21,660
24,163
22,929
20,185
39,222
94.3%
-12.0%
Net debt, thousand EUR
21,479
23,364
22,308
11,460
20,350
77.6%
-48.6%
Net debt/EBITDA
2.6
1.65
1.16
0.55
0.61
10.9%
-52.6%
p.p. – percentage points
VILVI GROUP ANNUAL REPORTS
2024
15
MAIN RAW MATERIALS
RAW COW’S MILK
Raw cow’s milk is the main raw material for the products produced by Vilkyškių pieninė AB, Modest AB and Kelmės
pienas UAB. According to the calculations of Vilkyškių pieninė AB, the Group occupies about 20% of the domestic
market in terms of the amount of milk processed, the third place among producers, after Rokiškio sūris AB and
Žemaitijos pienas AB.
In 2024, Group companies bought this raw material from Lithuanian, Estonian and Latvian milk suppliers.
Over third of the milk was imported.
2020
2021
2022
2023
2024
Purchased basic indicators milk*, in tons
287,370
314,540
342,953
351,832
351,607
Milk price, EUR/t
246.2
287.9
422.7
313.3
364.7
*The purchased milk is recalculated into base terms using a coefficient calculated based on fat and protein content.
In 2024, 351.6 thousand tons of milk were purchased according to the basic indicators, which is 0.1% less than in 2023.
The price of milk in 2024 increased by 16.4% compared to 2023.
MILK WHEY
The main raw material of Kelmės pieninė AB needed in the production of dry milk products 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 are supplied by VILVI Group companies, the other
part is purchased from suppliers in Latvia and Estonia.
2020
2021
2022
2023
2024
Purchased whey concentrates from VILVI GROUP
companies, in tons
40,641
43,593
60,297
64,692
61,898
Purchased whey concentrates from other suppliers, in tons
30,999
35,730
37,075
33,908
28,308
In 2024, 90 thousand tons of whey concentrates were purchased, which is 8.5% less than in 2023.
Raw material purchased by Kelmės pieninė AB
Lithuania 65%
Latvia 28%
Estonia 7%
246
288
423
313
365
0,0
100,0
200,0
300,0
400,0
500,0
2020 2021 2022 2023 2024
tho. tons
Purchased basic indicators milk, thousand tons Milk price, Eur/tons
57%
55%
62%
66%
69%
43%
45%
38%
34%
31%
0
20
40
60
80
100
120
2020 2021 2022 2023 2024
tho. tons
from VILVI GROUP companies from other suppliers
VILVI GROUP ANNUAL REPORTS
2024
16
VILVI GROUP OPERATING SEGMENTS
Operting segments:
• 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;
• Industrial cream – induatrial cream produced by the Company and its subsidiaries.
Until 2024, the cheese, cheese products, and other business segment consisted of the cheeses, cheese products,
industrial cream, and liquid whey produced by the Company and its subsidiaries, which remain as a byproduct of the
cheese production process. Starting from 2024, by management decision, it was decided to present the results of
industrial cream as a separate business segment - Industrial cream. This segment was separated due to its significant
volume and income amount.
Volumes of VILVI Group’s products for sale by segments, in tons:
2020
2021
2022
2023
2024
Change in
2024/2023
Change in
2023/2022
Cheese, cheese products and
other
39,187
43,970
47,575
48,809
26,907
11.8%*
2.6%
Fresh milk products
12,696
14,048
15,174
15,741
15,240
-3.2%
3.7%
Dry milk products
19,006
21,416
21,886
22,486
20,883
-7.1%
2.7%
Industrial cream
-
-
-
-
25,250
-
-
*Comparison with 2023 includes only cheese, cheese products, and etc., excluding industrial cream.
Since the "Industrial cream" segment was separated only in 2024, comparative results are not provided.
In 2024, cheese and cheese products were produced 2 thousand tons more than last year.
15.2 thousand tons of fresh milk products were produced, i.e. 3.2% less than in 2023. At the beginning of 2024, in
compliance with the EU regulation, and to ensure that caps of drinking product packaging are inseparable from the
packaging, work on the installation of a new line was carried out, which impacted production limitations.
20.9 thousand tons of dry milk products were produced in 2024 – production decreased by 7.1%. compared to 2023.
VILVI GROUP income from main products by segments, thousand EUR:
2020
2021
2022
2023
2024
Change in
2024/2023
Change in
2023/2022
Cheese, cheese products and
other
84,134
109,199
170,589
139,194
94,770
-31.9%
-18.4%
Fresh milk products
16,252
18,710
26,864
33,371
30,153
-9.6%
24.2%
Dry milk products
20,487
28,136
36,630
37,971
39,859
5.0%
3.7%
Industrial cream
-
-
-
-
80,647
-
-
Total:
120,873
156,045
234,083
210,536
245,429
16.6%
-10.1%
39%
12%
16%
33%
2024
Cheese, cheese
products and other
Fresh milk products
Dry milk products
Industrial cream
70%
70%
73%
66%
39%
13%
12%
11%
16%
12%
17%
18%
16%
18%
16% 33%
0 50 100 150 200 250
2020
2021
2022
2023
2024
MEur
VILVI GROUP ANNUAL REPORTS
2024
17
Cheese, cheese products and other
Until 2024, the income of this segment was derived from
sales of cheese and cheese products, industrial cream, and
etc. In the reporting year, industrial cream was separated
into its own segment, leaving the income from the sales
of cheese, cheese products, and etc. in the segment. The
sum of the income of these separate segments should be
compared with the total amount from previous periods.
The total turnover of cheese, cheese products, and etc.
increased by 11.5% compared to the previous year. This can
be attributed to the continuous and consistent increase in
dairy product prices.
In 2024, we succeeded in increasing cheese production
volumes, thereby increasing sales volumes in terms of
quantity (6.5% more cheese products were sold compared
to 2023).
Revenue structure in the segment:
Industrial cream
Results from industrial cream are presented as a
separate segment starting in 2024, so comparative
data is not provided. The management decided to
separate this segment, considering it significant, as in
2024 its sales income accounted for a third (32.9%) of
total sales income.
In 2024, more than 98% of the industrial cream
turnover was generated through exports to EU
countries.
Sales markets:
Dry milk products
Due to a slightly lower production in 2024 (7.1% compared
to 2023), sales volumes also decreased by 13.9% in quantity
compared to the previous year. However, the overall
increase in dairy product prices in 2024 (5.0%) boosted this
segment's sales income for the reporting year.
VILVI Group generates most of its income in this segment
from whey protein sales – about 60% (although this
accounts for only 12.4% in terms of quantity).
In 2024, 97.2% of the turnover of dry milk products was
exported:
European Union - 69.9%
Other foreign countries – 27.3%
Fresh milk products
In 2024, income from this segment decreased by 8.5%
compared to the previous year, as more high-value-
added dairy products were sold in 2023. During the
reporting year, the pricing of fresh dairy products
(such as yogurt, kefir, sour cream) on the local market
decreased, which impacted the income decrease in
this segment since more than 85% of fresh dairy
products were sold in the local market in 2024.
Additionally, at the beginning of 2024, less products
were manufactured and sold due to the installation
works of the new packaging line, in compliance with
EU regulations, to ensure that the caps of beverage
product packaging are inseparable from the entire
packaging.
Revenue:
0
10
20
30
40
50
2020 2021 2022 2023 2024
Quantity, tho. tons Turnover, MEUR
10
15
20
25
30
35
2020 2021 2022 2023 2024
MEur
58
63
92
84
91
26
43
75
55
0
50
100
150
200
2020 2021 2022 2023 2024
million Eur
Cheese and cheese products Industrial cream Other
70,7%
16,5%
8,5%
1,7%
2,6%
Poland
Germany
Netherlands
Lithuania
Other
VILVI GROUP ANNUAL REPORTS
2024
18
VILVI GROUP’S SALES BY MARKETS
In 2024, exports took place to more than 60 countries, but the most important export markets of VILVI Group
continue to be Poland, Netherlands, Italy, Germany, Saudi Arabia.
Export markets:
The last five years have been very active in looking for new markets, so in 2024, significant attention was focused on
analysing existing markets to assess and forecast potential sales growth in these regions.
Sales revenues by markets, thousand EUR:
2020
2021
2022
2023
2024
Change in
2024/2023
Change in
2023/2022
European Union
63,745
80,647
132,771
103,079
141,037
36.8%
-22.4%
Lithuania
20,234
21,748
26,751
36,624
32,246
-12.0%
36.9%
Other countries
36,894
53,650
74,561
70,833
72,146
1.9%
-5.0%
Total revenue
120,873
156,045
234,083
210,536
245,429
16.6%
-10.1%
In 2024, VILVI Group’s sales revenue in export markets increased by 22.6% compared to 2023. Exports accounted for
86.9% of the Group’s total sales in 2024 This is 4 p.p. higher than in 2023.
The growth in sales income both in the European Union and other foreign countries is attributed to the increased
53%
52%
57%
49%
57%
17%
14%
11%
17%
13%
30%
34%
32%
34%
29%
0
50
100
150
200
250
2020 2021 2022 2023 2024
million Eur
Other countries
Lithuania
European Union
VILVI GROUP ANNUAL REPORTS
2024
19
global demand for dairy products, especially milk fats. The structure of sales regions and sales channels remained
stable, sufficiently diversified, and not subject to risks from economic or political influences.
In 2024, sales in Lithuania decreased by 12.0% compared to the previous year. This was influenced by both the decrease
in the pricing of fresh dairy products in the country and the smaller volumes of products sold.
In 2024 and 2023, no products were exported to countries subject to EU sanctions.
VILVI GROUP ANNUAL REPORTS
2024
20
GOVERNANCE
− MANAGEMENT MODEL | 21
− AUTHORIZED CAPITAL STRUCTURE AND
SHAREHOLDERS | 22
− GENERAL MEETING OF SHAREHOLDERS AND
SHAREHOLDER RIGHTS | 23
− SUPERVISORY BOARD | 24
− BOARD | 26
− COMMITTEES | 30
− KEY MANAGERS | 31
− GOVERNANCE PRINCIPLES | 33
− DIVIDENDS | 34
− OTHER INFORMATION
ABOUT MANAGEMENT | 35
− RISK MANAGEMENT | 36
VILVI GROUP ANNUAL REPORTS
2024
21
MANAGEMENT MODEL
Management bodies of VILVI GROUP’s parent company Vilkyškių pieninė AB
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. 23.
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 Vilkyškių
pieninė AB consists of 3 members, elected for a four-year term. The Supervisory board is elected by the General
Meeting of Shareholders. More in p. 24-25.
Board
The Board is a collegial management body of the Company, which performs the function of company management.
The Board of Vilkyškių pieninė AB consists of 6 Board members. The Supervisory board elects the members of the
Board for a four-year term. More in p. 26-29.
Committees
The Supervisory 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. 30.
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 bodies of subsidiaries: Kelmės pienė AB, Kelmės pienas UAB, Modest AB and Baltic Dairy Board
SIA:
− General Meeting of Shareholders
− Board
− Head of the Company
The sole management body of Pieno logistika AB is the director.
VILVI GROUP ANNUAL REPORTS
2024
22
AUTHORIZED CAPITAL STRUCTURE AND SHAREHOLDERS
Įmonės pavadinimas
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
Vilkyškių pieninė AB
Ordinary
registered shares
11,943,000
0.29
3,463,470
Swisspartners Versicherung AG
Zweigniederlassung Österreich –
60,4%*;
Multi Asset Selection Fund – 17,0%.
Kelmės pieninė AB
Ordinary
registered shares
2,457,070
0.29
712,550
Vilkyškių pieninė AB – 100%.
Modest AB
Ordinary
registered shares
5,617,118
0.29
1,628,964
Vilkyškių pieninė AB – 99.7%.
Pieno logistika AB
Ordinary
registered shares
371,333
0.29
107,687
Kelmės pienas UAB – 59.0%,
Kelmės pienas UAB
Ordinary
registered shares
2,500
1.00
2,500
Kelmės pieninė AB – 100%.
Baltic Dairy Board
SIA
Ordinary
registered shares
777,778
1.00
777,778
Vilkyškių pieninė AB – 100%.
Information about significant and directly or indirectly controlled Company-held stock packages:
* As of 31 December 2024, 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 Vilkyškių pieninė AB).
Vilkyškių pieninė AB shareholder structure in 2024:
The total number of shareholders on 31/12/2024 was 1,844.
Distribution of shareholders of Vilkyškių pieninė AB by legal
entity:
− 18.5% natural persons
− 81.5% legal entities
The Company has never acquired or transferred its own shares.
Swisspartners
Versicherung AG
Zweigniederlassung
Österreich
60%
Multi Asset
Selection
Fund
17%
Other small
shareholders
23%
VILVI GROUP ANNUAL REPORTS
2024
23
GENERAL MEETING OF SHAREHOLDERS AND SHAREHOLDER RIGHTS
The shareholders of Vilkyškių pieninė AB 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 and in the electronic
publication by the Centre of Registers.
All shareholders have been provided with equal opportunities to access the information stipulated by law and to
participate in decision-making on matters within the competence of the general meeting of shareholders.
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 management report and the Group's consolidated management 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 REPORTS
2024
24
SUPERVISORY BOARD
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.
Members of the supervisory board:
Algimantas Lekevičius
Chairman of the Supervisory board
Term until 28/04/2027
Marijana Juškienė
Member of the Supervisory board
Term until 28/04/2027
Martynas Bertašius
Member of the Supervisory board
Term until 28/04/2027
Education
higher education, engineer
Education
higher education, engineer -
mathematician
Education
higher education, economics
The main workplace:
Šiaulių bankas AB (company code
112025254) Head of the Issuer
Accounting Group, Financial Markets
Department
The main workplace:
Head of Sports and Health
Supplements Department at
Vilkyškių pieninė AB
Does not participate in the
management of other companies
Participation in the management of
other companies:
Chairman of the Užupis Community
Senate
Participation in the management
of other companies:
Manager and actual member of
ŪKB RELI (company code
306286230)
Owned share of the company’s
capital and votes as of 31-12-2024, %
2000 vnt./0.02%
-
-
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;
• Giving comments and proposals for the annual financial statements, the profit (loss) allocation draft, and the
management 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.
VILVI GROUP ANNUAL REPORTS
2024
25
Supervisory board’s activities in 2024
In 2024, four supervisory board meetings took place. The meetings met the quorum requirements set by regulations.
During the meetings, the annual financial statements for 2023 and the profit (loss) allocation draft were reviewed, and
comments and proposals for the ordinary general meeting of shareholders were given, issues regarding the
involvement of the board in sustainability policy were discussed, as well as the Audit Committee's 2024 action plan,
and the board's actions concerning the implementation of European Parliament and Council Directive (EU) 2023/970
in 2023 were reviewed and approved.
All committee members attended the meetings.
MATRIX OF SUPERVISORY BOARD MEMBERS' COMPETENCIES:
Vilkyškių pieninė AB Supervisory board members have extensive experience in management, making them
competent to oversee the activities of the Company's board and manager, as well as analyze the Company's strategic
goals.
Indicator
Value
The gender ratio of the supervisory board members of the parent company.
1:3
Percentage of independent supervisory board members of the parent company
67%
Algimantas
Lekevičius
Marijana
Juškienė
Martynas
Bertašius
Area of Competence
Securities
Market
Risk
management
Marketing
Experience:
Setting Long-term Strategic Goals
+
Analysis of Financial/Sustainability Reports
+
+
+
Brand Value Creation
+
Business Activity Monitoring
+
+
Competence:
Human Resources Management
+
+
+
Risk Identification and Mitigation Strategy Development
+
+
+
Business Process Management
+
+
+
VILVI GROUP ANNUAL REPORTS
2024
26
BOARD
The Board is a collegial management body of the Company. The Board of Vilkyškių pieninė AB consists of 6 Board
members. Members of the 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.
The Board considers and approves the following:
• The management structure of the company and
the positions of employees;
• Positions to which employees are recruited by
tender procedure;
• The Board elects and dismisses the CEO,
determines working conditions and remuneration,
following the Remuneration Policy, as established
in Article 37
3
of the Law on Companies of the
Republic of Lithuania;
• Other matters as provided by the Law of the
Republic of Lithuania on Companies and the
Company’s Articles of Association.
Other functions of the Board:
• 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 drafts of the company’s
annual financial statements, the profit (loss)
allocation draft, and the remuneration policy draft,
and, after approving them, submits them along
with comments and proposals to 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.
Activities of the company’s Board in 2024
In 2024, Vilkyškių pieninė AB Board meetings were held regularly according to the established schedule. In 2024,
twelve regular board meetings took place. All Board meetings had the quorum required by legal acts. The Board
approved the Company’s prepared 2023 audited 12-month financial statements and the 2024 three-, six-, and nine-
month interim financial statements and annual report, convened the ordinary general meeting of shareholders and
proposed the 2023 profit allocation draft for approval at the general meeting of shareholders.
During the ordinary Board meetings, development plans were discussed, the progress of the Baltic Dairy Board SIA
cheese factory project was reviewed, and issues related to granting/extending loans and other ongoing matters were
addressed.
VILVI GROUP ANNUAL REPORTS
2024
27
MEMBERS OF THE BOARD OF VILKYŠKIŲ PIENINĖ AB
Name, Surname
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 31-12-2024, %
Gintaras Bertašius
Chairman of the Board
Term until
28/04/2026
higher
education,
engineer -
mechanic
The main workplace:
CEO of Vilkyškių pieninė AB
Participation in the management of
other companies:
Chairman of the Board of Modest AB,
Kelmės pieninė AB, Kelmės pienas UAB
and Baltic Dairy Board SIA.
As of 31 December 2024, G.
Bertašius had no shares in AB
Vilkyškių 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 Vilkyškių pieninė AB).
Vilija Milaševičiutė
Member of the Board
Term until
28/04/2026
higher
education,
finance and
credit
The main workplace:
Director of Economics and Finance of
Vilkyškių pieninė AB
Participation in the management of
other companies:
Member of the Board of Modest AB,
Kelmės pieninė AB, Kelmės pienas UAB
and Baltic Dairy Board SIA.
9,588 pcs./0.08%
Linas Strėlis
Member of the Board
Term until
28/04/2026
higher
education,
economics
The main workplace:
Director of Biglis UAB (company code
133688345)
Participation in the management of
other companies:
Member of the Board of Umega AB
(company code 126334727), Investicija
kubu UAB (company code 305818634),
Raudona saulė UAB (company code
302865867), East West Agro AB (company
code 300588407), Lords LB Baltic
Opportunity Fund (company code
306484707) and Galinta UAB (company
code 134568135).
-
VILVI GROUP ANNUAL REPORTS
2024
28
MEMBERS OF THE BOARD OF VILKYŠKIŲ PIENINĖ AB
Name, Surname
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-
2024, %
Sigitas Trijonis
Member of the Board
Term until
28/04/2026
higher
education,
engineer –
mechanic
The main workplace:
Director of the Investment Projects Department of
Vilkyškių pieninė AB
Participation in the management of other
companies:
Does not participate in the management of other
companies
425,607 pcs./3.56%
Rimantas
Jancevičius
Member of the Board
Term until
28/04/2026
higher
education,
zootechnician
The main workplace:
Director of Raw Material Purchase of Vilkyškių pieninė
AB
Participation in the management of other
companies:
Does not participate in the management of other
companies
357,370 pcs./2.99%
Andrej Cyba
Member of the Board
Term until
28/04/2026
higher
education,
business
administration
and
management
The main workplace:
CEO of Ymmalu UAB(company code 305765142)
Participation in the management of other
companies:
CEO of PEF GP1 UAB (company code 302582709), PEF
GP2 UAB (company code 302582716), Piola UAB
(company code 120974916), LAMA Capital UAB
(company code 306178639), V3 Installation Solutions
UAB (company code 124100519), Vokė-III UAB
(company code 120959622), Business Development
Manager of INVL Asset Management UAB (company
code 126263073), Chairman of the Board of FMĮ INVL
Financial Advisors UAB (company code 304049332),
Member of the Board of Baltic Dairy Board SIA,
Chairman of the Supervisory board IPAS INVL Asset
Management (company code 40003605043) and AS
INVL atklātais pensiju fonds (company code
40003377918), Member of the Board and Chairman
of the Audit Committee of „AUGA group“ (company
code 126264360).
-
VILVI GROUP ANNUAL REPORTS
2024
29
MATRIX OF BOARD MEMBERS' COMPETENCIES:
Indicator
Value
Ratio of female to male board members of the Parent Company
1:6
Percentage of independent board members of the Parent Company
33%
Executive board members of the Parent Company
4
Non-executive board members of the Parent Company
2
Gintaras
Bertašius
Rimantas
Jancevičius
Vilija
Milaševičiutė
Sigitas
Trijonis
Linas
Strėlis
Andrej Cyba
Area of Competence
Strategic
manage-
ment
Main raw
material
procurement
management
Financial
manage-
ment
Technology
implementa-
tion and
innovation
Business
develop-
ment
and sales
Organizational
development
and risk
management
Experience:
Long-term business strategy
creation and implementation
+
+
+
+
+
+
Establishing the company's mission,
vision, and values
+
+
+
+
+
Development and execution of
capital raising strategies
+
+
+
+
Analysis and optimization of
business processes
+
+
+
+
+
Market analysis and identification of
competitive advantages
+
+
+
+
Setting and pursuing sustainability
goals
+
+
Risk Identification and Mitigation
Strategy Development
+
+
+
+
Competence:
Finance management
+
+
+
Strategy formation
+
+
+
Investment analysis and
assessment
+
+
+
+
+
Change and risk management
+
+
Increasing operational efficiency
+
Optimization of raw material
procurement processes
+
Sustainability management:
- Environmental protection
+
- Human resources, safety, and
health
+
- Sustainable financing
+
+
- Accountability
+
- Monitoring of impacts, risks, and
opportunities
+
+
+
+
+
VILVI GROUP ANNUAL REPORTS
2024
30
COMMITTEES
Appointment and Remuneration Committee
Members:
− Chairman - Birutė Butkienė (ŪKB Šilgaliai Agro accountant),
− Giedrė Krinicina (Vilkyškių pieninė AB employee),
− Živilė Žymantaitė (Vilkyškių pieninė AB 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 – Supervisory board
Functions of the committee:
• rovides 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.
Activities of the Appointment and Remuneration Committee in 2024
In 2024, two committee meetings were held, during which the salaries of the Company’s employees were reviewed,
recommendations regarding the company’s internal regulations and remuneration policy, as well as
recommendations regarding a candidate for the position of Business Development and Growth Director, were
provided. Additionally, in 2024, the European Parliament and Council Directive (EU) 2023/970 on wage transparency
was reviewed, and an implementation plan for the directive was discussed and proposed.
All committee members participated in the meetings.
Audit Committee
Members:
− Chairman Aušra Lobinienė (Head of Internal Audit Service of Tauragė Credit Union),
− Vilma Morkaitienė (Bonus modus UAB senior Accountant)
− Sigita Montvilaitė (Vilkyškių pieninė AB 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.
Activities of the Audit Committee in 2024
In 2024, three committee meetings were held, during which the Company’s 2023 financial statements, the 2023
annual report, and the 2023 profit (loss) allocation were discussed and approved, and the 2024 budget was discussed.
Recommendations were made regarding the selection of the auditing companies for the corporate group. The risk
management systems for sales to various countries were reviewed, and the 2024 audit activity plan was discussed.
VILVI GROUP ANNUAL REPORTS
2024
31
KEY MANAGERS
Education/ Area of Competence
Information about participation
in the management of other
companies:
Available share of the
company’s capital and
votes as of 31-12-2024, %
Gintaras Bertašius
CEO
higher education, engineer -
mechanic
Chairman of the Board of
Vilkyškių pieninė AB, Modest AB,
Kelmės pieninė AB, Kelmės
pienas UAB and Baltic Dairy
Board SIA.
No shares
owned/60.40%
Area of Competence:
- strategic management
Vilija Milaševičiutė
Director of Economics and
Finance
higher education, finance and credit
Member of the Board of
Vilkyškių pieninė AB, Modest AB,
Kelmės pieninė AB, Kelmės
pienas UAB and Baltic Dairy
Board SIA.
9,588 pcs./0.08%
Area of Competence:
- finance
- risk management
Sigitas Trijonis
Director of the Investment
Projects Department
higher education, engineer -
mechanic
Member of the Board of
Vilkyškių pieninė AB.
425,607 pcs./3.56%
Area of Competence:
- technology implementation
- innovation
Rimantas Jancevičius
Director of Raw Material
Purchase
higher education, zootechnician
Member of the Board of
Vilkyškių pieninė AB.
357,370 pcs./2.99%
Area of Competence:
- main raw material procurement
management
Vaidotas Juškys
Executive Director
higher education, information
technologies
Does not participate in the
management of other
companies.
23,536 pcs./0.20%
Area of Competence:
- commercial activities
VILVI GROUP ANNUAL REPORTS
2024
32
KEY MANAGERS
Education/ Area of Competence
Information about participation
in the management of other
companies:
Available share of the
company’s capital and
votes as of 31-12-2024, %
Arvydas Zaranka
Production Director
higher education, dairy technology
Director of Kelmės pieninė AB,
member of the Board of Modest
AB.
1,933 pcs./0.02%
Area of Competence:
- production
- corporate governance
Rita Juodikienė
Director of
Management and
Quality
higher education, business
management
Member of the Board of Kelmės
pieninė AB and Kelmės pienas
UAB.
2,175 pcs./0.02%
Area of Competence:
- quality, human resources, procurement,
sustainability and environmental
management
Paulinas Stanaitis
Director of Transport
and Logistics
higher education, management and
business administration
Does not participate in the
management of other
companies.
-
Area of Competence:
- Transportation and Logistics
Jolita Valantinienė
Director of Kelmės
pienas UAB
higher education, management and
business administration
Director of Pieno logistika AB.
-
Area of Competence:
- production
- corporate governance
Matas Pozingis
Director of Modest AB
higher education, management and
business administration
Does not participate in the
management of other
companies.
-
Area of Competence:
- production
- corporate governance
VILVI GROUP ANNUAL REPORTS
2024
33
GOVERNANCE PRINCIPLES
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, 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.
More information in the Sustainability
Statement, page 84-95.
Business ethics and intolerance to bribery and corruption
The Code of Ethical Business was 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 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.
More information in the Sustainability Statement, page 104-106.
These provisions are established by:
Code of Ethical Employment
These provisions are established by:
Code of Ethical Business
All key policies and codes are publicly available on the Group’s website so that all stakeholders are aware of our ethical
employment principles (https://vilvigroup.lt/politikos/).
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.
VILVI GROUP ANNUAL REPORTS
2024
34
DIVIDENDS
In 2012, Vilkyškių pieninė AB 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.
Payment of dividends by Vilkyškių pieninė AB in the last years:
2020
2021
2022
2023
2024
(for 2019)
(for 2020)
(for 2021)
(for 2022)
(for 2023)
Dividends (EUR)
-
955,440
2,388,600
3,164,744
3,702,330
Dividends per share (EUR)
-
0.08
0.20
0.265
0.31
Number of shares
11,943,000
11,943,000
11,943,000
11,943,000
11,943,000
Payment of dividends in other VILVI GROUP companies:
Kelmės pienas UAB:
− In 2024 (for 2023) paid out dividends of EUR 2.0 million;
− In 2023 (for 2022) paid out dividends of EUR 1.2 million.
Payment of dividends by Kelmės pieninė AB in the last years:
2020
2021
2022
2023
2024
(for 2019)
(for 2020)
(for 2021)
(for 2022)
(for 2023)
Dividends (EUR)
5,651,261
7,371,210
3,931,312
1,523,383
8,992,876
Dividends per share (EUR)
2.30
3.00
1.60
0.620
3.66
Number of shares
2,457,070
2,457,070
2,457,070
2,457,070
2,457,070
Modest AB, Pieno logistika AB and Baltic Dairy Board SIA have not paid dividends in the past 5 years.
VILVI GROUP ANNUAL REPORTS
2024
35
OTHER INFORMATION ABOUT MANAGEMENT
Links to the applicable Corporate Governance Code and all necessary information about corporate governance
practices:
The Company's annual statements, which include the audited financial statements and the management report, are
published on the Company’s website, VILVI GROUP and on the Nasdaq Vilnius stock exchange website Vilkyškių
pieninė | Trading— Nasdaq Baltic Exchange (nasdaqbaltic.com).
Information on transactions with related parties
During 2024, the company did not have transactions with related parties that would meet the criteria specified in
Article 37
2
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 2024.
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 126.
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.
Agreements between shareholders
The Company does not have data on mutual agreements between shareholders. In 2024, the Companies have not
entered into agreements with members of their bodies or employees that will 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.
Main features of the internal control and risk management systems of the Company and the Group of companies
in relation to the compilation of the consolidated set of financial statements.
The Company's Chief Accountant and Finance Department regularly review the International Financial Reporting
Standards (IFRS) adopted in the European Union in order to ensure timely implementation of all changes in the
financial statements, analyze transactions significant to the Group's and the Company's activities, ensure correct and
timely collection of information, and periodically inform the Company's management about the progress of the
financial statements.
The Audit Committee supervises the preparation of the set of consolidated financial statements, internal control and
financial risk management systems, and compliance with the legal acts regulating the compilation of the set of
consolidated financial statements.
Events after the reporting period
VILVI Group's subsidiary, Vilkyškių pieninė AB entered into a claim assignment agreement with Šiaulių bankas AB and
the deed of transfer and acceptance of the documents was signed on 24 February 2025. The claim consists of unpaid
obligations of Marijampolės pieno konservai UAB and Lukšių pieninė UAB to the bank, and it is secured by the assets
of these companies and other additional guarantees.
The transaction does not have any significant impact on the financial situation of Vilkyškių pieninė AB as the claim
was acquired using the Company's own funds, is appropriately secured against credit risk, and the Company plans to
generate returns from these funds consistent with similar debt capital transactions. The invested funds also do not
affect the Company's assets or its competitive position in the market.
VILVI GROUP ANNUAL REPORTS
2024
36
RISK MANAGEMENT
Risk management is an integral part of the Group's activities. We identify, analyse and assess risk in the context of the
Group's objectives, activities and external environment. The approval of the Group's overall risk management model
is the responsibility of the Board, while the supervision is the responsibility of the Meeting of Directors.
RISK MANAGEMENT MODEL
The Group applies the Committee of Sponsoring Organisations of the Treadway Commission (COSO) internal control
and risk management model. The risk management process covers all Group entities as well as functions and is
continuously reviewed, assessing the Group's risk appetite and strategic objectives, and aligned to market conditions
and changes in the Group's business. We carry out regular monitoring of risk management in the Group. On a
quarterly basis, the Meeting of Directors reviews internal and external risks, assesses risk indicators, and identifies risk
management measures as appropriate.
Stages of risk management:
Risk management objectives:
• To ensure the functioning of the Group.
• To manage the impact of risks on the Group's
objectives.
• To ensure the Group's reputation.
• To protect the stakeholders' interests.
Types of risks:
• Strategic- affecting the Group's strategic objectives;
• Financial -affecting the Group's financial
performance;
• Operational (business) - affecting the efficient
operation of the Group.
Types of risks:
- by period: short-term (0–1 years), medium-term (1–4 years), long-term (>5 years);
- by source: internal and external
- by ESG area: E (Environment) – affecting the environment; S (Social) – affecting social factors and their
management; G (Governance) – affecting the area of governance.
ALIGNMENT OF RISK APPETITE AND
STRATEGY
RISK
IDENTIFICATION
RISK
ASSESSMENT
RISK MANAGEMENT:
TOOLS AND ACTIONS
RISK
MONITORING
VILVI GROUP METINIŲ ATASKAITŲ RINKINYS
2024 M.
37
1. STRATEGIC RISKS
RISK FACTORS
SOURCE OF RISK
SOURCE
TYPE
(internal/
external)
PERIOD
(short-term,
medium-
term, long-
term)
IMPACT ON
THE STRATEGY
/ AREA OF
IMPACT
RISK MANAGEMENT
ESG
TYPE:
E / S /
G
Risk of non-
completion, untimely
completion of
strategic investment
projects
Unforeseen external circumstances, issues
in project management.
Internal/
external
medium-
term
FINANCE
- A new Investment Projects Division has been created
to manage investment projects, and project
management expertise is being developed.
- Regular monitoring of the project implementation
plan and emerging risks is carried out.
- External professionals, consultants are used as needed.
Supply chain risks
Spikes in the prices of raw materials and
energy resources affect the cost of
production. Seasonality of raw material
supply, insufficient raw material quantity,
supply chain compliance with
sustainability requirements.
external
long-term
FINANCE
- Regular monitoring of price fluctuations.
- Diversification of sources of strategic raw materials.
- Technological solutions have been put in place to
diversify the energy resources used.
- Supply chain risk management model.
Dependence on a
branch or large
customers
Changes in the industry, changes in
customer spending power, competition.
internal
long-term
FINANCE
- Regular market monitoring.
- Diversification of businesses.
- Diversification of the customer portfolio.
Risk of non-sale of
products
Fluctuations in demand and price,
fluctuations in demand and price caused
by unfair competition.
external
long-term
FINANCE
- Regular market monitoring.
- Diversification of businesses.
- Diversification of the customer portfolio.
- Loyal customer database.
Climate change
transition risks
Growing production increases greenhouse
gas emissions and the pace of GHG
emission reductions is too slow due to
dependence on technological solutions.
internal
long-term
FINANCE/
COMPLIANCE
- Environmental policy, legal compliance.
- Regular monitoring, impact assessment, pollution
monitoring programmes.
- Deployment of low-impact technologies.
E
Climate change
transition risks
Ongoing military conflicts and geopolitical
tensions can affect trade restrictions, tariff
increases, raw materials and logistics costs.
external
long-term
FINANCE
- Supply chain diversification
- Diversification of businesses.
- Diversification of the customer portfolio.
G
Business ethics risks
Dishonesty, corruption and bribery can
affect reputation, share price and
customer confidence.
internal
medium-
term
ORGANISATION/
REPUTATION
- Policies and procedures for ethical conduct
- Education
- Confidential and anonymous reporting is possible.
G
Compliance risks
Unmanageable accountability to
stakeholders, compliance with EU
regulation, national law and legislation.
internal
long-term
ORGANISATION/
REPUTATION
- Timely and regular reporting to stakeholders.
- Assigned responsibilities and planning
E,S,G
VILVI GROUP METINIŲ ATASKAITŲ RINKINYS
2024 M.
38
2. FINANCIAL RISKS
RISK FACTORS
SOURCE OF RISK
SOURCE
TYPE
(internal/
external)
PERIOD
(short-term,
medium-
term, long-
term)
IMPACT ON
THE
STRATEGY /
AREA OF
IMPACT
RISK MANAGEMENT
ESG
TYPE:
E / S /
G
Financial liquidity risk
The risk that the Group and the Company
may not be able to meet their financial
obligations when due.
internal
long-term
-
- Sufficient cash and cash equivalents flow or be
financed through an adequate credit facility.
- Maintenance of a balance between continuity of
funding and flexibility.
Credit risk
The Group and the Company's trading
activities involve the sale of products and
services with deferred payment terms,
which may expose customers to the risk of
non-payment of the Group's and the
Company's receivables from the sale of
products and services.
external
long-term
-
- The application of credit limit principles, which
determine the amounts of credit to be granted to
customers and the types of collateral involved, such as:
limits, guarantees, insurance.
- Insurance for foreign buyers.
- Customer credit risk assessment.
Market risk
Changes in market prices, e.g. foreign
exchange rates and interest rates, affect
the Group's and Company's results or the
value of financial instruments held.
external
long-term
-
- Management of foreign exchange rates.
VILVI GROUP METINIŲ ATASKAITŲ RINKINYS
2024 M.
39
3. OPERATIONAL RISKS
RISK FACTORS
SOURCE OF RISK
SOURCE
TYPE
(internal/
external)
PERIOD
(short-term,
medium-
term, long-
term)
IMPACT ON
THE STRATEGY
/ AREA OF
IMPACT
RISK MANAGEMENT
ESG
TYPE:
E / S /
G
Product quality and
safety risks
Inadequate assessment and management
of risk factors (biological, chemical,
physical). Information for drivers.
Internal
Long-term
FINANCE
- Food safety, quality and management standards are in
place and regularly updated.
- Regular staff training and competency maintenance.
- Regular internal and external audits
S
Attraction and
retaining of workers
Population decline in the region, shortage
of highly skilled workers.
Internal/
External
Long-term
ORGANISATION/
FINANCE
- Close cooperation with organisations and research
institutions.
- Motivational tools for searching within the organisation.
- Competence development training.
- Loyalty incentives.
- Assessment of the market relevance of working
conditions and employee welfare, remuneration policy,
the remuneration system and its continuous
improvement.
S
Safety and health
risks
Risk of accidents, absence due to sickness.
Failure to control occupational risks, safety
and health violations.
Internal
Long-term
ORGANISATION
- An Occupational Health and Safety Policy is in place, and
regular health and safety briefings and training are
provided.
- Regular assessment of occupational risks.
- Reduction of ergonomic, chemical and other risks
through technological measures and internal
programmes.
S
Human rights
violations:
discrimination and
failure to ensure
equal opportunities
Inconsistency of staff behaviour with the
Group's values and policies.
Internal
Long-term
ORGANISATION
- The Human Rights, Equal Opportunities, Violence and
Harassment at Work Policies and their implementation
procedures are approved.
- Staff training.
- Confidential and anonymous reporting is possible.
S
Risk of negative
environmental
impacts
Risk of environmental pollution due to the
consumption and release of large
quantities of natural resources, potential
technology failures. Inadequate separation
of waste streams, too slow waste reduction
rates
Internal
medium-
term
ORGANISATION/
REPUTATION
- The necessary monitoring programmes, procedures and
practices are in place.
- Employee education.
E
IT security risks
Physical and software data insecurity,
cyber-attacks
External
Long-term
ORGANISATION/
REPUTATION
- An IT Security Policy is approved.
- The GDPR is approved.
G
VILVI GROUP METINIŲ ATASKAITŲ RINKINYS
2024 M.
40
- Continuous improvement of physical and software data
security.
- External consultants are brought in as needed.
Digitisation risks
Slow digitisation processes due to lengthy
procurement of software and technology
solutions, delays in deployment.
Internal
Medium-term
ORGANISATION
- Implementation of data automation solutions.
- Structural changes are being implemented to speed up
deployment processes.
S
Business continuity
risk
Regulatory compliance, climate change-
induced extremes, uncertainty caused by
political and other unrest (e.g. pandemics,
mobilisation, civil protection, etc.)
Internal/
External
Long-term
ORGANISATION/
FINANCE
- Business Continuity Plans are approved.
S, G
Physical risks of
climate change
Deterioration of factors affecting activities
due to climate change: environmental
degradation (air, water, soil pollution),
water degradation/scarcity, climate
warming.
External
Long-term
ORGANISATION/
FINANCE
- Regular monitoring programmes for environmental
factors.
E
Climate change
transition risks
Financial and human resource
requirements for adaptation to climate
change: deployment of low-emission
technological measures, resources for
ongoing impact assessment and
mitigation.
External
Long-term
ORGANISATION/
FINANCE
- Continuous assessment of the organisation's
sustainability.
- Continuous monitoring of EU and Lithuanian law and
action planning.
- A new Investment Projects Division has been created to
manage innovation projects, including the management
of low-carbon technology projects.
- Regular monitoring of mitigation results.
G
Compliance risk
Untimely reporting, unfavourable and
unplanned regulatory changes, supply
chain sustainability management.
Internal/
External
Medium-term
ORGANISATION/
REPUTATION
- Regular reporting according to plan.
- Confirmed responsibilities for the provision of
information.
- Confirmed responsibilities for different areas of activity.
- Information management and risk assessment at Group
level.
- Regular monitoring of customer requirements.
- Implementation of sustainability actions within the
Group.
- Raising sustainability requirements for the supply chain.
E, S, G
VILVI GROUP ANNUAL REPORTS
2024
41
Operational risk map of VILVI Group
VILVI Group main operational risks:
1. Produce quality and safety
2. Attraction of and retaining of staff
3. Safety and health risks
4. Human rights violations: discrimination
and failure to ensure equal opportunities
5. Risk of negative environmental impacts
6. IT security risks
7. Digitisation risks
8. Business continuity risk
9. Physical risks of climate change
10. Climate change transition risks
11. Compliance risks
RISK MARKING
By risk level:
Risks with low probability and
low impact are excluded from
the risk map.
Criteria for the Group's main
risks:
− has a significant financial
impact;
− high probability of risk.
Risks in ESG areas are marked:
High
Medium
Small
VILVI GROUP ANNUAL REPORTS
2024
42
REMUNERATION
− GENERAL INFORMATION | 43
− PRINCIPLES OF REMUNERATION DETERMINATION |
43
− BOARD MEMBERS’ REMUNERATION | 43
− REMUNERATION OF EMPLOYEES OF THE PARENT
COMPANY AND VILVI GROUP COMPANIES | 44
VILVI GROUP ANNUAL REPORTS
2024
43
General information
Vilkyškių pieninė AB remuneration report has been prepared for the reporting financial period of 2024, which
coincides with the calendar year. The preparation of the remuneration report (hereinafter - the Report) was guided by
the provisions of the Law of the Republic of Lithuania on the Reporting by Undertakings and Groups of Undertakings,
VILVI Group’s employee Remuneration Policy (hereinafter - the Remuneration Policy) and other legal acts. The
Remuneration Policy of VILVI Group 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 2023 – 2024
Two members of the Board of Vilkyškių pieninė AB 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 2024. Board members working under an employment contract received salary
only on the basis of employment relations. The wages calculated and paid during 2024 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
2023
2024
Fixed salary
Variable
salary
Total
Fixed salary
Variable
salary
Total
Gintaras Bertašius,
115,2
-
115,2
126,9
-
126,9
CEO
Vilija Milaševičiūtė,
72,2
12,8
85,0
83,7
9,9
93,6
Director of Economics and
Finance
Sigitas Trijonis,
72,7
12,3
85,0
76,7
10,0
86,7
Director of the Investment
Projects Department
Rimantas Jancevičius,
72,3
12,1
84,4
83,5
10,2
93,7
Director of Raw Material
Purchase
VILVI GROUP ANNUAL REPORTS
2024
44
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 2024, including no shares or other transactions concluded for
the benefit and interests of the managers. During the reporting period, 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.
Remuneration for the activity in the Supervisory board, 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.
Remuneration of employees of the parent company and Group companies
The wage fund of the Corporate Group in 2024 was equal to EUR 23,851 thousand (2023 – EUR 19,108 thousand).
Average monthly salary before taxes of the employees of Vilkyškių pieninė AB, EUR:
Staff group
2020
2021
2022
2023
2024
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
21
4,198
19
4,565
20
5,029
22
5,478
26
6,039
Specialists
155
1,338
147
1,506
150
1,777
150
2,038
161
2,078
Workers
283
948
274
1,059
292
1,253
252
1,507
213
1,859
Total:
459
1,228
440
1,365
462
1,581
424
1,884
400
2,183
Average monthly salary before taxes of the employees of VILVI Group, EUR:
Staff group
2020
2021
2022
2023
2024
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
29
3,997
30
4,261
30
4,799
31
5,240
37
5,796
Specialists
301
1,311
310
1,434
310
1,711
319
1,961
361
2,064
Workers
500
924
527
1,020
544
1,209
569
1,435
540
1,650
Total:
830
1,166
867
1,281
884
1,508
919
1,746
938
1,958
One of the companies of the Group operates in Latvia, where the salary calculation system differs from Lithuania. In
Latvia, the amount of taxes deducted from the employee's salary is lower than in Lithuania and the employer's
contributions are higher than the employee's salary.
In the period of 2024, the remuneration paid to the members of the Board of Vilkyškių pieninė AB 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 REPORTS
2024
45
SUSTAINABILITY
STATEMENT
SUSTAINABILITY REVIEW | 46
ESRS 2 | GENERAL INFORMATION | 47
ENVIRONMENT | 58
− TAXONOMY OVERVIEW | 59
− E1 CLIMATE CHANGE | 65
− E2 POLLUTION | 70
− E3 WATER AND MARINE RESOURCES | 74
− E4 BIODIVERSITY AND ECOSYSTEMS | 75
− E5 RESOURCE USE AND CIRCULAR ECONOMY |
78
SOCIAL | 84
− S1 OWN WORKFORCE | 85
− S3 AFFECTED COMMUNITIES | 96
− S4 CONSUMERS AND END USERS | 98
GOVERNANCE | 103
− G1 BUSINESS CONDUCT | 104
APPENDIX | 108
u
VILVI GROUP ANNUAL REPORTS
2024
46
SUSTAINABILITY REVIEW
We have been working towards a meaningful goal for many years, but
2024 is the year of change, when a clearer direction for increasing
positive impacts and reducing negative impacts is provided in the
double materiality assessment. It is the results of the Double Materiality
Assessment that will continue to dictate the strategic directions towards
a more sustainable organization.
In this Statement, topics of significance to the VILVI GROUP (hereinafter
referred to as the Group) in the areas of environmental, social and
governance (ESG) are highlighted. The information on the relevant
processes, policies, actions, performance indicators and targets for each
sustainability theme of the Group are provided, and the greatest
challenges we face to change in each area or part of the value chain are
revealed.
We understand that as we raise our expectations to reach more
consumers around the world, and increase our production capacity as
a result, our responsibilities in all areas of the ESG, as well as the risks of
GHG emissions and negative impacts, are growing. We are consistently
developing a sustainability governance model to manage these risks
responsibly and aim to integrate the management of impacts, risks and
opportunities into the management of the Group successfully.
Our objectives and priorities remain substantially unchanged after
performing the Double Materiality Assessment, and we are pleased that
this assessment only allows us to make them more personalized.
Long-term direction in the areas of ESG of the Group:
ENVIRONMENTAL PROTECTION
To decrease environmental impacts by reducing GHG emissions, using natural
resources responsibly and efficiently, increasing circularity and reducing
waste.
To ensure management of air and water pollution.
To aim for responsible use of extracted raw materials.
For more information see page 58,
section "Environment".
SOCIAL ENVIRONMENT
To ensure the well-being of employees.
To strengthen the communities in which we operate.
To increase the access to products and provide a safe and quality product for a
consumer.
For more information see page 84,
section "Social environment".
GOVERNANCE
To operate with transparency, fostering and cultivating a culture of responsible
business.
To ensure a whistleblowing and whistleblower protection.
To manage relationships with suppliers, in order to achieve a resilient and
efficient supply chain.
For more information see page 103,
section "Governance".
For comments, questions or other information regarding sustainability disclosures, please contact: sustainability@vilvi.eu.
SUSTAINABLE DEVELOPMENT GOALS OF
THE VILVI GROUP
We have joined the initiative of the United
Nations Sustainable Development Goals
(SDG): https://unglobalcompact.org/sdgs for
a several years. From the 17 points identified
as the world’s greatest sustainability
challenges, we have selected those areas
where we believe a positive impact can be
made, to turn negative impacts into positive
ones or at least significantly reduce them.
The set goals become our daily impetus to
find sustainable solutions.
VILVI GROUP ANNUAL REPORTS
2024
47
GENERAL INFORMATION
General basis for preparation of sustainability statements
This section provides “Vilkyškių pieninė“ AB (hereinafter referred to as VILVI Group or the Group) consolidated
information on sustainability matters (hereinafter referred to as the Sustainability Statement) for the year 2024,
prepared in accordance with the European Union Corporate Sustainability Reporting Directive (CSRD), the Law on
Corporate and Group Reporting (LCGR), the European Sustainability Reporting Standards (ESRS), and forms an
integrated part of the 2024 consolidated management report (hereinafter referred to as the Management Report).
VILVI GROUP submits the sustainability report in accordance with the ESRS starting from the reports published in
2025 for the 2024 financial year. The information presented in this report covers the period from January 1, 2024, to
December 31, 2024, and aligns with the scope of the financial reporting. The sustainability report also includes an
assessment of compliance with the EU Taxonomy Regulation.
The Sustainability Statement has been prepared on a consolidated basis at the level of the Group. The scope of the
Statement is the same as the scope of the financial statements - the Statement covers both the parent company,
“Vilkyškių pieninė” AB, and the subsidiaries controlled by the parent company directly and indirectly. Unless otherwise
stated, the material topics of the Sustainability Statement cover all companies of the Group and detailed sustainability
information for each Group is not prepared.
This Statement covers the main value chain of the Group (own operations), including the impacts, risks and
opportunities (further on – IRO’s) identified in our activities and those of our suppliers, partners and customers
(upstream and downstream). The preparation of the Sustainability Statement in accordance with ESRS gives it a
clearer structure and expands the scope of disclosures than was previously the case. In submitting the Sustainability
Statement, the Group has not used the exemption not to disclose specific classified information on intellectual
property, know-how, innovation performance or operational developments, as there was no need to do so.
The activities of the Group are divided into different business segments, for more information on the business
segments see page 16, section "VILVI GROUP Operating segments". Sustainability disclosures are not segmented -
individual business segments do not affect the sustainability objectives or actions of the Group due to the similarity
and synergies between the segments (cheese and cheese products, fresh dairy products, dry dairy products, industrial
cream). The business segments are inextricably linked to each other in order to create the highest possible value, for
more information on the business model of the Group, see page 51, section "Strategy, business model and value chain".
List of phased-in disclosure requirements:
In accordance with the list of phased-in requirements set out in Appendix C of ESRS 1, the Group takes advantage of
the exemption and does not present the information in the Sustainability Statement of the year 2024:
Disclosure
requirement
Information
SBM-1, 40 (b)
a breakdown of total revenue, as included in its financial statements, by significant ESRS sectors;
SBM-1, 40 (c)
a list of additional significant ESRS sectors;
SBM-3, 48 (e)
the anticipated financial effects of the undertaking’s material risks and opportunities on its financial
position, financial performance and cash flows over the short-, medium- and long-term, including the
reasonably expected time horizons for those effects;
SBM-3, 48 (f)
information about the resilience of the undertaking's strategy and business model regarding its
capacity to address its material impacts and risks and to take advantage of its material opportunities;
E1-9
anticipated financial effects from material physical and transition risks and potential climate-related
opportunities;
E2-6
anticipated financial effects from pollution-related impacts, risks and opportunities;
E3-5
anticipated financial effects from water and marine resources-related impacts, risks and opportunities;
E4-6
anticipated financial effects from biodiversity and ecosystem-related impacts, risks and opportunities;
ESRS 2
BP-1
VILVI GROUP ANNUAL REPORTS
2024
48
E5-6
anticipated financial effects from resource use and circular economy-related impacts, risks and
opportunities;
S1-7
characteristics of non-employee workers in the undertaking’s own workforce.
Disclosures in relation to specific circumstances
The information shall be provided for the calendar year ending 31
st
of December, 2024.
Unless otherwise stated, facts and figures are given for the date indicated (e.g. number of
employees, other indicators). The Statement includes disclosures of the year 2024 for which
limited assurance has been provided, comparative information for earlier periods is not
provided. If required, data for previous years can be found in the Annual Report of the Group
of the year 2023.
Significant errors were made in the sustainability report for 2023:
– The measurement units for GHG emissions were incorrectly stated. When presenting Scope 1 and Scope 2 GHG
emissions, the measurement units were indicated as “thousand t CO2 equiv.”, whereas they should have been “t CO2
equiv.”
– The OpEx indicator for non-taxonomy activities according to the taxonomy, as well as the total OpEx for taxonomy-
aligned and non-taxonomy activities, were incorrectly calculated.
– The taxonomy-aligned activity “Freight road transport services (6.6)” was incorrectly reported – the Group did not
carry out this activity in 2024.
In accordance with guidelines of ESRS and EFRAG (European Financial Reporting Advisory Group), the Double
Materiality Assessment was carried out in 2024 by the Group, which forms the basis for the structure and disclosures
in this Statement (for more information, see page 54. The Statement now discloses information about significant IRO’s
related to ESG factors of the Group, under the ESRS topics. The Statement does not disclose information on the
impacts of ESG that were assessed as less significant for the Group in the Double Materiality Assessment. The EU
Taxonomy disclosures are now provided in the Environmental section. The Statement does not provide additional
information required by other legislation or other reporting standards.
The Group decided to invest in the construction of a cheese factory in Latvia and began initial factory design work in
2024. The scope of the 2024 sustainability report – including the assessment of impacts, risks, and opportunities –
incorporates the new factory’s scope based on the project progress as of 2024. Once the factory becomes operational,
it is planned to update the double materiality assessment to include the scope of the operating factory.
The definition of time periods used in the Sustainability Statement aligns with those defined in the ESRS:
Definition of the period
ESRS-defined period/ Applicable period for disclosing sustainability
information of the Group
Short-term period
Reporting period
Medium-term period
From the end of the reporting period to five years
Long-term period
Longer than 5 years
Information from external sources was used to calculate scope 3 GHG emissions for the indicators related to upstream
and downstream parts of the supply chain, see page 68 for more details on the use of information. For the
presentation of indicators, uncertainty and error information and planned actions to improve accuracy are identified
in the information provided where relevant.
List of disclosure requirements incorporated by reference:
ESRS disclosure requirement
Reference
Group strategy, business segments, markets and customer groups
SBM-1
See page 6, 16-19.
Governing bodies and their composition
GOV-1
See page 21, 23-32.
Competences of the governing bodies and senior management
GOV-2
See page 25, 29.
Statement on due dilligence
GOV-4
See page 108-109.
List of data points that derive from EU legislation
IRO-2, ETAS 2
See page 110-114
Annual
Report of
the VILVI
GROUP of
the year
2023
BP-2
VILVI GROUP ANNUAL REPORTS
2024
49
The role of the administrative, management and supervisory bodies and Information provided
to and sustainability matters addressed by the undertaking’s administrative, management and supervisory
bodies
Sustainability decisions are now gradually being integrated into the strategy and decision-making processes of the
Group. Sustainability issues are increasingly being addressed in the relevant governance bodies to ensure full
integration into the strategy and operations of the Group in the future. Below, a diagram of sustainability decision-
making and sustainability-related responsibilities within the Group is shown.
- The Group Board oversees the direction of the Group and decides on the scale of the sustainability
ambition of the Group;
- The Audit Committee assists the Board in overseeing accountability - financial and sustainability
reporting;
- The Nomination and Remuneration Committee helps to integrate sustainability requirements into the
remuneration system and the assessment of management competences;
- The sustainability strategy and objectives are set by the senior management, which is responsible for the
key issues of sustainability integration in the day-to-day management of the Group. The senior
management of the Group is responsible for managing impacts, risks and opportunities directly.
- The planning and implementation of sustainability actions is entrusted to the Governance and Quality
Unit of the Group, with responsibility for overseeing IRO’s, employee engagement, and the inclusion of
consumer and client opinions in impact management and monitoring targets assigned to the Head of
the Unit. This Unit manages the core sustainability functions - environment, human resource
management, health and safety, achieving business ethics and governance standards, food safety and
quality, supply chain management. The sustainability function is managed, supervised and controlled by
- the Unit of Sustainable Operations within the Governance and Quality Unit.
Composition of the management bodies by gender and independence, as well as concentrated sustainability
competencies:
Supervisory Board
The Group Board
The Nomination and
Remuneration Committee
The Audit Committee
Women
Men
Women
Men
Women
Men
Women
Men
Members of the governing
body by gender, % (units)
33,33 (1)
66,66 (2)
14 (1)
86 (6)
100 (3)
0 (0)
100 (3)
0 (0)
Proportion of independent
members, %
67
33
All members are not
executive administrative
All members are not executive
administrative employees and
GOV-1
GOV-2
VILVI GROUP ANNUAL REPORTS
2024
50
employees and do not
participate in the Company's
statutory capital.
do not participate in the
Company's statutory capital.
- Environment
Director of the
Investment Projects
Unit
- Human resources, health
and health
AB „Vilkyškių pieninė“
General Director
- Sustainable financing
Finance Director,
independent member
- Accountability
Finance Director
- Oversight of IRO’s
All members
All members
All members
All members
Analysis and approval of
sustainability reports
All members
All members
The Articles of Association of the company and the governing bodies do not yet contain specific information on
responsibility for IRO’s, and no specific control measures are in place, which is planned to be integrated gradually into
the governance of the Group.
In 2024, the senior management, heads of units, specialists and staff representatives were actively involved in the
Double Materiality Assessment process, and in the year 2025 it is planned to set impact management goals to develop
an oversight model for monitoring the sustainability targets, with clear responsibilities for monitoring the tracking of
the targets, both for the governing bodies and for the senior management. The results of the Double Materiality
Assessment were presented to the Group Board. The Group Audit Committee and the Board approved the
Sustainability Statement prior to its publication.
External experts are used for education to raise sustainability competence at all levels: a sustainability session was
held at the Board in 2024, and the Senior Management was actively involved in the Double Materiality Assessment
process. We aim to cultivate green skills at all levels of the specialization.
We aim to follow this model of integrated sustainability management in our planning and implementation of
sustainability actions, and are integrating it into all sustainability-related activities gradually.
Integration of sustainability-related performance in incentive schemes
The Group does not currently have an incentive mechanism linked to sustainability.
Statement on due diligence
The information is provided in the appendix, see pages 108-117.
GOV-4
GOV-3
VILVI GROUP ANNUAL REPORTS
2024
51
Risk management and internal controls over sustainability reporting
The Sustainability Unit works regularly with other units - finance, production, HR, technical, procurement, quality and
others, in order to ensure the sustainability function and accountability. This unit is responsible for managing
sustainability data and preparation of the Sustainability Statement.
Sustainability risks are managed on a Group-wide basis, as part of the overall risk management model (see page 36
for more details). We assess the risks associated with incomplete or inconsistent sustainability reporting, including
risks related to data accuracy and human error in consolidating data from different systems. The risk of too slow
digitization is included in the strategic risks of the Group and the aim is to manage its impact and increase the pace
of digitization. The Sustainability Unit is responsible for collecting sustainability data and tracking indicators. Data is
collected on a quarterly or annual basis, depending on the significance of the data. To ensure the quality of the data,
the methodology is defined by internal processes, policies or procedures, validation and responsibilities of the data
are collected, stored and evaluated at Group level. The specialists responsible for the data are responsible for
assessment of the quality of the data collected and for implementing appropriate control measures.
Strategy, business model and value chain
The vision of the Group is to make higher quality dairy products and ingredients more accessible around the world to
give people more opportunities to enjoy them wherever they are, whereas, the meaningful purpose is at the heart of
the strategy of the Group. Sustainability continues to be progressively integrated into the strategy of the Group, with
synergies and recycling of raw materials being one of the key aspects of the business model.
All business segments of the Group belong to sectors with a high climate impact (NACE code 105100); therefore, net
income from sectors with a high climate impact can be found in the "Consolidated and the parent company’s separate
financial statement”, page 164, in the line "Revenue."
Business model
The Group aims to create the greatest possible value from a drop of milk through its business model while leaving
behind as little pollution as possible. This is achieved by creating a cycle that is as closed as possible—where what
could become waste or a residual product in one factory is utilized and becomes the primary raw material for another
Group factory.
In the cheese production process of AB "Vilkyškių pieninė" and AB "Modest," the residual product is whey. This whey
is broken down within the Group’s companies and becomes the main raw material for AB "Kelmės pieninė." At this
factory, whey protein concentrate and permeate are dried into powder form, becoming an important product for
athletes’ nutrition (Whey Protein Concentrate) or a key ingredient in the confectionery and feed industries (permeate).
In this way, most of the Group’s factories are interconnected in their operations.
GOV-5
SBM-1
VILVI GROUP ANNUAL REPORTS
2024
52
The value chain of the Group is extremely broad, with more than 600 direct suppliers at the upstream end and more
than 170 customers in more than 60 countries worldwide. Detailed information on the IRO’s in each part of the value
chain is provided in the relevant sections of the Sustainability Statement.
Inputs
In terms of sustainability and ESRS, the main inputs of the
Group are raw materials (milk, whey, other raw materials),
energy and fuels, chemicals, water, packaging, office
supplies, and services provided to support operations. The
communities of the operating places are the source of the
existing and potential employees of the Group, and the
employees of the suppliers are the basis for the operations
of the suppliers. We collect and store the relevant data
(sustainability and quality certifications, GHG emissions) by
actively managing our supplier database using a supplier
risk assessment model.
Outputs
In terms of sustainability and ESRS, the main outputs of the Group
are the products produced by the Group. The value created by the
Group for its employees, investors, business customers, end-users
and other stakeholders is in terms of wages and salaries, earnings
before interest and tax, and reduced GHG emissions.
The comprehensive income of the Group is presented in page 164, section "Consolidated and the parent company’s
separate financial statement”. The Group does not operate in the gas, coal and oil production sectors.
The information in accordance with paragraphs 40(b) (allocation of the amount of revenue by material sector) and (c)
(the list of additional material sectors in the ESRS) of ESRS 2 SBM-1 is not disclosed and is subject to the option of
disclosure to be phased-in.
Interests and views of stakeholders
The Group has a wide range of stakeholders, both internally and externally:
- Affected Stakeholders are natural and legal persons, organizations or groups whose interests are or could
be affected positively or negatively by the activities of the Group or its direct business relationships along
the value chain.
- The main users or readers of the Sustainability Statement are existing and potential investors, lenders and
other creditors (including asset managers, credit institutions, insurance companies), as well as other users
of the Sustainability Statement, including business and social partners of the Group, civil society and non-
governmental organizations, the government sector, analysts and academics.
SBM-1 42a
SBM-1 42b
SBM-2
VILVI GROUP ANNUAL REPORTS
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Below is a list of the key stakeholders of the Group. These stakeholders have been involved in the Double Materiality
Assessment and we are actively seeking their views and taking them into account when assessing the significance,
risks and opportunities of impacts. In the future, the development of a regular dialogue with key stakeholders to
ensure that their views are relevant to the conduct or updating the Double Materiality Assessment and to ensure due
diligence will be implemented gradually.
Stakeholder
Communication channels
Stakeholder interests
Objectives of the Group
Affected
stakeholder/
user of the
Sustainability
Statement
National
regulatory
authorities
Participation in legislative debates,
consultations with public
authorities, contact through
associations, performance audits,
media communication, quarterly
and annual reports.
Consistent compliance
with legal requirements,
control and monitoring
of activities, evaluation of
reports, transparent
dialogue.
Transparent dialogue,
compliance with laws and
regulations.
User of the
Sustainability
Statement
Financial
institutions
Quarterly and annual reports, one-
to-one meetings and consultations,
media briefings.
Keeping of
responsibilities,
transparent financial and
operational performance,
long-term growth and
stability, risk
management,
commitment to and
achievement of more
sustainable performance.
Transparent dialogue,
reporting on results and
sustainability objectives/
outcomes.
User of the
Sustainability
Statement
Shareholders
and investors
Quarterly and annual reports, one-
to-one meetings and consultations,
press releases, electronic investor
information via dedicated sections
of the website
Transparent financial and
operational performance,
long-term growth and
stability, risk
management, and
commitment to and
delivery of more
sustainable performance.
Ensuring long-term
investor confidence,
generating financial
returns, communicating
results in a timely and
transparent manner, and
improving the
sustainability performance
of the organization.
Affected
stakeholder
User of the
Sustainability
Statement
Management
Communication through electronic
channels (intranet, email, social
networks), regular meetings and
open discussions.
Creating Group value in
the long term, product
development prospects,
commitments to more
sustainable operations
and their
implementation.
Promotion of engagement
of the management and
motivation for
sustainability change,
building competence and
loyalty, and enhancing of
management of green
skills
Affected
stakeholder
User of the
Sustainability
Statement
Employees
Communication through electronic
channels (intranet, email, social
networks), regular meetings and
open discussions, training and
competence development
programs, employee satisfaction
and engagement surveys, internal
events and team building activities.
Fair remuneration, good
and safe working
conditions, clear
communication of
objectives of the
company, opportunities
for development and
career progression, work-
life balance, creating
meaningful activities.
Promotion of engagement
of employees and
motivation, decreasing the
turnover of the staff,
building long-term
cooperation and
development of green
skills.
Affected
stakeholder
User of the
Sustainability
Statement
Competitors
Marketing communication, media
communication, quarterly and
annual reports.
Respect, honest,
transparent and ethical
business, compliance
with laws and
regulations.
Fair and ethical
competition, compliance
with laws and regulations.
User of the
Sustainability
Statement
Business
customers
Regular meetings (exhibitions,
conferences, events),
Satisfaction surveys, electronic
communication of (newsletters,
website, social networks), direct
High product quality,
transparent and
complete information on
composition and origin,
responsiveness to
demand, fast service,
competitive pricing,
Ensuring of the supply of
safe and quality products,
building trust in the brand,
strengthening customer
loyalty, responding to
market changes and
needs, and
Affected
stakeholder
User of the
Sustainability
Statement
VILVI GROUP ANNUAL REPORTS
2024
54
contacts, visits to the
manufacturing places, surveys.
responsible and
sustainable practices,
product innovation,
sustainable supply
chains.
communicating the
sustainability performance
of the organization.
Suppliers (of
goods and
services)
Contract negotiations, regular
supplier meetings, quality audits
and assessments, electronic
communication, surveys.
Reasonable pricing of
goods and services,
assured delivery and
payment, accessible,
accurate and up-to-date
information, quality
assurance of goods and
services, effective
cooperation, supply
chain that meets
sustainability standards.
Long-term and reliable
partnerships, quality and
safe raw materials,
sustainable supply chains,
risk management.
Affected
stakeholder
User of the
Sustainability
Statement
Suppliers of raw
materials (milk,
food additives,
other raw
materials)
Contract negotiations, one-to-one
meetings, quality audits and
assessments, electronic
communication, surveys.
Reasonable prices, stable
demand and payment.
Long-term and reliable
partnerships, quality and
safe raw materials,
sustainable supply chains.
Affected
stakeholder
User of the
Sustainability
Statement
End users
Marketing communication, media
communication.
Product safety and
quality, variety and
availability, a complete
nutrition, social
responsibility
(transparency and
reduce of environmental
impact).
Positive image and
credibility, consistent
communication on
sustainability efforts.
Affected
stakeholder
User of the
Sustainability
Statement
Communities
Public events and initiatives for
communities, partnerships with
local organizations, information
messages on sustainability
activities, support for social and
cultural projects.
Responsibility for the
environment and local
people, reduce of air and
water pollution, safe
neighborhoods,
contributing to
community
development and well-
being, transparent
operations and
communication, reduce
of environmental
impacts.
Increase of the
contribution to the well-
being of the local
community by the
company, contributing to
environmental, social and
cultural projects, ensuring
safe neighborhoods,
reduce of environmental
impact, raising of
awareness of sustainability
efforts.
Affected
stakeholder
User of the
Sustainability
Statement
Media
Events, meetings, answers to
queries, press releases.
Transparency,
accountability and
dialogue.
Positive image and
credibility, consistent
communication on
sustainability efforts.
User of the
Sustainability
Statement
Non-
governmental
organizations
Community events, media
communication, quarterly and
annual reports.
Cooperation,
transparency,
accountability, reduce of
environmental impacts.
Positive image and
credibility, consistent
communication on
sustainability efforts,
dialogue.
User of the
Sustainability
Statement
Scientific
institutions
Individual appointments, joint
projects, academic events, careers
fairs, media communication.
Collaboration, sharing
experiences, career
opportunities,
investment in research.
Attracting potential
employees, synergies
between business and
science for innovation,
positive image,
partnerships.
Affected
stakeholder
User of the
Sustainability
Statement
Double materiality assessment
For the first time, an assessment of the non-financial materiality of the ESG aspects was carried out in 2022, in order
to highlight the sustainability aspects that form the basis for the sustainability priorities of the Group. With the
introduction of the CSRD and ESRS, the Double Materiality Assessment is the basis for sustainability reporting, and
IRO-1
VILVI GROUP ANNUAL REPORTS
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55
therefore the Double Materiality Assessment was carried out in 2024, in accordance with the EFRAG Guidance on the
Double Materiality Assessment. An assessment process was developed and followed step by step:
1. Identification of the environmental and social impacts of the Group. The task was implemented by using the
ESRS themes and impacts assessed in 2022, as well as scientific and industrial information to compile the list of
impacts.
2. Assessment of the environmental and societal impacts of the Group (from inside the organization to outside),
arising both from within the organization and along the value chain. Assessment of actual/ potential, negative/
positive environmental and human impacts in the short, medium and long term. Significance was assessed using
the ESRS sub-topics, assessing both impacts arising from within the company and along the value chain. In
particular, negative impacts and their magnitude, scope, irreversibility and likelihood were considered, and positive
impacts and their magnitude and scope were considered, where relevant. This identifies which impacts are
significant.
Thresholds applied:
- the extent and coverage of the impact is rated on a scale of 0 to 5 (from "No impact" to "Absolute" or
"Global");
- irreversibility - on a scale from 0 to 5 (from "Very easily remediable" to "Irreversible/ irreversible");
- the likelihood of exposure was rated on a scale of 0 to 5 (from "not likely" to "several times a day").
This impact assessment involves all stakeholders. The assessment of upstream and downstream impacts of the value
chain has benefited from the internal information of the Group and the involvement of specialists with close links to
the relevant participants in the value chain. External stakeholders were interviewed through a broad stakeholder
survey. In the future, it is planned to involve external experts in the development of the evaluation methodology, in
order to obtain a more detailed assessment by external experts.
3. Assessing financial impact, risks and opportunities (from outside to inside of the organization). The starting point
for assessing financial materiality is the risks or opportunities that affect, or could reasonably be expected to affect,
the financial position of the entity, financial performance, cash flows, access to finance or capital value in the short,
medium and long term. Based on the results of the materiality assessment, risks and opportunities have been
identified by assessing the possible scenarios that are expected to be most likely to occur, or the potential financial
impact from the situations with the lowest probability. Risks and opportunities that could occur as a result of past
events as well as future events have been assessed. The assessment is not limited to matters that are within the
control of the entity, but also considers risks and opportunities associated with business relationships not included
in the financial statements. The periods evaluated have been divided into short (up to 1 year), medium (1 to 5 years)
and long (more than 5 years) periods, as the effects and actions, risks and opportunities may manifest themselves
differently in different periods. The general requirements section of the Sustainability Statement provides the
rationale for the discrepancy between the assessment periods and the periods defined in the ESRS.
The identification of risks and opportunities has led to an
assessment of which are material for disclosure
purposes. The assessment is based on two criteria:
- The potential magnitude of the financial
impact, determined on the basis of
appropriate thresholds ranging from 0 to 5
(from "no impact" to "critical impact");
- Likelihood of occurrence, on a scale of 0 to 3
(from "not likely" to "very likely").
An impact is considered financially significant if:
- actually has, or can reasonably be expected
to have, a material financial effect on the
results of the company of operations,
financial position, financial performance,
cash flows, access to finance or capital value
in the short, medium and long term;
Applied financial materiality thresholds:
Materiality
Impact/consequence
Financial materiality
thresholds
Critical
Possible suspension of
operations
>3% of turnover
Significant
Major operational
disruptions, requiring
significant efforts to
manage
1-3% of turnover
Important
Notable operational
disruptions, requiring
efforts to manage
0.5-1% of turnover
Informative
Minor operational
disruptions
0.1-0.5% of turnover
Minimal
Operations are not
disrupted and proceed as
usual
Up to 0.1% of turnover
No impact
No impact
-
VILVI GROUP ANNUAL REPORTS
2024
56
- the omission, misstatement or concealment of this information could reasonably be expected to
influence the judgements that major users of general-purpose financial statements make on the basis
of the Sustainability Statement of the company.
Compared to the materiality assessment in 2022, this assessment was broader and deeper, involving stakeholders,
revealing not only impacts but also risks and opportunities, and assessing financial materiality. The results are not
comparable with the previous materiality assessment due to differences in the methodologies used. In the future,
when repeating the Double Materiality Assessment, the Sustainability Statement will include a comparison of the
results of the impact, risk and opportunity assessment.
The Sustainability Statement will provide a comparison of the results of the assessment of impacts, risks and
opportunities by repeating the Double Materiality Assessment.
A sustainability issue becomes significant if it meets the criteria for one or both of the two types of significance (impact
and financial). A detailed description of the material topics is provided for each topic in accordance with the ESRS
requirements. This Double Materiality Assessment is of particular importance to the Group as it has assessed the IRO’s
across all potential topics at a Group level and has identified one specific governance disclosure. The results of the
Double Materiality Assessment were approved by the Group’s Board.
Disclosure requirements in ESRS covered by the undertaking’s sustainability statement
A list of disclosures and datapoints required by other EU legislation is provided in Appendix, on page 108.
Material impacts, risks and opportunities and their interaction with strategy and business model
As part of the Double Materiality Assessment, the Group has identified its significant environmental and social
impacts and assessed risks and opportunities. The topics, sub-topics (sub-sub-topics) that are significant to the Group
in terms of impact or impact and financial significance are disclosed.
The most significant material impacts, risks and opportunities are concentrated in the businesses of the Group.
Impacts, risks and opportunities identified as significant to the Group on a double materiality basis, as well as
SBM-3
IRO-2
VILVI GROUP ANNUAL REPORTS
2024
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information on the management of significant sustainability issues, are disclosed in the thematic standards,
indicating the type of impact (positive/ negative) and the location of the impact in the value chain. Impacts reported
are factual unless otherwise stated.
In accordance with minimum disclosure requirements, the Group cannot disclose information on the topic of Value
Chain Workers (S2), as it has not yet adopted a relevant policy, implemented corresponding actions, or set targets in
this area. This is aimed to be addressed during 2025. Additionally, the Group has not conducted a resilience analysis
with respect to climate change or a comprehensive assessment of climate scenarios. This is planned to be carried out
during 2025-2026.
During the double materiality assessment, no indications were identified of a potential financial impact on the current
financial position, financial performance, or cash flows due to significant risks and opportunities. No significant risks
or opportunities were identified that would pose a risk of requiring substantial adjustments to the asset and balance
sheet values in the financial statements for another annual reporting period. The Group utilized the option of phased-
in disclosure and did not provide information on the anticipated financial impact of significant risks and opportunities
on the Group’s financial position, financial performance, and cash flows in the short, medium, and long term.
Sustainability aspects are integrated into the business model of the Group, but are not yet fully integrated into the
strategy and management of the Group - this is being done gradually, see page 49 for more details. This materiality
assessment provides the basis for both the disclosures under CSRD and ESRS and the subsequent sustainability
strategy of the Group and action plans in its own operations and value chain. The Double Materiality Assessment
provides a clearer direction of the Group towards a more sustainable organization in each of the ESG areas.
VILVI GROUP ANNUAL REPORTS
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58
ENVIRONMENT
− TAXONOMY OVERVIEW | 59
− E1 CLIMATE CHANGE | 65
− E2 POLLUTION | 70
− E3 WATER AND MARINE RESOURCES | 74
− E4 BIODIVERSITY AND ECOSYSTEMS | 75
− E5 RESOURCE USE AND CIRCULAR ECONOMY | 78
VILVI GROUP ANNUAL REPORTS
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59
TAXONOMY OVERVIEW
The valuation of taxonomy eligible economic activities is
revealed by the Group. 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 analyzed, and the aim is to increase the
taxonomy indicators.
The main activity of the Group is dairy processing, but food
production is not covered by Delegated Act (EU) 2021/2178
or the additional Delegated Acts published in 2022.
When analyzing the activities of the Group, evaluation of
them is implemented through this process:
- identifying the taxonomic activities of the
Group;
- carrying out a technical assessment of each
activity - whether it meets the technical
criteria and the criteria for making a
significant contribution to mitigation
and/or adaptation objectives;
- assessing whether the activity causes significant harm to other environmental objectives;
- assessing the enforcement of minimum safeguards;
- making a final assessment of operational compliance;
- calculating taxonomic indicators for each activity.
The main principles of accounting policies:
In 2024, the Group has set three key performance indicators for the Taxonomy:
- Revenue is external revenue in accordance with International Financial Reporting Standards, which
corresponds to consolidated sales in the statements of comprehensive income of “Vilkyškių pieninė” AB.
- Long-term investments (CAPEX under Taxonomy) is the increase in the value of property, factories and
equipment and intangible assets before depreciation, amortization and impairment during the previous
financial year, acquisition of assets managed under lease right.
- The increase is the investment during the financial year (net of any government grants received). The number
of long-term investments disclosed in the consolidated financial statements excludes increases due to
business combinations and asset retirement obligations, but includes advances and prepayments.
- Operating expenses (OPEX according to the Taxonomy) means the direct non-capitalized costs of research and
development, building improvements, short-term leases, maintenance and repairs, and any other direct costs
associated with the day-to-day maintenance of property, plant and equipment by the undertaking or by the
third party from which the services are purchased, and which is necessary for the continuous and efficient
operation of such assets.
Double counting:
All disclosed indicators under the Taxonomy avoid double counting, as each indicator is attributed to different activities. Intra-
group transactions are eliminated where necessary to avoid double counting. The activities of the Group 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.
Documents referred to:
VILVI GROUP ANNUAL REPORTS
2024
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List of taxonomic activities of the Group:
“CCM” - Climate Chane Mitigation; “CCA”– Climate Change Adaptation.
Activities
Taxonomy
code
Description of activities for mitigation of climate
change
Group activities
corresponding to the
description
Electricity generation using
solar photovoltaic
technology
CCM 4.1 / CCA
4.1
Construction or operation of electricity generating
installations using photovoltaic solar technology.
Installation and
operation of solar
power plants.
Construction, extension
and operation of water
collection, treatment and
supply systems
CCM 5.3
Construction, extension and operation of
centralized wastewater systems, including
collection (sewerage network) and treatment.
Construction of
primary wastewater
treatment plants.
Collection and transport of
non-hazardous waste in
source segregated
fractions
CCM 5.5
The separate collection and transportation of non-
hazardous waste of a single type or grouped
together for the purpose of preparing it for re-use or
recycling.
Collection and
preparation of non-
hazardous waste for
reuse or recycling.
Transport by motorbikes,
passenger cars and light
commercial vehicles
CCM 6.5 / CCA
6.5
The purchase, financing, hire, leasing and operation
of vehicles in categories M1, N1 covered by
Regulation (EC) No 715/2007 of the European
Parliament and of the Council or category L (two-
and three-wheel vehicles and quadricycles).
Group vehicles -
acquisition and
operation of electric
vehicles.
Construction of new
buildings
CCM 7.1
The development of residential and non-residential
construction by mobilizing the financial, technical
and physical means to develop projects for
subsequent sale, as well as the construction of
completed residential or non-residential buildings
on own account with a view to their sale, or their
construction for remuneration or on the contract.
Construction of new
buildings.
Renovation of existing
buildings
CCM 7.2 / CCA
7.2
Construction and civil engineering work or
preparation for it.
Renovation of
buildings
Installation, maintenance
and repair of charging
stations for electric
vehicles in buildings (and
parking spaces adjacent to
buildings)
CCM 7.4 / CCA
7.4
Installation, maintenance and repair of charging
stations for electric vehicles in buildings and in
parking spaces near buildings
Installing charging
stations for electric
cars.
Acquisition and ownership
of buildings
CCM 7.7 / CCA
7.7.
Buying and using of the real estate.
Acquisition and use of
buildings.
Professional services
related to energy
performance of buildings
CCM 9.3
Professional services related to the energy
performance of buildings.
Purchased energy
performance
measurement services
The list of activities includes taxonomic activities that were carried out in 2024.
The main objective of the Group is to contribute to mitigation of climate change, and therefore, identification,
measurement and disclosure of our activities is performed in line with this objective. The objective of climate change
adaptation is not fully assessed and is disclosed as not meeting the criteria.
VILVI GROUP ANNUAL REPORTS
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61
Revenue under the Taxonomy Regulation:
“CCM” - Climate Change Mitigation; “CCA”– Climate Change Adaptation.
"Y" - Yes/taxonomic activity meeting the criteria; "N" - No/taxonomic activity not meeting the criteria;
"N/EL" is not eligible, taxonomy-not-eligible activity in relation to the objective concerned; "TA" is a taxonomic activity, the "-" criterion does not apply.
Revenue under the Taxonomy Regulation
2024 Financial year
2024 Financial year
DNSH criteria
Minimum Safeguards
Proportion of Taxonomy
-
aligned
or eligible revenue
2023
Category Enabling
activity
Category transitional
activity
Economic
activities under
the Taxonomy
Regulation
Taxo
nom
ic
activ
ity
code
Revenue
Revenue share
Climate change
mitigation
Climate change
adaptation
Water
Pollution
Circular economy
Biodiversity
Climate change
mitigation
Climate change
adaptation
Water
Pollution
Circularity
Biodiversity
Thous
and
EUR
%
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
12,39
0,01
Y
N
N/
EL
N/
EL
N/
EL
N/
EL
-
Y
-
-
Y
-
Y
0,02
-
-
A.1 Total
12,39
0,01
0,02
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)
12
0,01
0,02
B. Taxonomy non-eligible activities
Revenue of
Taxonomy-non-
eligible activities
245.417
99,99
99,98
Total (A+B)
245 426
100
100
VILVI GROUP ANNUAL REPORTS
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62
Capital expenditure (Taxonomy CAPEX) according to the Taxonomy Regulation:
“CCM” - Climate Change Mitigation; “CCA”– Climate Change Adaptation.
"Y" - Yes/taxonomic activity meeting the criteria; "N" - No/taxonomic activity not meeting the criteria;
"N/EL" is not eligible, taxonomy-not-eligible activity in relation to the objective concerned; "TA" is a taxonomic activity, the "-" criterion does not apply.
CAPEX under the Taxonomy Regulation
2024 Financial year
Substantial contribution criteria
DNSH criteria
Minimum Safeguards
Proportion of Taxonomy
-
aligned or eligible CAPEX
2023
Category Enabling activity
Category transitional
activity
Economic activities under the Taxonomy Regulation
Taxonomic
activity
code
Revenue
Revenue share
Climate change
mitigation
Climate change
adaptation
Water
Pollution
Circular economy
Biodiversity
Climate change
mitigation
Climate change
adaptation
Water
Pollution
Circularity
Biodiversity
Thousand
EUR
%
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)
Electricity generation using solar photovoltaic technology
CCM 4.1 /
CCA 4.1
319,02
0,82
Y
N
N/EL
N/EL
N/EL
N/EL
-
Y
-
-
Y
Y
Y
0
-
-
Construction, extension and operation of water collection,
treatment and supply systems
CCM 5.3
0
0
Y
N
N/EL
N/EL
N/EL
N/EL
-
Y
Y
Y
-
Y
Y
0
-
-
Collection and transport of non-hazardous waste in source
segregated fractions
CCM 5.5
0
0
Y
N
N/EL
N/EL
N/EL
N/EL
-
Y
-
-
Y
-
Y
0
-
-
Transport by motorbikes, passenger cars and light commercial
vehicles
CCM 6.5
/ CCA 6.5
269,18
0,69
Y
N
N/EL
N/EL
N/EL
N/EL
T
Y
-
Y
Y
-
Y
0,90
-
-
Construction of new buildings
CCM 7.1
0
0
Y
N
N/EL
N/EL
N/EL
N/EL
-
Y
Y
Y
Y
Y
Y
0
-
-
Renovation of existing buildings
CCM 7.2 /
CCA 7.2
0
0
Y
Y
N/EL
N/EL
N/EL
N/EL
-
Y
Y
Y
Y
-
Y
0
-
T
Installation, maintenance and repair of charging stations for
electric vehicles in buildings (and parking spaces adjacent to
buildings)
CCM 7.4
/ CCA 7.4
9,76
0,03
Y
N
N/EL
N/EL
N/EL
N/EL
Y
Y
-
-
-
-
Y
0,01
E
-
Acquisition and ownership of buildings
CCM 7.7
/ CCA 7.7.
0
0
Y
Y
N/EL
N/EL
N/EL
N/EL
-
Y
-
-
-
-
Y
0
-
-
Professional services related to energy performance of buildings
CCM 9.3
0
0
Y
N
N/EL
N/EL
N/EL
N/EL
-
Y
-
-
-
-
Y
0
-
-
A.1 Total
597,96
1,54
1,05
of which Enabling
9,76
0,03
0
of which Transitional
0
0
0
A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
Electricity generation using solar photovoltaic technology
CCM 4.1 /
CCA 4.1
0
0
TA
TA
N/EL
N/EL
N/EL
N/EL
0
Construction, extension and operation of water collection,
treatment and supply systems
CCM 5.3
200,84
0,52
TA
TA
N/EL
N/EL
N/EL
N/EL
0
Collection and transport of non-hazardous waste in source
segregated fractions
CCM 5.5
0
0
TA
TA
N/EL
N/EL
N/EL
N/EL
0
VILVI GROUP ANNUAL REPORTS
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63
Transport by motorbikes, passenger cars and light commercial
vehicles
CCM 6.5
/ CCA 6.5
91,49
0,24
TA
TA
N/EL
N/EL
N/EL
N/EL
0,70
Construction of new buildings
CCM 7.1
5.797,94
14,94
TA
TA
N/EL
N/EL
N/EL
N/EL
9,78
Renovation of existing buildings
CCM 7.2 /
CCA 7.2
689,09
1,78
TA
TA
N/EL
N/EL
N/EL
N/EL
3
Installation, maintenance and repair of charging stations for
electric vehicles in buildings (and parking spaces adjacent to
buildings)
CCM 7.4
/ CCA 7.4
0
0
TA
TA
N/EL
N/EL
N/EL
N/EL
0
Acquisition and ownership of buildings
CCM 7.7
/ CCA 7.7.
159,79
0,41
TA
TA
N/EL
N/EL
N/EL
N/EL
0
Professional services related to energy performance of buildings
CCM 9.3
0
0
TA
TA
N/EL
N/EL
N/EL
N/EL
0
A.2 Total
6 939,15
17,88
13,48
CAPEX of Taxonomy-eligible activities (A.1+A.2)
7 377,32
19,01
14,53
B. Taxonomy non-eligible activities
CAPEX of Taxonomy-non-eligible activities
31 429,68
80,99
85,47
Total (A+B)
38 807
100
100
Operating costs (Taxonomy OPEX) according to the Taxonomy Regulation:
“CCM” - Climate Change Mitigation; “CCA”– Climate Change Adaptation.
"Y" - Yes/taxonomic activity meeting the criteria; "N" - No/taxonomic activity not meeting the criteria;
"N/EL" is not eligible, taxonomy-not-eligible activity in relation to the objective concerned; "TA" is a taxonomic activity, the "-" criterion does not apply.
OPEX under the Taxonomy Regulation
2024 Financial year
Substantial contribution criteria
DNSH criteria
Minimum Safeguards
Proportion of Taxonomy
-
aligned or eligible OPEX
2023
Category Enabling activity
Category transitional
activity
Economic activities under the Taxonomy Regulation
Taxonomic
activity
code
Revenue
Revenue share
Climate change
mitigation
Climate change
adaptation
Water
Pollution
Circular economy
Biodiversity
Climate change
mitigation
Climate change
adaptation
Water
Pollution
Circularity
Biodiversity
Thousand
EUR
%
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)
Electricity generation using solar photovoltaic technology
CCM 4.1 /
CCA 4.1
0
0
Y
N
N/EL
N/EL
N/EL
N/EL
-
Y
-
-
Y
Y
Y
0
-
-
Construction, extension and operation of water collection,
treatment and supply systems
CCM 5.3
0
0
Y
N
N/EL
N/EL
N/EL
N/EL
-
Y
Y
Y
-
Y
Y
0
-
-
Collection and transport of non-hazardous waste in source
segregated fractions
CCM 5.5
123,09
2,23
Y
N
N/EL
N/EL
N/EL
N/EL
-
Y
-
-
Y
-
Y
3,93
-
-
Transport by motorbikes, passenger cars and light
commercial vehicles
CCM 6.5 /
CCA 6.5
5,14
0,09
Y
N
N/EL
N/EL
N/EL
N/EL
T
Y
-
Y
Y
-
Y
0,02
-
-
Construction of new buildings
CCM 7.1
0
0
Y
N
N/EL
N/EL
N/EL
N/EL
-
Y
Y
Y
Y
Y
Y
0
-
-
VILVI GROUP ANNUAL REPORTS
2024
64
Renovation of existing buildings
CCM 7.2 /
CCA 7.2
0
0
Y
Y
N/EL
N/EL
N/EL
N/EL
-
Y
Y
Y
Y
-
Y
0
-
T
Installation, maintenance and repair of charging stations for
electric vehicles in buildings (and parking spaces adjacent to
buildings)
CCM 7.4 /
CCA 7.4
0
0
Y
N
N/EL
N/EL
N/EL
N/EL
Y
Y
-
-
-
-
Y
0
E
-
Acquisition and ownership of buildings
CCM 7.7 /
CCA 7.7.
0
0
Y
Y
N/EL
N/EL
N/EL
N/EL
-
Y
-
-
-
-
Y
0
-
-
Professional services related to energy performance of
buildings
CCM 9.3
0
0
Y
N
N/EL
N/EL
N/EL
N/EL
-
Y
-
-
-
-
Y
0
-
-
A.1 Total
128,23
2,32
3,96
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)
Electricity generation using solar photovoltaic technology
CCM 4.1 /
CCA 4.1
0
0
TA
TA
N/EL
N/EL
N/EL
N/EL
0
Construction, extension and operation of water collection,
treatment and supply systems
CCM 5.3
20,47
0,37
TA
TA
N/EL
N/EL
N/EL
N/EL
0
Collection and transport of non-hazardous waste in source
segregated fractions
CCM 5.5
6,64
0,12
TA
TA
N/EL
N/EL
N/EL
N/EL
0,67
Transport by motorbikes, passenger cars and light
commercial vehicles
CCM 6.5 /
CCA 6.5
55,39
1,01
TA
TA
N/EL
N/EL
N/EL
N/EL
0,07
Construction of new buildings
CCM 7.1
0
0
TA
TA
N/EL
N/EL
N/EL
N/EL
0
Renovation of existing buildings
CCM 7.2 /
CCA 7.2
102,85
1,87
TA
TA
N/EL
N/EL
N/EL
N/EL
0
Installation, maintenance and repair of charging stations for
electric vehicles in buildings (and parking spaces adjacent to
buildings)
CCM 7.4 /
CCA 7.4
0
0
TA
TA
N/EL
N/EL
N/EL
N/EL
0
Acquisition and ownership of buildings
CCM 7.7 /
CCA 7.7.
0
0
TA
TA
N/EL
N/EL
N/EL
N/EL
0
Professional services related to energy performance of
buildings
CCM 9.3
0
0
TA
TA
N/EL
N/EL
N/EL
N/EL
0,11
A.2 Total
185,34
3,37
0,85
OPEX of Taxonomy-eligible activities (A.1+A.2)
313,57
5,69
4,81
B. Taxonomy non-eligible activities
OPEX of Taxonomy-non-eligible activities
5 194,23
94,31
95,19
Total (A+B)
5 507,80
100
100
VILVI GROUP ANNUAL REPORTS
2024
65
CLIMATE CHANGE
Significant sustainability-related IROs
Notation: 'OO' for Own Operations, 'VC' for Value Chain. The impacts indicated are actual unless otherwise stated (potential).
Type of impact/
risk (location in
the value chain)
Significant IROs
Period
Description
Subtopic: climate change adaptation
Risks (OO, VC)
Acute and chronic
climate-related
physical events.
Medium, long
term
Heat waves increase the need for cooling in both administrative
and production areas, and both the Group and upstream value
chain actors are exposed to these impacts (e.g. cooling of cattle
housing).
Storms require the management of power outages to avoid loss
of raw materials and production, ensure production stability and
quality. Risks are also inherent in the upstream part of the value
chain.
Subtopic: climate change mitigation
Negative effects
(OO, VC)
GHG emissions
Short,
medium, long
term
The use of non-renewable sources of electricity, the production
of heat and steam, the use of refrigeration equipment and the
use of fossil fuels all have a negative impact on climate change.
Risks (OO)
Transition risk
Medium, long
term
With increasing pressure from the EU and the Republic of
Lithuania to switch to renewable energy sources, the
transformation of generation energy sources requires efficient
alternatives to renewable energy sources and significant
investments, which may affect the slow pace of transition.
Subtopic: Energy
Negative effects
(OO, VC)
Energy from non-
renewable sources
Short,
medium, long
term
A large amount of electricity and fuels from non-renewable
sources are used.
Positive impact
(OO)
Energy from
renewable sources
Short,
medium, long
term
Own solar power plants on the roofs of the factories allow us to
generate part of the energy ourselves, thus reducing the
negative impact of using energy from non-renewable sources.
Description of the processes to identify and assess material pollution-related impacts, risks and
opportunities
The Group has assessed climate change IROs through a Double Materiality Assessment, but has not carried out a full
assessment of climate scenarios. The Group used internal corporate information in the Double Materiality Assessment.
The assessment of the impact of climate change on the organization in accordance with the recommendations of
the TCFD is planned to be carried out during the year 2025. Information on climate change risks is disclosed in the
overall risk assessment of the Group, page 36. More information about the processes for identifying and assessing
IROs can be found on page 54.
Material impacts, risks and opportunities and their interaction with strategy and business model
Currently, the Group's strategy does not include integrated climate change-related goals, but this is planned to be
done gradually.
ESRS E1
IRO-1
2 ESRS SBM-3
VILVI GROUP ANNUAL REPORTS
2024
66
Policies related to climate change mitigation
and adaptation
The Environmental Policy of the Group is the main policy guiding the
environmental performance of the Group.
The Environmental Policy of the Group on climate change is defined as
follows:
The Group’s endorsement of the United Nations and other international
organizations’ initiative ‘Business Ambition for 1.5 °C,’ the Paris
Agreement, and the EU’s climate goals, which aim to limit global
temperature rise to 1.5 °C by 2050 and achieve net-zero greenhouse gas
emissions balance.
The Group’s objectives related to climate change mitigation and
adaptation:
− To achieve climate neutrality by 2050;
− To set Scope 1, 2, and 3 GHG emissions targets during 2025-
2026 and have them validated by the Science Based Targets
initiative (SBTi);
− To develop a transition plan during 2025-2026.
The main areas of impact related to climate change:
− Air pollution from greenhouse gases;
− Significant use of energy and natural resources;
− Generation of production waste, surface wastewater, and
other waste during operations.
The policy outlines principles for reducing negative impacts:
− Reducing air pollution – consistently decreasing greenhouse
gas and other air pollutant emissions by transitioning to
renewable energy sources, implementing advanced heating,
steam production, cooling, and transportation technologies,
and managing odor dispersion. We assess each impact
aspect, regularly conduct monitoring, and adapt the policy
based on analysis results.
− Increase the efficiency of energy and natural resource use –
apply the principle of prioritizing energy efficiency, implement
solutions that reduce the consumption of electricity, fossil
fuels, and water in both production and the supply chain.
− The Group purposefully implements the Environmental
Policy, guided by the principles of responsibility, prevention,
and continuous improvement. The implementation of the
policy is based on a comprehensive analysis of activities, risk
assessment, and a systematic approach to reducing
environmental impact.
How do we exercise our business activity in the Environmental sector:
− we operate in compliance with all mandatory environmental
legislation;
− we work with other stakeholders - business partners, public
authorities, institutions and the communities in which we
operate, in order to improve the environment;
− we review our environmental impact regularly, monitor and
verify our performance, continuously improve our
environmental policy and inform the society about our
progress;
− we take actions to prevent pollution;
− we build competence of the staff and a responsible approach
to protect the environment.
The Environmental Policy is approved by order of the Chief Executive
Officer of the parent company of the Group and is mandatory for all
employees of the Group. The Policy is publicly available on the website
of the Group.
Transition plan for climate change mitigation
The Group supports the Paris Agreement and is
committed to work in order to keep global warming
within 1.5 degrees Celsius. As a manufacturing industry,
the Group contributes to climate change through its
CO2 emissions from its operations (due to the
consumption of large amounts of energy resources and
its transport fleet), while on the other hand, our use of
the raw material milk, supplied by the livestock sector, is
also a significant source of GHG emissions. Climate
change has been identified as
significant area of impact, the energy and mitigation
sub-topics are financially critical, the costs of adaptation
are projected to increase significantly and this sub-topic
may also become financially critical in the future.
The Group has not yet developed a transition plan and
plans to do so between the years 2025 and 2026.
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VILVI GROUP ANNUAL REPORTS
2024
67
Actions and resources in relation to climate change policies
The biggest challenges of the Group in reducing GHG emissions and achieving climate neutrality by 2050 are the
choice of climate-friendly energy and transport. The operations of the Group are extremely energy-consuming.
Even the newest factories of the Group are designed for a specific type of energy, so the choice of more sustainable
solutions has a significant financial impact on the operations of the Group.
Nevertheless, the Group is looking for solutions:
− From the year 2024, the factories of the Group (“Vilkyškių pieninė”, “Kelmės pieninė” and “Modest”) will have
their own solar power plants on their roofs;
− The passenger car fleet is being renewed with electric cars, with 5 electric passenger cars purchased in
2024, representing 25% of the total passenger car fleet;
− Continuous use technologies are used to avoid power outages;
− Introducing heat exchange technologies to reduce the amount of electricity used;
− Finding new energy solutions to shift to cleaner energy sources;
− During the year 2025, energy efficiency measurements of buildings and decisions on the implementation
of energy management measures are planned for all companies of the Group.
Although the Group does not currently have an approved transition plan, it is actively planning actions and making
investments to reduce climate impacts and adapt to climate change. Following the completion of the construction
of the new factory in Latvia and the achievement of planned production volumes, the adoption of science-based
targets is planned. Since the Group does not have an approved transition plan, the results of achieving GHG
emissions reduction targets are not measured – there is no possibility to measure how much GHG emissions have
already been reduced or to specify how much and by what means they are expected to be reduced. The Group
monitors the implementation of the environmental policy, collects and evaluates data on mitigation of climate
change and assesses the effectiveness of the actions taken, in accordance with approved procedures.
In 2024, the Group did not allocate significant capital expenditures or operational expenditures for decarbonization
measures. This is also reflected in the Taxonomy disclosures under the EC Delegated Regulation (EU) 2021/2178,
page 59. There was no actual negative impact in 2024 that would require compensation for damages.
Energy consumption and mix
The Group produces energy from natural gas and liquefied petroleum gas. Most of the natural gas and petroleum gas
is used to produce steam used in technological processes. Until the year 2023, all the electricity purchased by the
Group was green electricity, generated from renewable energy sources. Due to the significant price differential for
green energy, a decision was taken to move away from renewable energy purchases in parallel with the development
of the rooftop solar power projects of the Group. During the year 2024, the majority of the factories of the Group
started to operate their own rooftop solar power plants and part of the electricity, which is purchased, is green again.
Energy consumption and mix of types
Units
2024
Information about calculation:
Data collection: data collection is the
responsibility of the corporate energy
specialists of the Group and is collected,
compiled and verified in accordance with
approved procedures. The data is based on
purchase invoices and consumption meters
(where available). Consolidated data is
1. Fuel consumption of coal and coal products
MWh
Not applicable
2. Consumption of crude oil and petroleum product fuel
MWh
20 332
3. Natural gas fuel consumption
MWh
43 729
4.Consumption of other fossil fuels
MWh
Not applicable
5.Consumption of electricity, heat, steam and cooling from
fossil fuels
MWh
32 165
6.Total fossil energy consumption (sum of rows 1-5)
MWh
96 226
Share of fossil energy in total energy consumption
%
91
7.Nuclear fuel consumption
MWh
Not applicable
Share of nuclear energy in total energy consumption
%
Not applicable
Targets related to climate change mitigation and adaptation
− Achieving climate neutrality by 2050.
− Set Scope 1, 2, and 3 GHG emissions targets during 2025-2026 and have them validated by the Science
Based Targets initiative (SBTi).
− Develop a transition plan during 2025-2026.
The objectives were set and approved by the Group’s top management.
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VILVI GROUP ANNUAL REPORTS
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68
8.Consumption of renewable fuels, including biomass (which
also includes industrial and municipal waste of biological
origin, biogas, hydrogen from renewable sources, etc.)
MWh
Not applicable
published annually in the Sustainability
Statement.
Direct energy sources: direct energy
consumption includes all the energy produced
by the Group from natural gas and liquefied
petroleum gas, which is consumed by the
Group for its own use and produces in its boiler
houses.
Indirect energy sources: indirect energy
sources include purchased energy such as grid
electricity and grid heat.
Energy production from non-renewable
sources: consumption of natural gas and
liquefied petroleum gas (LPG) to produce
steam and thermal energy.
Renewable energy: electricity generated from
own solar power plants.
9.Consumption of electricity, heat, steam and cooling from
renewable sources
MWh
8 593
10.Consumption of non-fuel renewable energy produced by
the company itself
MWh
504
11.Total renewable energy consumption
MWh
9 097
Share of renewable energy in total energy consumption
%
9
Total energy consumption (sum of rows 6 and 11)
MWh
105 323
Energy production by the Group
Energy production from non-renewable sources
MWh
64 062
Renewable energy production
MWh
504
Energy intensity by net income
Units
2024
Energy intensity: total energy consumption of
the Group divided by the net income of the
Group (EUR).
Energy intensity (total energy consumption divided by
net income)
MWh/ Million Eur.
429
Gross Scopes 1, 2, 3 and Total GHG emissions
GHG emissions
Units.
Information of calculation:
The consolidated Group GHG emissions report
has been prepared in accordance with the
Greenhouse Gas Protocol (hereinafter - GHG
Protocol) (The Greenhouse Gas Protocol: A
Corporate Accounting and Reporting Standard
- Revised Edition, WRI/WBCSD) (hereinafter –
GHG Protocol) and is aligned with the
requirements of the ESRS. The emission factors
used for calculations are sourced from
Lithuania’s National Inventory Report (NIR), the
United Kingdom’s Department for
Environment, Food and Rural Affairs (DEFRA),
the Waste and Resources Action Programme
(WRAP), and other qualified emission factor
databases. Secondary data are used for
calculations, as primary data from suppliers are
not currently available (0 percent of the data
used is obtained from suppliers). In the GHG
emissions calculation methodology, relevant
pollution factors (Emission Factors (EF)) are
selected and applied to convert activity data
into the amount of GHG emissions released.
Pollution factors are chosen for the assessed
period. Relevant Global Warming Potential
(GWP) indicators are selected, using the
Intergovernmental Panel on Climate Change
(IPCC) Fifth Assessment Report: Climate
Change (5AR).
Scope 1 GHG emissions
Total of Scope 1 GHG emissions
t CO
2
eq.
18 010
Percentage of Scope 1 GHG emissions covered by
regulated emissions trading schemes
t CO
2
eq.
Not applicable
Scope 2 GHG emissions
t CO
2
eq.
Indirect emissions (Scope 2) (location-based)
t CO
2
eq.
5 275
Indirect issues (volume 2) (market-based)
t CO
2
eq.
11 783
Scope 3 GHG emissions
t CO
2
eq.
Total of Scope 3 GHG emissions
t CO
2
eq.
432 737
Purchased goods and services (C1)
t CO
2
eq.
404 314
Capital goods (C2)
t CO
2
eq.
4 601
Fuel and energy related activities (C3)
t CO
2
eq.
4 411
Upstream transportation and Distribution (C4)
t CO
2
eq.
3 046
Waste generated in operations (C5)
t CO
2
eq.
209
Business travel (C6)
t CO
2
eq.
56
Employee commuting (C7)
t CO
2
eq.
830
Upstream Leased Assets (C8)
t CO
2
eq.
Įncluded in Scope 1 and
Scope 3 Category C1.
Downstream transportation and Distribution
(C9)
t CO
2
eq.
6 156
Processing of Sold Products (C10)
t CO
2
eq.
9 095
Use of Sold Products (C11)
t CO
2
eq.
Not applicable
End-of-life Treatment of Sold Products (C12)
t CO
2
eq.
19
Downstream Leased Assets (C13)
t CO
2
eq.
Not applicable
Franchises (C14)
t CO
2
eq.
Not applicable
Investments (C15)
t CO
2
eq.
Not applicable
Total of GHG emissions (location-based)
t CO
2
eq.
456 022
Total of GHG emissions (market-based)
t CO
2
eq.
462 530
GHG emissions other than Scope 1-3
t CO
2
eq.
Not applicable
GHG intensity
Total GHG emissions (location-based) per unit of
net income
t CO
2
eq./
Million Euros
1 858
Total GHG emissions (market-based) per unit of
net revenue
t CO
2
eq./
Million Euros
1 885
All greenhouse gases were assessed: CO₂, CH₄, N₂O, HFCs, PFCs, SF₆, which are converted into CO₂ equivalent. The Group’s operations do not use
biofuels, so biogenic emissions are not separately evaluated. All Group companies and activities are included in the calculations, with GHG
accounting covering Scope 1, Scope 2, and relevant Scope 3 categories (disclosed in the table). The parent company’s GHG emissions account for 15
percent of the Group’s total emissions (assessed using the location-based method). The Group determines organizational boundaries in accordance
with the operational control principle. When collecting baseline activity data, their level of detail, quality, and reliability were analyzed, and
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VILVI GROUP ANNUAL REPORTS
2024
69
opportunities for improvement were sought. Following the calculations, it is planned to implement necessary measures to ensure data quality and
completeness.
Scope 1 Emissions: direct GHG emissions from sources owned by the Group. Scope 1 GHG emissions consist of emissions from energy production
using natural gas and liquefied petroleum gas, fuel for transportation, and air conditioning and refrigeration processes. Data sources used for
emission calculations: company financial accounting documents (invoices, meter readings, internal accounting systems). Emissions were calculated
based on activity data by multiplying the consumed quantity by the corresponding emission factors specified in national sources.
Scope 2 Emissions: indirect GHG emissions arising from the production of purchased electricity and thermal energy. Emissions were calculated
based on activity data by multiplying the purchased energy quantity by the corresponding emission factors, specified in national or international
sources. Emissions determined using the location-based method are calculated based on the average emission factor of the country of operation.
The market-based method takes into account purchased green electricity. Contractual instruments and guarantees of origin are used for electricity
purchases, confirming the acquisition of green electricity produced from renewable energy sources, which accounts for 29 percent of all purchased
energy and 26 percent of Scope 2 emissions (when assessed using the location-based method). Data sources used for emission calculations:
company financial accounting documents (invoices, meter readings, internal accounting systems).
Scope 3 Emissions: emissions from activities that the Group does not own or control. These are emissions generated from all raw materials, goods,
and services purchased by the Group (C1), including the lifecycle of long-term tangible assets (C2) (Cradle to gate), their transportation and
distribution (C4), the production and transportation of fuel and fuels (C3), the management of waste and wastewater generated during operations
(C5), business travel (C6), employee commuting to/from work (C7), assets leased for own use (C8) (included in Scope 1 and Scope 3 Category C1),
downstream transportation and distribution of sold products (C9), processing of sold intermediate products (C10), and the management of
packaging released to the market (C12).
Data sources used for emission calculations: company financial accounting documents (invoices, internal accounting systems), which specify the
quantities of raw materials, products, and services purchased and/or consumed over the year, as well as the quantities of waste/wastewater
generated. In the calculations, the main raw material – milk – purchased in 2024, amounting to 351,607.40 tons, was recalculated based on fat and
protein content. Additional data were obtained during preliminary calculations and assessments (including employee commuting to/from work,
transportation distances, or the processing of intermediate products). Emissions were calculated by multiplying activity data by the corresponding
emission factors specified in national or international sources.
Emissions were calculated based on activity data by multiplying the consumed quantity by the corresponding emission factors specified in national
sources.
The methodology applied for calculating Scope 3 emissions:
− Average data method and spend-based method (C1);
− Average data method (C3, C7, C10);
− Spend-based method (C2, C4);
− Method based on waste/wastewater type, quantity, and management method, and spend-based method (C5);
− Method based on distance and hotel stays (C6);
− Distance-based method (C9);
− Method based on quantity generated, packaging type, and management method (C12).
Leased assets (for own use) (C8): The Group leases premises and equipment to meet its own needs, and the electricity, thermal energy, and fuel
associated with their operation, which the Company purchases and consumes during its activities, are included and accounted for in Scope 1 GHG
calculations.
Lease-related expenses (EUR) include payments for services as operating expenses and are therefore accounted for in Scope 3 Category C1. In
accordance with the GHG Protocol, indirect GHG emissions related to leasing are not separately assessed due to their predicted insignificant quantity,
but they are included in Scope 3 Category 1 and calculated using the spend-based method.
Use of Sold Products (C11):
During the consumption of dairy products produced by the group, greenhouse gas emissions (GHG) are not directly emitted. The group causes
indirect emissions during the use phase through the storage and consumption of its dairy products. Since, according to the GHG Protocol, reporting
emissions from the indirect use phase is optional, this category is presented as not applicable.
Categories C13, C14, and C15 are not applicable, as these activities are not carried out.
The assessment of Scope 3 GHG emissions is less reliable due to the complex nature of data collection/calculation, the assumptions made, and
significant uncertainty. During the assessment, most suppliers did not have calculated related emissions, making it impossible to obtain information
about their specific GHG emissions from primary sources. For these reasons, an spend-based method was used, which has a lower level of accuracy
compared to other methods.
VILVI GROUP ANNUAL REPORTS
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70
GHG Emissions Intensity:
− Total GHG emissions (location-based method) (t CO₂ eq.) / Group net revenue (million EUR);
− Total GHG emissions (market-based method) (t CO₂ eq.) / Group net revenue (million EUR).
The GHG emissions calculation methodology is planned to be expanded and improved to enhance the quality of Scope 3 data by directly involving
members of the initial and final value chain. The GHG emissions calculator used for the calculations has not been validated by an external party.
GHG removals and GHG mitigation projects financed through carbon credits
Not performed by the Group.
Internal carbon pricing
Not performed by the Group.
Anticipated financial effects from material physical and transition risks and potential climate-related
opportunities
The Group does not disclose information using the option of phased-in disclosure.
POLLUTION
Significant sustainability-related IROs
Notation: 'OO' for Own Operations, 'VC' for Value Chain. The impacts indicated are actual unless otherwise stated (potential).
Type of impact/
risk (location in
the value chain)
Significant IROs
Period
Description
Subtopic: pollution of air
Negative effects
(OO, VC)
Air pollution and
odors
Short,
medium, long
term
Air pollution from energy production (steam production in own
boilers), transport, and possible odors have a negative impact on
the environment.
Air pollution upstream and downstream in the supply chain - raw
material production, transport, has a negative impact on the
environment.
Risks (OO, VC)
Air pollution
incidents
Short,
medium, long
term
Potential air pollution, incidents due to technical failures that
need to be managed. The same risks are possible in the upstream
part of the value chain.
Subtopic: pollution of water
Negative effects
(OO)
Industrial
wastewater
Short,
medium, long
term
The production process generates industrial wastewater, the
treatment of which has to be ensured either with the methods
used by company (“Vilkyškių pieninė” AB, “Modest“ AB, “Baltic
Dairy Board“ SIA) or by the wastewater treatment plants of the
city (“Kelmės pienas” AB, “Kelmės pieninė” AB, “Modest“ AB). This
has a negative impact on the environment
Negative effects
(VC)
Load on urban
treatment plants
Short,
medium, long
term
The production process generates large volumes of wastewater,
which are discharged to municipal wastewater treatment plants
("Kelmės pienas” AB, "Kelmės pieninė” AB) in companies where
the wastewater is not treated in their own treatment plants. This
has a negative impact on the environment.
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Positive impact
(OO, VC)
Creation of
secondary raw
material
Wastewater treatment plants generate secondary raw material
(sludge), which is used to generate electricity and fertilizer
(“Vilkyškių pieninė” AB, “Modest“ AB). This has a positive impact
on the environment.
Risks (OO)
Wastewater plant
incidents
Short,
medium, long
term
Potential wastewater incidents due to technical failures that
need to be managed.
Description of the processes to identify and assess material pollution-related impacts, risks and
opportunities
The Group, as one of the largest dairy processing companies in Lithuania, generates both air and wastewater pollution.
During production, air pollutants and odors are released into the air, and arriving transport continuously contributes
to air pollution in the factory territories. Industrial wastewater is generated at all of the Group’s factories. To measure
the Group’s actual pollution impact, compliance with the laws and regulations of the Republic of Lithuania (LR) is
followed, and monitoring programs approved by the companies are implemented. More information is provided in
the pollution indicators calculation methodology, on page 73. When assessing risks and opportunities related to
pollution from the Group’s operations, reliance is placed on the information and expertise of technical department
specialists, forecasted production volumes, and their potential impact on pollution risks. To determine the impact,
risks, and opportunities in the initial and final parts of the Group’s value chain, publicly available information sources,
as well as data from suppliers and business clients, are used.
Significant impacts have been assessed in the Double Materiality Assessment of the Group, for more information see
page 54-57. On the topic of pollution, the Group used internal Group information, including inventory and monitoring
information on pollution sources and information from the surrounding population and suppliers.
Policies related to pollution
The Environmental Policy of the Group is the main policy that
guides the environmental performance of the Group.
The Environmental policy of the Group in the field of
pollution is defined as follows:
Key impact areas:
- Air pollution – emissions of greenhouse gases
and other pollutants due to the use of non-
renewable electricity resources, thermal
energy and steam production, refrigeration
equipment use, fossil fuel use, transportation,
and potential odors.
- Waste and wastewater generation – Large
quantities of waste and wastewater are
generated during the production process.
The efforts of the Group and operating principles in the field of
pollution:
- Reduce air pollution – consistently reduce
emissions of greenhouse gases and other air
pollutants by transitioning to renewable
energy sources, implementing advanced
heating, steam production, refrigeration, and
transportation technologies, and managing
odor dispersion. We assess each impact
aspect, regularly conduct monitoring, and
adapt the policy based on analysis results.
The Environmental Policy is approved by the order of the Chief
Executive Officer of the parent company of the Group and is
mandatory for all employees of the Group. The policy is publicly
available on the website of the Group.
How do we exercise our business in the Environmental field:
- We comply with all applicable legal
requirements, international standards, and
voluntarily undertaken commitments in the
field of environmental protection.
- We regularly assess the environmental
impact of our operations, identify key risks,
and implement measures to reduce, avoid, or
eliminate negative impacts.
- We adhere to the mitigation hierarchy
principle and strive to minimize the Group’s
operational impact on the environment and
ecosystems as much as possible. When it is
not possible to completely avoid or mitigate
impacts, we consider potential impact
compensation and environmental restoration
measures that align with the biodiversity ‘no
net loss’ principle and, where applicable,
achieve a net positive impact through
pollution prevention, damage-reducing
technologies, and, if necessary, impact
compensation or environmental restoration
measures.
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- Reduce waste and wastewater quantities –
aim to optimize the production process and
prevent waste generation, ensuring safe,
responsible, and environmentally friendly
management of waste and wastewater at all
stages of operations.
- Safely use chemical substances – apply the
precautionary principle when using chemical
substances, avoid hazardous compounds,
seek alternatives, and implement safe
handling solutions.
- We follow the principle of not disturbing
protected areas and preserving the integrity
of species and habitats of high ecological
value, and when this cannot be avoided, we
implement all necessary impact mitigation
and compensation measures.
- We ensure transparent communication,
educate, and engage employees, partners,
suppliers, and local communities in achieving
environmental protection goals.
Actions and resources related to pollution
Air pollution management
”Vilkyškių pieninė” AB has an Integrated Pollution Prevention and Control (IPPC) permit. The IPPC permit was issued
to the company based on its activities, which involve processing more than 200 tons of milk per day. The IPPC permit
controls emissions of carbon monoxide, nitrogen, sulphur oxides, particulate matter, volatile organic compounds and
other pollutants into the air in accordance with the values set in the permit.
“Kelmės pienas” UAB has a pollution permit for the management of ambient air pollution. The permit controls
emissions of nitrogen oxides to ambient air.
Other companies of the Group are not required to hold emission permits. The companies of the Group carry out
inventories of air pollution sources and measurements in accordance with national legislation.
The dry dairy factory of “Kelmės pieninė” AB produces loose, dusty products, so it is very important to minimize the
release of particulates and pollutants into the air and environment. Air polluted with particulate matter from the
dryers is routed to cyclones and discharged into the environment after being cleaned.
As “Pieno logistika” AB is a logistics company, transport emissions are counted towards the GHG emissions of the
Group and no other air pollution is generated by the Group. All of the factories of the Group are equipped with air
filters, which are regularly maintained.
“Baltic Dairy Board” SIA has an emission permit which controls emissions to air and pays a pollution tax.
All companies of the Group pay and account for pollution from mobile sources of air pollution based on fuel
consumption.
Wastewater pollution management
The Group is actively implementing technological solutions for secondary water recovery, which also allows for a
reduction in the volume and intensity of wastewater. It is not yet possible to account for the volume of recycled water,
and the solution is planned to be implemented in 2025.
Wastewater from the production of “Vilkyškių pieninė” AB is treated in its own mechanical-biological treatment
plants. Efficiency of wastewater treatment is up to 99%. An automatic effluent control system prevents excess sewage
sludge from entering the environment with the treated effluent. In order to conserve water, reduce the volume of
wastewater and pollutants released into the environment, wastewater treatment plants have been successfully
installed to reuse water used in the production processes. They reduce the volume of wastewater by 30%. The project
is partly financed by the EU. The treated wastewater is discharged into the natural environment in accordance with
the pollution limits set in the IPPC permit.
Wastewater from the production of fresh dairy products at “Kelmės pienas” UAB is discharged to the treatment plant
of “Kelmės vanduo” UAB.
Wastewater from the production of “Kelmės pieninė” AB is discharged to the wastewater treatment plant of “Tauragės
vandenys” UAB.
Wastewater generated by production of “Modest” AB is discharged into the wastewater system of the city operated
by “Tauragės vandenys” UAB. In 2024, primary wastewater treatment plants were installed in the common area of
plants of “Kelmės pieninė” and “Modest” AB and became operational in Q4 of 2024. The purpose of the pre-treatment
is to treat the wastewater before it is discharged into the sewerage system of “Tauragės vandenys” UAB.
All wastewater-generating companies of the Group monitor the pollutants discharged with wastewater.
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“Baltic Dairy Board” SIA discharges treated wastewater into the natural environment. Pollutant concentrations are
controlled and monitored in accordance with the standards set out in the pollution permit.
“Pieno logistika” AB is active in logistics, so this area is not relevant to the company.
“Vilkyškių pieninė” AB and “Modest” AB operate wastewater treatment plants that generate sludge. This is a residual
product that becomes a secondary raw material in the supply chain and is sold for electricity generation in biogas
plants and passed on to farms with management permits as a fertilizer. The risk of wastewater being discharged to
urban treatment plants and adding to their load has also been assessed as part of the Double Materiality Assessment,
which includes continuous monitoring of wastewater pollutants to meet regulatory targets.
Pollution of air, water and soil
Emissions,
ton/ year
“Vilkyškių
pieninė”
AB
“Modest”
AB
“Kelmės
pieninė”
AB
“Kelmės
pienas”
UAB
“Baltic
Dairy
Board”
SIA
Total:
Information of calculation:
Air pollution:
Key indicators are disclosed, which are calculated according
to the calculation methodologies set out in the inventories
of air pollution sources. The indicators are given for those
undertakings where measurements are made. "Pieno
logistika” AB - the company performs a logistics function
and has no stationary air pollution sources.
Laboratory measurements are regularly carried out and
indicators are continuously recorded and monitored in
accordance with the approved procedures of the Group and
LR regulations and monitoring programs. Responsibility for
tracking indicators is entrusted to technical specialists in
each company of the Group.
Wastewater pollution:
Wastewater pollutants are calculated on the basis of
wastewater analyses carried out in licensed laboratories
and in accordance with the methodologies for calculating
pollutants established by the Republic of Lithuania.
Carbon
monoxide
(CO)
1,99
1,78
2,12
0,55
0,39
6,83
Oxides of
nitrogen
(No
x
)
2,65
2,38
2,83
1,40
0,53
9,79
Sulphur
oxide (SO
2
)
0
0,02
0,02
-
0
0,04
Particulate
matter
0,03
-
-
-
0
0,03
Wastewater
pollution
BDS
(7)
0,95
194,50
54,24
143,79
0,73
394,21
Drowning
materials in
suspension
0,26
100,97
6,5
-
1,07
108,80
Petroleum
products
0,002
-
-
-
-
0,002
COD
9,41
60,49
142,54
206,29
6,15
364,39
In total
phosphorus
0,11
2,06
2,31
2,83
0,13
7,44
In total
nitrogen
1,75
7,21
3,68
7,38
0,68
20,70
Ammonium
nitrogen
0,10
-
-
0,28
-
0,38
Fats
1,13
103,90
2,42
8,11
-
115,56
Anticipated financial effects from material pollution-related risks and opportunities
The Group does not disclose information using the option of phased-in disclosure.
Targets related to pollution
The Group conducts its operations in accordance with the laws and regulations of the Republic of Lithuania (LR)
that govern the field of pollution. The Group aims to reduce wastewater intensity by decreasing water
consumption, i.e., by implementing technological solutions for water reuse.
This is currently being actively pursued, but data on reused water are not yet being recorded. The amount of
reused water is planned to begin being recorded in 2025, and accordingly, targets for reducing wastewater
intensity will be set during 2025-2026.
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WATER AND MARINE RESOURCES
Significant sustainability-related IROs
Notation: 'OO' for Own Operations, 'VC' for Value Chain. The impacts indicated are actual unless otherwise stated (potential).
Type of impact/ risk
(location in the value
chain)
Significant IROs
Period
Description
Subtopic: Water resources/ water consumption
Negative effects (OO,
VC)
Water consumption
Short, medium,
long term
Significant quantities of water are consumed during the production
processes by the Group, which has a negative impact on water resources.
The upstream part of the value chain of the Group, the production of the
necessary raw materials, is also subject to significant water consumption.
Description of the processes to identify and assess material water and marine resources-related impacts,
risks and opportunities
The principal activity of the Group is milk processing. Due to the technological process, these activities consume large
quantities of water. Significant impacts have been assessed in the Double Materiality Assessment of the Group, for
more information see page 54-57. On the topic of water and marine resources, the Group used internal Group
information, the parameters of the technological solutions applied and information from the surrounding population.
To determine the impact, risks, and opportunities in the initial and final parts of the Group’s value chain, reliance is
placed on publicly available information sources, as well as data from suppliers and business clients.
Policies related to water and marine resources
The Environmental Policy of the Group is the main policy. guiding the
Group's environmental performance.
The Environmental policy on water consumption of the “VILVI GROUP“
is defined as follows:
Key impact areas:
− significant amounts of energy and natural resources are used.
The efforts of the Group and operating principles in the field of pollution:
− Increase the efficiency of energy and natural resource use –
apply the principle of prioritizing energy efficiency, implement
solutions that reduce the consumption of electricity, fossil
fuels, and water in both production and the supply chain.
The Environmental Policy is approved by order of the Chief Executive
Officer of the parent company of the Group and is mandatory for all
employees of the Group. The policy is publicly available on the website
of the Group.
How do we exercise our business in the Environmental field:
- We comply with all applicable legal requirements,
international standards, and voluntarily undertaken
commitments in the field of environmental protection.
- We regularly assess the environmental impact of our
operations, identify key risks, and implement measures
to reduce, avoid, or eliminate negative impacts.
- We adhere to the mitigation hierarchy principle and
strive to minimize the Group’s operational impact on the
environment and ecosystems as much as possible.
When it is not possible to completely avoid or mitigate
impacts, we consider potential impact compensation
and environmental restoration measures that align with
the biodiversity ‘no net loss’ principle and, where
applicable, achieve a net positive impact through
pollution prevention, damage-reducing technologies,
and, if necessary, impact compensation or
environmental restoration measures.
- We follow the principle of not disturbing protected areas
and preserving the integrity of species and habitats of
high ecological value, and when this cannot be avoided,
we implement all necessary impact mitigation and
compensation measures.
- We ensure transparent communication, educate, and
engage employees, partners, suppliers, and local
communities in achieving environmental protection
goals.
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Actions and resources related to water and marine resources
The dairy industry consumes large quantities of water, so the use of this resource is directly linked to the industry that
is represented by the Group and is integral to its business model. The technology of dairy production means that the
amount of water withdrawn is less than the amount of wastewater discharged, and the Group has already
implemented technological solutions to save water: all the plants of the Group have Clean in Place (CIP) washing
technologies, which allow water to be reused for equipment washing, and the implementation of a technology to
treat permeate water so that it can be reused in the production processes will be completed in "Vilkyškių pieninė” AB
by the year 2024. Data on water reuse are not yet available due to technological challenges. The Group aims to start
recording water reuse in 2025, to assess the potential for further increases in reuse and to set targets.
“Vilkyškių pieninė” AB, “Kelmės pienas” UAB, “Baltic Dairy Board” SIA obtain their water from their own underground
water borehole. Monitoring of boreholes is carried out in accordance with approved monitoring programs. The
operation of the own boreholes does not affect the quantity or quality of water used by the surrounding population.
Water is supplied to “Kelmės pieninė” AB and “Modest” AB by “Tauragės vandenys” UAB. “Pieno logistika” AB is
engaged in logistics activities and is therefore not relevant for the company.
Targets related to water and marine resources
The Group will assess the efficiency of secondary water use and the potential for further target setting in the year
2025.
Water consumption
Water consumption
Units
2024
Information of calculation:
The source of water consumption data is the meter data and the
water purchase documents when the water is supplied by an
external supplier. Data collection is entrusted to the technical unit
specialists under the guidance of an approved data management
procedure.
Some of the water is reused, and technologies for water reuse are in
place at each plant, but the amount of water reused was not
recorded in 2024 and is planned to be disclosed in the report of the
year 2025.
The operational sites of the Group are not located in water risk areas.
Water is not stored at the sites.
Total water consumption
m3
878 952
Amount of water reused
m3
Not rated
Water consumption in water risk
areas, m3
m3
Not applicable
Volume of stored water and change
in storage
m3
Not applicable
Water quantity to produce 1 ton of
output
m3
10
Water per unit of income
m3/million
EUR
3 581
Anticipated financial effects from water and marine resources-related impacts, risks and opportunities
The Group does not disclose information using the option of phased-in disclosure.
BIODIVERSITY AND ECOSYSTEMS
Significant sustainability-related IROs
Notation: 'OO' for Own Operations, 'VC' for Value Chain. The impacts indicated are actual unless otherwise stated (potential).
Type of impact/
risk (location in
the value chain)
Significant IROs
Period
Description
Subtopic: Impacts on and dependence on ecosystem services
Negative effects
(VC)
Extraction of
ecosystem-
dependent raw
materials
Medium, long
term
All of the main raw materials (milk, water, vegetable oil, cocoa,
paper and wooden packaging) of the Group upstream in the
value chain have/ may have negative impacts on ecosystems.
Risks (OO)
Dependence on raw
Medium, long
The irreplaceability of raw materials is an important operational
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materials whose
extraction has an
impact on
ecosystems
term
risk.
Risks (OO, VC)
Increasing the
burden of a more
sustainable raw
material price
Medium, long
term
Rapidly tightening/ changing regulation at EU and national level
has an impact on the search for substitutability of raw materials,
increasing the rate of acquisition of certified raw materials, and
thus the need for investment. High dependence on raw material
price fluctuations.
Description of processes to identify and assess material biodiversity and ecosystem-related impacts,
risks and opportunities
Although none of the sites of the Group are part of the EU’s Natura2000 network of Special Protection Areas, the
protection of biodiversity and ecosystems is an important topic for the Group. The potential direct negative impacts
of the Group on biodiversity and ecosystems may arise from wastewater discharges, but impacts are managed
through monitoring of the wastewater, through regular testing of the wastewater sludge, for more information please
see page 72.
Dairy farming is an activity in which the extraction of the main raw material (milk) is intrinsically linked to ecosystems
and their vitality. The Group also uses other raw materials in its operations that can have an impact on ecosystems:
water, vegetable oil, cocoa, packaging paper or wood, etc.
Significant impacts have been assessed in the Double Materiality Assessment of the Group, for more information see
page 54-57. The Group used internal company information and data from market, industry, customer and raw material
certification systems to assess biodiversity and ecosystem impacts, risks and opportunities.
Transition plan and consideration of biodiversity and ecosystems in strategy and business model
The Group does not have a plan for biodiversity and ecosystems. A Double Materiality Assessment was carried out in
2024, which revealed the direction of the key themes, and further work will be done progressively to develop the
transition plan and link it to the business strategy.
Material impacts, risks and opportunities and their interaction with strategy and business model
At present, the strategy of the Group does not integrate biodiversity and ecosystem objectives, but plans to do so
gradually. Changing EU regulations and customer expectations are making this an increasingly important area and
the Group is responding and planning its actions accordingly, see page 77.
Policies related to biodiversity and ecosystems
Approved Group Environmental Policy in the Area of Biodiversity and
Ecosystems Defines:
Key impact areas:
- Impact on biodiversity, ecosystems, and animal welfare –
the extraction of the Group’s main raw materials (milk,
water, vegetable oil, cocoa, paper and wooden
packaging) at the beginning of the value chain.
The efforts and operating principles of the Group on biodiversity and
ecosystems:
The Environmental Policy is approved by order of the Chief Executive
Officer of the parent company of the Group and is mandatory for all
employees of the Group. The policy is publicly available on the website
of the Group.
The approved Group Supplier Code of Conduct defines requirements in
the field of environmental protection:
- The supplier must comply with all environmental laws
and regulations applicable to its operations.
- The supplier must actively strive to reduce its negative
environmental impact and increase its positive impact –
aiming for the control and reduction of GHG emissions,
waste control and reduction, protection of water
resources, use of renewable energy sources, energy
efficiency, management of hazardous substances
(storage, use, waste disposal), and circularity in the
relevant areas of its operations. The supplier must have
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- Protect ecosystems, biodiversity, and animal welfare –
assess the impact of the supply of key raw materials
(milk, water, vegetable oil, cocoa, wood, and paper) on
nature, strive to source from responsible suppliers,
adhere to the principles of species and habitat integrity,
avoid deforestation, and prevent disturbance of
protected areas.
How we aim to implement the Environmental Policy:
- We comply with all applicable legal requirements,
international standards, and voluntarily undertaken
commitments in the field of environmental protection.
- We regularly assess the environmental impact of our
operations, identify key risks, and implement measures
to reduce, avoid, or eliminate negative impacts.
- We adhere to the mitigation hierarchy principle and
strive to minimize the Group’s operational impact on the
environment and ecosystems as much as possible.
When it is not possible to completely avoid or mitigate
impacts, we consider potential impact compensation
and environmental restoration measures that align with
the biodiversity ‘no net loss’ principle and, where
applicable, achieve a net positive impact through
pollution prevention, damage-reducing technologies,
and, if necessary, impact compensation or
environmental restoration measures.
- We aim to protect biodiversity, animal welfare, and
natural ecosystems, particularly at the raw material
extraction stage at the beginning of the value chain.
- We follow the principle of not disturbing protected areas
and preserving the integrity of species and habitats of
high ecological value, and when this cannot be avoided,
we implement all necessary impact mitigation and
compensation measures.
- We ensure transparent communication, educate, and
engage employees, partners, suppliers, and local
communities in achieving environmental protection
goals.
an approved environmental policy and measure its
impacts and risks.
- The supplier must make every effort to ensure that its
activities do not harm soil, pollute water or air, emit
harmful noise, deplete natural resources, threaten access
to clean drinking water, hinder access to sanitation
facilities, or adversely affect human health.
Sustainable Purchasing Policy of the “VILVI GROUP“:
Planned for adoption during the years 2025-2026.
Deforestation policy of the “VILVI GROUP“:
Planned for adoption during the years 2025-2026.
Actions and resources related to biodiversity and ecosystems
The main raw material of the Group is milk. Potential negative impacts on ecosystems along the value chain. The
Group does not currently have any approved programs or specific requirements for farmers to try to manage soil
impacts in this part of the supply chain. The Group plans to initiate such actions by 2030.
The purchasers of raw materials of the Group that are sensitive to biodiversity and ecosystems are cocoa and vegetable
(palm) oil. These raw materials are more often sourced from regions where the extraction of the raw materials may
have adverse impacts on biodiversity and ecosystems. The Group aims to manage these potential impacts in two
ways:
1. The Group selects raw material suppliers only from countries in the European Union to ensure that suppliers
are subject to the EU Deforestation Regulation (EUDR), which will prevent the importation of raw materials related to
deforestation into the EU after the year 2021.
2. The Group aims to increase the use of certified, ecosystem-sensitive raw materials (cocoa, vegetable oil) to
ensure that the raw material does not have negative impacts on the environment and people. In 2024, “Kelmės
pienas” UAB was certified by the Rainforest Alliance and started using certified cocoa. RSPO certification will start to
be implemented at the plants of the Group in the year 2025.
E4 ESRS Biodiversity and ecosystems is closely linked to E3 ESRS Water and marine resources - information on water
and marine resources, respectively, is disclosed on page 75.
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Targets related to biodiversity and
ecosystems
1. Use of deforestation-related inputs.
2. Increasing the use of certified raw materials.
The objectives have been set and approved by
the Group’s top management.
100% of the raw materials used by 2026 are EUDR compliant
(the entry into force of the Deforestation Regulation has been
postponed to 30/12/2025, so this is the deadline).
Palm oil - 50% use of RSPO-certified raw material until 2030.
Cocoa - use of Rainforest Alliance certified cocoa, setting
targets by 2025.
The start of RSPO certification – 2025.
Impact metrics related to biodiversity and ecosystems change
The negative impacts of the Group are in upstream value chain, not in all cases with primary suppliers (milk), and in
many cases even with secondary raw materials suppliers, those extracting raw materials that can have an impact on
ecosystems (cocoa, vegetable oil, etc.), and the Group does not have the ability to disclose measurable indicators.
Anticipated financial effects from biodiversity and ecosystem-related risks and opportunities
The Group does not disclose information using the option of phased-in disclosure.
RESOURCE USE AND CIRCULAR ECONOMY
Significant sustainability-related IROs
Notation: 'OO' for Own Operations, 'VC' for Value Chain. The impacts indicated are actual unless otherwise stated (potential).
Type of impact/ risk
(location in the value
chain)
Significant IROs
Period
Description
Subtopic: resource inflows, including resource use
Negative effects (OO,
VC)
Significant quantities of
primary raw materials
Short,
medium, long
term
The Group uses large quantities of raw materials that
come from virgin sources (e.g. packaging), which has a
negative impact on the environment.
Positive impact (OO)
Creation/ use of
secondary raw materials
Short,
medium, long
term
The Group successfully reuses the residual products
generated in production for further production (in its
business model), and the recycling has a positive
environmental impact.
Risks (OO)
Changes in EU and
national regulation
Medium, long
term
Changing and rapidly tightening regulations on the
use of secondary raw materials in packaging, on the
recyclability of packaging, for which the packaging
market is not prepared - a foreseeable supply
shortage.
Risks (OO, VC)
Increasing price burden
for more sustainable raw
materials
Medium, long
term
Rapidly tightening/ changing regulation at EU and
national level affects the search for substitutability of
raw materials, the need for investment, and the high
dependence on raw material price fluctuations.
Subtopic: resource outflows, including resource use
Negative effects (OO,
VC)
Significant packaging
quantities
Short,
medium, long
The Group puts a large amount of packaging on the
market, which has a negative impact on the
environment, both in its own operations and in the
ESRS E5
E4-4
E4-5
E4-6
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term
final part of the value chain.
Positive effects (OO, VC)
Measures to reduce food
waste
Short,
medium, long
term
Reducing food waste is addressed at all stages of the
product lifecycle, from maximum shelf life to
consumer education.
Subtopic: waste
Negative effects (OO,
VC)
Generation of non-
hazardous and
hazardous waste
Short,
medium, long
term
Production activities generate non-hazardous and
hazardous waste and have a negative impact on the
environment. These impacts also occur upstream and
downstream along the value chain.
Positive effects (OO, VC)
Residual product -
secondary raw material
for further production
Short,
medium, long
term
The residual product (whey) from the production of
dairy products becomes a valuable raw material for
other factories of the Group, and provides the basis for
the production of other products.
Value is created at the end of the value chain by
providing a residual product (whey) that becomes a
feedstock for biogas plants (wastewater sludge) or a
fertilizer.
Positive effects (OO, VC)
Measures to reduce food
waste
Short,
medium, long
term
Reducing food waste is addressed at all stages of the
product lifecycle, from maximum shelf life to
consumer education.
Risks (OO, VC)
Changing customer
requirements and
regulation
Medium, long
term
In the longer term, customer requirements and
regulation may change, which will increase the need
for investment in waste management and the
development of waste-free systems.
Description of the processes to identify and assess material resource use and circular economy-related
impacts, risks and opportunities
Significant impacts have been assessed in the Double Materiality Assessment of the Group, for more information see
page 54-57. In the Double Materiality Assessment of the Use of Resources and Circular Economy, the Group used
internal company information and data from the market, industry, customers, raw material certification schemes and
consumer practices.
Policies related to resource use and circular economy
The approved the Environmental Policy on Biodiversity and
Ecosystems of the Group is defined as follows:
Key impact areas:
− Waste and wastewater generation – large quantities of
waste and wastewater are generated during the
production process.
− Significant use of product packaging – the Group
releases a large quantity of packaging into the market.
The efforts and principles of the Group in the circular economy:
The Environmental Policy is approved by order of the Chief
Executive Officer of the parent company of the Group and is
mandatory for all employees of the Group. The policy is publicly
available on the website of the Group.
The companies of the Group have adopted waste segregation
procedures that set out mandatory waste segregation
methods and responsibilities.
Sustainable Purchasing Policy of the Group:
Planned for adoption during the years 2025-2026.
Food Waste Policy of the of the Group:
Planned for adoption during the years 2025-2026.
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− Reduce waste and wastewater quantities – aim to
optimize the production process and prevent waste
generation, ensuring safe, responsible, and
environmentally friendly management of waste and
wastewater at all stages of operations.
− Responsibly manage packaging use – optimize
packaging use, promote the selection of recyclable
and sustainable materials, and apply circular economy
principles to reduce environmental impact during
both production and consumption stages.
Actions and resources related to resource use and circular economy
Circularity of the raw material
The circular economy and circularity are embedded in the business model and strategy of the Group, see page 51 for
more information. The Group aims to create the maximum possible value from a drop of milk, which it can do by
creating as closed a loop as possible, what could be a waste or residual product in one plant is used and becomes a
basic raw material for another plant. In the cheese production process of “Vilkyškių pieninė” AB and “Modest” AB, the
residual product is whey. The whey is broken down and becomes the main raw material for “Kelmės pieninė” AB. In
this plant, whey protein concentrates and permeate are dried to powder form and become an important product in
sports nutrition (Whey protein concentrate) or an important ingredient in the confectionery and feed industries
(permeate). Most of the plants of the Group are interlinked in this way. “Kelmės pienas” AB gives whey to the electricity
industry and to animal feed.
The Group has a number of good examples of how what could be considered a useless product or waste in one plant
becomes a raw material in another plant or outside the Group. The above example of the circular model is one of the
main ones, but there are many smaller examples in the activities of the Group, both in terms of the recycling of raw
materials, where what could be considered as a discarded product is successfully used as a raw material for the
production of a different product, e.g. the buttermilk left over from the production of fresh products is further used as
a value-added raw material for the production of yoghurts, the part of the cheese left over from the cutting of cheese
into the intended shape is used for the grating process, thus creating a new product, etc. One of the food safety
objectives at each of the plants of the Group is to reduce food waste (see page 81 for more details). Water recycling
and heat exchange projects are also part of this.
Packaging
The Group uses large quantities of packaging (buying already produced). EU regulation on packaging is changing
rapidly, creating new risks. As an example, the upcoming regulation on the use of recycled material in food packaging
is causing a wide debate on the side of both food producers and packaging suppliers. The use of secondary raw
materials in food packaging is today not allowed by the legislation of the Republic of Lithuania, and in order to keep
up with this EU requirement, it is necessary to change the legislative framework and to ensure the availability of such
raw materials on the market. In order to manage such risks, the Group continuously monitors regulatory
developments and actively communicates with packaging suppliers.
Finding more sustainable packaging solutions is a constant work in progress for the purchasing department. It is
constantly looking for ways to reduce the use of plastic or paper by changing the material, size or thickness of the
packaging. Solutions are being sought to replace existing combined packaging with mono-packaging. This is an area
of constant interest and exploration, and one in which there is very close cooperation with packaging manufacturers
and suppliers. The Group has developed a packaging strategy in the year 2024, which will include actions to increase
the recyclability of packaging, the use of recycled material, to reduce the weight of packaging, to choose more
favorable raw materials, and to continue its efforts to educate the consumer on packaging sorting and food
(non)waste. The Group will disclose the change projects and the positive impacts generated annually in the
Sustainability Statement.
In the companies of the Group, packaging generated during production is managed and accounted for in accordance
with the environmental requirements set out in the Product, Packaging and Waste Accounting Information System
- GPAIS. We pay particular attention to the conservation of natural resources and encourage consumers to sort their
dairy packaging, with clear instructions on the packaging on how to do this correctly. We make sorting easier by
marking the separation points of multi-layer packages on the packaging with perforations.
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Implementation in the year 2024 of the changes required by the EU Single-Use Plastics Directive 2019/904/EU. The
requirement that the beverage cap must be attached to the packaging has.
Reducing food waste is an important
focus of the “VILVI GROUP” and is
achieved through prevention, recycling
and reuse of leftovers. The Group, in line
with the principles of sustainability, is
constantly looking for new ways and
introducing technologies to reduce
waste and recycle residual products
more effectively. The Group strives to
ensure that every production residue
finds its purpose. Using the latest
technologies such as process
optimization and innovative recycling
solutions, it ensures that food waste is
kept to a minimum and resources are
used as efficiently as possible.
This allows production residues to be
integrated into new products or to be
used in other areas after they are sold,
such as biogas production or animal
feed.
Quality, packaged but unmarketable
products are sold to employees at a low
price, providing additional benefits for
employees and meeting the objective of
reducing food waste. Consumable
products are also donated to social
organizations, contributing to the well-
being of the community. These solutions
help to reduce waste and create added
value.
In 2024, the Group launched communications with employees and
consumers to promote responsible and educational initiatives help to
create a conscious attitude towards reducing food waste in both personal
and professional life.
The importance of reducing food waste is also reflected in the pyramid
above, which shows the hierarchy of food use, from prevention and
support to social organizations to energy production or waste disposal.
The Group aims to operate at the upper levels of the pyramid, prioritizing
prevention, recycling and animal nutrition.
In the year 2024, the Group launched a communication campaign with
employees and consumers to promote a responsible approach to the use
of food leftovers. Educational initiatives help to create a conscious
attitude towards reducing food waste in both personal and professional
life.
Waste
The waste generated by the production of the Group is managed and accounted for in accordance with established
environmental requirements in the product, packaging and waste accounting information systems - GPAIS and
AIVIKS. Waste is segregated, temporarily stored, collected, transported and treated in such a way that it does not cause
adverse effects on public health and the environment. All waste, including hazardous and chemical substances, is
managed in accordance with the laws and regulations of the Republic of Lithuania. Each Group company has
concluded contracts with waste handlers, and the companies have adopted a procedure for waste management (to
be specified). The vast majority of whey is used in the downstream production processes of the Group. Only a small
part of the whey is used for energy purposes, after sale to energy producing companies (with permits to do so).
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Targets related to resource use and circular economy
1. Packaging recyclability
100% Recycling of plastic and combined
packaging in 2030 - 96% in 2024.
2. Use of recycled plastics in packaging
The goals set by the Group packaging strategy working
group have been approved by top management.
Plastic contact-sensitive packaging* 7.5% in 2030, 40% in
2040
Disposable beverage packaging* 30% in 2030, 65% in
2040
Other plastic packaging 35% in 2030, 65% in 2040
* Recycling targets for food contact sensitive packaging are set by regulation, but
implementation will depend directly on the availability of food contact-safe
recycled plastic feedstock and further regulatory developments.
Resource inflows
Units
2024
Information of calculation:
Total gross weight of products and technical and biological
inputs consumed during the reporting period: calculated from
the information in internal databases of the Group, including:
milk, whey, water, fuel, packaging, consumed by the Group. The
data are consolidated at the Group level.
Primary raw materials: milk, salt.
Processed raw materials: whey, vegetable fats, food additives,
fuel.
Packaging: the total weight of packaging consumed during the
reference period.
The share of sustainably sourced raw materials is calculated as:
The share of all certified materials (ensuring sustainable
extraction) in the total quantity of products and technical and
biological materials consumed during the reporting period. This
includes packaging certified by FSC and food additives certified
with the “Rainforest Alliance” certificate.
Number of secondary components, secondary intermediates
and secondary materials reused or recycled: whey concentrates
extracted by “Vilkyškių pieninė” AB and used in the downstream
production of products by “Kelmės pieninė” AB.
Resource input information is tracked by monitoring the
movement of raw materials, with responsibility assigned to the
Finance, Purchasing, and Sustainable Operations departments,
following the approved Operational Data Management
Procedure.
Total combined weight of
products and technical and
biological materials used
during the reporting period
t
376 672
Of which, primary raw
materials
t
260 426
Of which, processed raw
materials
t
112 296
Of which packaging
t
3 950
Share of sustainably
sourced raw materials
(certification scheme)
%
6,7 (FSC, RA)
Weight of secondary
components, secondary
intermediate products and
secondary materials reused
or recycled
t
102 998
Resource outflows
Units
2024
Information of calculation:
Waste data is continuously monitored by the Environmental
Packaging waste
t
207,59
E5-3
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Hazardous waste
t
12,18
Officer of the Group, data is collected in accordance with the
approved data management procedures, and data is provided
on the basis of reports submitted by AIVIKS and GPAIS, as well as
recyclability information provided by waste managers.
Packaging waste: Packaging imported with raw materials by
Group companies, defective or used during the production
process, and other packaging.
Hazardous waste: Waste generated during equipment
maintenance, laboratory testing, and other hazardous waste.
Production waste: Waste generated during the production
processes of Group companies and sludge from wastewater
treatment. These wastes are significant in the Group’s operations
and characteristic of the entire food production sector.
Other waste: Non-hazardous waste generated during equipment
maintenance.
Non-recycled waste: Waste used for energy recovery or disposed
of in landfills.
Recycled waste: Waste used for secondary purposes,
composting, or biogas production.
Production waste
t
6782,82
Other waste
t
48,59
In total
t
7051,20
Unprocessed waste
%
0,32
Recycled waste
%
99,68
Anticipated financial effects from resource use and circular economy-related impacts, risks and
opportunities
The Group does not disclose information using the option of phased-in disclosure.
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SOCIAL
− S1 OWN WORKFORCE | 85
− S3 AFFECTED COMMUNITIES | 96
− S4 CONSUMERS AND END USERS | 98
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OWN WORKFORCE
WORKING CONDITIONS
Interests and views of stakeholders
Disclosures are provided on page 52, section "Interests and views of stakeholders".
Material impacts, risks and opportunities and their interaction with strategy and business model
Below are shown the impacts, risks and opportunities of the Group in the Working Conditions sub-topic identified as
significant in the Double Materiality Assessment. For more information on the Double Materiality Assessment, see
page 54-57.
Significant sustainability-related IROs
Notation: 'OO' for Own Operations, 'VC' for Value Chain. The impacts indicated are actual unless otherwise stated (potential).
Type of impact/ risk
(location in the value
chain)
Significant IROs
Period
Description
Subtopic: secure employment
Positive impact (OO)
Assured and secure
employment
Medium,
long term
The stability of the Group ensures long-term working
relationships, steady remuneration increases, which affects
confidence of the employees and long-term working
relationships.
Positive impact (VC)
Jobs in the region
Medium,
long term
The factories of the Group are located in the region and
create a significant number of jobs.
Risks (OO)
Shortages of
employees
Medium,
long term
Automation of production creates a new risk: the lack of
skilled labor in the region to work with automated processes.
Subtopic: working time
Negative effects (OO)
Shift work, physical
exertion
Short,
medium,
long term
Shift work (night work, weekend work) and heavy physical
workload contribute to high staff turnover.
Negative effects (OO)
Variability of
working hours
Short,
medium,
long term
The volatility of working hours due to fluctuating production
volumes and overtime has an impact on staff motivation
and turnover.
Risks (OO)
Shortages of
employees
Short,
medium,
long term
The risk of refusing night work leads to a risk of not finding
the right employees.
Subtopic: adequate wages
Positive impact (OO)
Stable remuneration
with regular
remuneration rises
(OO)
Short,
medium,
long term
Remuneration is paid regularly, and remuneration rises
twice a year have a positive impact on satisfaction of
employees.
Positive impact (OO)
Fair remuneration
for overtime,
overtime and rest
days for hourly (OO)
Short,
medium,
long term
Overtime and rest days are paid strictly - in line with the law.
This affects motivation of employees.
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ESRS 2 SBM-2
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workers
Topics: social dialogue, freedom of association, the existence of works councils and information, consultation and
participation rights of the workers
Negative effects (OO)
Representation of
the workers on the
work councils
Short,
medium,
long term
Not all companies have work councils, which can have a
negative impact - a lack of involvement of employees.
Positive impact (OO)
Involving workers in
safety and health
issues
Short,
medium,
long term
Consultations with representatives of the employees on
safety and health issues have a positive impact on improving
safety and health.
Positive effects (OO)
Encouraging staff
cooperation
Short,
medium,
long term
Encouraging cooperation between employees from
different departments has a positive impact on
understanding and communication between employees.
Risks (OO)
Insufficient dialogue
Medium,
long term
Not all companies have established work councils, but there
is a risk of a lack of dialogue with employees, which can have
an impact on turnover of employees.
Subtopic: health and safety
Negative effects (OO)
Health effects due to
physical strain, shift
work schedules
Short,
medium,
long term
Shift work, night work, and physical exertion can have a
negative impact on health of employees.
Positive impact (OO)
Staff education
Short,
medium,
long term
Regular education on occupational safety and health at all
levels can have a positive impact on attentiveness and safety
of employees.
Positive impact (OO)
Accident insurance
Short,
medium,
long term
All employees are covered by 24/7 accident insurance.
Risks (OO)
Accidents
Short,
medium,
long term
Risk of accidents on the way to/ from work, at work.
The Double Materiality Assessment identifies the impacts, risks and opportunities that are material to the Group.
Impacts that are significant for the Group are related to the business strategy and model, i.e. are more specific to the
manufacturing industry: shift work schedules, volatility of working hours due to fluctuating production volumes,
impact on health of the employees due to the physical workload and the shift schedule, safety and health. The Group
does not employ children due to hazardous working conditions, so the risk of child labor incidents is not relevant.
Risks related to forced labor are not relevant for the Group.
Policies related to own workforce
The Code of Ethical Employability of the “VILVI GROUP” has
been approved, which defines the basic principles of
employability in the Group:
- the work is freely chosen;
- the right of employees to peaceful association
and collective bargaining;
Other policies adopted by the “VILVI GROUP” relating to its
own workforce:
Remuneration policy, for more information see page 88.
The Safety and health policy of the employees has been
adopted in each company of the Group and is defined by the
essential principles of safety and health: the aim is to prevent
accidents and occupational diseases; every employee must be
aware of the essential principles of safety and health and must
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- the Group provides safe working conditions that
meet basic human needs;
- the company does not employ children;
- remuneration is paid at least as the minimum
wage;
- overtime in the Group is voluntary;
- no discrimination is tolerated;
- seeking of a permanent working relationship;
- rough and inhumane treatment is not tolerated.
The Policy is applied to employees of all companies of the
Group, it is based on the Ethical Trading Initiative’s Code of
Conduct, the Ethical Base Code, and is publicly available on the
website of the Group.
The Group does not have separate approved policies on
trafficking, forced labor and child labor, as these are already
covered by national law.
apply them in the workplace; compliance with the
requirements of the law and regulatory acts is mandatory; the
principles of organizing the health and safety activities in the
company, the inclusion of representatives of employees;
control; and education of employees.
Human rights policy of the Group, approved by the Group and
available to the public on the website of the Group. The policy
is based on the United Nations "Universal Declaration of
Human Rights" and is defined by the basic principles to be
followed when working with people. The human rights policy
establishes that the Group does not tolerate discrimination in
any form: we do not differentiate people based on their race,
skin color, gender, language, nationality, religion, political or
other beliefs, property, social status, or any other condition. The
policy applies to the employees of all Group companies. The
Policy is applied to employees of all companies of the Group.
The Equal opportunities policy and the policy for the
prevention of assault and abuse at work are disclosed in the
section "Equal treatment and equal opportunities for all" on
page 92.
Processes for engaging with own workforce and workers’ representatives about impacts
Representatives of employees were involved in the Double Materiality Assessment and in the determination of the
significance of impacts. Employees were also involved in the stakeholder survey. Although the Group does not have
work councils, trade unions or collective agreements in all companies, the aim is to develop an active dialogue. The
main principle of communication is through regular meetings, irrespective of the level/ degree of employees. Line
managers communicate with employees directly, by email or other methods approved by the Group (e.g. other
communication channels are used with production staff), key information is published on the internet page of the
Group, and employee opinion surveys are regularly conducted.
One of the most important topics is occupational safety and health (OSH). In every company, employees are
represented by safety and health representatives, and OSH committees are set up to deal with key safety and health
issues. In 2025, elections of the work council will be re-initiated in companies where employees are not yet
represented.
Processes to remediate negative impacts and channels for own workforce to raise concerns
Employees can raise concerns on the Helpline of the Group, which is available on the website of the Group and in each
company of the Group through a physical message box. Through this line, employees and other stakeholders can
report all situations of concern confidentially and anonymously. Illegal actions and possible breaches of legislation in
companies of the Group can also be reported by sending a report under the Whistleblower Protection Act of the
Republic of Lithuania: all the necessary information is available on the website of the Group. Employees are
additionally informed about the reporting channels through training. Employees can also, if necessary, use all other
mechanisms available on the market to contact public authorities in the ways they provide. For more information on
reporting channels, see page 106.
Taking action on material impacts on own workforce, and approaches to managing material risks and
pursuing material opportunities related to own workforce, and effectiveness of those actions
In order to manage significant impacts on its own workforce, procedural steps are taken, such as initiating internal
controls, setting up a management team to assess and correct identified risks or impacts, and initiating control
mechanisms. For more information, see page 49. The Group regularly conducts a Psychosocial Factors Survey, the
results of which are analyzed and corrective action is taken. The survey is carried out every two years, the last one was
in 2024.
Guaranteed employment
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The Group is one of the largest employers in the regions where all the factories of the Group are located, and is valued
for its stability and care for its employees and surrounding communities. The Group strives for long-term employment
relationships, motivated employees and stable annual pay increases. The automation of production processes poses
the risk of not finding higher skilled employees who are able to manage automated processes. For a number of years,
there have also been labor shortages due to the decline in the working age population in the regions. The Group seeks
to attract skilled professionals from larger cities or remote areas by offering a package of additional benefits, actively
cooperating with vocational and higher education institutions, organizing professional information and career
planning presentations, factory tours, and participating in career fairs organized by higher education institutions.
Continuous improvement of selection, entry and integration systems. Recruitment and dismissal procedures are
defined in approved procedures by the Group. A consistent onboarding process familiarizes the new employee with
the company culture, increases the efficiency of integration and learning, and strengthens motivation to work for the
company.
Working hours
The principles of working time accounting are adopted in the Payroll System, which is communicated to all
employees. The Group has adopted the principles of Time and Attendance in the Payroll System, which is
communicated to all employees. The Group has adopted a Working Time Monitoring, Control and Supervision
Procedure, which sets out the procedure for the granting of overtime (ensuring that overtime can only be voluntary),
the procedure for the monitoring of the work-rest regime and overtime rates, and responsibilities. The purpose of this
description is to ensure that the working time of employees complies with the requirements the Labor Code (LC) and
other LR legislation. A challenge for regional operations is the turnover of employees due to emigration or to move to
larger cities in search of a wider range of job opportunities. In recent years, there has been a risk of shortages of
employees due to unfavorable work schedules such as night shifts. The volatility of working hours in manufacturing,
which has a negative impact on employees, is controlled by increased attention to the scheduling of production and
leisure time.
Decent remuneration
The remuneration system of the Group is based on the principles of gender equality, non-discrimination and fair
remuneration of employees and is based on the legislation of the Republic of Lithuania and the Remuneration Policy
adopted by the Group. The remuneration system clearly identifies the categories of employees and the positions
assigned to these categories. The remuneration provisions set out in the framework and its annexes shall be applied
in such a way as to avoid any discrimination of gender or other grounds. Men and women shall be paid the same
remuneration for equal or equivalent work. We value transparent and clear remuneration, which is why we use Korn
Ferry Hay Group, the world’s leading provider of accurate remuneration information and analysis. "Korn Ferry Hay
Group’s remuneration market research allows us to benchmark the remuneration policy of the “VILVI GROUP” against
the local market and helps to ensure that remuneration is competitive and reasonable. In 2024, the Group started
preparing for the implementation of the Transparent Remuneration Directive by starting a remuneration analysis in
terms of compliance with the Directive and the need for improvement of the remuneration system.
Hourly staff are subject to an approved grading scheme, which sets out the specific qualification requirements for
each grade in the technical, production, laboratory and other departments/ sections.
Members of the staff may be paid increments for qualifications and/or bonuses for additional work or for the
performance of additional duties or tasks. Given the different ages and educational backgrounds of staff, the aim is to
have a balanced package that meets the needs of different groups. Employees receive a range of financial assistance
and other incentives: social benefits in the event of the death of a family member; gift vouchers from the supermarket.
For example, birthday, anniversary, Christmas and retirement; access to the workplace for employees; additional
health incentives for administrative staff.
The Group assesses the adequacy of staff remuneration in relation to the level of fair remuneration. A robust
methodology, the “Wageindicator” (www.wageindicator.org), was used to select the benchmark. According to this
methodology, the minimum monthly wage in Lithuania and Latvia is higher than the Living Wage, i.e. the Living
Wage is lower than the Minimum Wage. For comparison purposes, the lower band is used as the indicator threshold
used globally to measure a decent/ adequate standard of living. In the most recent assessment, in IIQ of the year 2024,
the Group found that the remuneration paid across the Group is 100% in line with the Decent Living Wage. The lowest
remuneration paid across the Group is higher than the Minimum Wage. Nevertheless, the Group has established a
practice of raising the remuneration of employees twice a year. The Group plans to revise its decent remuneration
methodology in the future to more accurately assess the level of decent remuneration in the regions in which it
operates and to find a solution for a more accurate assessment of decent remuneration, while observing market
trends.
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Social dialogue
The Code of Ethical Employers and Human Rights Policy of the Group states that we respect the right of employees
to associate, form or not to form associations, trade unions and to bargain collectively. In 2018, elections for work
councils were initiated across the Group, but employees did not express a desire to form them. In 2024, a work council
was formed at “Kelmės pienas” UAB, and in the year 2025, it is planned to initiate elections of work councils again at
other companies. The Group is aware of the risks of insufficient social dialogue, and in the companies of the Group
without a work council, the most active dialogue with employees is through the representatives of employees for
safety and health, and regular surveys are carried out to find out their views. As part of the Double Materiality
Assessment, the representatives of employees are also actively involved in the live discussions and an online survey of
employees has been carried out. Employees can also be involved in dealing with situations of concern when a report
is received via the Helpline and there is the possibility to ensure full confidentiality of the case.
Health and safety
The Group complies with all occupational health and safety laws and regulations, has designated responsible persons
and established processes to ensure compliance with workplace safety and internal procedures, regular briefings,
certification, and appropriate training and drills. Regular risk assessments, training and briefings are carried out in
companies of the Group. Employees are provided with all necessary personal protective equipment.
Various projects and programs are in place to encourage employees to take better care of their health:
- all employees are covered by 24/7 accident insurance;
- additional motivational health measures are provided to administrative staff, such as access to
comprehensive medical examinations/ specialist consultations, a gym, dentist, rehabilitation and other
services;
- all employees are invited to receive free eye tests and flu vaccinations;
- to prevent potential chronic occupational diseases and preserve health of employees, an ergonomics
project is being implemented to provide employees with ergonomic tools and workplace improvements
to preserve their health and prevent injuries and other health effects;
- the training also encourages employees to pay more attention to their own health and to learn the
necessary skills.
In order to prevent accidents, all companies of the Group follow the Occupational Health and Safety Policy. Accidents
are recorded in accordance with established procedures, and in the case of each incident, the situation is carefully
analyzed, the causes are identified and the necessary changes and measures are immediately initiated to prevent
similar occurrences in the future. The Group is aware that in the event of an accident, there is a risk of a psychological
and emotional crisis amongst the members of the staff, and therefore it takes active steps to manage these risks and
ensure the well-being of employees.
A psychosocial factors survey was conducted in the year 2024 (previously in 2022). The aim of this survey is to identify
the psychosocial challenges experienced by employees at work, assess their impact on their emotional well-being
and working environment, and identify areas where additional changes or preventive measures are needed. The
results help to develop an effective policy and action plan to ensure safety, health and emotional stability of the
employees.
In the area of occupational safety and health, regular training is provided, preventive and control actions are taken in
line with occupational risk assessments, accident information is analyzed at management level, and civilian training
is provided. In 2024, additional safety and health training was provided to top and middle management to instill a
culture of zero tolerance for safety non-compliance.
In order to reduce and prevent risks related to physical work, all companies of the Group provide ergonomic tools for
use by employees in the production field that can help prevent the risk of health problems (massagers, support splints,
etc.). All employees of the Group are covered by 24/7 accident insurance, and administrative staff are provided with
an additional health package.
Targets related to managing material negative impacts, advancing positive impacts, and managing
material risks and opportunities
The main objectives of the Group are to reduce the number of accidents and to maintain the turnover rate of the
employees.
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90
1. Number of accidents
TRIR (number of incidents per 1 million hours worked) <2
Result of the year 2024 is 1,27.
2. Turnover of employees
The goals were set by the Group’s Management and
Quality Department and approved by top management.
Currently, the goals are not coordinated with employee
representatives. In the future, it is planned to align the
set goals with employee representatives and regularly
share information about the results.
<25%, Result of the year 2024 is - 22%.
Characteristics of the undertaking’s employees
Units
2024
Information of calculation:
Number of employees: number of employees with
employment contracts on 31/12/2024. The number
of employees does not include employees on
maternity leave, paternity leave, parental leave,
military service. The number of employees is
recorded in the internal IT software.
Turnover of employees: number of employees
leaving during the financial year/ number of
employees at the beginning of the financial period.
women
men
All employees
pcs.
938
By gender
pcs.
492
446
Share of employees
percent
52%
48%
Employees by gender and employment contract:
Permanent
pcs.
911
By gender
pcs.
475
436
Temporary
pcs.
27
By gender
pcs.
17
10
Full-time
pcs.
866
By gender
pcs.
448
418
Part-time
pcs.
72
By gender
pcs.
44
28
Employees working non-
guaranteed hours
pcs.
0
By gender
pcs.
0
0
Employees by country
Lithuania
pcs.
878
Latvia
pcs.
60
Turnover of employees
Number of leavers
pcs.
205
By gender
pcs.
-
-
Total turnover of employees
percent
21,85
Characteristics of non-employees in the undertaking’s own workforce
The Group does not have any non-employees who are classified as its own workforce.
Collective bargaining coverage and social dialogue
Units
2024
Information of calculation:
Coverage of collective agreements: there are no collective
agreements in the Group.
Social dialogue: the share of employees of companies based in
Lithuania represented in work councils. Coverage in Latvia is not
disclosed, as less than 10% of the workforce in the region is
employed in the sector. The number of employees in Latvia does
not exceed 10% of the employees of the Group.
Lithuania
Latvia
Coverage of collective
agreements
percent
0
Social dialogue (work
councils)
percent
19,5
Not
applicable
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Adequate wages
Units
2024
Information of calculation:
All employees of the Group are paid a living wage in accordance
with the provisions of Directive (EU) 2022/2041.
Lithuania
Latvia
Applicable adequate
wage benchmark
percent
100%
100%
Social protection
Units
2024
Information of calculation:
All employees of the Group are covered by social security in
accordance with the laws of the Republic of Lithuania and the
Republic of Latvia (compulsory health insurance, parental leave,
retirement, etc.) and all employees of the Group are covered by
the Accident Insurance.
Lithuania
Latvia
Social protection against
certain types of events
under national law
percent
100%
100%
Health and safety metrics
Units
2024
Information of calculation:
Application of a legally compliant OSH management system: all
employees of the Group are subject to an OSH system in
accordance with the laws of the Republic of Lithuania and the
Republic of Latvia.
Number of accidents: accidents on the way to/ from work and
accidents recorded at the workplace.
Number of accidents with temporary disability: all accidents
recorded in the Group (on the way to/ from work and at the
workplace) involved temporary disability.
TRIR (total recordable employee injury rate, TRIR): total
recordable work-related incident rate (number of recorded
accidents x 200 000 / total hours worked per year).
Number of working days lost due to injuries, accidents, deaths or
illnesses: data provided by the internal payroll IT software.
Applying a legally compliant
HSSE management system
percent
100
Number of accidents
pcs.
10
Of which accidents on the way
to/ from work
pcs.
5
Of which accidents at the
workplace
pcs.
5
Of these, fatal
pcs.
0
Number of accidents resulting in
temporary loss of work capacity
pcs.
10
The total number of hour
worked
hours
1 569 732
TRIR (total recordable employee
injury rate, TRIR):
1,27
Number of working days lost due
to injuries, accidents, deaths or
illness
pcs.
13 440
Remuneration metrics (pay gap and total remuneration)
Units
2024
Information of calculation:
Percentage gap of remuneration between female and male
employees: the difference between the average remuneration rates
of male and female employees expressed as a percentage of the
average remuneration rate of male employees.
Ratio of the highest earner’s remuneration to the average
remuneration of employees: the total remuneration of the highest
earner for the whole year divided by the average total annual
remuneration of all employees (excluding the highest earner).
Minimum wage: the lowest wage paid to employees (the basic
wage including fixed additional payments guaranteed to all
employees).
Women
Men
Percentage gap of
remuneration between
female and male
employees
percent
13,5
Ratio of the highest
earner’s remuneration
to the average
remuneration of
employees
5,84
Lithuania
Latvia
Minimum wage, Eur
Eur
1 139
1 177
S1-10
S1-11
S1-14
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VILVI GROUP ANNUAL REPORTS
2024
92
EQUAL TREATMENT AND EQUAL OPPORTUNITIES FOR ALL
Interests and views of stakeholders
Disclosures are on page 52, section "Interests and views of stakeholders".
Material impacts, risks and opportunities and their interaction of with strategy and business model
Below are the impacts, risks and opportunities of the Group in the Equal Value for Money and Equal Opportunities
sub-topic identified as significant in the Double Materiality Assessment. For more information on the Double
Materiality Assessment, see page 54-57.
Significant sustainability-related IROs
Notation: 'OO' for Own Operations, 'VC' for Value Chain. The impacts indicated are actual unless otherwise stated (potential).
Type of impact/
risk (location in
the value chain)
Significant IROs
Period
Description
Subtopic: gender equality and equal pay for work of equal value
Negative effects
(OO)
Distribution of
stereotypical "male"
and "female"
occupations
Medium, long
term
Stereotypical norms and market attitudes about typical "male"
and "female" jobs have a negative impact on the gender
balance in some jobs.
Negative effects
(OO)
Workload
distribution by
gender
Medium, long
term
In workplaces with different workloads, there is a natural
distribution between men and women, with men taking on a
greater physical workload, which has a negative impact on the
gender balance.
Positive impact
(OO)
Ensuring fairness in
remuneration
grades for hourly
staff
Medium, long
term
Gender-neutral grading system for hourly staff
Subtopic: training and skills development
Positive impact
(OO)
Career, training and
learning
opportunities
Short,
medium, long
term
Upgrading and learning opportunities for employees have a
positive impact on their motivation, skills and career prospects
The Double Materiality Assessment identifies the impacts, risks and opportunities that are material to the Group.
Impacts that are material to the Group are not related to the manufacturing industry or the strategy or business
model of the Group, the issues are observed across the market. The distribution of stereotypical, gender-specific roles
is observed across the market from the choice of studies, e.g. In the technical department of the Group, the vast
majority of employees are male, in the laboratory or in the accounting department are women, etc. The attractiveness
of a profession to one or the other gender is also determined by the physical demands of the job/position.
Policies related to own workforce
The Equal Opportunities Policy of the Group establishes the principles
of equal opportunities within the Group and the conditions and
procedures for their implementation. Essential principles:
- Direct and indirect discrimination, harassment, sexual
harassment, direct or indirect discrimination, or
The Policy on Prevention of Violence and Harassment at Work of the
Group provides for effective measures to create a safe working
environment for all Group employees:
ESRS 2 SBM-2
ESRS 2 SBM-3
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VILVI GROUP ANNUAL REPORTS
2024
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directing discrimination on the grounds of sex, race,
nationality, language, origin, social status, age, sexual
orientation, disability, ethnicity, membership of a
political party or association, religion, belief, faith or
opinion, intention to have a child(-ren), or any other
circumstance unrelated to the member of the staff
character, is prohibited within the Group.
- All employees are given equal opportunities during
working hours. Recruitment is based solely on merit and
the ability to do the job well.
- All staff are given equal opportunities to learn, develop
their skills and advance professionally.
- Salaries are based on objective criteria related to the
qualifications of the staff member, the responsibilities
assigned, the nature of the work performed, the results
achieved and other gender-neutral criteria.
- Employees are paid the same for work of equal value.
- The principles of employee protection are applied.
- Measures to implement equal opportunities.
- Overseeing the process of equal opportunities.
The policy is adopted in accordance with Article 26 of the Labor Code.
The following provisions of the Law on Equal Opportunities of the
Republic of Lithuania shall be applied. The Policy was approved by a
decision of the Chief Executive Officer of the parent company. The Policy
is valid for all employees of the Group and is available on the website of
the Group.
- Protecting staff from acts of violence and harassment
and ensuring their psychological safety by preventing
violence and harassment.
- Ensuring that cases of violence and harassment are
identified and dealt with by establishing effective
procedures for identifying, recording and dealing with
cases of violence and harassment.
- Ensuring psychosocial risk assessment.
The policy identifies how to identify cases of violence and harassment at
work, defines the use of preventive action, and outlines rules of conduct
and reporting methods. The Policy was approved by a decision of the
CEO of the Parent Company in 2022, reviewed and updated in the year
2023. The Policy is available to all Group employees on the intranet page
of the Group.
The Human Rights Policy of the Group is adopted in 2022 and includes
key provisions of human rights. The policy is based on the United Nations
"Universal Declaration of Human Rights". Valid for all employees of the
Group.
Other related policies of the “VILVI GROUP“:
- Remuneration policy, see page 88.
- Requirements enshrined in the Supplier Code of
Conduct that suppliers must implement in their
organizations in the social sphere. The Supplier Code of
Conduct is publicly available on the Group’s website.
Processes for engaging with own workforce and workers' representatives about impacts
In cases of adverse impacts, following a referral through the reporting channels of the Group, reports are dealt with in
accordance with the approved procedures for dealing with reports, in accordance with the established review process,
see page 106, for more information. Involvement of relevant employees, as appropriate, while maintaining
confidentiality, as provided for in the procedures. Any changes to the policies shall be agreed with representatives of
employees (existing work councils or safety and health representatives) in companies of the Group.
Processes to remediate negative impacts and channels for own workers to raise concerns
Employees can raise concerns on the Helpline of the Group, which is available on the website of the Group and in each
company of the Group through a physical message box. Through this line, employees and other stakeholders can
report all situations of concern confidentially and anonymously. Illegal actions and possible violations of legislation in
companies of the Group can also be reported by sending a report under the Whistleblower Protection Act of the
Republic of Lithuania, all information is available on the website of the Group. Employees are additionally informed
about the reporting channels through education. Employees can also, if necessary, use all other mechanisms available
on the market to contact public authorities in the ways they are provided. For more information on reporting channels,
see page 106.
In order to mitigate the negative impacts identified in the Double Materiality Assessment, appropriate measures are
being taken to reduce the stereotyping of occupations or positions in favor of one or the other gender: job searches,
recruitment processes, assessment of qualifications, and training are carried out on the basis of gender-neutral
criteria, and university career fairs are attended, where gender-neutral information about the positions is provided.
Automation of production processes is being implemented to reduce the gender distribution of the workload, with
men doing the heavier manual tasks in production. However, this process requires investment, is not fast and presents
a new risk: the lack of skilled employees in the region who can work with automated machinery. Where possible,
simplified solutions are being introduced to ease the physical workload of employees.
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Taking action on material impacts on own workforce, and approaches to managing material risks and
pursuing material opportunities related to own workforce, and effectiveness of those actions and approaches
In order to manage significant impacts on its own workforce, procedural steps are taken, such as initiating internal
audits, setting up a management team to assess and correct identified risks or impacts, and initiating control
mechanisms. The Group regularly conducts a Psychosocial Factors Survey, the results of which are analyzed and
corrective action is taken.
Gender equality and equal remuneration for work of equal value
The Group has adopted key policies to ensure that not only do we know within the Group which 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 stakeholders. In order to ensure that the approach of the Group is reflected in its activities, procedures have
been put in place to support this, responsible persons have been appointed and control mechanisms have been
approved. A number of different policies adopted by the Group (Human Rights Policy, Equal Opportunities Policy,
Prevention of Violence and Harassment at Work Policy, Personal Data Handling Policy, IT Security Policy, Code of
Ethical Conduct for Employers) help to ensure that human rights are taken into account in the various phases of the
operations of the organization. As part of the Double Materiality Assessment, the Group has assessed the main
impacts, risks and opportunities in the area of human rights. In 2025, the Group plans to launch a human rights risk
assessment in some of its businesses, with a due diligence policy to be finalized and approved by the year 2027.
The Group does not tolerate any form of violence or other attempts to harm. The policy of the Group on the prevention
of violence and harassment at work has been adopted and in 2024 a strong focus has been placed on violence and
harassment prevention training, training of employees to distinguish between different forms of negative behavior
and informing them where to report situations of concern. Employees are informed about the reporting channels
they can use to report worrying situations.
The remuneration policy and remuneration system of the Group ensures that men and women are paid equally for
the same or equivalent work. The Group employs a large number of employees with different competences in
different positions, which results in a complex remuneration structure that influences the median gender ratio. There
is a negative impact on remuneration differentials due to the stereotyping of 'male' and 'female' jobs in the market,
which may have a negative impact on the balance of gender remuneration. The Group has started preparations for
the Transparent Remuneration Directive in 2024 and is actively analyzing data of remuneration. Men and women are
paid identically on an hourly basis, and the grading system ensures that remuneration of an employee is determined
solely by his or her qualifications, skills and performance. However, there is an imbalance in remuneration between
men and women in the administration. The Group seeks to address this discrepancy through continuous analysis of
salary data and targeted actions to ensure equal remuneration for work of equal value.
Due to the nature of production, there are negative effects when the workload is distributed between the genders,
with a higher physical workload for men. This imbalance of power is addressed by automating production processes
and introducing other means of easing the physical effort that even out the workload.
Learning and upskilling
The Group focuses not only on maintaining and improving the physical and emotional health of its employees, but
also on development of competences and opening up of career opportunities. The Group has adopted a learning
culture that aims to support an environment of growth and development, and encourages knowledge sharing and
collaboration.
Targeted training is organized within the Group, taking into account the objectives of the Group, staff needs and
competence expectations. Organization-wide training is provided for both specialized, professional and generic
competences. Cooperation with various academic and training institutions is used to enable employees to acquire
the competences they lack, both internally and externally, through training courses, seminars or conferences.
In 2024, significant attention was devoted to deepening employees’ professional and specialized knowledge as well
as general competencies – developing leadership skills, effective internal communication, and conflict prevention
abilities. Top-level managers placed particular emphasis on analyzing organizational culture and creating a
responsibility matrix model at the Group level.
The approach of the Group is that upskilling helps maintain competitiveness and the pace of innovation. The risk is
that too much training may reduce employee engagement, so a balance is sought. An annual survey of learning needs
and areas is conducted and learning plans are formulated based on the survey results.
Nevertheless, there are also market challenges - there is a trend towards a sharp decline in the number of students
interested in studying dairy processing technology, and there are challenges in attracting engineering specialties to
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2024
95
the regions. The Group participates in career fairs at educational institutions to raise the profile of the Group and to
educate students about the opportunities of joining the “VILVI GROUP”.
Targets related to managing material impacts, advancing positive impacts, as well as to risks and
opportunities
The main objective linked to this sub-topic is turnover of employees, the purpose of which is identified above. Other
objectives are not relevant in this field.
Diversity metrics
Units
2024
Information of calculation:
Top level managers: heads of departments.
Middle managers: heads of units.
The gender breakdown of the Supervisory bodies of the Board, is
shown on page 49-50.
All data is recorded in the internal IT systems of the Group for the
employees.
The number of employees includes employees on maternity,
paternity, parental leave or military service.
Women
Men
Top managers
pcs.
3
8
Part of
percent.
27
73
Middle managers
pcs.
13
10
Part of
percent
56
43
All employees by age group
Under 30 years old
pcs.
54
53
Part of
percent
5,76
5,65
30-50 years
pcs.
237
193
Part of
percent
25,27
20,58
Over 50 years old
pcs.
201
200
Part of
percent
21,43
21,32
Persons with disabilities
Units
2024
Information of calculation:
Number of employees with disabilities working for the Group at the
end of the reporting year.
The Group does not use additional performance indicators aimed at
analyzing the inclusion of persons with disabilities.
Percentage of
employees with
disabilities
Percent
7,6
Training and Skills Development metrics
Units
2024
Information of calculation:
Employees who participated in regular performance
and career development reviews:
In 2024, 129 employees (104 employees assessed by
qualification categories and 15 administrative
employees) were promoted or changed categories. This
accounted for 7.3 percent of all Group employees at the
end of the reporting year. The performance of 62
percent of the Group’s non-administrative employees is
evaluated using qualification categories. Qualification
categories increased for 104 employees, i.e.,
approximately 18 percent of non-administrative
employees assessed by qualification categories.
Women
Men
Employees who have
participated in regular
performance and
career development
reviews
pcs.
129
Part of
percent
7,3
Average number of
training hours per
employee
19
By gender
not evalueted
not evalueted
Average number of training hours per employee: the number of training hours during the reference period divided by the
average number of employees during the reference period.
Average number of training hours per staff member by gender: training is organized according to the post and its skill
requirements. The aim of the training is to improve competences regardless of gender, so information is not recorded on the
basis of gender.
S1-5
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Work-life balance
Units
2024
Information of calculation:
The percentage of hired employees who exercised their right to take
leave for family reasons: the calculated percentage of the number of
female/male employees of the Group’s companies at the end of the
reporting year compared to the number of female/male employees
entitled to family leave (pregnancy, childbirth, childcare).
Women
Men
Percentage of
employees entitled to
family leave
percent
100
100
Percentage of
employees who have
taken family leave
percent
2,24
By gender
percent
3,83
0,45
Incidents, complaints and severe human rights impacts
Units
2024
Information of calculation:
Number of complaints made through the channels through
which concerns by persons classified as self-employed can be
raised: number of complaints received through the reporting
channels of the Group - the Helpline and the Reporting
Channel.
Number of complaints made
through channels through which
concerns can be raised by people in
the own workforce
pcs.
0
Of which number of
discrimination incidents
pcs.
0
Of which number of confirmed
incidents of discrimination
pcs.
0
Total amount of penalties, fines and
compensation for damages
resulting from previously disclosed
incidents and complaints
Eur
0
Number of major incidents of
human rights involving own
workforce
pcs.
0
Total amount of fines, penalties and
compensation for damages
resulting from major incidents of
human rights, involving own
workforce
Eur
0
AFFECTED COMMUNITIES
Interests and views of stakeholders
During the Double Materiality Assessment, community representatives were involved in the assessment process. For
more information, see page 52-54.
Material impacts, risks and opportunities and their interaction with strategy and business
The Double Materiality Assessment identified the following sub-topic as significant and directly related to the strategy
and business model of the Group: economic, social and cultural rights of communities, adequate food. The mission of
the Group to increase access to food has a direct positive impact on its core product development. By providing food
aid to the community, the Group creates an even greater positive impact.
Below are the impacts, risks and opportunities of the Group in the Working Conditions sub-topic identified as
significant in the Double Materiality Assessment. For more information on the Double Materiality Assessment, see
page 54-57.
ESRS S3
ESRS 2 SBM-3
ESRS 2 SBM-2
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Significant sustainability-related IROs
Notation: 'OO' for Own Operations, 'VC' for Value Chain. The impacts indicated are actual unless otherwise stated (potential).
Type of impact/
risk (location in
the value chain)
Significant IROs
Period
Description
Communities’ civil and political rights: adequate food
Positive effects
(OO, VC)
Proper food
Medium, long
term
The Group’s efforts are directed towards increasing food
accessibility (in the final part of the value chain – for the end
consumer of food products). In its operational communities
(around the Group’s companies), the Group provides food
support, thereby enhancing the positive impact it creates.
Policies related to affected communities
The Grantmaking Policy of the Group sets out the objectives,
directions and process of granting support to affected
communities.
The focus of the Group for support under the Sustainable Development
Goals:
- Beyond Hunger - support for projects and activities
carried out by organizations fighting poverty and
hunger, and by relief and charitable foundations
working in this field, with the aim of achieving public
benefit (SDG2).
- Local communities - to strengthen cooperation with
communities in the regions of operation of the Group to
contribute to economic development and improved
living conditions, local employment, social inclusion and
the reduction of economic inequalities (SDG8 and
SDG10).
- Good Health – support for projects and activities for the
benefit of the public that promote healthy eating and
active movement (SDG3)
- Quality education - for educational institutions to
improve the quality of courses of study relevant to the
business areas of the Group, to promote the
attractiveness and popularity of these courses of study
and/or careers in manufacturing and industry, and to
promote research activities in these courses of study
(SDG4).
No support can be granted:
Funding for political parties, state politicians, political advertising
and/or political campaigns.
Activities that may have a negative impact on society or parts of society
(extreme and high-risk sports, gambling, alcoholic beverages, smoking
and other intoxicants, etc.)
Activities and/or projects that are incompatible with the values of the
Group
Beneficiaries who have committed material irregularities or misused
the aid during the execution of a previous support contract with a
company of the Group.
The support policy sets out the criteria for granting support:
- The focus of the Group for support under the Sustainable
Development Goals:
- Support is given to applicants whose activities or projects
- The objectives of the support project/ activity must be in line
with the focus of the support of the Group.
The importance of the support project and the problem to be solved
must be justified - the need for the project/ activity must be clearly
justified. The beneficiary must have sufficient resources to implement
the activity.
- Outcomes must be clear, realistic and measurable, with
measures to achieve the objectives of the project. The project
must add value, increase the visibility and reputation of the
Group through appropriate publicity in line with brand
requirements.
Forms of support:
- Financial support.
- Product donation - donations are made in support of
products produced by the Group.
- The decision to grant/ not to grant support is taken by the
Support Evaluation Group.
The decision is based on:
Donation Policy of the Group
Rules on the granting of Support of the Group
The Code of Ethical Business Conduct of the Group sets out the
principles of how the Group communicates/ collaborates with
stakeholders, including communities. The factories of the Group are
located in the regions of the country and therefore cooperation with
local people, many of whom work for the Group, is essential. We aim to
build community and close relationships and to maintain the trust of
local people.
Environmental policy of the Group states that we take into account
the interests of the communities in which we operate when applying
environmental principles. We work with our communities as we do
with other stakeholders who have an interest in improving the
environment.
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2024
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create value in the regions where the Group operates -
priority is given to initiatives in the municipalities of Tauragė,
Kelmė, Pagėgiai and Bauska.
Processes for engaging with affected communities about impacts
The Group is an active member of the communities in which it operates. Although the Group does not currently have
a specific procedure for involving communities in its decision-making, it is actively engaging with representatives of
local communities or organizations. The closest contacts have been established with the local and surrounding
communities of the parent company, “Vilkyškių pieninė” AB, located in the municipalities of communities of Vilkyškiai
and Pagėgiai.
Processes to remediate negative impacts and channels for affected communities to raise concerns
Representatives of communities can report situations of concern through the reporting channels of the Group. The
Helpline is available on the website of the Group or in physical boxes located at the security checkpoints at each of
the sites of the Group. A Whistleblower Channel is also available on the website of the Group for members of the
communities to report under the Whistleblower Protection Act.
Taking action on material impacts on affected communities, and approaches to managing material risks
and pursuing material opportunities related to affected communities, and effectiveness of those actions
“Vilkyškių pieninė” AB has received complaints from residents about noise from heavy vehicles and unsafe traffic
situations around the factory site in Vilkyškiai town. This situation is planned to be resolved in the year 2026 with the
construction of a new administrative building in Tauragė, when the administration of the Group will be moved from
Vilkyškiai to Tauragė and the freed-up space will be made safer for heavy vehicles.
The Double Materiality Assessment did not identify any adverse impacts on communities caused by the Group and
therefore there are no other specific situations that require remedial action. Positive impacts are generated through
support to communities and the support is carried out in accordance with the approved Grant Policy. In close
cooperation, it is not the first year in 2024 that the communities of Vilkyškiai, Pagėgiai, Tauragė, Kelmė have been
supported financially and with products.
Targets related to managing material negative impacts, advancing positive impacts, and managing
material risks and opportunities
The Group does not currently have any objectives related to management of community impact.
CONSUMERS AND END-USERS
PERSONAL SAFETY OF CONSUMERS AND/OR END-USERS
Interests and views of stakeholders
The Double Materiality Assessment sought the views of both direct business customers and end-users of the
products, so these stakeholders were included in the assessment. For more information, see page 52-54.
Material impacts, risks and opportunities and their interaction with strategy and business model
The Double Materiality Assessment found that under the topic of personal safety of consumers/ end-users, the sub-
topic of health and safety is significant for the Group. For more information on the Double Materiality Assessment, see
page 54-57.
ESRS S4
ESRS 2 SBM-2
ESRS 2 SBM-3
S3-2
S3-3
S3-4
S3-5
VILVI GROUP ANNUAL REPORTS
2024
99
The Group produces food products, so food safety and quality are one of the most important areas of impact overall.
This topic is not isolated in the strategic objectives or business model of the Group, but is at the heart of the entire
food manufacturing industry. Food safety and quality must be ensured for business continuity.
Notation: 'OO' for Own Operations, 'VC' for Value Chain. The impacts indicated are actual unless otherwise stated (potential).
Type of impact/
risk (location in
the value chain)
Significant IROs
Period
Description
Sub-topic: health and safety
Positive effects
(OO, VC)
Food safety and
quality standards
Medium, long
term
The implementation and compliance with food safety and
quality standards of the Group, results in a higher level of
compliance with food safety and quality requirements, which has
a positive impact on product safety and quality.
Risks (OO)
Failure to comply
with the conditions
for storing
production
Medium, long
term
Failure to respect storage conditions at the end of the value chain
creates risks of product quality non-conformity.
Policies related to consumers and end-users
The Food Safety and Quality Policy of the “VILVI Group” sets out
guidelines and principles to ensure food safety and quality and to foster
a culture of food safety within the companies of the Group and its
environment.
The policy is approved by a decision of the CEO of the parent company,
and the Head of Quality is responsible for the implementation of the
food safety and quality policy. All employees of the Group are required to
comply with the Policy. The policy is available to all stakeholders on the
website of the Group.
The policy defines key principles of food safety and quality:
- We responsibly develop and supply the market with safe and
quality food products that comply with food safety standards,
legal and other requirements of the buyer's country,
European Union and Republic of Lithuania regulations and
legislation.
- To meet the needs of consumers and business customers, we
continuously monitor healthy lifestyle trends, the competitive
environment and scientific discoveries, and apply them to
develop new products and improve the products that
consumers already love.
- We maintain communication and close contact with all
stakeholders, aiming for timely, reliable and transparent
communication, especially with business customers, partners
and raw material suppliers.
- We only work with trusted suppliers of raw materials, supplies
and services, ensuring stable quality, authenticity and safety
performance. This ensures the authenticity of the dairy
products we produce, protecting consumers from counterfeit
products that do not comply with composition requirements.
- We continuously improve our food safety and quality
management system, and monitor our processes on a daily
basis to improve its efficiency and effectiveness.
- We continuously maintain staff competence in food safety
culture, pay increased attention to the importance of hygiene
and food safety risks, and improve communication and
feedback.
- We encourage autonomy, initiative, understanding and
responsibility for the quality of our products, fostering mutual
respect and communication based on company values.
- We ensure the safety of employees in the work environment.
- We are constantly improving our production technologies
and looking for solutions to produce the highest quality dairy
products.
- In order to minimize our environmental impact, we use our
existing infrastructure responsibly and keep it up-to-date,
coordinate resource management and assess potential risks.
- We aim to share our knowledge with all key stakeholders -
consumers, business customers and partners.
S4-1
VILVI GROUP ANNUAL REPORTS
2024
100
Processes for engaging with consumers and end-users about impacts and processes to remediate
negative impacts and channels for consumers and end-users to raise concerns
End Users may at any time express their comments, complaints or feedback through the channels provided by the
Group: the general quality telephone number, email, the messaging channels of the Group are available on the
website of the Group, and the accounts on the most popular social networking sites of the Group. User comments
and complaints are actively analyzed and a dialogue is established to clarify the circumstances. Complaints are
registered, analyzed and responded to in accordance with the Complaints Guidelines and the Incident Management
Procedure of the Group. We notice a risk that comments, complaints or reflections made in public social spaces are
often unfounded or misleading. However, we do not interfere with freedoms of the customers by not limiting their
deliberations, and responding when necessary. When information is received through the communication channels
of the Group, it is always responded to and answered.
Business customers are actively engaged to gather information on their specific needs and labelling requirements.
This ensures that expectations are met right from the selection of raw materials and production processes. Annual
customer and consumer surveys are carried out and used to further needs of analysis.
Taking action on material impacts on consumers and end-users, and approaches to managing material
risks and pursuing material opportunities related to consumers and end-users, and effectiveness of those
actions
Fostering a culture of food safety and ensuring product safety and quality is one of the top priorities of the Group. The
factories of the Group produce and control products in accordance with the highest food safety and quality standards
and legal regulations. The Group has implemented Food Safety and Quality Systems and follows an approved Food
Safety and Quality Policy. The Group is subject to audits by controlling and certifying authorities, inspections by
existing and potential customers and their representatives, and inspections by the State Food and Veterinary Service
(SFVS).
The Group has Food Safety and Quality Systems in place:
Certificates
“Vilkyškių
pieninė”
AB
"Modest" AB
"Kelmės
pieninė” AB
"Kelmės
pienas” UAB
“Baltic Dairy
Board“ SIA
ISO 22000
FSSC 22000
ISO 50001
HALAL
Kosher
IFS Food Version 8
Certificate of organic production
Rainforest Alliance certificate
Taking action on material impacts on consumers and end-users, and approaches to managing material
risks and pursuing material opportunities related to consumers and end-users, and effectiveness of those
actions
Measurable food safety and quality goals and objectives are set annually in each Group company and approved by
the company managers. The Quality Department is responsible for ensuring the achievement of these goals. The
approved plan outlines the measures, implementation deadlines, and measurable indicators.
The objectives are set in the following areas of food safety and quality:
S4-2
S4-3
S4-4
S4-5
VILVI GROUP ANNUAL REPORTS
2024
101
1. To produce high-quality and safe dairy products that meet consumer needs and food safety standards. To strive
for maximum satisfaction of customer needs and expectations, aiming to gain their trust and loyalty to the group
of companies, by improving and developing new products and their packaging, and implementing new
technologies capable of delivering products of exceptional quality to the customer.
2. To contribute to the creation of a sustainable environment by utilizing existing infrastructure and upgrading it,
while reducing the impact on the surrounding environment, coordinating resource management, and assessing
risks. To aim to reduce the amount of food lost at all stages of production and distribution.
3. To maintain communication with all stakeholders, striving for transparent communication.
4. To work only with reliable suppliers who ensure the stable quality, authenticity, and safety indicators of the
supplied raw materials.
5. To ensure employee safety in the workplace environment.
6. To improve the Food Safety and Management System, enhancing its effectiveness and efficiency. To maintain
employee competence in the area of food safety culture, paying increased attention to the importance of hygiene
and risks to food safety, and improving mutual communication and feedback. To encourage employee
independence, initiative, understanding, and responsibility for the quality of the produced products, fostering.
SOCIAL INCLUSION OF CONSUMERS/ END-USERS
Interests and views of stakeholders
The Double Materiality Assessment found that under the topic of personal safety of consumers/ end-users, the sub-
topic of health and safety is significant for the Group. For more information on the Double Materiality Assessment, see
page 52-54.
The Group produces food products, so food safety and quality are one of the most important areas of impact overall.
This topic is not isolated in the strategic objectives or business model of the Group, but is at the heart of the entire
food manufacturing industry. Food safety and quality must be ensured for business continuity.
Material impacts, risks and opportunities and their interaction with strategy and business model
The Double Materiality Assessment found that under the theme of social inclusion of users/ end-users, access to
products and services is a significant sub-topic for the Group. For more information on the Double Materiality
Assessment, see page 54-57.
Notation: 'OO' for Own Operations, 'VC' for Value Chain. The effects reported are actual unless otherwise stated (potential).
Type of impact/
risk (location in
the value chain)
Significant IROs
Period
Description
Subtopic: access to products and services
Positive effects
(OO, VC)
Increasing
accessibility
Medium, long
term
The Group develops product lines for different consumer
segments (healthier product lines, lower-priced products, sports
products), which increases the accessibility of dairy products to a
wider range of consumers.
Risks
Food safety and
quality risks
Medium, long
term
Placing food on the market exposes you to food safety and
quality risks, as well as possible recalls.
Ensuring access to products is at the heart of the strategy and business model of the Group, as set out in the mission
statement of the Group. The Group has long sought to differentiate its product basket by producing a wide variety of
dairy products for different audiences and to meet the needs of different customers and consumers: from everyday
fresh dairy products and cheese, to healthier (lower sugar) product lines and proteins for sports nutrition. The business
ESRS 2 SBM-2
ESRS 2 SBM-3
VILVI GROUP ANNUAL REPORTS
2024
102
model of the Group of creating synergies between companies allows for a very broad and diverse basket of dairy
products.
Policies related to consumers and end-users
The customers and users of the Group are the subject of a full range
of Group policies, which ensure smooth operations and the interests
of stakeholders are met:
Business Ethics Policy, more on page 104.
Food safety and health policy, more on page 99.
Human rights policy, more on page 87.
Environmental policy, more on page 66, 71, 74, 76, 79.
All of these policies are approved at Group level and must be adhered to
by all employees of the Group, and are publicly available on the website
of the Group.
In order to ensure that suppliers are held to the same ethical
standards, the Group has adopted a Supplier Code of Conduct to
which all suppliers approved by the Group are required to adhere.
The Supplier Code of Conduct is publicly available on the website of the
Group. The Code has been drawn up in accordance with the OECD
Guidelines for Multinational Enterprises and sets out the main
requirements for suppliers approved by the Group: general, social and
environmental requirements and anti-corruption requirements.
Processes for engaging with consumers and end-users about impacts, processes to remediate
negative impacts and channels for consumers and end-users to raise concerns
Dialogue and remediation with business customers and end-users shall be pursued through the channels listed
above under "S4-2, S4-3 Processes for engaging consumers and end-users in addressing impacts, processes for
remediating adverse impacts and channels for consumers and/or end-users to raise concerns" under Food Safety and
Quality, page 99.
All stakeholders can report situations of concern through the trust channels of the Group, for more information see
page 106.
Taking action on material impacts on consumers and end- users,, and approaches to mitigating material
risks and pursuing material opportunities related to consumers and end-users and effectiveness of those
actions
Putting food on the market exposes you to food safety and quality risks. To manage these risks, actions are taken in
accordance with the procedures set out in the Food Safety and Quality area, see page 99, for more information. "S4-4
Actions taken to address significant impacts on consumers and end-users. Methods of management of significant
risks and seizing of significant opportunities for consumers and end-users and the effectiveness of those actions".
All products manufactured by the Group are labelled in accordance with the requirements of the legislation of the
Republic of Lithuania and the markets in which we operate, the principles of fairness in marketing and
communication are respected by not publishing untrue information, and by complying with the laws regulating
communication and marketing.
Targets related to managing material negative impacts, advancing positive impacts, and managing
material risks and opportunities
Ensuring of food availability is directly linked to food and safety risks, and the objectives of this strand are set out on
page 100-101.
S4-1
S4-2
S4-3
S4-4
S4-5
VILVI GROUP ANNUAL REPORTS
2024
103
GOVERNANCE
− G1 BUSINESS CONDUCT | 104
VILVI GROUP ANNUAL REPORTS
2024
104
BUSINESS CONDUCT
Significant impacts, risks and opportunities and their interaction with its strategy and business
model
The Double Materiality Assessment found the following sub-topics to be significant in the topic of business ethics.
For more information on the Double Materiality Assessment, see page 54.
Notation: 'OO' for Own Operations, 'VC' for Value Chain. The impacts indicated are actual unless otherwise stated (potential).
Type of impact/
risk (location in
the value chain)
Significant IROs
Period
Description
Subtopic: corporate culture
Positive effects
(OO, VC)
An organizational
culture that fosters
ethical business
Medium, long
term
The Group creates and fosters an organizational culture based on
ethical business norms, with a positive impact both within the
organization and upstream in the value chain.
Risks (OO)
Turnover of
employees
Medium, long
term
The organizational culture and values introduced by the Group
may not be acceptable to all employees, which can lead to a risk
of turnover of employees.
Subtopic: protection of whistleblowers
Positive effects
(OO, VC)
Ensuring reporting
channels and
whistleblower
protection
Medium, long
term
The messaging channels of the Group are accessible to all
stakeholders, provide anonymous and confidential reporting and
whistleblower protection, and have a positive impact both within
the organization and across the value chain.
Subtopic: management of relationships with suppliers including payment practices
Positive effects
(OO, VC)
Defined payment
practices
Medium, long
term
The Group operates on a contractual basis - payment practices
are set out in contracts, creating a positive impact both within
the organization and across the value chain.
Positive effects
(OO, VC)
Supply chain risk
assessment
Medium, long
term
The Group assesses supply chain risks and works with trusted
and approved suppliers, creating a positive impact both within
the organization and upstream in the supply chain.
The role of the administrative, supervisory and management bodies
Information is available on page 23-31.
Description of the processes for identifying and assessing significant impacts, risks and
opportunities
Information is available on page 54-57, section "Material impacts, risks and opportunities and their interaction with
strategy and business model“.
Business conduct policies and corporate culture
The Business Ethics Policy approved within the Group
establishes the fundamental principles of ethical business
conduct, applicable to all Group employees:
- How we communicate and maintain
relationships with all stakeholders of the Group.
The Group, aiming to ensure that suppliers adhere to no less
stringent ethical standards, has approved a Supplier Code of
Conduct, which all Group-approved suppliers must familiarize
themselves with. The Supplier Code of Conduct is publicly
available on the Group's website. The Code was developed
ESRS G1
ESRS 2 SBM-3
ESRS GOV-1
ESRS 2 SBM-1
G1-1
VILVI GROUP ANNUAL REPORTS
2024
105
- The core operating principles of the Group:
transparency, trust, responsibility, and
collaboration.
- No form of corruption is tolerated within the
Group, and compliance with the provisions on
giving/receiving gifts is upheld.
- We monitor and strive to prevent conflicts of
interest within the Group.
- The Group does not support political parties or
participate in political activities.
- Internal Group information that is not publicly
disclosed is confidential, safeguarded by the
Group itself, and may not be disclosed to third
parties.
The Business Ethics Policy has been approved at the Group
level, and all Group employees are required to comply with it.
The policy is publicly accessible on the Group's website.
based on the OECD Guidelines for Multinational Enterprises
and outlines the key requirements for Group-approved
suppliers: general, social, and environmental requirements, as
well as anti-corruption requirements.
In 2024, strategic sessions and activities were conducted at the
Group's management level (senior and middle management)
with the goal of reaching agreements on organizational
culture, clarifying the functions between departments and
units, and establishing responsibilities. This represented a
significant step toward a clearer organizational culture.
Management of relationships with suppliers
The Group has a procurement procedure that must be
followed by all purchasing units. Most of the purchases
of the Group are made through the Purchasing
Department. The Group conducts an annual supplier
risk assessment (using the Supplier Risk Assessment
Model) and establishes lists of trusted suppliers to
ensure smooth supply and develop partnerships.
Contracts with third parties are subject to mandatory
requirements for compliance with laws and regulations,
environmental and occupational health and safety
requirements. Sustainability requirements are
integrated into the supplier risk assessment model.
In 2024, suppliers included in the list of trusted suppliers
were introduced to the Group’s Supplier Code of
Conduct. In 2025, it is planned to start imposing more
requirements on suppliers, with an action plan to be
outlined in 2025.
The supplier risk assessment model followed by the
Group.
Prevention and detection of corruption and bribery
The Group does not have a separate anti-corruption and anti-bribery policy, but the main provisions are set out in the
Code of Ethical Conduct of the Group. The Group does not tolerate any form of corruption, including bribery and
kickbacks, and advocates honest business practices and transparent cooperation with public authorities and other
stakeholders. These provisions are also enshrined in the Supplier Code of Conduct.
The Group pays all taxes, maintains fair accounting records, has a transparent payroll policy, ensures transparency in
the procurement of the Group and requires potential and existing suppliers to act transparently and fairly.
Every new customer goes through a screening process, and no transactions are involved in which bribes are solicited
or non-transparent behavior is offered. The Group has clearly and publicly set out its principles of business conduct
and cooperation in its Code of Ethical Business Conduct, the Supplier Code of Conduct is communicated to partners
and suppliers, and employees are constantly reminded of the types of behavior or agreements that are not tolerated
and the risks that may arise in dealing with stakeholders, both in Lithuania and overseas. Employees in higher risk
departments who are involved in procurement/ sales receive additional training on the Code of Conduct. In the event
of a change of team members, training for new employees is provided immediately. The training covers the basic
ethical business practices of the Group, expectations of employees in the area of business ethics, rules on conflicts of
interest, provisions on political participation, receipt and provision of gifts, and information on reporting channels.
Training is not currently provided to members of supervisory bodies.
G1-2
G1-3
VILVI GROUP ANNUAL REPORTS
2024
106
The Group unconditionally complies with the approved sanctions. The Group does not have a formalized anti-money
laundering policy, which is planned to be in place during the year 2025.
Training for functions at risk
Units
2024
Information of calculation:
Units/ departments with a higher risk of corruption and
bribery are procurement and sales functions.
Scope of the risk functions covered by the
training
Perce
nt
100
Whistleblowing channels
The Group has reporting channels through which both employees and other stakeholders can report situations of
concern:
- A Helpline where all stakeholders can report situations of concern. You can also report anonymously. An
approved description of the procedures for handling reports to the Helpline ensures that all reports received
are treated in full confidentiality and within the time limits and procedures laid down for handling. The
Helpline is accessible to all interested parties via the website of the Group. In order to ensure access also for
stakeholders who do not necessarily use electronic channels, the Helpline is accessible via physical message
boxes located in each of the factories of the Group.
- Through the whistleblowing channel, all interested parties can confidentially report illegal actions and
possible violations of legal acts in companies of the Group. The report shall be submitted and processed in
accordance with the requirements provided for by the Law on the Protection of Whistleblowers of the
Republic of Lithuania. The Whistleblowing Channel is accessible via contact section on the website of the
Group.
The reporting channels are available to all stakeholders on the website of the Group. In the companies of the Group,
in order to give access to the messaging channels to employees who are less likely to use online solutions, the
messaging channels can be accessed through a physical Helpline box located at the security desk of each factory. The
recording and handling of messages received there follows the same approved procedures for handling messages
received through the messaging channels
Incidents of corruption or bribery
Units
2024
Information of calculation:
Reports received through the
channels of the Group shall be
registered and dealt with in
accordance with the approved
procedures for dealing with reports
received through the channels. There
were no reports related to corruption
and bribery in the year 2024.
Number of convictions for violation of anti-corruption and anti-
bribery laws
pcs.
0
Number of fines for infringements of anti-corruption and anti-
bribery laws
Eur
0
Total number and nature of confirmed cases of corruption or
bribery
pcs.
0
Number of confirmed cases of dismissal or disciplinary action for
corruption or bribery-related incidents
pcs.
0
Number of confirmed incidents involving contracts or business
partners that have been terminated or extended due to
irregularities related to corruption or bribery
pcs.
0
Political influence and lobbying activities
The Code confirms that the Group has decided to be politically neutral and not to make any financial contributions to
political parties, groups or politicians. The Code also defines rules of conduct for employees involved in political
activities, in order to avoid any affiliation or potential reputational risks. The Group is not dissociated from the
legislative process and participates in it as a member of the Association of Lithuanian Milk Processing Companies
"Pieno centras". "Pieno centras” is transparent in its political activities, using official lobbyists and legally permissible,
declared lobbying activities. The Group is not directly involved in political activities or legislative processes.
Payment practices
Payment practices are defined in the business contracts concluded, and the Group has not approved a separate policy
or procedure to formalize payment practices; it is planned to be approved in 2025. Payments are subject to an average
G1-4
G1-5
G1-6
VILVI GROUP ANNUAL REPORTS
2024
107
settlement period of 30 days. 90% of the Group's invoices consist of material suppliers' invoices, with a payment term
of 30 days. The payment term for raw milk suppliers' invoices ranges from 5 to 25 days, with 70% of invoices paid within
20-25 days and 30% within 5-15 days.
In settling payments for raw milk, the Group adheres to the provisions established by the Law of the Republic of
Lithuania on the Prohibition of Unfair Trading Practices in the Agricultural and Food Product Supply Chain, which
mandates settlement with milk suppliers—most of whom are representatives of small farms—within 30 days. Further
priority in settlements is given to wages and payments for services. The company has no legal proceedings or disputes
regarding payment practices.
VILVI GROUP ANNUAL REPORTS
2024
108
ANNEXES
Sustainability Due Diligence Statement
The main elements of a due diligence statement
Sections of the Sustainability
Report, page
Interface with
People
Environment
Integrating due diligence into governance, strategy
and business model
2 ESRS GOV-2, page 49-50
2 ESRS GOV-3, psl. 50
2 ESRS SBM-3, page 56-57
2 ESRS SBM-3 E1, page 65
2 ESRS SBM-3 E4, page 76
2 ESRS SBM-3 S1, page 85, 92
2 ESRS SBM-3 S3, page 96
2 ESRS SBM-3 S4, page 98
2 ESRS SBM-3 G1, page 104
Involvement of affected stakeholders in all key stages
of due diligence
2 ESRS GOV-2, page 49-50
2 ESRS SBM-2, page 52-53
2 ESRS IRO-1, page 54-56
2 ESRS MDR-P E1-2, page 66
2 ESRS MDR-P E2-1, page 71
2 ESRS MDR-P E3-1, page 74
2 ESRS MDR-P E4-2, page 76-77
2 ESRS MDR-P E5-1, page 79-80
2 ESRS MDR-P S1-1, page 86-87, 92-93
S1-2, page 87, 93
2 ESRS MDR-P S3-1, page 97-98
S3-1, page 97-98
2 ESRS MDR-P S4-1, page 99
S4-2, page 99, 102
G1-1, page 104-105
Identification and assessment of negative impacts
2 ESRS IRO-1, page 54-56
2 ESRS SBM-3, page page 56-57
2 ESRS SBM-3 E1, page 65
2 ESRS SBM-3 E4, page 76
2 ESRS SBM-3 S1, page 85, 92
Taking action to address these negative impacts
2 ESRS MDR-A, E1-3, page 67
2 ESRS MDR-A, E2-2, page 72-73
2 ESRS MDR-A, E3-2, page 75
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VILVI GROUP ANNUAL REPORTS
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2 ESRS MDR-A, E4-3, page 77
2 ESRS MDR-A, E5-2, page 80-81
2 ESRS MDR-A S1-4, page 87-89, 94-95
E1-1, page 66
E4-1, page 76
G1-1, page 104-105
G1-2, page 105
G1-3, page 105-106
Monitoring and communicating the effectiveness of
these efforts
2 ESRS MDR-M, E1-5, page 67-68
2 ESRS MDR-M, E1-6, page 68-70
2 ESRS MDR-M, E2-4, page 73
2 ESRS MDR-M, E3-4, page 75
2 ESRS MDR-M, E4-5, page 78
2 ESRS MDR-M, E5-4, page 82
2 ESRS MDR-M, E5-5, page 82-83
2 ESRS MDR-M, S1-8, page 90
2 ESRS MDR-M, S1-9, page 95
2 ESRS MDR-M, S1-10, page 91
2 ESRS MDR-M, S1-11, page 91
2 ESRS MDR-M, S1-12, page 95
2 ESRS MDR-M, S1-13, page 95
2 ESRS MDR-M, S1-14, page 91
2 ESRS MDR-M, S1-15, page 96
2 ESRS MDR-M, S1-16, page 91
2 ESRS MDR-M, S1-17, page 96
G1-4, page 106
G1-5, page 106
G1-6, page 106-107
E1-4, page 67
E2-3, page 73
E3-3, page 75
E4-4, page 78
E5-3, page 82
S1-5, page 89-90, 95
S3-5, page 98
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ESRS 2 IRO-2 EU Datapoint List
DISCLOSURE REQUIREMENT AND
RELATED DATA UNIT
REFERENCE
TO TFIAR*
REFERENCE TO PILLAR 3
REFERENCE TO THE
BENCHMARK
REGULATION
REFERENCE TO
THE EU
CLIMATE ACT
PAGE
2 ESRS GOV 1 Gender balance on
the Board, Article 21(d)
Indicator 13 in
Annex 1, Table
1.
-
Annex II to
Commission
Delegated Regulation
(EU) 2020/1816
-
Page 49
2 ESRS GOV 1 Percentage of
independent board members,
Article 21(e)
-
-
Annex II to
Commission
Delegated Regulation
(EU) 2020/1816
-
Page 50
2 ESRS GOV 4 Due Diligence
Statement, Article 30
Indicator 10 in
Annex 1, Table
3.
-
-
-
Page 108-
109
2 ESRS SBM 1 Participation in
activities related to fossil fuels,
Article 40(d)(i)
Indicator 4 in
Annex 1, Table
1.
Article 449a of Regulation
(EU) No 575/2013;
Table 1 of Commission
Implementing Regulation
(EU) 2022/2453 (
28
): Table 1.
Qualitative information on
environmental risks and
Table 2: Qualitative
information on social risks
Annex II to
Commission
Delegated Regulation
(EU) 2020/1816
-
Not
applicable
2 ESRS SBM 1 Participation in
activities related to the production
of chemicals, Article 40(d)(ii)
Indicator 9 of
Annex 1, Table
2.
-
Annex II to
Commission
Delegated Regulation
(EU) 2020/1816
-
Not
applicable
2 ESRS SBM 1 Participation in
activities related to controversial
weapons, Article 40(d)(iii)
Indicator 14 in
Annex 1, Table
1.
-
Article 12(1) of
Delegated Regulation
(EU) 2020/1818,
Annex II to Delegated
Regulation (EU)
2020/1816
-
Not
applicable
2 ESRS SBM 1 Participation in
activities related to the production
and cultivation of tobacco, Article
40(d)(iv)
-
-
Article 12(1) of
Delegated Regulation
(EU) 2020/1818, Annex
II to Delegated
Regulation (EU)
2020/1816
-
Not
applicable
E1 ESRS Roadmap for moving to a
climate-neutral economy by the
year 2050, Article 14
-
-
-
Article 2(1) of
Regulation (EU)
2021/1119
Page 67
E1 ESRS companies not covered by
benchmarks aligned to the Paris
Agreement, Article 16(g)
-
Article 449a
Regulation (EU) No
575/2013; Template 1 of
Commission
Implementing Regulation
(EU) 2022/2453: Bankbook.
Indicators of potential risks
of climate change-related
transformation. Credit
quality of exposures by
sector, emissions and
residual maturity
Article 12(1)(d) to (g)
and (g) and Article
12(2) of Delegated
Regulation (EU)
2020/1818
-
Not
applicable
E1-4 ESRS GHG emission reduction
targets, Article 34
Indicator 4 in
Annex 1, Table
2.
Article 449a
Regulation (EU) No
575/2013; Template 3 of
Article 6 of Delegated
Regulation (EU)
2020/1818
-
Page 67
VILVI GROUP ANNUAL REPORTS
2024
111
Commission
Implementing Regulation
(EU) 2022/2453: Bankbook.
Risk indicators for
potential climate change-
related transition.
Reconciliation parameters
E1-5 ESRS Fossil energy
consumption broken down by
source (only for sectors with high
climate impact), Article 38
Indicator 5 in
Annex 1, Table
1;
Indicator 5 in
Annex 1, Table
2.
-
-
-
Page 67-68
E1-5 ESRS Energy consumption and
mix, Article 37
Indicator 5 in
Annex 1, Table
1.
-
-
-
Page 67-68
E1-5 ESRS Energy intensity related
to the activities of sectors with
significant climate impacts, Article
40-43
Indicator 6 in
Annex 1, Table
1.
-
-
-
Page 68
E1-6 ESRS Overall emissions of
Scale 1, 2 and 3 and total emissions,
Article 44
Indicators 1
and 2 in Annex
1, Table 1.
Article 449a; Regulation
(EU) No 575/2013; Template
1 of Commission
Implementing Regulation
(EU) 2022/2453: Bankbook.
Indicators of potential
climate change-related
transition risks. Credit
quality of exposures by
sector, emissions and
residual maturity
Articles 5(1), 6 and 8(1)
of Delegated
Regulation (EU)
2020/1818
-
Page 68
E1-6 ESRS Energy intensity of total
GHG emissions, Article 53-55
Indicator 3 of
Annex 1, Table
1.
Article 449a of Regulation
(EU) No 575/2013; Template
3 of Commission
Implementing Regulation
(EU) 2022/2453: Bankbook.
Indicators of potential
climate change-related
transition risks.
Article 8(1) of
Delegated Regulation
(EU) 2020/1818
-
Page 68
E1-7 ESRS GHG removals and
carbon credits, Article 56
-
-
-
Article 2(1) of
Regulation (EU)
2021/1119
Not
applicable
E1-9 ESRS Benchmark portfolio
exposure to climate-related
physical risk, Article 66
-
-
Annex II to Delegated
Regulation (EU)
2020/1818, Annex II to
Delegated Regulation
(EU) 2020/1816
-
Not
applicable
E1-9 ESRS Breakdown of cash
amounts by acute and chronic
physical risk, Article 66(a)
E1-9 ESRS Location of important
assets subject to significant
physical risk, Article 66(c)
-
Article 449a of Regulation
(EU) No 575/2013; Articles
46 and 47 of Commission
Implementing Regulation
(EU) 2022/2453; Template
5. Bankbook. Indicators of
potential physical risks
associated with climate
change. Exposures related
to physical risks.
-
-
Phased-in
disclosure
E1-9 ESRS Breakdown of the
carrying amount of an
-
Article 449a of Regulation
(EU) No 575/2013; Article 34
-
-
Phased-in
disclosure
VILVI GROUP ANNUAL REPORTS
2024
112
undertaking's immovable property
by energy efficiency class, Article
67(c)
of Commission
Implementing Regulation
(EU) 2022/2453; Template
2. Bankbook. Indicators of
potential climate change-
related transition risks.
Loans secured by real
estate. Collateral
instruments Energy
efficiency
E1-9 ESRS Extent of portfolio
exposure to climate-related
opportunities, Article 69
-
-
Annex II to
Commission
Delegated Regulation
(EU) 2020/1818
-
Phased-in
disclosure
E2-4 ESRS Amount of each
pollutant listed in Annex II of
Regulation 5 of the E-IPTR
Regulation (European Pollutant
Release and Transfer Register
Regulation) emitted to air, water
and soil, Article 28
Indicator 8 in
Annex 1, Table
1;
Annex 1, Table
2, Indicators 1,
2, 3.
-
-
-
Phased-in
disclosure
E3-1 ESRS Water and marine
resources, Article 9
Indicator 7 in
Annex 1, Table
2.
-
-
-
Page 74
E3-1 ESRS Accepted Policy, Article
13
Indicator 8 in
Annex 1, Table
2.
-
-
-
Page 74
E3-1 ESRS Sustainable Oceans and
Seas, Article 14
Indicator 12 in
Annex 1, Table
2.
-
-
-
Page 74
E3-4 ESRS Total quantity of water
recycled and reused, Article 28(c)
Indicator 6.2 of
Annex 1, Table
2
-
-
-
Page 75
E3-4 ESRS Total water
consumption (m
3
) by net revenue
of own operations, Article 29
Indicator 6.1 of
Annex 1, Table
2
-
-
-
Page 75
2 ESRS IRO 1 - E4, Article 16(a)(i)
Indicator 7 of
Annex 1, Table
1
-
-
-
Page 76
2 ESRS IRO 1 - E4, Article 16(b)
Indicator 10 of
Annex 1, Table
2
-
-
-
Page 76
2 ESRS IRO 1 - E4, Article 16(c)
Indicator 14 in
Annex 1, Table
2
-
-
-
Page 76
E4-2 ESRS Sustainable land use
and/or agricultural practices or
policies, Article 24(b)
Indicator 11 of
Annex 1, Table
2
-
-
-
Page 76
E4-2 ESRS Sustainable ocean/
marine use practices or policies,
Article 24(c)
Indicator 12 of
Annex 1, Table
2
-
-
-
Page 76
E4-2 ESRS Policies to address
deforestation, Article 24(d)
Indicator 15 of
Annex 1, Table
2
-
-
-
Page 76-77
E5-5 ESRS Untreated waste, Article
37(d)
Indicator 13 of
Annex 1, Table
2
-
-
-
Page 82-83
VILVI GROUP ANNUAL REPORTS
2024
113
E5-5 ESRS Hazardous waste and
radioactive waste, Article 39
Indicator 9 of
Annex 1, Table
1
-
-
-
Page 82-83
2 ESRS - SBM3 - S1
Risk of incidents involving forced
labour, Article 14(f)
Annex I, Table
3, Indicator 13
-
-
-
Page 86
2 ESRS - SBM3 - S1
Risk of child labour incidents,
Article 14(g)
Annex I, Table
3, Indicator 12
-
-
-
Page 86
S1-1 ESRS Human rights policy
commitments, Article 20
Annex I, Table
3, Indicator 9
and Table 1,
Indicator 11
-
-
-
Page 87
S1-1 ESRS Policy on comprehensive
verification applicable to aspects
covered by International Labor
Organization Core Conventions No.
1 to 8, Article 21
-
Annex II to
Commission
Delegated Regulation
(EU) 2020/1816
-
Page 91, 95,
96
S1-1 ESRS Processes and measures
to prevent trafficking in human
beings, Article 22
Indicator 11 of
Annex I, Table
3
-
-
-
Not
applicable
S1-1 ESRS Occupational accident
prevention policy or management
system, Article 23
Annex I, Table
3, Indicator 1
-
-
-
Page 89
S1-3 ESRS Complaints/complaints
handling mechanism, Article 32(c)
Annex I, Table
3, Indicator 5
-
-
-
Page 106
S1-14 ESRS Number and rate of
deaths and work-related accidents,
Article 88(b) and (c)
Indicator 2 of
Annex I, Table
3
-
Annex II to
Commission
Delegated Regulation
(EU) 2020/1816
-
Page 91
S1-14 ESRS Number of working days
lost due to injury, accident, death
or sickness, Article 88(e)
Annex I, Table
3, Indicator 3
-
-
-
Page 91
S1-16 ESRS Unadjusted gender
remuneration gap, Article 97(a)
Indicator 12 of
Annex I, Table 1
-
Annex II to
Commission
Delegated Regulation
(EU) 2020/1816
-
Page 91
S1-16 ESRS Excessive coefficient of
remuneration for the Executive
Director, Article 97(b)
Annex I, Table
3, Indicator 8
-
-
-
Page 91
S1-17 ESRS Discrimination cases,
Article 103(a)
Annex I, Table
3, Indicator 7
-
-
-
Page 96
S1-17 ESRS Failure to comply with
the UN Guiding Principles on
Business and Human Rights and
OECD Recommendations, Article
104(a)
Annex I, Table
1, Indicator 10
and Table 3,
Indicator 14
-
Annex II to Delegated
Regulation (EU)
2020/1816, Article 12(1)
of Delegated
Regulation (EU)
2020/1818
-
Page 96
2 ESRS - SBM3 - S2
High risk of child labor or forced
labor in the value chain, Article
11(b)
Annex I, Table
3, indicators 12
and 13
-
-
-
Undisclosed
information,
page 57
S2-1 ESRS Human rights policy
commitments, Article 17
Annex I, Table
3, Indicator 9
and Table 1,
Indicator 11
-
-
-
Undisclosed
information,
page 57
S2-1 ESRS Policy on value chain
employees, Article 18
Annex 1, Table
3, Indicators 11
and 4
-
-
-
Undisclosed
information,
page 57
VILVI GROUP ANNUAL REPORTS
2024
114
S2-1 ESRS Failure to comply with
the UN Guiding Principles on
Business and Human Rights and
OECD Recommendations, Article 19
Indicator 10 in
Annex 1, Table
1
-
Annex II to Delegated
Regulation (EU)
2020/1816, Article 12(1)
of Delegated
Regulation (EU)
2020/1818
-
Undisclosed
information,
page 57
S2-1 ESRS Policy on comprehensive
verification applicable to aspects
covered by International Labor
Organization Core Conventions No.
1 to 8, Article 19
-
-
Annex II to
Commission
Delegated Regulation
(EU) 2020/1816
-
Undisclosed
information,
page 57
S2-4 ESRS Human rights problems
and incidents in the upstream and
downstream parts of the value
chain, Article 36
Indicator 14 in
Annex 1, Table
3
-
-
-
Undisclosed
information,
page 57
S3-1 ESRS Human rights policy
commitments, Article 16
Annex 1, Table
3, Indicator 9
and Table 1,
Indicator 11
-
-
-
Page 97-98
S3-1 ESRS Failure to comply with
the UN Guiding Principles on
Business and Human Rights, ILO
Principles and OECD
Recommendations, Article 17
Indicator 10 in
Annex 1, Table
1
-
Annex II to Delegated
Regulation (EU)
2020/1816, Article 12(1)
of Delegated
Regulation (EU)
2020/1818
-
Page 98
S3-4 ESRS Human rights problems
and incidents, Article 36
Indicator 14 in
Annex 1, Table
3
-
-
-
Page 98
S4-1 ESRS Consumer and end-user
policy, Article 16
Annex I, Table
3, Indicator 9
and Table 1,
Indicator 11
-
-
-
Page 99
S4-1 ESRS Failure to comply with
the UN Guiding Principles on
Business and Human Rights and
OECD Recommendations, Article 17
Indicator 10 in
Annex 1, Table
1
-
Annex II to Delegated
Regulation (EU)
2020/1816, Article 12(1)
of Delegated
Regulation (EU)
2020/1818
-
Page 98
S4-4 ESRS Human rights problems
and incidents, Article 35
Indicator 14 in
Annex 1, Table
3
-
-
-
Page 100,
102
G1-1 ESRS United Nations
Convention against Corruption,
Article 10(b)
Indicator 15 of
Annex 1, Table
3
-
-
-
Page 104
G1-1 ESRS Protection of
whistleblowers, Article 10(d)
Indicator 6 of
Annex 1, Table
3
-
-
-
Page 106
G1-4 ESRS Penalties for
infringements of anti-corruption
and anti-bribery laws, Article 24(a)
Indicator 17 of
Annex 1, Table
3
-
Annex II to Delegated
Regulation (EU)
2020/1816
-
Page 106
G1-4 ESRS Anti-corruption and anti-
bribery standards, Article 24(b)
Indicator 16 in
Annex 1, Table
3
-
-
-
Page 105-
106
VILVI GROUP ANNUAL REPORTS
2024
115
ESRS IRO-2 – Content of Disclosure Requirements
Disclosure Requirements List
Page
Disclosure Requirements List
Page
2 ESRS General Disclosures
E1-4 Targets related to climate change mitigation and
adaptation
67
BP-1 General basis for preparation of sustainability statements
47-48
E1-5 Energy consumption and mix
67-68
BP-2 Disclosures in relation to specific circumstances
48
E1-6 Gross Scopes 1, 2, 3 and Total GHG emissions
68-70
GOV-1 The role of the administrative, management and
supervisory bodies
49
E1-7 GHG removals and GHG mitigation projects financed
through carbon credits
70
GOV-2 Information provided to and sustainability matters
addressed by the undertaking’s administrative, management
and supervisory bodies
49-50
E1-8 Internal carbon pricing
70
GOV-3 Integration of sustainability-related performance in
incentive schemes
50
E1-9 Anticipated financial effects from material physical
and transition risks and potential climate- related
opportunities
70
GOV-4 Statement on due diligence
50
E2 – Pollution
GOV-5 Risk management and internal controls over
sustainability reporting
51
2 ETAS IRO-1-E2 Description of the processes to identify
and assess material pollution-related impacts, risks and
opportunities
71
SBM-1 Strategy, business model and value chain
51-52
E2-1 Policies related to pollution
71-72
SBM-2 Interests and views of stakeholders
52-54
E2-2 Actions and resources related to pollution
72-73
SBM-3 Material impacts, risks and opportunities and their
interaction with strategy and business model
56-57
E2-3 Targets related to pollution
73
IRO-1 Materiality assessment process
54
E2-4 Pollution of air, water and soil
73
IRO-2 Disclosure Requirements in ESRS covered by the
undertaking’s sustainability statement
110-14
E2-6 Anticipated financial effects from material pollution-
related risks and opportunities
73
E1 – Climate change
E3 – Water and marine resources
ESRS 2 GOV-3-E1 Integration of sustainability-related
performance in incentive schemes
50
2 ETAS IRO-1-E3 Description of the processes to identify
and assess material water and marine resources -related
impacts, risks and opportunities
74
E1-1 Transition plan for climate change mitigation
66
E3-1 Policies related to water and marine resources
74
ESRS 2 SBM-3-E1 Material impacts, risks and opportunities and
their interaction with strategy and business model
65
E3-2 Actions and resources related to water and marine
resources
75
ESRS 2 IRO-1-E1 Description of the processes to identify and
assess material climate-related impacts, risks and
opportunities
65
E3-3 Targets related to water and marine resources
75
E1-2 Policies related to climate change mitigation and
adaptation
66
E3-4 Water consumption
75
E1-3 Actions and resources in relation to climate change
policies
67
E3-5 Anticipated financial effects from water and marine
resources-related impacts, risks and opportunities
75
VILVI GROUP ANNUAL REPORTS
2024
116
E4 – Biodiversity and ecosystems
S1-6 Characteristics of the undertaking’s employees
90
E4-1 Transition plan and consideration of biodiversity and
ecosystems in strategy and business model
76
S1-7 Characteristics of non-employees in the
undertaking’s own workforce
90
ESRS 2 IRO-1-E4 Description of processes to identify and assess
material biodiversity and ecosystem-related impacts, risks
dependencies and opportunities
76
S1-8 Collective bargaining coverage and social dialogue
90
E4-2 Policies related to biodiversity and ecosystems
76-77
S1-9 Diversity metrics
95
E4-3 Actions and resources related to biodiversity and
ecosystems
77
S1-10 Adequate wages
91
E4-4 Targets related to biodiversity and ecosystems
78
S1-11 Social protection
91
E4-5 Impact metrics related to biodiversity and ecosystems
change
78
S1-12 Persons with disabilities
95
E4-6 Anticipated financial effects from material biodiversity
and ecosystem-related risks and opportunities
78
S1-13 Training and skills development metrics
95
E5 – Resource use and circular economy
S1-14 Health and safety metrics
91
ESRS 2 IRO-1-E5 Description of the processes to identify and
assess material resource use and circular economy-related
impacts, risks and opportunities
79
S1-15 Work-life balance metrics
96
E5-1 Policies related to resource use and circular economy
79-80
S1-16 Remuneration metrics (pay gap and total
remuneration)
91
E5-2 Actions and resources related to resource use and circular
economy
80-81
S1-17 Incidents, complaints and severe human rights
impacts
96
E5-3 Targets related to resource use and circular economy
82
S3 – Affected communities
E5-4 Resource inflows
82
ESRS 2 SBM-2-S3 Interests and views of stakeholders
96
E5-5 Resource outflows
82-83
ESRS 2 SBM-3-S3 Material impacts, risks and opportunities
and their interaction with strategy and business model
96-97
E5-6 Anticipated financial effects from material resource use
and circular economy-related impacts, risks and opportunities
83
S3-1 Policies related to affected communities
97-98
S1 – Own workforce
S3-2 Processes for engaging with affected communities
about impacts
98
ESRS 2 SBM-2-S1 Interests and views of stakeholders
85, 92
S3-3 Processes to remediate negative impacts and
channels for affected communities to raise concerns
98
ESRS 2 SBM-3-S1 Material impacts, risks and opportunities and
their interaction with strategy and business model
85, 92
S3-4 Taking action on material impacts on affected
communities, and approaches to managing material risks
and pursuing material opportunities related to affected
communities, and effectiveness of those actions
98
S1-1 Policies related to own workforce
86-87,
92-93
S3-5 Targets related to managing material negative
impacts, advancing positive impacts, and managing
material risks and opportunities
98
S1-2 Processes for engaging with own workforce and workers'
representatives about impacts
87, 93
S4 – Consumers and End-users
S1-3 Processes to remediate negative impacts and channels
for own workforce to raise concerns
87, 93
ESRS 2 SBM-2-S4 Interests and views of stakeholders
98, 101
S1-4 Taking action on material impacts on own workforce, and
approaches to mitigating material risks and pursuing material
opportunities related to own workforce, and effectiveness of
those actions
87-89,
94-95
ESRS 2 SBM-3-S4 Material impacts, risks and opportunities
and their interaction with strategy and business model
98-99,
101
S1-5 Targets related to managing material negative impacts,
advancing positive impacts, and managing material risks and
opportunities
89-90, 95
S4-1 Policies related to consumers and end-users
99, 102
VILVI GROUP ANNUAL REPORTS
2024
117
S4-2 Processes for engaging with consumers and end-users
about impacts
100, 102
S4-3 Processes to remediate negative impacts and channels
for consumers and end-users to raise concerns
100, 102
S4-4 Taking action on material impacts on consumers and
end-users, and approaches to managing material risks and
pursuing material opportunities related to consumers and
end- users, and effectiveness of those actions
100, 102
S4-5 Targets related to managing material negative impacts,
advancing positive impacts, and managing material risks and
opportunities
100-101,
102
G1 – Business Conduct
ESRS 2 SBM-3-G1 Material impacts, risks and opportunities and
their interaction with strategy and business model
104
ESRS 2 GOV-1-G1 The role of the administrative, management
and supervisory bodies
104
ESRS 2 IRO-1-G1 Description of the processes to identify and assess
material impacts, risks and opportunities
104
G1-1 Business conduct policies and corporate culture
104-105
G1-2 Management of relationships with suppliers
105
G1-3 Prevention and detection of corruption and bribery
105-106
G1-4 Incidents of corruption or bribery
106
G1-5 Political influence and lobbying activities
106
G1-6 Payment practices
106-107
PricewaterhouseCoopers UAB, J. Jasinskio str. 16B, LT-03163 Vilnius, Lithuania
+370 (5) 239 2300, lt_vilnius@pwc.com, www.pwc.lt
Company code 111473315, is a private company registered with the Legal Entities’ Register of the Republic of Lithuania
Independent practitioner’s limited assurance report on
VILKYŠKIŲ PIENINĖ AB consolidated Sustainability Statement
To the shareholder of VILKYŠKIŲ PIENINĖ AB
Limited assurance conclusion
We have conducted a limited assurance engagement on the consolidated sustainability statement of
VILKYŠKIŲ PIENINĖ AB (the “Company”), included in Sustainability Statement of the Management
report (the “consolidated Sustainability Statement”), as at 31 December 2024 and for the year then
ended.
Based on the procedures we have performed and the evidence we have obtained, nothing has come
to our attention that causes us to believe that the consolidated Sustainability Statement is not
prepared, in all material respects, in accordance with the Law of the Republic of Lithuania on
Reporting by Undertakings and by Groups of Undertakings Articles 21 and 22 implementing Article
29(a) of EU Directive 2013/34/EU, including:
• compliance with the European Sustainability Reporting Standards (ESRS), including that the
process carried out by the Company to identify the information reported in the consolidated
Sustainability Statement (the “Process”) is in accordance with the description set out in note
IRO-1 –Double materiality assessment; and
• compliance of the disclosures in subsection Taxonomy overview within the Environment
section of the consolidated Sustainability Statement with Article 8 of EU Regulation 2020/852
(the “Taxonomy Regulation”).
Basis for conclusion
We conducted our limited assurance engagement in accordance with International Standard on
Assurance Engagements (ISAE) 3000 (Revised), Assurance engagements other than audits or
reviews of historical financial information (“ISAE 3000 (Revised)”), issued by the International Auditing
and Assurance Standards Board.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our
conclusion. Our responsibilities under this standard are further described in the Practitioner’s
responsibilities section of our report.
Our independence and quality management
We have complied with the independence and other ethical requirements of the International Code of
Ethics for Professional Accountants (including International Independence Standards) issued by the
International Ethics Standards Board for Accountants (IESBA Code), which is founded on
fundamental principles of integrity, objectivity, professional competence and due care, confidentiality,
and professional behaviour and the Law of the Republic of Lithuania on the Audit of Financial
Statements and Other Assurance Services that are relevant to our sustainability assurance services
in the Republic of Lithuania.
The firm applies International Standard on Quality Management 1, which requires the firm to design,
implement and operate a system of quality management including policies or procedures regarding
compliance with ethical requirements, professional standards and applicable legal and regulatory
requirements.
Responsibilities for the consolidated Sustainability Statement
Management of the Company is responsible for designing and implementing a process to identify the
information reported in the consolidated Sustainability Statement in accordance with the ESRS and
for disclosing this Process in note IRO-1 – Double materiality assessment of the consolidated
Sustainability Statement. This responsibility includes:
• understanding the context in which the Group’s activities and business relationships take
place and developing an understanding of its affected stakeholders;
• the identification of the actual and potential impacts (both negative and positive) related to
sustainability matters, as well as risks and opportunities that affect, or could reasonably be
expected to affect, the Group’s financial position, financial performance, cash flows, access to
finance or cost of capital over the short-, medium-, or long-term;
• the assessment of the materiality of the identified impacts, risks and opportunities related to
sustainability matters by selecting and applying appropriate thresholds; and
• making assumptions that are reasonable in the circumstances.
Management of the Company is further responsible for the preparation of the consolidated
Sustainability Statement, in accordance with the Law of the Republic of Lithuania on Reporting by
Undertakings and by Groups of Undertakings Articles 21 and 22 implementing Article 29(a) of EU
Directive 2013/34/EU, including:
• compliance with the ESRS;
• preparing the disclosures in subsection Taxonomy overview within the Environment section
of the consolidated Sustainability Statement, in compliance with Article 8 of EU Regulation
2020/852 (the “Taxonomy Regulation”);
• designing, implementing and maintaining such internal control that management determines
is necessary to enable the preparation of the consolidated Sustainability Statement that is
free from material misstatement, whether due to fraud or error; and
• the selection and application of appropriate sustainability reporting methods and making
assumptions and estimates that are reasonable in the circumstances.
Those charged with governance are responsible for overseeing the Group’s sustainability reporting
process.
Inherent limitations in preparing the consolidated Sustainability Statement
In reporting forward-looking information in accordance with ESRS, management of the Company is
required to prepare the forward-looking information on the basis of disclosed assumptions about
events that may occur in the future and possible future actions by the Group. Actual outcomes are
likely to be different since anticipated events frequently do not occur as expected.
Practitioner’s responsibilities
Our responsibility is to plan and perform the assurance engagement to obtain limited assurance about
whether the consolidated Sustainability Statement is free from material misstatement, whether due to
fraud or error, and to issue a limited assurance report that includes our conclusion. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they
could reasonably be expected to influence decisions of users taken on the basis of the consolidated
Sustainability Statement as a whole.
As part of a limited assurance engagement in accordance with ISAE 3000 (Revised) we exercise
professional judgement and maintain professional scepticism throughout the engagement.
Our responsibilities in respect of the consolidated Sustainability Statement, in relation to the Process,
include:
• obtaining an understanding of the Process, but not for the purpose of providing a conclusion
on the effectiveness of the Process, including the outcome of the Process;
• considering whether the information identified addresses the applicable disclosure
requirements of the ESRS; and
• designing and performing procedures to evaluate whether the Process is consistent with the
Group’s description of its Process set out in note IRO-1 – Double materiality assessment.
Our other responsibilities in respect of the consolidated Sustainability Statement include:
• identifying where material misstatements are likely to arise, whether due to fraud or error; and
• designing and performing procedures responsive to where material misstatements are likely
to arise in the consolidated Sustainability Statement. 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.
Summary of the work performed
A limited assurance engagement involves performing procedures to obtain evidence about the
consolidated Sustainability Statement. The procedures in a limited assurance engagement vary in
nature and timing from, and are less in extent than for, a reasonable assurance engagement.
Consequently, the level of assurance obtained in a limited assurance engagement is substantially
lower than the assurance that would have been obtained had a reasonable assurance engagement
been performed.
The nature, timing and extent of procedures selected depend on professional judgement, including
the identification of disclosures where material misstatements are likely to arise in the consolidated
Sustainability Statement, whether due to fraud or error.
In conducting our limited assurance engagement, with respect to the Process, we:
• obtained an understanding of the Process by:
o performing inquiries with the Company and its subsidiaries’ representatives to
understand the sources of the information used by management (e.g., stakeholder
engagement, business plans and strategy documents, information available in-house,
and publicly available information); and
o reviewing the Group’s internal documentation of its Process;
• evaluated whether the evidence obtained from our procedures with respect to the Process
implemented by the Company was consistent with the description of the Process set out in
note IRO-1 – Double materiality assessment.
In conducting our limited assurance engagement, with respect to the consolidated Sustainability
Statement, we:
• obtained an understanding of the Group’s reporting processes relevant to the preparation of
its consolidated Sustainability Statement by:
o obtaining an understanding of the Group’s control environment, processes and
information system relevant to the preparation of the consolidated Sustainability
Statement, but not for the purpose of providing a conclusion on the effectiveness of the
Group’s internal control.
o obtaining an understanding of the roles and responsibilities in the preparation of the
consolidated Sustainability Statement, including communication within the Group and
between management and those charged with governance.
• evaluated whether the information identified by the Process is included in the consolidated
Sustainability Statement;
• evaluated whether the structure and the presentation of the consolidated Sustainability
Statement is in accordance with the ESRS;
• performed inquiries of relevant personnel and analytical procedures on selected information in
the consolidated Sustainability Statement;
• performed substantive assurance procedures on selected information in the consolidated
Sustainability Statement;
• where applicable, compared disclosures in the consolidated Sustainability Statement with the
corresponding disclosures in the financial statements and management report;
• evaluated the methods, assumptions and data for developing estimates and forward-looking
information;
• obtained an understanding of the Company’s process to identify taxonomy-eligible and
taxonomy-aligned economic activities and the corresponding disclosures in the consolidated
Sustainability Statement.
Other matter
The comparative information included in the consolidated Sustainability Statement of the Company as
at 31 December 2023 and for the year then ended was not subject to an assurance engagement. Our
conclusion is not modified in respect of this matter.
On behalf of PricewaterhouseCoopers UAB
/signed with electronic signature/
Rasa Selevičienė
Assurance director
Auditor's Certificate No.000504
Vilnius, Republic of Lithuania
8 April 2025
The auditor's electronic signature is used herein to sign only the Independent Limited Assurance
Report
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ADDITIONAL INFORMATION
ALTERNATIVE INDICATORS
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 AB 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.
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
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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.
COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE
VILKYŠKIŲ PIENINĖ AB CORPORATE GOVERNANCE REPORT FORM FOR THE YEAR THAT ENDED ON 31 DECEMBER
2024
The public limited liability company Vilkyškių pieninė AB (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 Vilkyškių pienienė AB 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 Vilkyškių pieninė AB 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 2024.
2. Structured table for disclosure:
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PRINCIPLES/ RECOMMENDATIONS
YES/NO/NOT
APPLICABL
E
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.
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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
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.
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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
2.1. 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
Vilkyškių pieninė AB the Supervisory board
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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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 board of supervisors 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.
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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.
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
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
3.1. 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.
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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 Pieno logistika
AB 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 Baltic dairy board
SIA 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.
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
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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 Vilkyškių pieninė AB and one on the
management board of Modest AB and one on
the management board of Baltic Dairy SIA
Board of the Company Group; and two women
on the management board of Kelmės pieninė
AB and on the management board Kelmės
pienas UAB 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.
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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
Vilkyškių pieninė AB 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.
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 2024, 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 2024.
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 Vilkyškių
pieninė AB, Modest AB, Kelmės pieninė AB,
Kelmės pienas UAB and Baltic dairy board SIA
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 2024.
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.
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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. 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
5.1. 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
Vilkyškių pieninė AB has 2 committees:
Nomination and Remuneration Committee and
Audit Committee.
Appointments and Remuneration Committee is
formed by the Supervisory Board.
The members of the Audit Committee and the
Regulations of the Committee is approved by
the general meeting of shareholders.
Modest AB, Kelmės pieninė AB, Pieno logistika
AB, Kelmės pienas UAB and Baltic dairy board
SIA have no committees.
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 functions of the Nomination and
Remuneration Committee shall be carried out
by a formed single Nomination and
Remuneration Committee.
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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 Vilkyškių pieninė AB 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
have experience in management and the
development of remuneration systems, and one
of them is independent.
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
Vilkyškių pieninė AB activities of the Nomination
and Remuneration Committee are regulated by
the Committee’s regulations approved by the
Supervisory Board.
Regulations of the Audit Committee of Vilkyškių
pieninė AB 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
2024.
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
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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 Vilkyškių pieninė
AB.
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 Vilkyškių pieninė
AB.
The Nomination and Remuneration Committee
submits proposals to the collegial body on the
remuneration policy, reviews it regularly, and
monitors its implementation.
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.
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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 Supervisory 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.
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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.
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.
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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.
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.
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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.
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
Sustainability Statement.
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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 and supervisory 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
Vilkyškių pieninė AB 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.
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 (
Vilkyškiu pienine AB Supervisory board,
manager in Pieno logistika AB 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 2024, 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.
VILVI GROUP ANNUAL REPORTS
2024
141
FINANCIAL
STATEMENTS:
− MANAGEMENT’S STATEMENT | 144
CONSOLIDATED AND THE PARENT
COMPANY’S SEPARATE:
− STATEMENTS OF FINANCIAL POSITION | 144
− STATEMENTS OF PROFIT OR LOSS | 145
− STATEMENTS OF OTHER COMPREHENSIVE INCOME |
146
− SEPARATE STATEMENT OF CHANGES IN EQUITY | 147
− CONSOLIDATED STATEMENT OF CHANGES IN EQUITY |
148
− STATEMENTS OF CASH FLOWS | 149
− NOTES TO FINANCIAL STATEMENTS | 151
VILVI GROUP ANNUAL REPORTS
2024
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Company details
VILKYŠKIŲ PIENINĖ AB
Telephone: +370 441 55330
Company code: 277160980
Registered office address: P. Lukošaičio g. 14, Vilkyškiai, LT-99254 Pagėgiai municipality, Lithuania
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, CEO
Vaidotas Juškys, Executive Director
Sigitas Trijonis, Director of the Investment Projects Department
Rimantas Jancevičius, Director of Raw Material Purchase
Arvydas Zaranka, Production Director
Vilija Milaševičiutė, Director of Economics and Finance
Rita Juodikienė, Director of Management and Quality
Paulinas Stanaitis, Director for Transport and Logistics
Auditor
PricewaterhouseCoopers UAB
Banks
AB SEB bankas
AB Swedbank”
AB „Luminor Bank“
AB Šiaulių bankas
OP „Corporate Bank plc“ Lithuanian branch
AS „Citadele banka“ Lithuanian branch
SC „Citadele bank“
142
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2024
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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, 8 April 2025
Gintaras Bertašius
CEO
(The document has been signed by a qualified electronic signature)
Vilija Milaševičiutė
Director of Economics and Finance
(The document has been signed by a qualified electronic signature)
143
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2024
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Consolidated and separate statements of financial position
EUR ‘000
GROUP
COMPANY
At 31 December
At 31 December
2024
2023
Assets
Note
2024
2023
-
-
Investment property
14
8,045
6,903
89,269
56,178
Property, plant and equipment
12
18,731
18,370
2,366
1,542
Right-of-use assets
12,13
2,270
1,483
4,200
4,168
Intangible assets
15
30
2
-
-
Investments in subsidiaries
16
27,388
11,318
243
913
Non-current amounts receivable
17
1,404
2,022
96,078
62,801
Non-current assets
57,868
40,098
14,254
17,627
Inventories
18
7,104
8,988
22,411
17,207
Trade and other receivables
19
22,383
17,686
711
679
Prepayments
20
483
527
18,872
8,725
Cash and cash equivalents
21
13,286
2,854
56,248
44,238
Current assets
43,256
30,055
152,326
107,039
Total assets
101,124
70,153
Equity
3,463
3,463
Share capital
3,463
3,463
3,301
3,301
Share premium
3,301
3,301
3,240
1,883
Reserves
1,262
1,248
74,458
52,379
Retained earnings
51,470
38,610
84,462
61,026
Equity attributable to owners of the Company
59,496
46,622
20
5
Non-controlling interest
-
-
84,482
61,031
Equity
22
59,496
46,622
Liabilities
33,280
15,706
Borrowings
23
5,778
2,569
1,551
775
Lease liabilities
23
1,190
728
4,043
3,598
Government grants
24
1,387
671
2,059
930
Deferred income tax liabilities
25
1,318
568
40,933
21,009
Non-current liabilities
9,673
4,536
3,649
3,235
Borrowings
23
1,771
1,356
742
469
Lease liabilities
23
614
432
819
512
Income tax payable
-
-
21,701
20,783
Trade and other payables
26
29,570
17,207
26,911
24,999
Current liabilities
31,955
18,995
67,844
46,008
Liabilities
41,628
23,531
152,326
107,039
Total equity and liabilities
101,124
70,153
The notes on pages 151 to 196 form an integral part of these separate and consolidated financial statements, which were issued and signed on 8 April 2025.
CEO
(the document has been signed by a qualified electronic signature)Gintaras Bertašius
Director of Economics and Finance
(the document has been signed by a qualified electronic signature)Vilija Milaševičiutė
144
VILVI GROUP ANNUAL REPORTS
2024
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Consolidated and separate statements of profit or loss
EUR ‘000
GROUP
COMPANY
2024
2023
2024
2023
245,429
210,536
Revenue
1
262,079
245,072
-203,648
-182,849
Cost of sales
2
-245,737
-236,059
41,781
27,687
Gross profit
16,342
9,013
348
275
Other operating income
3
12,890
5,598
-5,034
-4,438
Distribution expenses
6
-3,547
-4,224
-7,901
-6,662
Administrative expenses
7
-6,023
-4,434
-257
-305
Other operating expenses
4
-2,695
-3,264
106
221
Other gain (loss) – net
5
545
223
29,043
16,778
Results of operating activities
17,512
2,912
118
39
Finance income
124
100
-1,481
-1,378
Finance costs
-579
-438
-1,363
-1,339
Finance costs, net
9
-455
-338
27,680
15,439
Profit (loss) before income tax
17,057
2,574
-2,011
-787
Income tax
10
-698
-47
25,669
14,652
Profit (loss) for the reporting year
16,359
2,527
Attributable to:
25,654
14,666
Shareholders of the Company
16,359
2,527
15
-14
Non-controlling interest
-
-
25,669
14,652
Profit (loss) for the reporting year
16,359
2,527
2.15
1.23
Basic and diluted earnings per share (in EUR)
11
1.37
0.21
The notes on pages 151 to 196 form an integral part of these separate and consolidated financial statements.
145
VILVI GROUP ANNUAL REPORTS
2024
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Consolidated and separate statements of other comprehensive income
GROUP
COMPANY
2024
2023
EUR ‘000
2024
2023
25,669
14,652
Profit (loss) for the reporting year
16,359
2,527
Other comprehensive income
-
-
Items that will not be reclassified to profit or loss
-
-
1,787
-
Profit (loss) due to the revaluation of tangible fixed assets
268
-
-303
-
Deferred income tax liability
-51
-
-
-
Items that are or may be subsequently reclassified to profit or loss
-
-
1,484
-
Other comprehensive income for the year, net of
217
-
27,153
14,652
Total comprehensive income for the year
16,576
2,527
Attributable to:
27,138
14,666
Shareholders of the Company
16,576
2,527
15
-14
Non-controlling interest
-
-
27,153
14,652
Total comprehensive income for the year
16,576
2,527
The notes on pages 151 to 196 form an integral part of these separate and consolidated financial statements.
146
VILVI GROUP ANNUAL REPORTS
2024
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Separate statement of changes in equity
EUR ‘000
Share capital
Share premium
Revaluation reserve
Legal reserve
Retained earnings
Total
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
-
-
-152
-
2,679
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
Balance at 1 January 2024
3,463
3,301
902
346
38,610
46,622
Profit (loss) for the period
-
-
-
-
16,359
16,359
Other comprehensive income
-
-
-
-
-
-
Total comprehensive income for the year
-
-
14
-
16,562
16,576
Value gains/decreases of revalued assets
-
-
217
-
-
217
Depreciation, write-off of revalued assets
-
-
-203
-
203
-
Transactions with owners recognised directly
in equity
Dividends
-
-
-
-
-3,702
-3,702
Total transactions with owners recognised directly
in equity
-
-
-
-
-3,702
-3,702
Balance at 31 December 2024
3,463
3,301
916
346
51,470
59,496
The notes on pages 151 to 196 form an integral part of these separate and consolidated financial statements.
147
VILVI GROUP ANNUAL REPORTS
2024
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Consolidated statement of changes in equity
EUR ‘000
Equity attributable to owners of the Company
Share capital
Share premium
Revaluation reserve
Legal reserve
Retained earnings (deficit)
Total
Non-controlling interest
Total equity
At 1 January 2023
3,463
3,301
1,722
346
40,749
49,581
321
49,902
Comprehensive income for the year
Net profit (loss)
-
-
-
-
14,666
14,666
-14
14,652
Other comprehensive income
-
-
-185
-
185
-
-
-
Total comprehensive income for the year
-
-
-185
-
14,851
14,666
-14
14,652
Depreciation, write-off of revalued assets
-
-
-185
-
185
-
-
-
Transactions with owners recognised directly in equity
Dividends
-
-
-
-
-3,165
-3,165
-
-3,165
Change in fair value of put option
-
-
-
-
42
42
-
42
Total transactions with owners recognised directly in equity
-
-
-
-
-3,123
-3,123
-
-3,123
Changes in the Group not resulting in a loss of control
Non-controlling interests on acquisition of subsidiary
-
-
-
-
-98
-98
-302
-400
Total transactions with owners
-
-
-
-
-3,221
-3,221
-302
-3,523
At 31 December 2023
3,463
3,301
1,537
346
52,379
61,026
5
61,031
At 1 January 2024
3,463
3,301
1,537
346
52,379
61,026
5
61,031
Comprehensive income for the year
Net profit (loss)
-
-
-
-
25,654
25,654
15
25,669
Other comprehensive income
-
-
1,357
-
127
1,484
-
1,484
Total comprehensive income for the year
-
-
1,357
-
25,781
27,138
15
27,153
Value gains/decreases of revalued assets
-
-
1,484
-
-
1,484
-
1,484
Depreciation, write-off of revalued assets
-
-
-127
-
127
-
-
-
Transactions with owners recognised directly in equity
Dividends
-
-
-
-
-3,702
-3,702
-
-3,702
Change in fair value of put option
-
-
-
-
-
-
-
-
Total transactions with owners recognised directly in equity
-
-
-
-
-3,702
-3,702
-
-3,702
Changes in the Group not resulting in a loss of control
Non-controlling interests on acquisition of subsidiary
-
-
-
-
-
-
-
-
Total transactions with owners
-
-
-
-
-3,702
-3,702
-
-3,702
At 31 December 2024
3,463
3,301
2,894
346
74,458
84,462
20
84,482
The notes on pages 151 to 196 form an integral part of these separate and consolidated financial statements.
148
VILVI GROUP ANNUAL REPORTS
2024
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Consolidated and separate statements of cash flows
EUR ‘000
GROUP
COMPANY
2024
2023
Note
2024
2023
Cash flows from operating activities
25,669
14,652
Profit (loss) for the year
16,359
2,527
Adjustments for:
4,966
4,648
Depreciation of property, plant and equipment
1,879
1,719
-
-
Loss (gain) on change in fair value of investment property
-449
-123
3
7
Amortisation of intangible assets
2
3
-456
-430
Amortisation and write-off of grants
-177
-134
1,211
-1,413
Change in inventory write-down allowance
899
59
-74
-33
Loss (gain) from disposal and write-off of property, plant and equipment
-69
12
-
-
Other operating income
-8,993
-1,523
2,011
787
Income tax expenses
698
47
1,363
1,339
Finance costs, net
455
338
34,693
19,557
10,604
2,925
2,170
9,278
Change in inventories
985
141
670
-802
Change in non-current amounts receivable
618
-1,014
-5,758
541
Change in trade and other receivables and prepayments
-5,154
8,566
1,417
-292
Change in trade and other payables
21,644
2,100
33,192
28,282
28,697
12,718
-1,410
-1,225
Interest paid
-524
-287
-1,116
-364
Income tax paid
-
-
30,666
26,693
Net cash flows generated from operating activities
28,173
12,431
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VILVI GROUP ANNUAL REPORTS
2024
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Consolidated and separate statements of cash flows (cont.)
EUR ‘000
GROUP
COMPANY
2024
2023
Note
2024
2023
Cash flows from investing activities
-35,956
-12,151
Payments for acquisition of property, plant and equipment
-2,421
-6,773
-35
-
Payments for acquisition of intangible assets
-30
-
980
557
Proceeds from sale of property, plant and equipment
350
137
-
-
Acquisition of ownership interest in subsidiary
-16,070
-400
-
-170
Loans granted
-
-320
901
285
Government grants
893
285
-
-
Dividends received
-
1,631
600
381
Repayment of loans
600
381
-
-400
Outflow of cash to acquire subsidiary, net of cash acquired
-
-
-33,510
-11,498
Net cash flows (used in) investing activities
-16,678
-5,059
Cash flows from financing activities
23,409
2,134
Proceeds from borrowings
23
7,166
2,134
-5,421
-5,410
Repayments of borrowings
23
-3,542
-3,191
-1,295
-650
Lease payments
-985
-621
-3,702
-3,165
Payment of dividends
-3,702
-3,165
12,991
-7,091
Net cash flows (used in) financing activities
-1,063
-4,843
10,147
8,104
Net increase (decrease) in cash and cash equivalents
10,432
2,529
8,725
621
Cash and cash equivalents as at 1 January
2,854
325
18,872
8,725
Cash and cash equivalents as at 31 December
21
13,286
2,854
The notes on pages 151 to 196 form an integral part of these separate and consolidated financial statements.
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2024
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Notes to the consolidated and separate financial statements
General information
The following companies are part of the VILVI Group (hereinafter the “Group”):
VILKYŠKIŲ PIENINĖ AB, a parent company (hereinafter the “Parent” or the “Company”);
Modest AB, a subsidiary (hereinafter the “subsidiary Modest AB” or “Modest AB”);
Kelmės Pieninė AB, a subsidiary (hereinafter the “subsidiary Kelmės Pieninė AB” or “Kelmės Pieninė AB”).
Kelmės Pienas UAB, a subsidiary of Kelmės Pieninė AB (hereinafter the “Kelmės Pienas UAB”).
Pieno Logistika AB, a subsidiary of Kelmės Pienas UAB (hereinafter “Pieno Logistika AB”).
Baltic Dairy Board SIA, a subsidiary (hereinafter the “subsidiary Baltic Dairy Board SIA“ or “Baltic Dairy Board SIA“).
VILKYŠKIŲ PIENINĖ AB was established in 1993. The Parent has no branches or representative offices.
VILKYŠKIŲ PIENINĖ AB is a Lithuanian company listed on the Nasdaq OMX Vilnius AB stock exchange.
As at 31 December 2024, the Company’s shareholder structure was as follows:
Shareholder
Number of shares held
Nominal value,
EUR
Total value,
EUR
Swisspartners Versicherung AG Zweigniederlassung Österreich
7,213,680
0.29
2,091,968
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
As at 31 December 2023, the Company’s shareholder structure was as follows:
Shareholder
Number of shares held
Nominal value,
EUR
Total value,
EUR
Swisspartners Versicherung AG Zweigniederlassung Österreich
6,994,316
0.29
2,028,352
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
The Company’s ultimate controlling party is Mr. Gintaras Bertašius and persons related to him.
According to the data as of 31 December 2023 and 31 December 2024, Gintaras Bertašius did not hold shares in AB Vilkyškių pieninė but owned 60.4% of the votes at the general meeting of shareholders (since 2018, a joint life insurance policy was established with Swisspartners Versicherung AG Zweigniederlassung Österreich, which, according to the data as of 31 December 2024, acquired ownership rights to 7,213,680 shares of AB Vilkyškių pieninė).
The Parent’s core line of business is production and sale of fermented cheese, industrial cream, whey products. Business activities are carried out at the main production facilities located in Vilkyškiai, Pagėgiai region municipality.
The Parent controls the subsidiary Modest AB, which is engaged in production of blue-veined cheese, processed cheese, smoked cheese, Mozzarella cheese, and industrial cream. At 2024 The Company owns 99.7% of shares with voting rights in the subsidiary Modest, AB (at 2023: 99.7%).
The Parent also controls the subsidiary Kelmės Pieninė AB, which is engaged in production of dry milk products – WPC, skimmed milk, permeate, and whey powder. At 2024 The Company owns 100% of shares with voting rights in the subsidiary Kelmės Pieninė AB (at 2023: 100%).
As from 28 February 2021, Kelmės Pieninė AB controls the subsidiary Kelmės Pienas UAB, which is engaged in production of fresh milk products – kefir, sour cream, yoghurts, curd, glazed curd cheese, butter. At 2024 Kelmės Pieninė AB owns 100% of shares in Kelmės Pienas UAB (at 2023: 100%).
Kelmės Pienas UAB controls the subsidiary Pieno Logistika AB with the main business activity of collection and transportation of raw milk, lease of buildings. At 2024 Kelmės Pienas UAB owns 59.0% of shares with voting rights in Pieno Logistika AB (at 2023: 58.9%).
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2024
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Since 1 April 2021, the group also includes the subsidiary Baltic Dairy Board SIA, which specializes in milk and whey separation. As from 14 April 2023, the Company owns 100% of shares with voting rights in the subsidiary Baltic Dairy Board SIA.
As at 31 December2024, the Group had 938 (31 December 2023: 919) employees.
As at 31 December 2024, the Company had 400 (31 December 2023: 424) employees.
Basis of preparation
Statement of compliance
The Group’s consolidated and the Company’s separate financial statements (hereinafter the “financial statements” or the “consolidated and separate financial statements”) have been prepared in accordance with International Financial Reporting Standards (IFRS), as adopted by the European Union (hereinafter “the EU”).
Pursuant to the Law on Companies of the Republic of Lithuania, the annual financial statements prepared by management shall be approved by the General Meeting of Shareholders. The shareholders of the Company have a statutory right to approve these financial statements or not to approve them, and to request preparation of a new set of the annual financial statements.
These financial statements include the consolidated financial statements of the Group and the separate financial statements of the Company.
Measurement basis
The financial statements have been prepared on a historical cost basis except for:
buildings that are a part of property, plant and equipment measured at fair value, less any subsequent accumulated depreciation and impairment loss;
buildings that a part of investment property measured at fair value.
Functional and presentation currency
All amounts in these financial statements are presented in the euros (EUR) and they have been rounded to the nearest thousand.
Foreign currency transactions
Foreign currency transactions are translated into the euros using the exchange rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in a foreign currency are translated in the euros using the exchange rate prevailing at the date of the preparation of the statement of financial position. All foreign currency transactions have been translated in accordance with the provisions of the Law on Accounting using the exchange rate of the euro against the foreign currency prevailing at the date of the transaction.
Foreign exchange differences arising from the settlement of such transactions are recognised in the statement of profit or loss. Non-monetary assets and liabilities that are measured at historical cost in a foreign currency are translated into the euros using the official exchange rate prevailing at the date of the transaction.
Consolidation basis
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of the subsidiaries are included in the Group’s consolidated financial statements from the date on which the Group obtains control, and continue to be included until the date that such control ceases.
All intra-group transactions and balances are eliminated for the purpose of the consolidated financial statements.
The acquisition method is used to account for business combinations. The consideration transferred in return for the acquisition of the subsidiary is the fair value of the assets transferred, the liabilities assumed and the Group‘s equity interest. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are expensed when incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Under the acquisition method, the Group recognises the non-controlling interest in the acquiree either at the fair value or at the non-controlling interest’s proportionate share of net assets in the acquiree.
The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the Group’s share of the
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identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the Group’s share of net assets in the acquiree, the difference is recognised directly in the statement of profit and loss as negative goodwill.
Summary of material accounting policies
The accounting policies set out below have been consistently applied by the Group/Company to all the periods presented in these financial statements, except for those which have changed due to the IFRS amendments and newly issued IFRS, as presented in the section below Impact of adoption of new standards, amendments and interpretations on the financial statements.
Property, plant and equipment
Property, plant and equipment, excluding buildings, is stated at acquisition cost, less subsequent accumulated depreciation and impairment losses. Costs related to the acquisition of the assets are included in the acquisition cost. The cost of assets produced internally by the Parent and the subsidiaries comprises the cost of materials, direct labour costs and indirect labour costs allocated on a proportionate basis. When parts of the items of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment.
Buildings are recorded at revalued amounts, being their fair value at the date of the revaluation less any subsequent accumulated depreciation and impairment. Revaluations are carried out at regular intervals, i.e. at least every five years, to ensure that the carrying amount of buildings does not materially differ from their fair value at the date of the preparation of the statement of financial position. The fair value of buildings is determined by certified independent property valuers. Depreciation is calculated on a straight-line basis over the estimated useful lives of assets. The revaluation reserve for buildings is transferred to retained earnings in proportion to the depreciation of revalued buildings.
In case of revaluation, when the estimated fair value of an asset is lower than its net book value, the net book value of the asset is immediately reduced to the fair value and such impairment is recognised as expenses. However, such impairment is deducted from the previous revaluation increase of the asset accounted for in the revaluation reserve, to the extent it does not exceed the amount of such increase.
In case of revaluation, when the estimated fair value of an asset is higher than its net book value, the net book value of the asset is increased to the fair value and such increase is recorded in the revaluation reserve of property, plant and equipment under the shareholder’s equity in the statement of other comprehensive income. Depreciation is recognised on a straight-line basis to write down the cost of the asset over its useful life, less its residual amount.
The estimated useful lives are as follows:
Buildings
8-40 years
Plant and machinery
4-20 years
Other PP&E
3-15 years
The useful lives, residual values and depreciation methods are reviewed regularly to ensure that the deprecation period and other estimates are consistent with the expected pattern of economic benefits from property, plant and equipment.
Investment property
Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the Company, is classified as investment property. Investment property also includes property that is being constructed or developed for future use as investment property.
Investment property is measured initially at its cost, including related transaction costs and where applicable borrowing costs.
After initial recognition, investment property is carried at fair value. Investment property that is being redeveloped for continuing use as investment property, or for which the market has become less active, continues to be measured at fair value. Investment property under construction is measured at fair value if the fair value is considered to be reliably determinable. Investment properties under construction for which the fair value cannot be determined reliably, but for which the Company expects the fair value of the property will be reliably determinable when construction is completed, are measured at cost less impairment until the fair value becomes reliably determinable or construction is completed - whichever is earlier).
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It may sometimes be difficult to determine reliably the fair value of the investment property under construction. In order to evaluate whether the fair value of an investment property under construction can be determined reliably, management considers the following factors, among others:
the provisions of the construction contract;
the stage of completion;
whether the project/property is standard (typical for the market) or non-standard;
the level of reliability of cash inflows after completion;
the development risk specific to the property;
Fair value is based on active market prices, adjusted, if necessary, for differences in the nature, location or condition of the specific asset. If this information is not available, the Company uses alternative valuation methods, such as recent prices on less active markets or discounted cash flow projections. Valuations are performed as at the financial position date by professional valuers who hold recognised and relevant professional qualifications and have recent experience in the location and category of the investment property being valued. These valuations form the basis for the carrying amounts in the Company’s financial statements.
The fair value of investment property reflects, among other things, rental income from current leases and other assumptions market participants would make when pricing the property under current market conditions.
Subsequent expenditure is capitalised to the asset’s carrying amount only when it is probable that future economic benefits associated with the expenditure will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance costs are expensed when incurred. When part of an investment property is replaced, the cost of the replacement is included in the carrying amount of the property, and the fair value is remeasured.
Changes in fair values are recognised in the statement of profit and loss. Investment properties are derecognised when they have been disposed of.
Where the Company disposes of a property at fair value in an arm’s length transaction, the carrying value immediately prior to the sale is adjusted to the transaction price, and the adjustment is recorded in the income statement within net gain from fair value adjustment on investment property.
If an investment property becomes owner occupied, it is reclassified as property, plant and equipment. Its fair value as at the date of reclassification becomes its cost for subsequent accounting purposes.
If an item of owner-occupied property becomes an investment property because its use has changed, any difference resulting between the carrying amount and the fair value of this item as at the date of transfer is treated in the same way as a revaluation under IAS 16.
Any resulting increase in the carrying amount of the property is recognised in the income statement to the extent that it reverses a previous impairment loss, with any remaining increase recognised in other comprehensive income and increased directly to equity in revaluation surplus within equity. Any resulting decrease in the carrying amount of the property is initially charged in other comprehensive income against any previously recognised revaluation surplus, with any remaining decrease charged to the income statement.
Where an investment property undergoes a change in use, such as commencement of development with a view to sell, the property is transferred to inventories. A property’s deemed cost for subsequent accounting as inventories is its fair value at the date of change in use.
Intangible assets
Intangible assets with definite useful lives acquired by the Parent and the subsidiaries are stated at cost, less accumulated amortisation and impairment loss. Amortisation is calculated on a straight-line basis over the period of 3 years and reported in the statement of profit or loss.
Goodwill
Goodwill is an asset representing the future economic benefits arising from assets that cannot be separated from other assets and recognised on a business combination.
Goodwill arising on acquisition of subsidiaries is recognised as intangible assets.
Following initial recognition, goodwill is measured at cost less any accumulated impairment losses (tested on an annual basis). For the purposes of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group's cash-generating units that are expected to benefit from the
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synergies of the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. Cash-generating units are operations of Modest AB relating to production and sale of cheese and cheese products, and operations of Kelmės Pienas UAB relating to production and sale of fresh milk products.
Where goodwill is a portion of a cash-generating unit, and a portion of an operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the carrying amounts of the operation disposed of and the portion of the cash-generating unit retained.
Non-controlling interest
Non-controlling interest is the equity in a subsidiary not attributable directly or indirectly to the Parent. Acquisitions of non-controlling interests are accounted for as transactions with owners in their capacity as owners and therefore no goodwill is recognised as a result of such transactions. Adjustments to non-controlling interest not resulting in a loss of control are based on a proportionate amount of the controlled net assets of the subsidiary.
Investments in subsidiaries
Investments in subsidiaries in the separate financial statements are stated at acquisition cost, less impairment loss.
Inventories
Inventories comprise finished products, work in progress, and goods and materials.
Inventories are initially measured at acquisition or production cost. The production cost includes direct labour costs, costs of materials and conversion costs incurred during the production period. Production costs also include a systematic allocation of fixed and variable production overheads.
At the end of the reporting period inventories are measured at the lower of cost or net realisable value, less any write-downs. Net realisable value is the estimated selling price, less the estimated costs of completion and selling expenses. Write-downs of inventories to net realisable value are included in the cost of sales.
The utilisation of inventories is determined using the first-in, first-out (FIFO) method.
Financial assets and liabilities
The Group/Company classifies the financial assets into the following categories:
financial assets subsequently measured at fair value (either at fair value through other comprehensive income or at fair value through profit or loss), and the Group/Company has no such assets;
financial assets measured at amortised cost.
The classification depends on the entity’s business model for managing the financial assets and the contractual terms of the cash flows. The Group reclassifies debt instruments when and only when its business model for managing those assets changes.
All regular way purchases and sales of financial assets are recognised on trade-date, the date on which the group commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the group has transferred substantially all the risks and rewards of ownership.
On initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial asset.
Financial assets measured at amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in other gains/(losses) together with foreign exchange gains and losses.
Trade receivables
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business. They are generally due for settlement within 30 days, and therefore, are all classified as current. Trade receivables are recognised initially at the amount of consideration that is unconditional. The Group/Company holds the trade receivables with the objective to collect the contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest method.
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The carrying amounts of the trade receivables include receivables which are subject to a factoring arrangement. Under this arrangement, the Group/Company has transferred the relevant receivables to the factor in exchange for cash and the Group/Company is prevented from selling or pledging the receivables. Under the factoring with recourse agreements, the Group/Company retains the risk of late payment and credit risk. The Group/Company, therefore, continues recognising the transferred assets in their entirety in the statement of financial position. The amount repayable under the factoring agreement is presented as secured borrowing. The Group/Company considers the ‘hold to collect’ business model to remain appropriate for these receivables and hence continues measuring them at amortised cost. Under the factoring without recourse agreements, the Group/Company does not retain any risks, and therefore, these assets are derecognised from the statement of financial position and there is no balances outstanding at year-end.
Impairment
The Group/Company assesses on a forward-looking basis the expected credit losses associated with its debt instruments measured at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk.
For trade receivables, the Group applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognised from initial recognition of the trade receivables and contract assets.
To measure the expected credit losses, trade and other receivables have been grouped based on shared credit risk characteristics and the days past due. The expected loss rates are based on the profiles of receivables from sale of goods over the period of 48 months before 31 December 2024 or 31 December 2023, respectively, and the corresponding historical credit losses experienced within this period. The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability of the customers to the amounts due.
Trade receivables are written off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, amongst others, failure of a debtor to engage in a repayment plan with the Group, and contractual payments past due more than 180 days.
Impairment losses on trade receivables are presented as net impairment losses within operating profit. Subsequent recoveries of amounts previously written off are credited against the same line item.
Trade and other payables
These amounts represent outstanding liabilities for goods and services provided to the Group prior to the end of the financial year. The amounts payable are unsecured and are usually paid within 30 days after their recognition. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest rate method.
Borrowings costs
General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale. Other borrowing costs are expensed in the period in which they are incurred.
Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest rate method. Costs incurred in relation to collateralisation of borrowing facilities are recognised as transaction costs of the borrowings to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the related costs are capitalised as a prepayment for liquidity services and amortised over the period of the loan facility to which it relates.
Interest-bearing amounts
Interest-bearing amounts are recognised initially at fair value, plus transaction costs. Subsequently, interest-bearing amounts are recognised at amortised cost using the effective interest method.
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Reversal of impairment
An impairment loss on amounts receivable carried at amortised cost is reversed, if, in a subsequent period, the increase in the recoverable amount can be related to an event occurring after the impairment loss was recognised.
The impairment loss is reversed to the extent that the carrying value of the asset does not exceed its value that would have been determined had no impairment loss been recognised.
Fair value measurement
The fair value of investments traded in an active market is based on quoted market prices at the reporting date. If the market for a financial asset is not active (and for unlisted securities), the Group/Parent establishes the fair value by using the valuation techniques. These include the use of recent arm's length transactions, reference to other instruments that are substantially the same, discounted cash flow analysis or other valuation models.
In determining the fair value of assets or liabilities the Group/Company uses, if possible, inputs that are observable in the market. A fair value hierarchy categorises into three levels inputs used in the valuation techniques to measure the fair value:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices);
Level 3: inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).
The inputs used to measure the fair value of an asset or a liability might be categorised within different levels of the fair value hierarchy. In those cases, the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.
The Group/Company recognises the amounts transferred within the fair value hierarchy levels at the end of the reporting period in which the change occurred.
Fair values measured for the purposes of assessment and (or) disclosure are calculated using the below presented methods. When applicable, further information on assumptions used in determining fair values is disclosed in the note related to specific assets or liabilities.
Derecognition of financial assets and financial liabilities
Financial assets
A financial asset (or a part of a financial asset or part of a group of similar financial assets) is derecognised when:
the rights to receive cash flows from the asset have expired; or
the Group/Company has retained the right to receive cash inflows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under a “pass through” arrangement; or
the Group/Company has transferred their rights to receive cash flows from the asset and/or (a) has transferred all the risks and rewards of the asset, or (b) has neither transferred nor retained all the risks and rewards of the asset, but has transferred control of the asset.
Where the Group/Company has transferred their rights to receive cash flows from the asset and has neither transferred nor retained all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Parent’s/subsidiary’s continuing involvement in the asset.
Financial liabilities
A financial liability is derecognised when the obligation under the liability is settled, cancelled or expires.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and cash at bank. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash with original maturities of three months or less and that are subject to an insignificant risk of change in value.
For the purpose of the cash flow statement, cash and cash equivalents comprise cash on hand, demand deposits in bank accounts and other short-term liquid investments. Bank overdrafts are recognised in the statement of financial position as current borrowings and are not attributed to cash equivalents in the statement of cash flows as usually their balance is negative. Interest and dividends received are attributed to cash flows of investing activities, interest
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paid are attributed to cash flows from operating activities, whereas dividends paid – to cash flows from financing activities.
Impairment
Non-financial assets
Non-financial assets, except for inventories and deferred tax assets, are reviewed for impairment whenever events or changes in circumstance indicate that the asset may be impaired. If such an indication exists, the asset's recoverable amount is estimated.
The recoverable amount of an asset or cash-generating unit is the higher of its value in use and its fair value, less costs to sell. The asset’s value in use is calculated by discounting future cash flows to their present value using a pre-tax discount rate reflecting current market assumptions regarding time value of money and risk specific to the asset concerned.
For the purpose of impairment testing, assets that cannot be tested individually are grouped into the smallest group of assets that generates cash inflows through the asset’s continuous use and is independent from cash flows generated by other assets or the groups of assets (“the cash generating unit” or “CGU”).
Whenever the net book value of an asset exceeds its recoverable amount, an impairment loss is recognised in the statement of profit or loss. Impairment losses recognised in respect of CGUs are allocated first to reduce the carrying amount of goodwill allocated to the unit and then to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis.
Reversal of impairment losses recognised in prior years is recorded when there is an indication that the impairment losses recognised for the asset no longer exist or have decreased. Reversal is accounted for in the statement of profit or loss under the same caption as impairment loss. An impairment loss allocated to goodwill is not reversed.
Provisions
Provisions for liabilities are recognised in the statement of financial position when there are commitments as a result of past events and it is probable that additional funds will be required to settle these obligations. If the impact is material, provisions are estimated by discounting future cash flows to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the liability.
Leases
Where the Group/Company is a lessee
The Group/Company leases out buildings, motor vehicles, plant and machinery, and other assets. The Group‘s term of lease ranges up to 8 years, but they contain an extension option.
As the management determines the lease term, it considers all relevant facts and circumstances that create an economic incentive for the lessee to exercise the option to extend the lease, or not to exercise the option to terminate the lease. The extension option is included in the lease term only when it is reasonably certain that the lease will be extended (or will not be terminated).
The lease terms and conditions are negotiated individually, however, there are no non-standard terms and conditions. The lease contracts do not stipulate any financial performance covenants that the Group/Company would be required to comply with.
The lease liabilities arising from a lease are measured by a lessee at the commencement date on a present value basis, including the following payments:
fixed payments (including in-substance fixed payments), less any lease incentives receivable;
variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the commencement date;
amounts expected to be payable by the group under residual value guarantees;
payments of penalties for terminating the lease, if the lease term reflects the group exercising that option.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, the lessee’s incremental borrowing rate is used.
The interest rate implicit in the lease is the interest rate as a result of which the present value of the lease payments and unguaranteed residual value is equal to the sum of fair value of leased assets and any other initial direct costs of the lessor.
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The lease liability is measured at amortised cost using the effective interest rate, which represents the discount rate used in discounting of lease payments. Interest expenses relating to the lease liability are allocated over the lease period and recognised through profit or loss.
Right-of-use assets are initially measured at cost comprising the following:
the amount of the initial measurement of lease liability;
any lease payments made at or before the commencement date, less any lease incentives received;
any initial direct costs incurred by a lessee; and
restoration costs.
Subsequently the right-of-use assets are recognised by the lessee at cost less accumulated depreciation and impairment losses. When the title of ownership is transferred to the lessee at the end of the lease period or when the price of the right-of-use assets shows that the lessee will exercise the buy option, then the lessee estimates depreciation of right-of-use assets from the commencement date to the end of the useful life of the leased assets. Otherwise, the lessee estimated depreciation for right-of-use assets from the commencement date to the end of the useful life of the right-of-use assets or the end of the lease period, depending on which occurs earlier. Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases that, at the commencement date, have a lease term of 12 months or less, and that do not contain a purchase option. Low-value assets mostly represent milk products.
Operating lease -– where the Group/Company is a lessee
Operating lease payments are recognised as expenses in profit or loss using the straight-line method over the lease term.
Dividends
Dividends are recorded as a liability or an amount receivable in the period in which they are declared.
Government grants
Grants received as a compensation for the costs incurred are recognised in profit or loss over the period in which the costs are incurred.
Government and the EU grants and third-party compensations received in the form of non-current assets or intended for the purchase of non-current assets are considered as asset-related grants. Grants are initially recorded at the fair value of the asset received and subsequently amortised. Amortisation costs of grants are included in the cost of production or administrative expenses as well as in the depreciation charge of property, plant and equipment for which the grant was received.
Revenue
The Group/Company manufactures and sells a range of cheese and milk products in the wholesale market. Sales are recognised when control of the products has been transferred, being when the products are delivered to the buyer, the buyer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the buyer’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the wholesaler, and either the wholesaler has accepted the products in accordance with the sales contract, the acceptance provisions have lapsed, or the Group/Company has objective evidence that all criteria for acceptance have been satisfied.
Income from transport services is recognised in the period in which the services are rendered.
The goods are sometimes sold with retrospective volume discounts based on aggregate sales over a month or a 12-months period. Revenue from these sales is recognised based on the price specified in the contract, net of the estimated volume discounts. Accumulated historical experience is used to estimate and provide for the discounts, using the expected value method, and revenue is only recognised to the extent that it is highly probable that a significant reversal will not occur. A refund liability is recognised for expected volume discounts payable to customers in relation to sales made until the end of the reporting period. It is considered that there is no significant financing component, since customers are offered a credit period of 30 days to settle their obligations, which is in line with the market practice.
Receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.
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The Group/Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Group does not adjust any of the transaction prices for the time value of money.
Contract liabilities are recognised and presented as advance amounts received.
Cost of sales
Cost of sales consists of direct and indirect costs, including depreciation and remuneration expenses incurred in order to achieve the turnover set for a respective year. Expenses are recognised on an accrual basis and matching principle.
Distribution and administrative expenses
Distribution and administrative expenses comprise expenses related to transportation, administrative staff, coordination activities, office supplies, etc. and also comprise depreciation and amortisation expenses. Operating expenses are recognised on an accrual basis.
Other operating income and expenses
Other operating income and expenses comprise gain or loss from the disposal of non-current assets as well as other income and expenses not directly related to the operating activities of the Group/Company.
Finance income and costs
Income and expenses of financing activities include interest receivable and payable, realised and unrealised foreign exchange gain and loss related to borrowings and financial liabilities denominated in foreign currencies.
Interest income is recognised in profit or loss using the effective interest method. Interest expenses on leases is recognised in profit or loss using the effective interest rate method.
Capitalization of Interest
Interest directly attributable to the acquisition, construction, or production of assets meeting capitalization criteria is capitalized as part of the self-cost of the asset. The capitalization period begins when costs related to the asset are incurred, borrowing costs start to accrue, and actions are taken to prepare the asset for its intended use. Capitalization ends when the asset is ready for use or sale.
Employee benefits
Short-term employee benefits are recognised as current expenses of the period in which the services have been rendered. Such employee benefits include wages and salaries, social security contributions, extra pays, paid vacation, contributions to pension funds, and other benefits. There are no long-term employee benefits.
The Company also pays contributions to Pillar III investment fund on behalf of its employees based on the defined contribution plan. The contributions are recognised as expenses on an accrual basis and included in general and administrative expenses.
Income tax
Income tax comprises current and deferred tax. Income tax is recognised in the statement of profit or loss, except to the extent that it relates to line items recognised directly in equity or through other comprehensive income, in which case the tax is recognised in equity through other comprehensive income.
Current income tax is calculated in accordance with the tax legislation, using the tax rates enacted and effective as at the reporting date in the countries where the Company and its subsidiaries generate revenue. A standard income tax rate of 15% is applied to companies registered in the Republic of Lithuania. Tax losses, except for those arising on disposal of securities and/or derivative financial instruments, can be carried forward for unlimited period, provided the entity continues the operations, which generated these tax losses. Tax losses available for carry forward cannot exceed 70% of income for the tax period, calculated by deducting non-taxable income, allowable deductions and limited allowable deductions.
The procedure of carrying forward losses arising on disposal of securities and/or derivative financial instruments has not changed, therefore, these losses can be carried forward for the period of 5 years and can only be used to reduce taxable income earned from transactions of the similar nature.
The Group companies operating in the Republic of Latvia pay income tax upon distribution of profit.
Income tax rate of 20% is payable on distributed profit (calculated dividends, dividend equivalent income and conditional dividends) and conditional distributed profit (non-operating expenses, etc.). Income tax rate of 20% is
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applied to gross taxable amount. Gross tax base for the tax period is calculated as net tax base (distributed profit and conditionally distributed profit) divided by 0.8 coefficient.
Deferred income tax is calculated on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts reported in the financial statements. Deferred income tax is not calculated on temporary differences arising on initial recognition of an asset or liability, which at the time of the transaction affect neither accounting nor taxable profit. Deferred income tax is determined using the tax rates that are expected to apply when the related temporary differences are expected to reverse and that are known at the date of the preparation of the statement of financial position. Deferred income tax assets are recognised only when the Group/Company expects that future taxable profit will be available against which tax assets can be utilised. Deferred income tax is reviewed at each date of the statement of financial position and reduced by the amount of tax assets that will not be utilised.
Earnings per share
The Group/ Company discloses information on basic and diluted earnings per share. Basic earnings per share are calculated by dividing profit or loss attributable to the shareholders of the Parent by the weighted average number of ordinary shares during the period. Diluted earnings per share are calculated by adjusting profit or loss attributable to the shareholders, and the weighted average number of ordinary shares during the year, for the effects of all potential ordinary shares. During the reporting periods, the Group/Company did not issue potential ordinary shares.
Segment information
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board making the strategic decisions, and the General Manager.
An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including intra-segment revenues and expenses. In 2024, the Group has 4 accounted segments based on different product categories: cheese, cheese products and etc., dry dairy products, fresh dairy products, and industrial cream (In 2023, there were 3 accounted segments: cheese, cheese products and etc., dry dairy products, fresh dairy products). Starting from 2024, by management decision, it was decided to separate industrial cream as a business segment due to the significant volume of sales and income.
Impact of adoption of new standards, amendments and interpretations on the financial statements
The accounting policies applied in the preparation of these financial statements are consistent with those applied in the previous periods, except for the following:
Standards and amendments to the existing standards that became effective on 1 January 2024
There are no standards, amendments to standards or interpretations that are effective for annual periods commencing on 1 January 2024 and that would have a material impact on the Group’s financial statements.
Amendment to IAS 1 – “Classification of Liabilities as Short-Term or Long-Term” (first issued on 23 January 2020, later amended on 15 July 2020, and 31 October 2022, and finally applicable to annual periods beginning on or after 1 January 2024). The amendments clarify the principle of classifying liabilities. It is explained that liabilities are classified as short-term or long-term based on the rights of the entity at the end of the reporting period, not on management's expectations or future events.
Amendments to IAS 7 – “Cash Flow Report” and IFRS 7 – “Financial Instruments: Disclosures: Supplier's Financing Arrangements” (issued on 25 May 2023, and applicable to annual periods beginning on or after 1 January 2024). The amendments require economic entities to disclose more information about supplier's financing arrangements to increase transparency. Entities must provide data that allows users of financial statements to assess the impact of such arrangements on liabilities, cash flows, and liquidity risks. These amendments do not change the principles of recognition or measurement of financial instruments but strengthen the disclosure requirements.
Amendments to IFRS 16 – Lease Liabilities in Sale and Leaseback Transactions (issued on 22 September 2022, and applicable to annual periods beginning on or after 1 January 2024). The amendments stipulate that in sale and leaseback transactions, the seller-lessee must account for the liabilities in such a way that no profit or loss is recognized for the right-of-use asset that remains with the seller-lessee. This applies even in cases of variable lease payments that are not based on an index or rate. The amendments aim to ensure consistent accounting treatment in such transactions.
Standards and Amendments to Existing Standards Effective After 1 January 2025
Several new standards, amendments to standards, and interpretations will become effective for annual periods
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beginning after 1 January 2025 and were not applied in preparing these financial statements. None of these are expected to have a significant impact on the group's and company's financial statements.
Amendments to IAS 21 – "The Effect of Changes in Foreign Exchange Rates" – "Currency Inconvertibility" (issued on 15 August 2023, and applicable to annual periods beginning on or after 1 January 2025). These amendments establish principles for evaluating currency inconvertibility and determining the current exchange rate in cases where a currency is not convertible. They apply to entities that conduct transactions in a foreign currency that is not freely convertible. The amendments do not require adjustments to the comparative information for prior periods; however, they do require recalculating the affected amounts based on the current exchange rate on the day of first application, adjusting the non-allocated profit or the currency translation reserve accordingly.
The following standards have been issued, but not yet endorsed by the EU
There are no other IFRS or IAS amendments or IFRIC interpretations that are not yet effective and that would be expected to have a significant impact on the Company/Group.
Events after the reporting period
Events after the reporting period that provide additional information about the Group’s and the Company’s position at the reporting date (adjusting events) are reflected in the financial statements. Events after the reporting period that are not adjusting events are disclosed in the notes to the financial statements when material.
Offsetting financial assets and financial liabilities
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the company or the counterparty.
Accounting estimates and assumptions
The preparation of financial statements in conformity with IFRS as adopted by the European Union requires the use of accounting estimates and assumption by management that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. The accounting estimates and the related assumptions are based on historical experience and other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgements about the net book amounts of assets and liabilities that are not readily apparent from other sources. The actual results may ultimately differ from those estimates. The accounting estimates and underlying assumptions are regularly reviewed and are based on historical experience, other factors reflecting a current situation and reasonably possible future events.
The Group/Company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant effect on the amounts of assets and liabilities and can cause a significant adjustment to these amounts within the next financial year are addressed below.
Impairment losses on property, plant and equipment and intangible assets
The Company/Group did not identify any impairment indications in respect of property, plant and equipment as at 31 December 2024 and 2023, and accordingly, no impairment test was performed. Assumptions and results of impairment test performed by the Group in respect of goodwill as at 31 December 2024 and 2023 are disclosed in Note 15.
Measurement of inventories
The Group/Company reviews the movement on the inventory account, assesses the carrying amount on a quarterly basis. The carrying amount of inventories should not exceed future economic benefits expected to be received from the disposal or use of inventories. Loss on inventory write-down to net realisable value is recognised in the statement of profit or loss during the period in which the inventory measurement and write-down were performed. Inventory write-down is assessed considering the historical data and actual sales of inventories below cost. For more information refer to Note 18 ‘Inventories’.
Useful life of property, plant and equipment
Useful lives of the assets are reviewed annually and revised when there are grounds for believing that the remaining useful lives do not reflect technical conditions, economic utilisation or physical conditions of the assets.
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Financial risk management
The use of the financial instruments exposes the Group/Company to the following risks:
credit risk;
liquidity risk;
market risk.
Information on each type of the above-mentioned risks to which the Group/Company is exposed, objectives, policies and processes for managing the risk and the methods used to measure the risk is set out in this section.
Note 29 ‘Financial instruments and risk management’ discloses quantitative information on each type of the above-mentioned risks and on the Group’s/Company’s capital management.
Risk management framework
The Board is responsible for the development and monitoring of the Group’s/Company’s overall risk management programme. The Group’s/Company’s risk management policy defines and analyses risks to which the companies are exposed, establishes appropriate risk limits, controls risks and adherence to risk limits. The risk management policy and systems are reviewed on a regular basis to reflect market conditions and the Group’s/Company’s operational changes. The Group/Company, through its training and management standards and procedures, seeks to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.
Credit risk
In conducting trading activities, the Group/Company applies deferred payment in respect of sale of products and services, and therefore, a risk may arise that clients will not pay for products and services provided by the Group/Company. The Group/Company seeks to minimise credit risk through credit limit approach, based on which the amounts of credits granted to clients and the types of credit enhancements are established as follows:
limit,
guarantees,
insurance.
The Group/Company has insurance for their sales to foreign clients under the credit insurance agreement concluded with the company Euler Hermes for the term of two years. On November 2023, the insurance was extended for additional two years.
For each client, the credit risk is assessed individually. Trade receivables are regularly monitored by the Finance Department. In the event of overdue amounts receivable, the sale is suspended and debt recovery procedures are initiated.
Liquidity risk
Liquidity risk is a risk that the Group/Company will not be able to meet their financial liabilities in due time. The Group/Company manages the liquidity risk with the aim to achieve the best possible liquidity of the Group/Company, thereby allowing to settle obligations both in the ordinary course of business and under complicated operating conditions, and preventing from incurring unacceptable losses and damaging the Group’s/Company’s reputation.
The Group’s/Company’s policy is aimed at maintaining sufficient cash and cash equivalents or ensuring funding through an adequate amount of committed credit facilities in order to meet their commitments at a given date in accordance with the strategic plans.
The Group’s/Company’s objective is to maintain balance between the continuity and flexibility of funding. The Group/Company generates a sufficient amount of cash form activities, and therefore, the management is responsible for ensuring a sufficient level of the Group’s/Company’s liquidity.
Market risk
Market risk is a risk that changes in market prices, e.g. foreign exchange rates and interest rates, will affect the Group’s/Company’s results of operations or the value of financial instruments held. The purpose of the market risk management is to manage open risk positions in order to optimise rate of return.
The Group/Company manage foreign exchange risk by minimising the open position in a foreign currency. Further information on hedging against foreign exchange risk is disclosed in Note 29 ‘Financial instruments and risk management’.
The Group’s/Company’s income and operating cash flows are substantially independent of market interest rates.
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1.Segment information
GROUP
The Group cmprises 6 legal entities: Vilkyškių Pieninė AB, Kelmės Pieninė AB, Kelmės Pienas UAB, Modest AB, Baltic Dairy Board SIA, and Pieno Logistika AB. The main business activity of each entity (operating segment) is the production of milk products, except for Pieno Logistika AB that is collection and transportation of raw milk, lease of buildings.
The Group has several operating segments as described below. The operating segments represent different product groups that are managed separately, because they require different technologies and marketing strategies.
The Board and the General Manager review the internal management reports prepared for each operating segment on a monthly basis.
The following summary describes the products in each operating segment of the Group:
Cheese, cheese products and other. The operating segment comprises cheese, cheese products, and liquid whey that remains during the process of cheese production and other;
Dry milk products. The operating segment comprises WPC, MPC, skimmed-milk, permeate, whey powder produced by the subsidiaries;
Fresh milk products. The operating segment comprises fresh milk products produced by the subsidiary (kephir, yoghurt, sour cream, butter, curd products and other);
Industrial Cream. The segment consists of industrial cream produced by the Company and its subsidiaries.
Information on the results of operations of each operating segment is presented below. Performance is assessed based on the gross profit of the operating segments, which is presented in the internal management reports reviewed by the Board and the General Manager. The operating segment’s gross profit is used to assess performance, as the management believes it is the most appropriate indicator for that purpose.
Results of operations of the operating segments at 31 December 2024:
EUR ‘000
Cheese, cheese products and other
Dry milk products
Fresh milk products
Industrial cream
Total
Revenue
94,770
39,859
30,153
80,647
245,429
Cost of sales
-93,799
-26,882
-25,669
-57,298
-203,648
Gross profit
971
12,977
4,484
23,349
41,781
Other operating income
348
Distribution, administrative and other operating expenses
-13,192
Other gain (loss) – net
106
Operating result
29,043
Finance income
118
Finance costs
-1,481
Finance costs, net
-1,363
Profit (loss) before income tax
27,680

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Results of operations of the operating segments at 31 December 2023:
EUR ‘000
Cheese, cheese products and other
Dry milk products
Fresh milk products
Industrial cream
Total
Revenue
84,578
37,971
33,371
54,616
210,536
Cost of sales
-82,849
-26,152
-26,333
-47,515
-182,849
Gross profit
1,729
11,819
7,038
7,101
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
Information on the operating segments’ assets, liabilities, interest income, interest expenses, depreciation, results of operations before tax, income tax and other non-cash items is not reported to the Board and the General Manager. In the management’s opinion, the allocation of such items to the operating segments is not reasonable. Revenue, cost of sales and gross profit reported to the management are the same as reported in the financial statements. In 2024 and 2023, all revenue was recognised at a point in time.
For the purpose of disclosure by geographical location, revenue is recognised with reference to the place of registration of a client. Assets are allocated with reference to their geographical location.
Breakdown by geographical location for 2024:
GROUP
COMPANY
EUR ‘000
Revenue
Assets
Revenue
Assets
Lithuania
32,246
94,768
53,732
64,878
European Union (excluding Lithuania)
141,037
52,070
136,226
30,759
Other countries
72,146
5,488
72,121
5,487
245,429
152,326
262,079
101,124
Breakdown by geographical location for 2023:
GROUP
COMPANY
EUR ‘000
Revenue
Assets
Revenue
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
Information on major clients. In 2024, the Group had one client with sales revenue representing 12% of its total revenue (In 2023, the Group had one client with sales revenue representing 11.3% of total revenue).

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2.Cost of sales
Thousand EUR
GROUP
COMPANY
2024
2023
2024
2023
-162,819
-143,805
Raw materials
-160,141
-117,098
-
-
Resale cost of goods produced by the subsidiaries
-67,796
-102,928
-11,543
-10,817
Employee expenses, including social security contributions
-4,668
-3,974
-3,270
-3,562
Depreciation and grants’ amortisation
-1,047
-952
-7,371
-6,387
Milk collection and transportation costs
-6,179
-5,445
-7,125
-7,758
Gas, electricity, water
-2,099
-1,827
-2,025
-2,109
Transport costs
-2,025
-2,109
-9,495
-8,411
Other
-1,782
-1,726
-203,648
-182,849
-245,737
-236,059
As of 31 December 2024, the Group’s inventory write-down to net realizable value amounted to EUR 2,414 thousand, and the Company’s - amounted to EUR 1,501 thousand (as of 31 December 2023, the Group’s was EUR 1,218 thousand, and the Company’s was EUR 617 thousand).
3.Other operating income
Thousand EUR
GROUP
COMPANY
2024
2023
2024
2023
242
183
Income from rendering of services
3,448
3,625
-
-
Dividends
8,993
1,523
16
16
Income from accounting services
388
388
90
76
Other income
61
62
348
275
12,890
5,598
4.Other operating costs
Thousand EUR
GROUP
COMPANY
2024
2023
2024
2023
-240
-80
Cost of services rendered
-2,688
-3,260
-17
-225
Other expenses
-7
-4
-257
-305
-2,695
-3,264
5.Other gain (loss) – net
Thousand EUR
GROUP
COMPANY
2024
2023
2024
2023
106
221
Gain (loss) from disposal of raw materials, non-current assets
96
98
-
-
Gain (loss) from fair value change of investment property
449
125
106
221
545
223
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6.Distribution expenses
Thousand EUR
GROUP
COMPANY
2024
2023
2024
2023
-2,106
-1,602
Logistics and transport services
-820
-1,427
-455
-549
Marketing and advertising services
-381
-481
-1,367
-1,201
Personnel expenses, including social security contributions
-1,367
-1,201
-43
-39
Depreciation expenses
-23
-21
-1,063
-1047
Other selling expenses
-956
-1094
-5,034
-4,438
-3,547
-4,224
7.Administrative expenses
Thousand EUR
GROUP
COMPANY
2024
2023
2024
2023
-3,653
-3,239
Personnel expenses, including social security
contributions and change in vacation reserve
-3,047
-2,374
-138
-155
Depreciation and amortisation, including amortisation
of subsidies
-84
-99
-512
-451
Services received
-195
-192
-323
-282
Taxes, other than income tax
-241
-201
-129
-131
Veterinary services
-78
-82
-296
-198
Consultation services
-236
-136
11
11
Inventory write-down, reversal
11
11
-182
-166
Security
-68
-62
-28
-93
Fines and interest paid on late payments
-20
-1
-335
-209
Write-off of bad debt expenses
-335
-209
-285
-209
Computer expenses
-271
-197
-58
-55
Fuel
-51
-48
-72
-65
Repair expenses
-63
-44
-51
-47
Fee for membership in association
-51
-47
-37
-34
Stock exchange expenses
-34
-31
-
-16
New product development expenses
-
-
-119
-84
Insurance
-53
-36
-48
-65
Bank charges
-39
-52
-1,646
-1174
Other
-1168
-634
-7,901
-6,662
-6,023
-4,434
In 2024, the Group’s and the Company’s social security contributions payable by an employer amounted to EUR 657 thousand and EUR 214 thousand, respectively (2023: EUR 533 thousand and EUR 182 thousand, respectively). Social security amount includes social security contributions on vacation and pension reserves.

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8.Services provided by the audit firm to the Company and the Group
Thousand EUR
GROUP
COMPANY
2024
2023
2024
2023
97
90
UAB PricewaterhouseCoopers financial statement audit services under the agreements
69
64
23
22
Audit services of financial statements of other independent auditors under the agreements
-
-
42
1
Other services
42
1
162
113
Total
111
65
9.Finance costs, net
Thousand EUR
GROUP
COMPANY
2024
2023
2024
2023
Finance income
110
34
Interest
117
98
8
5
Other
7
2
118
39
Total finance income
124
100
Finance costs
-1,301
-1,194
Interest
-436
-257
-110
-37
Interest on lease
-88
-32
-31
-129
Factoring charges
-31
-129
-39
-18
Foreign exchange loss
-24
-20
-1,481
-1,378
Total finance costs
-579
-438
-1,363
-1,339
-455
-338
10.Income tax expenses
Recognised in profit or loss (thousand EUR)
GROUP
COMPANY
2024
2023
2024
2023
Current year income tax expenses
-1,185
-647
Reporting period
-
3
Deferred income tax expenses
-826
-140
Change in deferred income tax
-698
-50
-2,011
-787
-698
-47

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Reconciliation of effective income tax rate (thousand EUR)
GROUP
COMPANY
2024
2023
2024
2023
27,680
15,439
Profit for the year
17,057
2,574
4,152
2,316
Income tax calculated at a rate of 15%
2,558
386
-
-
Dividend income
-1,349
-228
-258
-128
Other non-taxable income
-223
-1
-
-
Impairment of goodwill
-
-
-7
-12
Charity expenses deductible twice for tax purposes
-6
-11
-
-12
R&D expenses deductible thrice for tax purposes
-
-
-688
-107
Investment project relief
-605
-87
217
-67
Tax loss utilisation
259
-67
56
-
The impact of the future change in the tax rate
40
0
183
151
Other expenses not deductible for tax purposes
24
55
-1,644
-1,354
Other expenses deductible for tax purposes
-
-
2,011
787
Income tax expenses (benefit)
698
47
Pursuant to the effective laws, the State Tax Inspectorate may at any time inspect the books and accounting records of the Group/Company for 3 years preceding the reporting tax period and may assess additional taxes or fines (a 5-year period is applied to some types of transactions). The Company’s management is not aware of any circumstances that might result in a potential material tax liability in this respect for the Group/Company.
11.Earnings per share
GROUP
COMPANY
2024
2023
2024
2023
25,654
14,666
Net profit attributable to holders of ordinary shares
of the Parent, EUR ‘000
16,359
2,527
11,943
11,943
Number of issued shares calculated based on the
weighted average unit cost method, ‘000 units
11,943
11,943
2.15
1.23
Basic earnings (loss) per share (EUR
1.37
0.21
The diluted earnings per share are the same as basic earnings per share.

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12.Property, plant and equipment
Thousand EUR
GROUP
Right-of-use assets*
Land and buildings
Plant and machinery
Other assets
Construction in progress
Total
Cost/revalued amount
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
Balance at 1 January 2024
2,082
20,086
63,243
3,869
13,196
102,476
Additions
1,496
-
2,547
183
34,581
38,807
Increase in value
-
48
-
-
-
48
Revaluation
-
1,787
-
-
-
1,787
Disposals
-221
-379
-953
-300
- 1,109
-2,962
Reclassifications
-389
1,462
7,636
95
-8,804
-
Balance at 31 December 2024
2,968
23,004
72,473
3,847
37,864
140,156
Depreciation and impairment losses
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
Balance at 1 January 2024
540
5,209
36,212
2,795
-
44,756
Depreciation charge for the year
335
665
3,717
243
-
4,960
Disposals
-144
-167
-593
-291
-
-1,195
Reclassifications
-129
-
129
-
-
-
Balance at 31 December 2024
602
5,707
39,465
2,747
-
48,521
Net book amount
At 1 January 2023
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
At 31 December 2024
2,366
17,297
33,008
1,100
37,864
91,635
* for more details on right-of-use assets, see Note 13.
** 2024: EUR 363 thousand represents capitalized borrowing costs (applicable interest rate - 6-month EURIBOR + margin). Future capital investments amount to EUR 15,749 thousand (see Note 27 for additional details).
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COMPANY
Right-of-use assets*
Land and buildings
Plant and machinery
Other assets
Construction in progress
Total
Cost/revalued amount
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
Reclassifications (a)
-565
415
1,115
-
-1,275
-310
Balance at 31 December 2023
2,022
7,094
23,353
1,359
8,450
42,278
Balance at 1 January 2024
2,022
7,094
23,353
1,359
8,450
42,278
Additions
1,337
-
2,136
29
352
3,854
Increase in value
105
41
-
-
-
146
Revaluation
-
268
-
-
-
268
Disposals
-221
-367
-760
-235
-
-1,583
Reclassifications
-389
777
5,957
88
-7,119
-686
Balance at 31 December 2024
2,854
7,813
30,686
1,241
1,683
44,277
Depreciation and impairment losses
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
Decrease in value
1
-
-
-
-
1
Disposals
-96
-34
-931
-118
-
-1,179
Reclassifications
-338
-58
338
-
-
-58
Balance at 31 December 2023
539
1,970
18,738
1,178
-
22,425
Balance at 1 January 2024
539
1,970
18,737
1,178
-
22,424
Depreciation charge for the year
318
256
1,247
58
-
1,879
Disposals
-144
-163
-486
-234
-
-1,027
Reclassifications
-129
-
129
-
-
-
Balance at 31 December 2024
584
2,063
19,627
1,002
-
23,276
Net book amounts
At 1 January 2023
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
At 31 December 2024
2,270
5,750
11,059
239
1,683
21,001
* For more details on right-of-use assets, see Note 13.
(a) Amount of EUR 686 thousand is related to reclassification of assets to investment property.
Prepayments made for non-current assets are classified under additions.
Pledged assets
To secure the repayment of its bank borrowings, the Group has pledged the following PP&E:
Land and buildings with the carrying amount of EUR 12,922 thousand as at 31 December 2024 (31 December 2023: EUR 10,016 thousand);
Machinery and equipment with a carrying value as of 31 December 2024 amounting to EUR 30,412 thousand (as of 31 December 2023, EUR 27,557 thousand) (see Note 23).
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VILVI GROUP ANNUAL REPORTS
2024
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To secure the repayment of its bank borrowings, the Company has pledged the following PP&E:
Land and buildings with the carrying amount of EUR 5,249 thousand as at 31 December 2024 (31 December 2023: EUR 3,427 thousand);
Machinery and equipment with a carrying value as of 31 December 2024 amounting to EUR 10,469 thousand (as of 31 December 2023, EUR 2,923 thousand) (see Note 23).
Group’s land and buildings, machinery and equipment, and other assets, which are fully depreciated but still in use, had an acquisition cost as of 31 December 2024 amounting to EUR 14,217 thousand (as of 31 December 2023, EUR 12,138 thousand).
Company’s land and buildings, machinery and equipment, and other assets, which are fully depreciated but still in use, had an acquisition cost as of 31 December 2024 amounting to EUR 12,006 thousand (as of 31 December 2023, EUR 10,628 thousand).
Depreciation
Depreciation was included in the following line items (thousand EUR):
GROUP
COMPANY
 2024
2023
 2024
2023
4,741
4,426
Cost of finished products
1,628
1,447
225
219
Distribution and administrative expenses
154
144
-
-
Other operating expenses
97
128
4,966
4,645
1,879
1,719
Revaluation of Buildings
The Group/Company accounts for the buildings at a revalued amount, less subsequent accumulated depreciation and impairment.
Valuations of Group’s buildings:
The property valuation, carried out by an independent appraiser, UAB Korporacija "Matininkai", includes the determination of the fair value of buildings and structures owned by the Company, located at Gaurės st. 23 and Gaurės st. 31, Tauragė, as of 1 December 2024. Using the comparative method, the total market/fair value of the Company’s buildings and structures at the time of the valuation was EUR 2,070 thousand;
The property valuation, carried out by an independent appraiser, UAB Korporacija "Matininkai", includes the determination of the market value of the whey processing production asset complex (long-term tangible real and movable assets) owned by the Group and the Company, located at Gaurės st. 23, Tauragė, as of 29 August 2024. Using the income (discounted cash flow method) and expense (cost) approach, the total market/fair value of the Group’s and the Company’s whey processing production asset complex at the time of the valuation was EUR 35,600 thousand;
The property valuation, carried out by an independent appraiser, UAB Korporacija "Matininkai", includes the determination of the fair value of buildings and structures owned by the Group, located at Raseinių st. 2, Kelmė, Sedulos st. 10, Tytuvėnai, and M. Valančiaus st. 16, Kražiai, as of 1 December 2024. Using the comparative method, the total market/fair value of the Group’s buildings and structures at the time of the valuation was EUR 1,526 thousand;
The property valuation, carried out by an independent appraiser, UAB Korporacija "Matininkai", includes the determination of the fair value of buildings and structures owned by the Company, located at Prano Lukošaičio stt. 14, Vilkyškiai, Pagėgiai Municipality, and Gaurės st. 31, Tauragė, as of 1 December 2022. Using the comparative method, the total market/fair value of the Company’s buildings and structures at the time of the valuation was EUR 3,553 thousand;
The property valuation, carried out by an independent appraiser, SIA NEWSEC VALUATIONS LV., includes the determination of the fair value of buildings and structures owned by the Group, located at Stacijas st. 2 and Stacijas st. 4, Bauska, Latvia, as of 7 February 2023. Using the discounted cash flow method, the total market/fair value of the Group’s buildings and structures at the time of the valuation was EUR 2,300 thousand.
Based on the Group's buildings and structures valuations carried out, the revaluation of the Group’s and the Company’s assets was completed on 31 December 2024.
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VILVI GROUP ANNUAL REPORTS
2024
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GROUP
COMPANY
 2024
2023
 2024
2023
1,808
2,026
Balance at the beginning of the reporting period
1,061
1,240
1,787
-
Profit (loss) from the revaluation of long-term assets
268
-
-150
-218
Depreciation or write-off of revalued assets.
-239
-179
3,445
1,808
Balance as of the end of the reporting period
1,090
1,061
The revaluation of assets of the Group and the Company is classified into hierarchy levels as follows:
GROUP
COMPANY
 2024
2023
 2024
2023
2,366
1,808
Hierarchy level 2 (a)
1,090
1,061
1,079
-
Hierarchy level 3 (b)
-
-
3,445
1,808
1,090
1,061
(a) The revalued assets of the Group and the Company, intended for the production and storage of fermented, mold-ripened, melted, smoked, mozzarella cheese, fresh dairy products, and cream, are valued using the comparative value method and are classified under Level 2 of the fair value hierarchy.
(b) The revalued assets of the Company, intended for the production of whey processing products (whey protein concentrate WPC80 and permeate), are valued using the income method and are classified under Level 3 of the fair value hierarchy.
The increase in the Group's and Company's value, amounting to EUR 1,484 thousand (net of the deferred profit tax liability), and respectively EUR 217 thousand was recognized in shareholders' equity. The total increase in value amounted to EUR 1,787 thousand and, respectively, EUR 268 thousand was recognized in the 2024 real estate acquisition line.
The net revaluation reserve of the Group as of 31 December 2024, is EUR 2,894 thousand (as of 31 December 2023, it was EUR 1,537 thousand). The net revaluation reserve of the Company as of 31 December 2024, is EUR 916 thousand (as of 31 December 2023, it was EUR 902 thousand).
If the Group's buildings were accounted for at self-cost, their carrying amount as of 31 December 2024 would be EUR 10,544 thousand (revalued value – EUR 13,961 thousand), (as of 31 December 2023 – EUR 9,471 thousand, with the revalued value of EUR 11,339 thousand).
If the Company's buildings were accounted for at self-cost, their carrying amount as of 31 December 2024 would be EUR 3,744 thousand (revalued value – EUR 4,794 thousand), (as of 31 December 2023 – EUR 2,464 thousand, with the revalued value of EUR 3,443 thousand).
13.Leases
Amounts recognised in profit or loss were as follows (thousand EUR):
GROUP
COMPANY
2024
2023
2024
2023
335
199
Depreciation of right-of-use assets
318
194
-
-
Impairment of right-of-use assets
-
1
110
37
Interest expenses (included in finance costs)
88
32
35
39
Expenses related to short-term leases (included in cost of sales
and general and administrative expenses)
24
31
64
78
Expenses related to leases of low-value assets not included in the above
short-term leases (included in cost of sales, general and
administrative expenses, other operating expenses)
7
25
13
24
Expenses related to variable lease payments not included in
lease liabilities (included in cost of sales, general and
administrative expenses, other operating expenses)
13
24
557
377
450
307
Movements in right-of-use assets during 2024 and 2023 are disclosed in Note 12.
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VILVI GROUP ANNUAL REPORTS
2024
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Lease liabilities, including the breakdown of lease liabilities by maturity are disclosed in Note 23.
14.Investment property
Thousand EUR
2024
2023
Balance at 1 January
6,903
6,527
Additions
39
38
Disposals
-
-
Net gain/(loss) on fair value adjustment
449
123
Transfer from long-term tangible assets used for the needs of the owner
654
215
Balance at 31 December
8,045
6,903
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 assets consist of production, storage, and administrative property leased to subsidiaries. Under the terms of the lease agreements, the assets are leased for a period of 5-8 years, with the lease period expected to expire by 31 December 2026-2028. The execution of the lease agreements is not secured by pledges, guarantees, or other commitments.
Fair value of investment property
Below is allocation of the Company’s investment property to hierarchy levels for fair value measurement purposes:
Thousand EUR
31/12/2024
31/12/2023
Hierarchy level 2 (a)
2,514
1,797
Hierarchy level 3 (b)
5,531
5,106
8,045
6,903
a)The Company's investment assets, intended for the production and storage of mold-ripened, melted, smoked, mozzarella cheese, and industrial cream, are valued using the comparative value method and is classified under Level 2 of the fair value hierarchy. The fair value was determined with reference to the valuation performed on 1 December 2024 by an independent property valuation corporation Matininkai UAB (the same approach was applied on 1 December 2023). 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 investment assets, intended for the production of whey processing products (whey protein concentrate WPC80 and permeate), are valued using the income method and is classified under Level 3 of the fair value hierarchy. The fair value was determined based on the valuation conducted by the independent appraiser UAB corporation "Matininkai" on 29 August 2024. The valuation includes the determination of the fair value of the Company's whey processing production asset complex (including buildings, machinery and equipment, as well as other assets) as a cash-generating unit. The determined fair value is allocated to each unit of long-term tangible asset, so the fair value of the buildings is known. The asset value was determined using the discounted cash flow method. Future post-tax cash flows calculated based on the value in use were discounted to their present value using a discount rate, which was estimated based on current market conditions, the existing time value of money, and risks associated with the asset that were not accounted for.
The adjusted weighted average cost of capital (pre-tax) was 14.54% (2023 – 16.3%). The key assumptions underpinning the calculation of the value in use are:
The future cash flows are calculated based on historical experience and approved business forecasts for 2025-2029, which have been prepared based on already concluded long-term contracts with the consumers of the products and the anticipated sales (production) expansion, taking into account the growth in demand for whey processing products in both domestic and foreign markets.
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VILVI GROUP ANNUAL REPORTS
2024
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The forecasted production costs have been calculated based on actual production, as well as anticipating their changes due to production growth. It is forecasted that production and sales in tons will grow by an average of 1% annually from 2025 to 2029.
The same method was applied in the evaluation conducted on 1 December 2023.
Sensitivity analysis using the discounted cash flow method indicated that the asset value is sensitive to changes in production costs and sales income.
Change in discount rate: a decrease in the weighted average cost of capital (WACC) discount rate (pre-tax) by 1.76 percentage points in 2024 compared to 2023 would result in an increase of EUR 3.7 million in the asset value.
Income changes: if sales income increased by 1%, the asset value would increase by EUR 4.9 million. If sales income decreased by 1%, the asset value would decrease by EUR 4.8 million.
Production cost changes: if raw material costs decreased by 1%, the asset value would increase by EUR 4.1 million. If raw material costs increased by 1%, the asset value would decrease by EUR 4.2 million.
These results indicate that the value of the company’s investment assets is highly sensitive to changes in sales income and raw material costs, making these factors crucial when assessing the long-term efficiency of asset use and investment decisions.
Minimum lease payments receivable on lease of investment property:
(Thousand EUR)
31/12/2024
31/12/2023
Within one year
330
330
Between 1 and 5 years
611
941
941
1,271
In 2024, the Company’s rental income amounted to EUR 330 thousand (2023: EUR 330 thousand). Rental income is included in other operating income.
There were no direct operating expenses from investment property that generated rental income during 2024 and 2023.
The Company’s investment property with the carrying amount of EUR 8,045 thousand as at 31 December 2024 (31 December 2023: EUR 6,903 thousand) was pledged to the banks as a security for bank borrowings.

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VILVI GROUP ANNUAL REPORTS
2024
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15.Intangible assets
Thousand EUR
GROUP
Goodwill
Computer software
Other intangible assets
Total
Cost
Balance at 1 January 2023
6,915
546
17
7,478
Balance at 31 December 2023
6,915
546
17
7,478
Balance at 1 January 2024
6,915
546
17
7,478
Additions
-
35
-
35
Balance at 31 December 2024
6,915
581
17
7,513
Amortisation and impairment
Balance at 1 January 2023
2,749
544
10
3,303
Amortisation charge for the year
-
2
5
7
Balance at 31 December 2023
2,749
546
15
3,310
Balance at 1 January 2024
2,749
546
15
3,310
Amortisation charge for the year
-
2
1
3
Balance at 31 December 2024
2,749
548
16
3,313
Net book amounts
At 1 January 2023
4,166
2
7
4,175
At 31 December 2023
4,166
-
2
4,168
At 31 December 2024
4,166
33
1
4,200
Amortisation charge for the year was included in administrative expenses.
COMPANY
Goodwill
Computer software
Other intangible assets
Total
Cost
Balance at 1 January 2023
-
656
17
673
Balance at 31 December 2023
-
656
17
673
Balance at 1 January 2024
-
656
17
673
Additions
-
30
-
30
Balance at 31 December 2024
-
686
17
703
Amortisation and impairment
Balance at 1 January 2023
-
654
14
668
Amortisation charge for the year
-
2
1
3
Balance at 31 December 2023
-
656
15
671
Balance at 1 January 2024
-
656
15
671
Amortisation charge for the year
-
1
1
2
Balance at 31 December 2024
-
657
16
673
Net book amounts
At 1 January 2023
-
2
3
5
At 31 December 2023
-
-
2
2
At 31 December 2024
-
29
1
30
Amortisation charge for the year was included in administrative expenses.
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VILVI GROUP ANNUAL REPORTS
2024
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Recoverable amount of cash-generating units to which goodwill is attributed
Goodwill is attributed to the following cash-generating units of the Group (Modest AB business activities relating to production and sale of cheese and cheese products; Kelmės Pienas UAB business activities relating to production and sale of fresh milk products), as specified below:
31/12/2024
31/12/2023
Kelmės Pienas UAB (fresh milk products)*
3,867
3,867
Modest AB (cheese, cheese products)
299
299
4,166
4,166
* Before 1 March 2021, the business activities of fresh milk products were conducted by the subsidiary Kelmės Pieninė AB. As from 1 March 2021, the business activities of fresh milk products have been transferred to Kelmės Pienas UAB.
Goodwill arising on business combination is attributable mostly to synergy, which has resulted from the integration of the Companies into the existing operations of the Group relating to production of milk products.
These cash-generating units were tested for impairment when calculating the recoverable amount.
Recoverable value of the cash-generating unit of UAB “Kelmės pienas”
The recoverable value of the cash-generating unit of UAB “Kelmės pienas” fresh dairy products was determined on 31 December 2024. The recoverable amount was calculated by discounting future cash flows to their present value based on a five-year financial forecast approved by the management.
Key assumptions used in the calculation of the recoverable amount were as follows:
The future cash flows were calculated based on historical experience and a 5-year business plan. Cash flows in a long-term perspective were estimated by extrapolating the fifth-year cash flows at a projected long-term growth rate of 1% (2023: growth rate of 1.5%).
The recoverable amount was calculated using a pre-tax 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. Pre-tax rate of weighted average cost of capital was 14.38% (2023: 12.74%).
The annual revenue growth rate is projected to be 2% in 2025 and 5% during 2025-2029. Growth of revenue is projected due to the expected increase in production volumes, introduction of new products to the market, and expansion into the new markets. In 2025, a decrease in gross profit is forecast due to the increase in the prices of raw milk and other raw materials and materials.
The basic components of the working capital: inventory requirement, trade receivables and trade payables are taken as the factual amounts at the end of 2024. Subsequently (starting from 2025), the working capital requirement is calculated in view of the production growth and inventory, trade receivables and trade payables requirement, as a proportionate share of the cost of sales and revenue.
The sensitivity analysis shows the impact of changes in discount rate and long-term growth rate on the results of valuation. These variable inputs were chosen for the sensitivity analysis because, as a result of valuation, they were noted as having the most impact on the entity’s business value:
Had the budgeted gross margin used in the value-in-use calculation for Kelmės Pienas UAB been 3% lower as at 31 December 2024 compared to the management’s forecast, no impairment would have been recognised for the Group’s goodwill.
Had the pre-tax discount rate used in the cash flow forecast for Kelmės Pienas UAB been 1% higher compared to the management’s estimates (15.38% instead of 14.38%), no impairment would have been recognised for the Group’s goodwill.
Based on the above assumptions, the calculated recoverable amount of the cash-generating unit was higher than the carrying amount, and therefore, no impairment was recognised.
177
VILVI GROUP ANNUAL REPORTS
2024
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16.Investments in subsidiaries
EUR ‘000
31/12/2024
31/12/2023
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
16,741
671
27,388
11,318
The Company acquired control over Modest AB in 2006. The ownership interest held by the Company was 99.7% as at 31 December 2024 (31 December 2023: 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 2024 (31 December 2023: 100%).
In 2021, Vilkyškių Pieninė AB acquired 70% of shares in Baltic Dairy Board SIA, in 2023, Vilkyškių Pieninė AB acquired the remaining 30% of shares. The ownership interest held by the Company was 100% as at 31 December 2024 (31 December 2023: 100%).
As at 31 December 2024 (and 31 December 2023), there were no indications of impairment for investments in subsidiaries.
Key financial indicators of Pieno Logistika AB:
EUR ‘000
31/12/2024
31/12/2023
Total assets
573
559
Shareholders’ equity
82
68
Net profit (loss)
15
-37
Key financial indicators of Modest AB:
EUR ‘000
31/12/2024
31/12/2023
Total assets
12,091
7,692
Shareholders’ equity
9,012
5,664
Net profit (loss)
3,348
611
17.Non-current amounts receivable
Thousand EUR
GROUP
COMPANY
31/12/2024
31/12/2023
Note
31/12/2024
31/12/2023
Financial instruments
-
-
28
Loans granted to related parties (a)
1,170
1,111
-
600
Loans granted to related parties (b)
-
600
-
600
1,170
1,711
Non-financial assets
241
311
Non-current amounts receivable from farmers ©
234
311
2
2
Other non-current amounts receivable
-
-
243
313
234
311
243
913
1,404
2,022
a) In December 2021, a loan was granted to the subsidiary Baltic Dairy Board SIA. As at 31 December 2024, the outstanding balance of the loan was EUR 980 thousand (31 December 2023: EUR 980 thousand) and interest was EUR 190 thousand (31 December 2023: EUR 131 thousand). The loan is to be repaid by 31 January 2026.
b) The Group’s and the Company’s do not have loan receivable from other related parties at 31 December 2024.
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VILVI GROUP ANNUAL REPORTS
2024
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c) Non-current amounts receivable from farmers and agricultural companies comprise prepayments made to milk suppliers for milk. An administration fee is charged on these prepayments.
The Group’s/Company’s exposure to credit and foreign exchange risks, impairment losses related to trade and other amounts receivable are disclosed in Note 29.
18.Inventories
Thousand EUR
GROUP
COMPANY
31/12/2024
31/12/2023
31/12/2024
31/12/2023
8,272
11,343
Finished products
4,702
5,958
890
1,650
Products in transit
890
1,650
9,162
12,993
5,592
7,608
427
324
Raw materials
170
105
4,388
4,016
Consumables
1,342
1,275
277
294
Work in progress
-
-
14,254
17,627
7,104
8,988
Raw materials include milk and other materials used in the production.
As at 31 December 2024, the Group’s materials (packaging, auxiliary materials, etc.) written down to net realisable value amounted to EUR 15 thousand (31 December 2023: EUR 26 thousand).
As at 31 December 2024, the Company’s materials (tare, packaging, auxiliary materials, etc.) written down to net realisable value amounted to EUR 15 thousand (31 December 2023: EUR 26 thousand).
The write-down of inventories (finished products) to net realisable value and its reversal were included in the cost of sales.
As at 31 December 2024, the Group's and the Company's inventories (finished products) written down to net realisable value amounted to EUR 2,414 thousand and EUR 1,501 thousand, respectively (31 December 2023: EUR 1,192 thousand and EUR 591 thousand, respectively). Inventory write-down due to expected changes in sales prices in export markets.
As of 31 December 2024, the company’s inventory (cheeses, cheese products) was pledged to banks, with a carrying value of EUR 7,104 thousand. As of 31 December 2023, the group and company’s inventory were pledged, with a carrying value of up to EUR 12,091 thousand, with the company’s portion being EUR 8,988 thousand) (see Note 23).
19.Trade and other receivables
Thousand EUR
GROUP
Note
31/12/2024
31/12/ 2023
Trade receivables
18,089
14,815
Impairment losses
-629
-307
Trade receivables from related parties
-
88
Financial assets
17,460
14,596
Taxes receivable (other than income tax)
4,912
2,593
Other receivables
39
18
Total trade and other receivables
22,411
17,207
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VILVI GROUP ANNUAL REPORTS
2024
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COMPANY
Note
31/12/2024
31/12/ 2023
Trade receivables
14,385
11,686
Impairment losses
-629
-307
Trade receivables from related parties
28
5,596
499
Financial assets
19,352
11,878
Taxes receivable (other than income tax)
3,031
2,283
Other receivables
-
3,525
Total trade and other receivables
22,383
17,686
Trade and other receivables are non-interest bearing and their settlement term is 30 days.
Taxes receivable consist of VAT receivable.
As at 31 December 2024, the Group’s/Company’s receivables were not pledged (31 December 2023: the Group’s/Company’s receivables were not pledged) (Note 27).
The Group’s/Company’s exposure to credit and foreign exchange risks, impairment losses related to trade and other receivables are disclosed in Note 29.
The ageing analysis of trade receivables is disclosed in Note 29.
20.Prepayments
Thousand EUR
GROUP
COMPANY
31/12/2024
31/12/2023
Note
31/12/2024
31/12/2023
560
608
(a)
Prepayments
412
456
151
71
Advance income tax
71
71
711
679
483
527
(a) Prepayments consist of prepayments made to the companies for goods and services and to the farmers for milk.
21.Cash and cash equivalents
GROUP
COMPANY
31/12/2024
31/12/2023
31/12/2024
31/12/2023
18,751
8,609
Cash at bank
13,165
2,740
121
116
Cash on hand
121
114
18,872
8,725
13,286
2,854
As of 31 December 2024, the group and company’s cash balances were pledged as collateral for bank loans, amounting to EUR 13,364 thousand and EUR 13,286 thousand (as of 31 December 2023, no cash balances were pledged for bank loans).
The Group’s and the Company’s exposure to interest rate risk arising from cash and cash equivalents is disclosed in Note 29.
22.Capital and reserves
As at 31 December 2024 and 2023, the Company’s authorised share capital was divided into 11,943,000 ordinary shares with the nominal value of EUR 0.29 each. All the shares are fully paid.
Ordinary shares are stated at their nominal value. Consideration received for the shares sold in excess over their nominal value is shown as share premium. Incremental external costs directly attributable to the issue of new shares are accounted for as a deduction from share premium.
Pursuant to the Law on Companies, the holders of ordinary shares have one vote per share at the Company's shareholders' meeting, the right to receive dividends, and the right to receive payments in the event of liquidation of a company.
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VILVI GROUP ANNUAL REPORTS
2024
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Legal reserve
Pursuant to the Law on Companies of the Republic of Lithuania, annual transfers of 5% from distributable profit are required until the legal reserve reaches 10% of the authorised share capital. Pursuant to the Law the legal reserve may be used to cover accumulated losses only. As at 31 December 2024, the Company’s/ Group’s legal reserve amounted to EUR 346 thousand (31 December 2023: EUR 346 thousand).
Share premium
Share premium is the difference between the nominal value and issue price of the shares.
Revaluation reserve
Revaluation reserve is related to the revaluation of the buildings and is stated net of deferred income tax liability. The reserve is reduced in proportion to the depreciation and disposal of the revalued assets. Transfers from the revaluation reserve to retained earnings are performed when the revalued buildings are being depreciated. The amount transferred is determined as a difference between depreciation calculated from the revalued amount and depreciation calculated from the initial cost of the buildings. Revaluation reserve can be used to increase the share capital.
Other reserves
Other reserves are formed by the decision of the annual meeting of shareholders on profit appropriation, and they are established in the Company’s Articles of Association. These reserves can be used only for the purposes approved by the general meeting of shareholders.
The Group/Company has no other reserves.
Dividends
In 2024, dividends of EUR  0.31 per share were paid out to the shareholders (2023: dividends of EUR 0.265 per share were paid out to the shareholders).
23.Borrowings and lease liabilities
GROUP
COMPANY
31/12/2024
31/12/2023
Note
31/12/2024
31/12/2023
33,280
15,706
Non-current borrowings
27,28
5,778
2,569
1,551
775
Lease liabilities
13
1,190
728
34,831
16,481
Non-current
6,968
3,297
3,649
3,235
Current bank borrowings and other borrowings
27,28
1,771
1,356
742
469
Lease liabilities
13
614
432
4,391
3,704
Current
2,385
1,788
39,222
20,185
Total borrowings and lease liabilities
9,353
5,085
As of 31 December 2024, the company and group had unused short-term credit limits totaling EUR 3 million (as of 31 December 2023, the company and group had no short-term credit limits). As of 31 December 2024, the company and group did not have long-term credit limits, but the group still had an unused portion of a long-term loan from AS “Citadele Banka” amounting to EUR 16,559 thousand (for the construction and equipment of the SIA “Baltic Dairy Board” cheese factory). The interest rates for the company and group’s loans, according to agreements with the banks, are based on the 6-month EURIBOR + margin and the 3-month EURIBOR + margin.
Under the agreements signed with the banks, the Company/Group has committed to comply with certain covenants, such as financial debt and net financial debt to EBITDA ratio, debt service coverage ratio and equity ratio. These ratios are calculated according to the data reported in the consolidated financial statements. The Company and the Group complied with these covenants in 2024 and 2023.
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2024
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Borrowings by maturity (thousand EUR):
GROUP
COMPANY
31/12/2024
31/12/2023
31/12/2024
31/12/2023
3,649
3,235
Within 1 year
1,771
1,356
33,280
15,706
Between 1 and 5 years
5,778
2,569
36,929
18,941
7,549
3,925
In 2024, the Group’s borrowings were subject to annual effective interest rate of 3.60% (2023: 6.10%).
In 2024, the Company’s borrowings were subject to annual effective interest rate of 5.60% (2023: 5.68%).
Lease liabilities (thousand EUR):
GROUP
COMPANY
31/12/2024
31/12/2023
31/12/2024
31/12/2023
742
469
Within 1 year
614
432
1,551
775
Between 1 and 5 years
1,190
728
2,293
1,244
1,804
1,160
The right-of-use assets recognised in relation to lease liabilities is disclosed in Notes 12 and 13.
Cash flows from financing activities (thousand EUR)
COMPANY
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
Total
At 1 January 2024
432
728
1,356
-
2,569
5,085
Cash inflows - proceeds from borrowings
-
-
33
2,153
4,980
7,166
Cash outflows - repayments of borrowings
-
-
-1,389
-2,153
-
-3,542
Additions - lease
616
1,011
-
-
-
1,627
Repayments – lease
-983
-
-
-
-
-983
Other non-cash changes (reclassification of
current/non-current portion, impairment, write-offs)
549
-549
1,771
-
-1,771
-
At 31 December 2024
614
1,190
1,771
-
5,778
9,353
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2024
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GROUP
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
Total
At 1 January 2024
469
775
3,235
-
15,706
20,185
Cash inflows - proceeds from borrowings
-
-
33
2,153
21,223
23,409
Cash outflows - repayments of borrowings
-
-
-3,268
-2,153
-
-5,421
Additions - lease
673
1,671
-
-
-
2,344
Repayments – lease
-1,295
-
-
-
-
-1,295
Other non-cash changes (reclassification of
current/non-current portion, impairment, write-offs)
895
-895
3,649
-
-3,649
-
At 31 December 2024
742
1,551
3,649
-
33,280
39,222
COMPANY
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
Total
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
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2024
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GROUP
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
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
24.Government grants
Thousand EUR
GROUP
COMPANY
31/12/2024
31/12/2023
31/12/2024
31/12/2023
3,598
3,743
Opening net book amount
671
520
901
285
Grants received
893
285
0
0
Grant receivable
0
0
-445
-417
Amortisation recognised in profit or loss and
write-off of grants
-177
-134
-11
-13
Write-off of grants upon disposal of assets
0
0
4,043
3,598
Closing net book amount
1,387
671
The Group/Company received support from the EU funds under the Lithuanian Rural Development Programmes from the National Paying Agency under the Ministry of Agriculture. The support was received for the acquisition of non-current assets. The amounts of support are amortised in proportion to the depreciation of the related assets.
On 8 July 2021, Kelmės Pieninė AB and public enterprise Lithuanian Business Support Agency signed an agreement on project No. 01.2.1-LVPA-K-856-02-0037 for the Development of an innovative food supplement for the elderly to prevent senile weakness syndrome and malnutrition. During 2020–2023, the amount of support received was EUR 277 thousand (whereof EUR 32 thousand was received in 2023).
In December 2022, Vilkyškių Pieninė AB and National Paying Agency under the Lithuanian Ministry of Agriculture signed an agreement on project No Nr. 17PP-KT-22-1-04217-PR001 for the Lithuanian Rural Development Programme 2014-2020 measure "Investments in tangible assets" of the activity area "Support for investments in the processing, marketing and/or development of agricultural products". EUR 1 million is expected to be allocated to the Company for the implementation of this project.
Amount of EUR 191 thousand was received in 2023.
Amount of EUR 809 thousand was received in 2024.
In 2022, Vilkyškių Pieninė AB and the Environmental Project Management Agency under the Lithuanian Ministry of Environment signed an agreement on the financial support of EUR 150 thousand for the implementation of the project Installation of wastewater treatment facilities for Vilkyškių Pieninė AB. In 2023, amount of EUR 90 thousand was received in 2023 and EUR 60 thousand – in 2024.
The Latvian government, through the Latvian state development financial institution AS “Attīstības finanšu institūcija Altum,” will contribute EUR 10 million euros in aid for cheese factor project of SIA “Baltic Dairy Board”, a subsidiary of AB “Vilkyškių pieninė.” Additionally, EUR 1.2 million in aid will be received from EU funds. The conditions for the aid will
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2024
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be considered fulfilled upon the completion of the project and upon meeting the specified indicators outlined in the agreement.
In 2024, VILVI Group submitted applications for compensation for newly acquired electric vehicles under the 'Promotion of the Use of Alternative Fuels in the Transport Sector' activity of the 2022-2030 development program managed by the Ministry of Transport of the Republic of Lithuania, Measure No. 10-001-06-01-01 'Encouraging the Acquisition of Electric Vehicles by Legal Entities". In 2024, the company received EUR 24 thousand.
In 2023, AB "Modest" and AB "Vilkyškių pieninė" signed agreements with the Public Institution - Innovation Agency "RES Production Capacity Installation," applying for support from the EU Structural Funds under the activity "Encouraging the Deployment of Renewable Energy Sources in Industrial Enterprises (Central and Western Lithuania)" of the Measure No 05-001-01-04-02 "Promoting Companies' Transition to a Climate-Neutral Economy," of the Economic Transformation and Competitiveness Development Program of the Manager of the 2022–2030 Development Program - the Ministry of Economy and Innovation of the Republic of Lithuania. A total of EUR 309 thousand in support was allocated to VILVI Group companies for this project.
25.Deferred income tax assets (liabilities)
Deferred income tax assets and liabilities calculated at a 16% tax rate in 2024 (2023: 15%) relate to the following line items (thousand EUR):
COMPANY
Assets
Liabilities
Net value
31/12/2024
31/12/2023
31/12/2024
31/12/2023
31/12/2024
31/12/2023
Property, plant and equipment
-
-
2,023
1,725
2,023
1,725
Vacation reserve
-300
-252
-
-
-300
-252
Abejotinos skolos
-101
-
-
-
-101
-
Inventories
-243
-92
-
-
-243
-92
Government grants
-60
-62
-
-
-60
-62
Right-of-use asset
-24
-
23
-
-1
-
Tax loss carry forward
-
-751
-
-
-
-751
Deferred income tax (assets)/liabilities
-728
-1,157
2,046
1,725
1,318
568
In 2024, the Group’s deferred income tax assets and liabilities were calculated at the effective tax rate of 16% valid from 2025 in accordance with the Lithuanian laws and the effective tax rate of 25% in accordance with the Latvian laws. Tax rate 25% was applied to deferred tax assets and liabilities relating to Baltic Dairy Board SIA.
The Group’s deferred tax assets and liabilities relate to the following line items (thousand EUR):
GROUP
Assets
Liabilities
Net value
31/12/2024
31/12/2023
31/12/2024
31/12/2023
31/12/2024
31/12/2023
Property, plant and equipment
-
-
2,609
1,960
2,609
1,960
Vacation reserve
-370
-316
-
-
-370
-316
Abejotinos skolos
-101
-
-
-
-101
-
Inventories
-243
-92
-
-
-243
-92
Government grants
-60
-62
-
-
-60
-62
Tax loss carry forward
-
-751
-
-
-
-751
Right-of-use asset
-23
-
22
-
-1
-
Fair value adjustment to assets and liabilities of Baltic Dairy Board SIA
-
-
225
191
225
191
Deferred income tax (assets)/liabilities
-797
-1,221
2,856
2,151
2,059
930
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2024
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COMPANY
01/01/2024
Recognised in profit or loss
Recognised in equity
31/12/2024
Property, plant and equipment
1,725
246
52
2,023
Vacation reserve
-252
-48
-
-300
Abejotinos skolos
-
-101
-
-101
Inventories
-92
-151
-
-243
Government grants
-62
2
-
-60
Right-of-use asset
-
-1
-
-1
Tax loss carry forward
-751
751
-
-
Deferred income tax (assets)/liabilities
568
698
52
1,318
COMPANY
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
GROUP
01/01/2024
Recognised in profit or loss
Recognised in equity
31/12/2024
Property, plant and equipment
1,960
346
303
2,609
Vacation reserve
-316
-54
-
-370
Abejotinos skolos
-
-101
-
-101
Inventories
-92
-151
-
-243
Government grants
-62
2
-
-60
Tax loss carry forward
-751
751
-
-
Right-of-use asset
-
-1
-
-1
Adjustment to assets and liabilities of Baltic Dairy Board SIA
191
34
-
225
Deferred income tax (assets)/liabilities
930
826
303
2,059
GROUP
01/01/2023
Recognised in profit or loss
Recognised in 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
Thousand EUR
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2024
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GROUP
COMPANY
31/12/2024
31/12/2023
31/12/2024
31/12/2023
Deferred income tax assets/(liability)
0/704
470/-442
Deferred income tax assets (liability), which
will be realised within 12 months
0/319
273/ -16
796/-3,559
751/-1,709
Deferred income tax assets (liability), which
will be realised after 12 months
727/-2,364
884/ -1,709
-2,059
-930
Net deferred income tax assets (liability)
-1,318
-568
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, 2024 amounts to EUR 741 thousand, respectively on December 31, 2023 – EUR 626 thousand.
26.Trade and other payables
Thousand EUR
GROUP
COMPANY
31/12/2024
31/12/2023
Note
31/12/2024
31/12/2023
Financial instruments
15,050
13,171
Trade payables
11,126
9,903
-
-
Trade payables to related parties
28
14,896
3,798
15,050
13,171
26,022
13,701
Non-financial instruments
5,116
4,684
Employment-related liabilities
2,850
2,575
492
781
Advance amounts received
491
781
74
73
Dividends payable
1
-
610
1,680
Taxes payable (other than income tax)*
102
77
359
394
Accrued expenses and provisions
103
71
-
-
Other amounts payable
1
2
6,651
7,612
3,548
3,506
21,701
20,783
29,570
17,207
* In December 2022, the Group received a tax-related aid measure for the repayment of the loan in amount of EUR 1,900 thousand.
As of 25 November 2024, the Group's tax relief loan was repaid.
The Group’s/Company’s exposure to foreign exchange and liquidity risks arising from trade and other payables is disclosed in Note 29.
27.Contingent liabilities
Significant contractual commitments (thousand EUR):
GROUP
COMPANY
31/12/2024
31/12/2023
31/12/2024
31/12/2023
49,952
39,577
Acquisition of PP&E
813
6,353
6,405
5,692
Purchase of raw materials
5,561
5,583
56,357
45,269
6,374
11,936
*Contracts were signed with the suppliers regarding supply of the main equipment for the new cheese production plant at the subsidiary Baltic Dairy Board SIA.
As at 31 December 2024, the Group’s/Company’s assets pledged to secure the repayment of bank borrowings and other collaterals were as follows:
GROUP:
immovable property with the carrying amount of EUR 12.922 thousand;
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2024
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movable property with the carrying amount of EUR 30,412 thousand;
inventories in turnover with the carrying amount of EUR 7,104 thousand;
lease rights to state-owned land.
COMPANY:
the Company’s immovable property located at address: P. Lukošaičio g. 14, Vilkyškiai, P. Lukošaičio g. 3, Vilkyškiai and Sodų g, 13, Eržvilkas, Jurbarko r. sav., with the carrying amount of EUR 4,718 thousand – to secure fulfilment of the Company’s obligations to Swedbank AB;
the Company’s investment property located at address: Gaurės g. 23, Tauragė, with the carrying amount of EUR 5,531 thousand, to secure fulfilment of obligations of Kelmės Pieninė AB to OP Corporate Bank plc;
the Company’s lease rights to state-owned land;
the Company’s movable property located at address: P. Lukošaičio g. 14, Vilkyškiai, with the carrying amount of EUR 10,469 thousand to secure fulfilment of the Company’s obligations to Swedbank AB;
all the Company’s inventories in turnover to secure fulfilment of the Company’s obligations to Swedbank AB;
Other collaterals:
the sureties issued by Kelmės Pieninė AB, Modest AB, Kelmės Pienas UAB and Baltic Dairy Board SIA to secure proper fulfilment of the Company’s obligations under the loan agreement with Swedbank AB. The outstanding balance of the loan was EUR 7,549 thousand as at 31 December 2024 (the surety agreements were signed in 2021, 2022 and 2023).
Sureties and guarantees issued:
surety issued to AS Citadele Banka to secure fulfilment of financial liabilities of SIA Baltic Dairy Board in amount of EUR 13,148 thousand as at 31 December 2024.
surety issued to Op Corporate bank to secure fulfilment of financial liabilities of Kelmės Pieninė AB in amount of EUR 10,029 thousand as at 31 December 2024.
The Group’s/Company’s management is aware that pursuant to the effective laws, the State Tax Inspectorate may at any time inspect the books and accounting records of the Group/Company for 5 years preceding the reporting tax period and may assess additional taxes or fines. The Group’s/Company’s management is not aware of any circumstances that might result in a potential material tax liability in this respect.
28.Transactions with related parties and management personnel
The parties of the Group/Company are related when one party has a power to exercise control over the other party or make significant influence on its financial and operation decisions.
The main related parties of the Group/Company are as follows:
Kelmės Pieninė AB,
Modest AB,
Kelmės Pienas UAB,
Pieno Logistika AB,
Baltic Dairy Board SIA,
Management personnel,
Other related parties.
(i) Transactions with related parties:
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2024
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Purchases of raw materials, products, non-current assets and services, interest expenses (thousand EUR)
GROUP
COMPANY
2024
2023
2024
2023
-
-
Kelmės Pieninė AB
37,830
34,606
-
-
Kelmės Pienas UAB
4,501
30,806
-
-
Modest AB
50,181
43,579
-
-
Pieno Logistika AB
148
142
-
-
Baltic Dairy Board SIA
1,231
20
2
1
Management personnel
2
1
1,170
1,076
Other related parties
1,170
1,076
1,172
1,077
95,063
110,230
(ii) Transactions with related parties:
Sale of raw materials, products, non-current assets and services, interest income (thousand EUR)
GROUP
COMPANY
2024
2023
2024
2023
-
-
Kelmės Pieninė AB
7,350
5,659
-
-
Kelmės Pienas UAB
6,982
12,126
-
-
Modest AB
41,492
33,752
-
-
Pieno Logistika AB
70
143
-
-
Baltic Dairy Board SIA
7,937
4,088
23
45
Other related parties
23
45
23
45
63,854
55,813
(iii) Year-end balances of transactions with related parties:
GROUP
COMPANY
31/12/2024
31/12/2023
31/12/2024
31/12/2023
-
-
Trade and other amounts payable
14,896
3,799
-
-
(Kelmės Pieninė AB)
11,424
3,762
-
-
(Modest AB)
3,466
-
-
-
(Pieno Logistika AB)
6
37
-
-
Trade and other receivables
5,597
499
-
-
(Kelmės Pienas UAB)
440
377
-
-
(Modest AB)
-
63
-
-
(Baltic Dairy Board SIA)
5,157
59
-
-
Loan receivable (Baltic Dairy Board SIA, including interest)
1,170
1,111
124
54
Trade and other payables (to other related parties)
124
54
-
600
Loan receivable (including interest and administration fee from
other related parties)
-
600
Assets pledged, guarantees/sureties issued by the Group/Company to secure the fulfilment of financial liabilities of related parties, and assets pledged, guarantees/sureties issued by related parties to secure the fulfilment of financial liabilities of the Company are disclosed in Note 27.
The main terms and conditions for the Group’s/Company’s amounts payable and receivable under the loan agreements are as follows:
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The Company granted a loan of EUR 980 thousand to the subsidiary Baltic Dairy Board SIA. The loan has to be repaid by 31 January 2026. The outstanding balance of the loan was EUR 980 thousand as at 31 December 2024. Interest receivable in 2024 was EUR 190 thousand.
There were no Group’s/Company’s loans receivable from other related parties as of 31 December 2024 (EUR 600 thousand at 31 December 2023).
In 2024, personnel expenses included payments of EUR 1,080 thousand and EUR 783 thousand to the Group‘s and the Company‘s management personnel, including social security contributions (2023: EUR 728 thousand and EUR 501 thousand, respectively).
In 2024, the Group’s and the Company’s payments for employees to Pillar III investment funds under the defined plan for contributions amounted to EUR 419 thousand (2023: EUR 194 thousand).
29.Financial instruments and risk management
Credit risk
The maximum exposure to credit risk is the net book amount of financial assets designated at 31 December 2024 as financial assets measured at amortised cost. The maximum exposure to credit risk at the reporting date was as follows:
GROUP
Net book amount
EUR ‘000
Note
31/12/2024
31/12/2023
Non-current amounts receivable
17
-
600
Trade amount receivable
19
17,460
14596
Other amount receivable
19
4,951
2,611
Cash and cash equivalents
21
18,872
8,725
41,283
26,532
BENDROVĖ
Likutinė vertė
Tūkst. Eur
Pastaba
2024.12.31
2023.12.31
Ilgalaikės gautinos sumos
17
1,170
1,711
Prekybos gautinos sumos
19
19,352
11,878
Kitos gautinos sumos
19
3,031
5,808
Pinigai ir pinigų ekvivalentai
21
13,286
2,854
36,839
22,251
Impairment losses
The Group/Company establishes provisions for impairment losses representing the estimate of incurred losses in respect of trade and other receivables. Such provisions includes only specific losses associated with individual significant items of trade and other receivables. The ageing analysis of trade and other receivables and non-current amounts receivable at the reporting date is as follows:
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GROUP
EUR ‘000
Total amount
Impairment
Total amount
Impairment
31/12/2024
31/12/2024
31/12/2023
31/12/2023
Related parties:
Not past due
-
-
688
-
Past due 0-30 days
-
-
-
-
Past due 31-60 days
-
-
-
-
More than 60 days
-
-
-
-
-
-
688
-
Other parties:
Not past due
15,509
-
13,059
-
Past due 0-30 days
2,002
-341
1,502
-
Past due 31-60 days
165
-
82
-
More than 60 days
413
-288
172
-307
18,089
-629
14,815
-307
18,089
-629
15,503
-307
Impairment losses related to trade and other receivables amounted to EUR 629 thousand as of 31 December 2024 (as of 31 December 2023, it was EUR 307 thousand). In recognizing impairment, debts are evaluated based on the expected credit loss model, considering the debtor's financial situation, payment history, the duration of defaults, and economic conditions that may impact the likelihood of debt recovery.
COMPANY
EUR ‘000
Total amount
Impairment
Total amount
Impairment
31/12/2024
31/12/2024
31/12/2023
31/12/2023
Related parties:
Not past due
2,982
-
2,152
-
Past due 0-30 days
-
-
59
-
Past due 31-60 days
1,366
-
-
-
More than 60 days
2,420
-
-
-
6,768
-
2,211
-
Other parties:
Not past due
11,815
-
10,011
-
Past due 0-30 days
1,991
-341
1,420
-
Past due 31-60 days
165
-
82
-
More than 60 days
412
-288
172
-307
14,383
-629
11,685
-307
21,151
-629
13,896
-307
Impairment losses related to trade and other receivables amounted to EUR 629 thousand as at 31 December 2024 (2023: EUR 307 thousand).
Movements on the account of provisions for impairment of trade and other receivables during the year were as follows:
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VILVI GROUP ANNUAL REPORTS
2024
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GROUP
EUR ‘000
COMPANY
2024
2023
Net book amount
2024
2023
-307
-99
Balance at 1 January
-307
-99
-461
-268
Impairment losses recognised
-461
-268
12
-
Write-off of bad debts
12
-
127
60
Impairment losses reversed
127
60
-629
-307
Balance at 31 December
-629
-307
Based on historical payment statistics and detailed analysis of customer solvency, the Company’s management considers that the amounts which are past due more than 30 days and not impaired are still recoverable. As of 31 December 2024, the balance of irrecoverable debts amounted to EUR 629 thousand (as of 31 December 2023 - EUR 307 thousand).
Liquidity risk
The table below analyses financial liabilities, including interest charged thereon, based on their contractual maturities:
At 31 December 2024
GROUP
EUR ‘000
Net book amount
Contractual cash flows
Less than 6 months
6-12 months
1-2 years
2-5 years
Financial liabilities
Bank borrowings
36,929
-41,025
-2,592
-2,473
-13,760
-22,200
Other borrowings
-
-
-
-
-
-
Lease liabilities
2,293
-2,471
-481
-345
-693
-952
Factoring
-
-
-
-
-
-
Trade payables
15,050
-15,050
-15,050
-
-
-
54,272
-58,546
-18,123
-2,818
-14,453
-23,152
At 31 December 2023
GROUP
EUR ‘000
Net book amount
Contractual cash flows
Less than 6 months
6-12 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
At 31 December 2024
COMPANY
EUR ‘000
Net book amount
Contractual cash flows
Less than 6 months
6-12 months
1-2 years
2-5 years
Financial liabilities
Bank borrowings
7,549
-8,513
-1,086
-990
-1,299
-5,137
Lease liabilities
1,804
-1,936
-403
-273
-560
-700
Factoring
-
-
-
-
-
-
Trade payables
26,022
-26,022
-26,022
-
-
-
35,375
-36,471
-27,511
-1,263
-1,859
-5,837
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VILVI GROUP ANNUAL REPORTS
2024
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At 31 December 2023
COMPANY
EUR ‘000
Net book amount
Contractual cash flows
Less than 6 months
6-12 months
1-2 years
2-5 years
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
As at 31 December 2024, the Group’s and the Company’s current assets exceeded the current liabilities by EUR 29,337 thousand and EUR 11,301 thousand, respectively. As at 31 December 2024, the Group’s and the Company’s borrowings and lease liabilities totalled EUR 39,222 thousand and EUR 9,353 thousand, respectively. According to the current loan and other agreements with banks, in 2025, the Group and the Company are expected to repay EUR 4,391 thousand and EUR 2,385 thousand, respectively (see Note 23).
Borrowings and lease liabilities are expected to amount to around EUR 60 million as at 31 December 2025. With due consideration of all the projections for 2025, the Group’s net debt to EBITDA ratio will be around 2.6 as at 31 December 2025.
Foreign exchange risk
Exposure to foreign exchange risk at the exchange rates effective at 31 December 2024:
GROUP (COMPANY)
EUR ‘000
USD
PLN
2024
2023
2024
2023
Trade and other receivables, net of tax
1,819
1,451
-
38
Cash and cash equivalents
-
-
-
-
Trade payables
-
-
-
-
Net exposure
1,819
1,451
-
38
During the year the exchange rates against the euro were as follows:
Average
2024
2023
USD
1.0823
1.0809
PLN
4.3059
4.5441
The exchange rates against the euro applied as at 31 December:
Average
2024
2023
USD
1.0444
1.105
PLN
4.2655
4.3395
Analysis of sensitivity to changes in the exchange rates
The Company’s foreign exchange risk arises from purchases and sales denominated in currencies other than the euro. In 2024, the Company’s transactions were mostly conducted in the euros, and therefore, the Company was not exposed to significant foreign exchange risk.
Interest rate risk
The Group’s and the Company’s borrowings bear variable interest rates linked to EURIBOR + margin.

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VILVI GROUP ANNUAL REPORTS
2024
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Interest rates applied to the Group’s and the Company’s financial instruments as at 31 December 2024 were as follows:
GROUP
COMPANY
Net book amount
EUR ‘000
Net book amount
31/12/2024
31/12/2023
31/12/2024
31/12/2023
Financial instruments with fixed interest rates
-
-
Loan granted to Baltic Dairy Board SIA
980
980
-
-
Current portion of loan granted
-
-
-
-
Short-term loan granted to management personnel
-
-
-
-
Current borrowings of management personnel
-
-
-
-
980
980
GROUP
COMPANY
Net book amount
EUR ‘000
Net book amount
31/12/2024
31/12/2023
31/12/2024
31/12/2023
Financial instruments with variable interest rates
-36,929
-18,515
Bank borrowings
-7,549
-3,499
-
-426
Factoring
-
-426
-2,293
-1,244
Lease liabilities
-1,804
-1,160
-39,222
-20,185
-9,353
-5,085
-39,222
-20,185
-8,373
-4,105
In 2024, the Group paid interest of EUR 1,301 thousand on borrowings. In 2025, interest payments are projected to approximate EUR 1.2 million, provided there is a similar level of borrowings.
Analysis of sensitivity of cash flows to instruments bearing variable interest rates
A shift in interest rates by +/- 100 basis points (bps) would increase/decrease equity and profit/(loss) by the amounts set out in the table below. This analysis assumes that all other variables, in particular exchange rates, are held constant. The analysis for 2023 was performed using the same basis.
GROUP
COMPANY
Profit (loss)
Impact (EUR ’000)
Profit (loss)
100 bp
100 bp
100 bp
100 bp
increase
decrease
increase
decrease
At 31 December 2024
-392
392
Financial instruments bearing variable interest rates
-84
84
At 31 December 2023
-202
202
Financial instruments bearing variable interest rates
-41
41
Fair value of financial instruments / Fair value hierarchy
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the main (or most advantageous) market between market participants at the measurement date, regardless of whether the price is directly observed or determined using a valuation methodology.
The table below analyses financial instruments carried at fair value, by valuation method.
The following methods and assumptions are used by the Group/Company to determine the fair value of these financial instruments:
Financial instruments that are not measured at fair value
The main financial instruments of the Group/Company that are not measured at fair value are trade and other amounts receivable, term deposits, trade and other amounts payable, non-current and current borrowings. The Group’s/Company’s management is of the opinion that the carrying amounts of these financial instruments approximate their fair values because borrowing costs are linked to an interbank lending rate EURIBOR, and other financial assets and liabilities are of short-term nature; therefore, their fair value variation is not significant. Fair value
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VILVI GROUP ANNUAL REPORTS
2024
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is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement hierarchy has three levels:
Level 1 includes fair value of assets based on quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2 includes fair value of assets based on directly or indirectly observable inputs;
Level 3 includes fair value of assets based on unobservable inputs.
Financial instruments measured at fair value
The Group/Company has no financial instruments measured at fair value.
At 31 December 2024
GROUP
EUR ’000
Level 1
Level 2
Level 3
Total
Non-current amounts receivable
-
-
-
-
Trade and other receivables
-
-
17,460
17,460
Cash and cash equivalents
18,872
-
-
18,872
Borrowings and lease liabilities
-
-
-39,222
-39,222
Trade and other payables
-
-
-15,050
-15,050
18,872
-
-36,812
-17,940
At 31 December 2023
GROUP
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
-
-
-20,186
-20,186
Trade and other payables
-
-
-13,171
-13,171
8,725
-
-18,161
-9,436
At 31 December 2024
COMPANY
EUR ’000
Level 1
Level 2
Level 3
Total
Non-current amounts receivable
-
-
1,170
1,170
Trade and other receivables
-
-
19,352
19,352
Cash and cash equivalents
13,286
-
-
13,286
Borrowings and lease liabilities
-
-
-9,353
-9,353
Trade and other payables
-
-
-26,022
-26,022
13,286
-
-14,853
-1,567
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VILVI GROUP ANNUAL REPORTS
2024
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At 31 December 2023
COMPANY
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 equivalents
2,854
-
-
2,854
Borrowings and lease liabilities
-
-
-5,085
-5,085
Trade and other payables
-
-
-13,701
-13,701
2,854
-
-5,197
-2,343
Capital management
The policy of the management bodies is to ensure a significant share of equity compared to borrowings in order to maintain trust of investors, creditors and the market, to facilitate development of operations in the future, and to ensure compliance with the externally imposed capital requirements. Capital is defined as equity attributable to equity holders.
The management bodies also aim to maintain balance between a higher rate of return, which could be achieved through more borrowings, and security, which is ensured by a larger amount of equity.
The Group/Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of their activities. To maintain or adjust the capital structure, the Group/Company may adjust the amount of dividend payments to shareholders, return capital to the shareholders or issue new shares. There were no changes in the capital management objectives, policies or processes during the financial years ended 31 December 2024 and 31 December2023.
The Law on Companies of the Republic of Lithuania require that the Group/Company keep equity at no less than 50% of the share capital.
The Group has a commitment to comply with the external capital requirements set by the banks. Based on the requirements of the banks (equity – revaluation reserve) / (total assets) ratio should not be less than 30%. Management monitors the compliance with the requirements set for the Group. Further details are given in Note 22.
30.Impact of the war in Ukraine and Israel
In the opinion of the Group‘s and the Company‘s management, the geopolitical changes in 2023 had no significant impact on the Group‘s and the Company's operations
At the end of February 2022, after the Russian Federation announced a military operation in Eastern Ukraine, VILVI Group's strong and unequivocal position and support for Ukraine allowed to strengthen relations with existing partners in Ukraine and gain greater trust from new trade partners. At the beginning of the war, projects with the largest retailers were frozen until fourth quarter of 2022, were updated and the product range expanded. The Group's sales to Ukraine in 2022 amounted to EUR 477 thousand, and in 2023, they increased by 2.5 times to EUR 1,169 thousand. In 2024, sales further increased by 16.5% to EUR 1,362 thousand.
No product exports to Russia and Belarus took place in 2022–2024.
In October 2023 the outbreak of the war in Israel did not have a significant impact on the Group's sales. At the beginning of the war, the amount of production sold fell from 200 tons in September to 72 tons in October and 48 tons in December, but the goods were diverted to other markets. In 2024, sales income from Israeli market customers accounted for 1.6% of total sales, with more than 970 tons of cheese products sold for over EUR 3.8 million.
The management did not identify any other additional threats to business continuity of the Group and the Company. The management monitors the changing situation on a daily basis and, if necessary, makes decisions to ensure the stable operation of the Group and the Company.
31.Events after the reporting period
VILVI Group's subsidiary, Vilkyškių pieninė AB entered into a claim assignment agreement with Šiaulių bankas AB and the deed of transfer and acceptance of the documents was signed on 24 February 2025. The claim consists of unpaid obligations of Marijampolės pieno konservai UAB and Lukšių pieninė UAB to the bank, and it is secured by the assets of these companies and other additional guarantees.
The transaction does not have any significant impact on the financial situation of Vilkyškių pieninė AB as the claim was acquired using the Company's own funds, is appropriately secured against credit risk, and the Company plans to generate returns from these funds consistent with similar debt capital transactions. The invested funds also do not affect the Company's assets or its competitive position in the market.
196
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 2024, 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 8 April 2025.
What we have audited
The Group’s consolidated and the Company’s separate financial statements comprise:
● the consolidated and separate statements of financial position as at 31 December 2024;
● 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 and separate 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 and Other Assurance Services that are relevant to our
audit of the consolidated and separate 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 and Other Assurance Services.
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 2024 to 31 December 2024, are disclosed in note 8 to the consolidated and separate financial
statements.
Our audit approach
Overview
● Overall Group and Company materiality: Euro 1,570 thousand
and Euro 1,570 thousand respectively
• We performed a full scope audit of the Company and its two
subsidiaries. At the Group level, based on our assessment of risk
of material misstatement of the financial statements and the
significant accounts and disclosures, we tested the consolidation
process and performed selected specified procedures over two of
the subsidiaries in addition to the full scope audit entities.
• 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 1,570 thousand (in 2023 – EUR 1,480 thousand).
Overall Company materiality
EUR 1,570 thousand (in 2023 – EUR 1,480 thousand).
Materiality
Group
scoping
Key audit
matters
How we determined it
0.64% of the Group’s and 0.60% of the Company’s total
revenue.
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 0.64% and 0.60%, which is within
the range of acceptable quantitative materiality thresholds for
this benchmark.
We communicated to the Audit Committee that we would report to them misstatements identified during
our audit above EUR 78 thousand for the Group and the Company 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
Impairment testing of goodwill (Group)
Refer to accounting policy on impairment
testing on page 158, accounting estimates and
assumptions on page 162 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 2024) 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
volume growth rate, the timing of future
operating expenditure and the most
appropriate discount and long-term growth
rates.
As at 31 December 2024, 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.
Inventory write-down to net realisable value
(Group and Company)
Refer to accounting policy on inventory on
page 155, accounting estimates and
assumptions on page 162 and note 18
‘Inventories’ in the financial statements.
We focused on this area due to the size of the
inventory balance (EUR 14,254 thousand and
EUR 7,104 thousand as at 31 December 2024
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 2024 the Group’s and the
Company’s inventory (finished goods) write-
down to net realisable value allowance
amounted to EUR 2,414 thousand and EUR
1,501 thousand, respectively.
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 consolidated 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.
For Group audit purposes, based on our risk and materiality assessment we determined that a full scope
audit was required for the Company and its subsidiaries Kelmės Pieninė AB and Modest AB. For
Kelmės pienas UAB and Baltic Dairy Board SIA we have carried testing on selected balances and
transactions which were assessed by us as material from the Group audit perspective and assessed
other significant areas that may impact the consolidated financial statements. The remaining component
of the Group was immaterial. Our audit addressed 97% of the Group’s revenues and 98% of the Group’s
total assets.
Reporting on other information including the consolidated management report
Management is responsible for the other information. The other information comprises the consolidated
management report, including the information on corporate governance matters, remuneration and
consolidated sustainability matters (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
management 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 management report, including the information on corporate governance
matters and remuneration and excluding the information on consolidated sustainability matters on which
the separate assurance report on consolidated sustainability statement is issued by us on 8 April 2025,
we considered whether it includes the disclosures required by the Law of the Republic of Lithuania on
Reporting by Undertakings and by Groups of Undertakings.
Based on the work undertaken in the course of our audit, in our opinion:
● the information given in the consolidated management report for the financial year for which the
financial statements are prepared is consistent with the financial statements; and
● the consolidated management report, including the requirements for the information on corporate
governance matters and remuneration and excluding the requirements for the information on
consolidated sustainability matters, has been prepared in accordance with the Law of the Republic of
Lithuania on Reporting by Undertakings and by Groups of Undertakings.
In addition, in light of the knowledge and understanding of the Company and the Group and their
environment obtained in the course of the audit, we are required to report if we have identified material
misstatements in the consolidated management 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.
● Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the
financial information of the entities or business units within the Group as a basis for forming an
opinion on the consolidated financial statements. We are responsible for the direction, supervision
and review of the audit work performed for the purpose 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 and separate financial
statements with the requirements of the European Single Electronic Reporting Format
We have been engaged based on 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 and Company’s separate
financial statements, including the consolidated management report, for the year ended 31 December
2024 (the “Single Electronic Reporting Format of the consolidated and separate financial statements”).
Description of a subject matter and applicable criteria
The Single Electronic Reporting Format of the consolidated and separate 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 and separate 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 and separate 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 and separate 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 and separate 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 and separate 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 and separate 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 and separate 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 and separate financial statements,
including the preparation of the XHTML format and marking up the consolidated and separate
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 and separate financial
statements for the year ended 31 December 2024 complies, in all material aspects, with the ESEF
Regulation.
Appointment
We were first appointed as auditors of the Company and the Group on 28 April 2017. Our appointment
has been renewed annually by shareholder resolution representing a total period of uninterrupted
engagement appointment of 8 years. Our appointment for the year ended 31 December 2024 was
approved by the shareholder’s resolution on 26 April 2024.
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
8 April 2025
The auditor's electronic signature is used herein to sign only the Independent Auditor's Report