Annual reporting
Consolidated management report and consolidated and parent company financial statements for the year
ended 31 December 2025, prepared in accordance with the International Financial Reporting Standards
adopted for application in the European Union.
2025
VILVI GROUP ANNUAL REPORTS
2025
1
CONTENT
MANAGEMENT REPORT
1. Overview.........................................................................................3
1.1. About VILVI Group...............................................................3
1.2. CEO’S statement................................................................4
1.3. Strategy and goals.............................................................5
1.4. VILVI Group short history..............................................7
1.5. Solutions for customers.................................................8
1.6. Highlights 2025...................................................................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................................................34
2.9. Dividends.............................................................................35
2.10. Other information about management.......35
2.11. Risk management.........................................................37
4. Remuneration.......................................................................43
4.1. Board members’ remuneration............................44
4.2. Remuneration of employees of Company
and VILVI Group.......................................................................45
5. Sustainability Statement.......................,...................47
5.1. General disclosures........................................................49
5.2. Environment.....................................................................62
5.3. Social......................................................................................95
5.4. Governance......................................................................122
5.5 Annexes...............................................................................126
Additional information:
Alternative indicators.........................................................136
Compliance with the Corporate Governance
Code...............................................................................................137
FINANCIAL STATEMENTS
1. Management’s statement..................................................157
2. Consolidated and the parent company’s
separate financial statements:
2.1. Statements of financial position........................................158
2.2. Statements of profit or loss...................................................159
2.3. Statements of other comprehensive income..........160
2.4. Separate statement of changes in equity..................161
2.5. Consolidated statement of changes in equity........162
2.6. Statements of cash flows.......................................................163
2.7. Notes to financial statements……………………………………..165
VILVI GROUP ANNUAL REPORTS
2025
2
MANAGEMENT
REPORT
− RESULTS | 11
− GOVERNANCE | 20
− REMUNERATION | 43
− SUSTAINABILITY STATEMENT | 47
− COMPLIANCE WITH THE CORPORATE
GOVERNANCE CODE | 136
VILVI GROUP ANNUAL REPORTS
2025
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
2025
4
CEO’S STATEMENT
The past year was a period of focused growth and
significant change for VILVI Group. In 2024, the Group
achieved financial results that exceeded expectations,
while 2025 was marked by historic growth. We are proud
that this focus on growth continues to create long-term
value for all stakeholders — shareholders, employees,
partners, and the communities in which we operate.
This year represented a breakthrough and a phase of
intensive investment for the Group. We made substantial
investments to strengthen and expand operations, while
also recording 17% revenue growth and achieving EBITDA
of EUR 16.4 million.
One of our most notable achievements was completing
the construction of a new cheese factory in Bauska, Latvia
— an investment exceeding EUR 60 million, making it the
largest project in VILVI Group’s history. This modern,
automated and robotized factory signifies a new era for
the Group in terms of efficiency, quality and
competitiveness.
After extensive groundwork, we were granted the Competition Council’s permission to acquire Marijampolės Pieno
Konservai UAB. This acquisition significantly supports the implementation of our expansion strategy and positions
VILVI Group as one of the leading dairy product manufacturers in the Baltic region.
In 2025, VILVI Group continued to consistently develop its export strategy. We consolidated and expanded export
volumes to more than 60 countries and entered new markets, including Japan.
Our growth in production volumes and the expansion of operations resulted in a significant increase in the amount
of raw material purchased. In 2025, milk purchases grew by 24% compared to 2024. Over 48% of raw milk was
imported, with Estonia becoming increasingly important in our supply structure, indicating greater supply
diversification.
VILVI Group remains committed to implementing operational efficiency initiatives aimed at improving processes and
enhancing organisation and planning. As operations and production volumes expand, efficient process management
becomes crucial to maintaining growth and competitiveness. Employee engagement, accountability, and adherence
to operational principles are key drivers of improved labour productivity and overall results. VILVI Group continues to
expand the use of artificial intelligence solutions to optimize processes, ensure high product quality, analyse data
more effectively, and support well-founded decision-making.
Sustainability remains an integral part of the Group’s operations. We adapt rapidly to evolving regulations, provide
transparent and responsible sustainability reporting in line with the ETAS standard, and consistently develop our
sustainability governance model. We are becoming a Group of companies that creates hundreds of jobs for people
living in the regions of Lithuania and Latvia. We actively contribute to regional development, attract talent, and foster
local economic growth. Through our teams’ daily efforts, we create value for society— producing high-quality food
products that remain essential at all times. This work is meaningful, and its impact is visible and significant.
Aligned with our brand strategy, the VILVI brand was strengthened in 2025 across local and export markets and all
product categories. One standout initiative was a unique and widely discussed project with Lithuania’s most listened-
to radio station M1 — the creation of blue milk, a product with no equivalent in the country.
The year 2026 brings new opportunities. We will focus on expanding the capacity of the newly launched cheese plant
in Bauska and boosting product sales. Following the acquisition of Marijampolės Pieno Konservai UAB, we will
strengthen common operating standards, enhance efficiency, and leverage the growth potential across the entire
Group.
Operating in an ever-changing geopolitical and competitive environment, we are committed to consistently
strengthening our competitiveness. We continue to systematically diversify and expand our markets as well as
broaden our product portfolio. The addition of Marijampolės Pieno Konservai UAB has enriched our portfolio with
unique products we had not previously manufactured — milk preserves and an expanded range of dry dairy products,
including milk powder. We also plan to commission the largest butter production line in the Baltic region. In 2026, we
will also continue advancing in the field of biotechnology, aiming to extract maximum value from every drop of milk.
VILVI GROUP ANNUAL REPORTS
2025
5
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.
RESPONSIBILITY AND RESPECT. We take responsibility for our actions and their impact on others. We treat everyone
with dignity, without exception, and value each person’s opinion and contribution. By following these principles, we
build strong relationships, foster productive teamwork, and strive toward shared goals.
RESPONSIVENESS TO NEEDS. We listen, observe, and take action. We consider situations and real circumstances,
aiming for high-quality results. We combine individual professionalism with effective teamwork.
CURIOSITY. We are open to knowledge. Continuous learning and curiosity enable us to grow, broaden our horizons,
and discover new ways to act and develop.
BETTER THAN YESTERDAY. Every day we strive to perform better than the day before. This helps us grow and
encourages us to push our boundaries. This commitment also includes each of our personal promises to create
increasing value for ourselves and for the entire organization.
Invironment 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:
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
High-quality development and
consistent growth of
competitiveness
Ingredients and product
solutions for businesses
worldwide
Innovation and
development of new
solutions
Our values
Responsibility and
respect
VILVI GROUP ANNUAL REPORTS
2025
6
• Setting environmental impact reduction goals;
• Assessment of climate change scenarios and adaptation to their potential impact on operational locations and
the Group’s activities;
• Climate change adaptation planning and management. In the short term, additional human and financial
resources are required to respond to evolving regulations. However, the majority of investments are planned for
the long term, focusing on implementing meaningful changes, increasing resource efficiency and circularity, and
transitioning to renewable energy.
For more information, see the Sustainability Statement, pages 71-77.
VILVI GROUP ANNUAL REPORTS
2025
7
VILVI GROUP SHORT HISTORY
VILVI GROUP ANNUAL REPORTS
2025
8
SOLUTIONS FOR CUSTOMERS
D
FLAGSHIP PROJECT in 2025| Blue milk
The blue milk drink was created as a result of an
exclusive partnership between VILVI Group and one of
the most popular Lithuanian radio stations, M-1. The
traditional white milk was naturally colored using blue
spirulina, which enabled the creation of a vivid blue
milk drink. A total of 30 tons of the drink were produced
and filled into 60,000 packages. Over the course of one
month, a blue wave spread across Lithuania: 6.5 million
views on social media, a contest for the “most turned
blue” school, and a prize of 200 blue milk packages
awarded to the winning school.
•
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
•
• Industrial cream
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
2025
9
HIGHLIGHTS 2025
The largest investment project in the history of VILVI Group
completed
In 2025, the largest investment project in the history of VILVI
Group was completed – a cheese production facility worth more
than EUR 60 million in Bauska, Latvia, located in the territory of
the Group’s subsidiary, Baltic Dairy Board. Following the
successful completion of construction works, installation of
advanced production equipment, and the performance of all
required technological tests, continuous cheese production
commenced at the end of 2025.
The new facility is automated, robotised and equipped with the
latest technologies. This strategically significant investment
strengthens the Group’s competitiveness and expansion in
international markets. In total, more than 100 new jobs will be
created at the new plant, with planned annual cheese
production capacity of up to 18 thousand tonnes. The products
will be exported to more than 40 countries worldwide.
The State Revenue Service of Latvia has included Baltic Dairy
Board SIA, owned by VILVI Group, in the A category list. This
confirms that the company’s operations meet the highest
standards of transparency and responsible tax compliance.
Vilkyškių pieninė AB signed an agreement for
the acquisition of shares in Marijampolės pieno
konservai UAB
− In February 2025, Vilkyškių pieninė AB, a company
of VILVI Group, entered into an assignment
agreement with “Artea bank” AB. These rights
consisted of outstanding obligations of
Marijampolės pieno konservai UAB and Lukšių
pieninė UAB to the bank. As of 31 December 2025,
the claim right comprised only the outstanding
obligations of Marijampolės pieno konservai UAB.
− In May 2025, Vilkyškių pieninė AB signed an
agreement with Karpis UAB regarding the
acquisition of ordinary registered shares of
Marijampolės pieno konservai UAB.
− On 13 November 2025, the permission of the
Competition Council of the Republic of Lithuania
to implement the concentration was obtained.
Upon acquisition of 100% of the shares of
Marijampolės pieno konservai UAB, sole control of
the company was acquired.
− After the reporting period (on 16 January 2026),
Vilkyškių pieninė AB completed the transaction
for the acquisition of shares of Marijampolės
pieno konservai UAB. 100% of the company’s
shares were acquired.
RSPO certificates have been granted to Vilkyškių
pieninė AB and Kelmės pienas UAB, confirming
that the palm oil used in the companies’ products
is sourced responsibly with respect to both the
environment and the people working in this sector.
Kelmės pienas UAB, the only company within VILVI Group
producing fresh dairy products, celebrates its 100th
anniversary
New flavours, updated “Murr…” curd snack
packaging design and brand.
− VILVI Less Sugar: yogurt with matcha and
strawberries, with pears and bananas, and a
strawberry curd snack;
− Murr... curd snacks: matcha, matcha with
strawberries, strawberry panna cotta, and
caramel popcorn flavours;
− VILVI drinking yogurt with mango and passion
fruit;
− VILVI natural yogurt;
− VILVI Memel Blue processed cheese with truffles;
− Vilkyškiai Kefir-style curd snack and cream
cheese.
Modest AB and Vilkyškių pieninė AB, part of the VILVI Group, are
among the strongest companies in Lithuania’s food industry
sector in the “Lithuanian Sector Leaders 2025” rankings.
In 2025, VILVI Group participated in four international
exhibitions:
• „Gulfood 2025“ (DubaI, UAE);
• „Anuga“ (Cologne, Germany);
• „Gulfood Manufacturing“ (DubaI, UAE);
• „Fi Europe 2025“ (Paris, France).
During the exhibitions, the Group showcased products
manufactured by the Group’s companies: cheese products,
dried dairy products, protein curd snacks, and Gymon.
VILVI GROUP ANNUAL REPORTS
2025
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
2021
2022
2023
2024
2025
Opening price, EUR
2.46
3.67
4.79
5.26
8.12
Highest price, EUR
3.68
4.91
5.36
8.24
12.8
Lowest price, EUR
2.4
3.00
4.12
5.02
8.04
Average price, EUR
2.9
4.12
4.88
6.36
10.47
Last price, EUR
3.66
4.79
5.24
8.14
11.75
Turnover, units
1,060,431
637,222
337,974
498,359
895,228
Turnover, MEUR
3.08
2.63
1.65
3.17
9.37
Capitalization, MEUR
43.71
57.21
62.58
97.22
140.33
Vilkyškių pieninė AB share price change and turnover in 2023-2025.
Comparison of Vilkyškių pieninė AB share prices and Nasdaq OMX Vilnius, AB indices in 2023-2025.
0
50
100
150
200
250
300
350
400
450
500
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
2023-01 2023-06 2023-11 2024-04 2024-09 2025-02 2025-07 2025-12
Share price, EUR Turnover, thsd., EUR
0%
50%
100%
150%
200%
250%
300%
2023-01 2023-06 2023-11 2024-04 2024-09 2025-02 2025-07 2025-12
OMX Vilnius VLP1L
VILVI GROUP ANNUAL REPORTS
2025
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
2025
12
OVERVIEW OF VILVI GROUP RESULTS
EUR 286.9 million
consolidated sales
turnover
EUR 10.9 million
consolidated net
profit
EUR 16.4 million in
consolidated
EBITDA
85% of exports to >
60 countries
EUR 21.5 million in
taxes paid to the
state 2025
>434 thousand
tons of purchased
milk
EUR 33.6 million in
development and
supporting
investments
during the
reporting period
In 2025, sales revenue increased by 16.9% compared to 2024. During the reporting period, VILVI Group’s consolidated
net profit decreased to EUR 10.9 million, i.e. it was 57.4% lower than in 2024. In 2025, the Group’s EBITDA decreased by
51.1% to EUR 16.4 million. The main factors behind the decline in the Group’s EBITDA and net profit were lower export
prices for milk fat products and higher raw milk purchase prices.
See the comparison of other indicators of the Company and the Group in p. 13-14 respectively.
156.0
234.1
210.5
245.4
286.9
2021 2022 2023 2024 2025
Group revenue, MEur
14.1
19.3
21.0
33.6
16.4
5.5
12.7
14.7
25.7
10.9
2021 2022 2023 2024 2025
Group EBITDA, MEur Group net profit, MEur
VILVI GROUP ANNUAL REPORTS
2025
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.
2021
2022
2023
2024
2025
Change in
2025/2024
Change in
2024/2023
Revenue, thousand EUR
196,442
288,643
245,072
262,079
322,037
22.9%
6.9%
Gross profit, thousand EUR
9031
17,195
9,013
16,342
4,692
-71.3%
81.3%
Gross profit margin, %
4.6%
6.0%
3.7%
6.2%
1.5%
-4.7 p.p.
2.5 p.p.
EBITDA, thousand EUR
13,079
15,530
4,500
19,216
18,827
-2.0%
327.0%
EBITDA margin, %
6.7%
5.4%
1.8%
7.3%
5.8%
-1.5 p.p.
5.5 p.p.
Operating profit(EBIT), thousand EUR
11,450
13,893
2,912
17,512
16,632
-5.0%
501.4%
EBIT margin, %
5.8%
4.8%
1.2%
6.7%
5.2%
-1.5 p.p.
5.5 p.p.
Profit before tax (EBT), thousand EUR
11,194
13,733
2,574
17,057
17,089
0.2%
562.6%
EBT margin, %
5.7%
4.8%
1.1%
6.5%
5.3%
-1.2 p.p.
5.4 p.p.
Net profit (loss), thousand EUR
10,774
12,599
2,527
16,359
17,233
5.3%
547.4%
Net profit margin, %
5.5%
4.4%
1.0%
6.2%
5.4%
-0.8 p.p.
5.2 p.p.
Net profit per share, Eur
0.9
1.05
0.21
1.37
1.44
5.1%
547.5%
The ratio of the share’s market price and
profit per share – P/E ratio
-
-
-
-
-
-
-
Return on equity (ROE), %
33.5%
29.9%
5.4%
30.8%
26.6%
-4.2 p.p.
25.4 p.p.
Return on assets (ROA), %
19.9%
19.4%
3.6%
19.1%
16.1%
-3.0 p.p.
15.5 p.p.
Return on capital employed (ROCE), %
28.3%
27.7%
5.7%
25.3%
22.6%
-2.7 p.p.
19.6 p.p.
Debt ratio
0.37
0.33
0.34
0.41
0.38
-7.7%
22.7%
Debt to equity ratio
0.19
0.12
0.11
0.16
0.10
-37.5%
46.7%
Liquidity ratio
1.47
1.87
1.58
1.35
1.37
1.5%
-14.7%
Asset turnover
3.31
4.10
3.49
2.59
2.84
9.7%
-25.9%
Capital to asset ratio
0.63
0.67
0.66
0.59
0.62
5.1%
-11.2%
Financial debts, thousand EUR
6,941
5,665
5,085
9,353
7,254
-22.4%
83.9%
Net debt, thousand EUR
6,362
5,340
2,231
-3,933
4,566
-216.1%
-276.3%
Net debt/EBITDA
0.49
0.34
0.50
-0.20
0.24
-220.0%
-140.3%
p.p. – percentage points
Information about the calculation of AVR and what useful information they provide is provided in the section
Additional information, page 136-137.
VILVI GROUP ANNUAL REPORTS
2025
14
PERFORMANCE RESULTS OF VILVI GROUP
2021
2022
2023
2024
2025
Change in
2025/2024
Change in
2024/2023
Revenue, thousand EUR
156,045
234,083
210,536
245,429
286,931
16.9%
16.6%
Gross profit, thousand EUR
17,196
24,274
27,687
41,781
23,838
-42.9%
50.9%
Gross profit margin, %
11.0%
10.4%
13.2%
17.0%
8.3%
-8.7 p.p.
3.8 p.p.
EBITDA, thousand EUR
14,122
19,280
21,003
33,556
16,410
-51.1%
59.8%
EBITDA margin, %
9.0%
8.2%
10.0%
13.7%
5.7%
-8.0 p.p.
3.7 p.p.
Operating profit(EBIT), thousand EUR
7,134
14,921
16,778
29,043
11,131
-61.7%
73.1%
EBIT margin, %
4.6%
6.4%
8.0%
11.8%
3.9%
-7.9 p.p.
3.8 p.p.
Profit before tax (EBT), thousand EUR
6,156
14,180
15,439
27,680
10,800
-61.0%
79.3%
EBT margin, %
3.9%
6.1%
7.3%
11.3%
3.8%
-7.5 p.p.
4.0 p.p.
Net profit (loss), thousand EUR
5,500
12,699
14,652
25,669
10,941
-57.4%
75.2%
Net profit margin, %
3.5%
5.4%
7.0%
10.5%
3.8%
-6.7 p.p.
3.5 p.p.
Net profit per share, Eur
0.46
1.06
1.23
2.15
0.92
-57.2%
74.8%
The ratio of the share’s market price and profit per
share – P/E ratio
7.95
4.5
4.27
3.79
12.77
236.9%
-11.2%
Return on equity (ROE), %
14.8%
28.4%
26.4%
35.3%
12.6%
-22.7 p.p.
8.9 p.p.
Return on assets (ROA), %
6.7%
13.6%
14.3%
19.8%
6.4%
-13.4 p.p.
5.5 p.p.
Return on capital employed (ROCE), %
11.7%
22.0%
20.5%
23.2%
8.0%
-15.2 p.p.
2.7 p.p.
Debt ratio
0.55
0.49
0.43
0.45
0.53
17.8%
4.7%
Debt to equity ratio
0.61
0.46
0.33
0.46
0.74
60.9%
39.4%
Liquidity ratio
1.24
1.46
1.77
2.09
1.26
-39.7%
18.1%
Asset turnover
1.77
2.38
1.97
1.61
1.52
-5.6%
-18.3%
Capital to asset ratio
0.45
0.51
0.57
0.55
0.47
-14.5%
-3.5%
Financial debts, thousand EUR
24,163
22,929
20,185
39,222
65,516
67.0%
94.3%
Net debt, thousand EUR
23,364
22,308
11,460
20,350
62,731
208.3%
77.6%
Net debt/EBITDA
1.65
1.16
0.55
0.61
3.82
526.2%
10.9%
p.p. – percentage points
VILVI GROUP ANNUAL REPORTS
2025
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 2025, Group companies bought this raw material from Lithuanian, Estonian and Latvian milk suppliers.
Over 48% of the raw cow‘s milk was imported.
2021
2022
2023
2024
2025
Purchased basic indicators milk*, in tons
314,540
342,953
351,832
351,607
434,692
Milk price, EUR/t
287.9
422.7
313.3
364.7
416.4
*The purchased milk is recalculated into base terms using a coefficient calculated based on fat and protein content.
In 2025, 434,7 thousand tons of milk were purchased according to the basic indicators, which is 23.6% more than in
2024. The price of milk in 2025 increased by 14.2% compared to 2024.
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.
2021
2022
2023
2024
2025
Purchased whey concentrates from VILVI GROUP
companies, in tons
43,593
60,297
64,692
61,898
68,348
Purchased whey concentrates from other suppliers, in tons
35,730
37,075
33,908
28,308
21,424
In 2025, 90 thousand tons of whey concentrates were purchased, which is 0.5% less than in 202.
Whey concentrates purchased by Kelmės pieninė AB
Lithuania 52%
Latvia 26%
Estonia 22%
288
423
313
365
416
00
100
200
300
400
500
2021 2022 2023 2024 2025
tho. tons
Purchased basic indicators milk, thousand tons Milk price, Eur/tons
55%
62%
66%
69%
76%
45%
38%
34%
31%
24%
0
20
40
60
80
100
120
2021 2022 2023 2024 2025
tho. tons
from VILVI GROUP companies from other suppliers
VILVI GROUP ANNUAL REPORTS
2025
16
VILVI GROUP OPERATING SEGMENTS
Operting segments:
• Cheese, cheese products and other – cheese, cheese products industrial 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;
Volumes of VILVI Group’s products for sale by segments, in tons:
2021
2022
2023
2024
2025
Change in
2025/2024
Change in
2024/2023
Cheese, cheese products and
other
43,970
47,575
48,809
52,157
62,546
19.9%
6.9%
Fresh milk products
14,048
15,174
15,741
15,240
13,057
-14.3%
-3.2%
Dry milk products
21,416
21,886
22,486
20,883
24,302
16.4%
-7.1%
In 2025, compared to 2024, the Group’s production of cheese and cheese products increased by 3.5 thousand tonnes.
The growth was driven by expanded production capacities and increased contract manufacturing. Meanwhile, the
production of fresh dairy products amounted to 2 thousand tonnes, i.e. 14.3% less than in 2024, due to changing
market conditions and higher raw milk purchase prices. The production of dried milk products increased by 16.4%
compared to 2024 as a result of expanded production capacities.
VILVI GROUP income from main products by segments, thousand EUR:
2021
2022
2023
2024
2025
Change in
2025/2024
Change in
2024/2023
Cheese, cheese products and
other
109,199
170,589
139,194
175,417
202,164
15.2%
26.0%
Fresh milk products
18,710
26,864
33,371
30,153
29,787
-1.2%
-9.6%
Dry milk products
28,136
36,630
37,971
39,859
54,980
37.9%
5.0%
Total:
156,045
234,083
210,536
245,429
286,931
16.9%
16.6%
71%
10%
19%
2025
Cheese, cheese
products and
other
Fresh milk
products
Dry milk products
70%
73%
66%
72%
71%
12%
11%
16%
12%
10%
18%
16%
18%
16%
19%
0 50 100 150 200 250 300
2021
2022
2023
2024
2025
MEur
VILVI GROUP ANNUAL REPORTS
2025
17
Cheese, cheese products and other
The total turnover of the cheese, cheese products and related segment increased by 15.2% in 2025 compared to the
previous year.
Revenue from cheese and cheese products grew by 10.1% year-on-year, driven by several factors:
− increased cheese production volumes, which led to higher sales volumes in quantitative terms;
− in preparation for the launch of the new Latvian factory’s products to the market, we intensified the sales
and marketing of cheese products, which boosted interest in the products.
Revenue structure of the segment:
Dry milk products
In 2025, sales volumes in quantitative terms increased by
16.0% compared to 2024, while sales revenue grew by
37.9%. This growth was mainly driven by higher
production volumes and favourable product price
dynamics.
Whey protein (WPC80) accounts for the largest share of
the segment’s revenue – 52.5%, although it represents
only 10.4% of the segment’s sales volume structure. In
2025, whey protein prices were higher than a year earlier,
which had a particularly positive impact on export
performance
In 2025, exports accounted for 93.1% of the turnover of
dried milk products (2024: 97.2%):
European Union – 73.1%
Other exports countries– 20.0%
Fresh milk products
In 2025, revenue from this segment decreased by 1.2%
compared to the same period last year.
In the domestic market, increased prices of fresh dairy
products (cottage cheese, yogurts, kefir, glazed curd
snacks) became the main factor leading to reduced
consumption, resulting in lower sales volumes. More
than 86% of fresh dairy products in 2025 were sold in
the Lithuanian market, therefore domestic demand
dynamics had a significant impact on the segment’s
performance.
Sales revenue:
10
15
20
25
30
35
2021 2022 2023 2024 2025
MEur
63
92
84
91
100
43
75
55
81
94
0
50
100
150
200
250
2021 2022 2023 2024 2025
million Eur
Cheese and cheese products Industrial cream Other
0
10
20
30
40
50
60
2021 2022 2023 2024 2025
Quantity, tho. tons Turnover, MEUR
VILVI GROUP ANNUAL REPORTS
2025
18
VILVI GROUP’S SALES BY MARKETS
In 2025, 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 2025, significant attention was focused on
analysing existing markets to assess and forecast potential sales growth in these regions.
Sales revenues by markets, thousand EUR:
2021
2022
2023
2024
2025
Change in
2025/2024
Change in
2024/2023
European Union
80,647
132,771
103,079
141,037
168,961
19.8%
36.8%
Lithuania
21,748
26,751
36,624
32,246
41,798
29.6%
-12.0%
Other countries
53,650
74,561
70,833
72,146
76,172
5.6%
1.9%
Total revenue
156,045
234,083
210,536
245,429
286,931
16.9%
16.6%
In 2025, VILVI Group’s sales revenue in export markets increased by 15.0% compared to 2024. Exports accounted for
85.4% of the Group’s total sales in 2025.
The growth in sales income both in the European Union and other foreign markets is attributed to the increased
global demand for dairy products. The structure of sales regions and sales channels remained stable and sufficiently
52…
57%
49%
57%
59%
14%
11%
17%
13%
15%
34%
32%
34%
29%
26%
0
50
100
150
200
250
2021 2022 2023 2024 2025
million Eur
Other countries
Lithuania
European Union
VILVI GROUP ANNUAL REPORTS
2025
19
diversified therefore economic or political factors did not pose significant risk.
n 2025, sales in Lithuania increased by 29.6% compared to the previous year. This growth was mainly driven by
increased demand for industrial products – cream and milk/whey powders. Meanwhile, revenue from fresh dairy
product sales in Lithuania decreased by 0.9%.
In 2025 and 2024, no products were exported to countries subject to EU sanctions.
VILVI GROUP ANNUAL REPORTS
2025
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 | 34
− DIVIDENDS | 35
− OTHER INFORMATION
ABOUT MANAGEMENT | 35
− RISK MANAGEMENT | 37
VILVI GROUP ANNUAL REPORTS
2025
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
2025
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 2025, 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 2025:
The total number of shareholders on 31/12/2025 was 2,469.
Distribution of shareholders of Vilkyškių pieninė AB by legal
entity:
− 19.4% natural persons
− 80.6% 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
2025
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
2025
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:
Old-age pension recipient
The main workplace:
Activity under an individual activity
certificate (accounting,
bookkeeping and auditing activities,
tax consulting)
The main workplace:
Head of Sports and Health
Supplements Department at
Vilkyškių pieninė AB
Participation in the management of
other companies:
Chairman of the Užupis Community
Senate
Participation in the management
of other companies:
Does not participate in the
management of other companies
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 31-12-2025, %
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
2025
25
Supervisory board’s activities in 2025
In 2025, three meetings of the Supervisory Board were held. All meetings met the quorum requirements set by
applicable regulations. During the meetings, the Company’s annual report and financial statements for 2024, as well
as the draft profit (loss) appropriation, were reviewed, and comments and proposals were submitted to the Ordinary
General Meeting of Shareholders. The Supervisory Board also reviewed and approved the actions of the Board related
to the implementation of Directive (EU) 2023/970 of the European Parliament and of the Council on pay transparency,
reviewed the 2025 investments and their management, and assessed the terms of the acquisition of UAB
Marijampolės pieno konservai UAB.
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
2025
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 2025
In 2025, meetings of the Board of Vilkyškių pieninė AB were held regularly in accordance with the established
schedule. During the year, twenty-one regular Board meetings took place. All meetings met the quorum
requirements set by applicable regulations. The Board approved the Company’s audited financial statements for the
twelve months of 2024 and the management report, convened the Ordinary General Meeting of Shareholders,
submitted the draft profit appropriation for 2024 to the Ordinary General Meeting of Shareholders, and approved the
unaudited interim financial statements for three, six and nine months of 2025.
During the regular Board meetings, development plans were discussed, the progress of the Baltic Dairy Board SIA
cheese plant project was reviewed, matters related to the acquisition of Marijampolės pieno konservai UAB were
considered, and issues related to the granting/extension of loans and leasing, as well as other current matters, were
examined.
VILVI GROUP ANNUAL REPORTS
2025
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 31-12-2025, %
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 2025, G.
Bertašius had no shares in
Vilkyškių pieninė AB, 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
2025
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-
2025, %
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
369,000 pcs./3.09%
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 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
2025
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
management
Technology
implement
a-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
2025
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 2025
In 2025, two committee meetings were held, during which the Company’s employee remuneration was reviewed,
recommendations were provided regarding the Company’s internal procedures and remuneration policy, Directive
(EU) 2023/970 of the European Parliament and of the Council on pay transparency was reviewed, and the
implementation plan of 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)
− Simona Norkienė (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 2025
In 2025, two committee meetings were held, during which the Company’s financial statements for 2024, the 2024
management report, and the draft profit (loss) appropriation for 2024 were discussed and approved, and the 2025
budget was reviewed. Risk management systems related to sales in various countries were reviewed, and the 2025
audit plan was discussed.
All committee members participated in the meetings.
VILVI GROUP ANNUAL REPORTS
2025
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 31-12-2025, %
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
369,000 pcs./3.09%
Area of Competence:
- main raw material procurement
management
Vaidotas Juškys
Executive Director
higher education, information
technologies
Director of Deivesta UAB
(company code 302855517),
Member of the Board of
Tauragės apskrities vartotojų ir
smulkaus verslo centras
(company code 193474367) and
Tauragės kredito unija
(company code 112046768)
26,236 pcs./0.22%
Area of Competence:
- commercial activities
VILVI GROUP ANNUAL REPORTS
2025
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 31-12-2025, %
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
2025
33
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 31-12-2025, %
Rimantas Damanskis
Director of Baltic dairy
board SIA
higher education, management
Does not participate in the
management of other
companies
307 pcs./0.003%
Area of Competence:
- production
- corporate governance
VILVI GROUP ANNUAL REPORTS
2025
34
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 96-112.
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 follow a transparent salary policy, 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 120-124.
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
2025
35
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:
2021
2022
2023
2024
2025
(for 2020)
(for 2021)
(for 2022)
(for 2023)
(for 2024)
Dividends (EUR)
955,440
2,388,600
3,164,744
3,702,330
6,449,220
Dividends per share (EUR)
0.08
0.20
0.265
0.31
0.54
Number of shares
11,943,000
11,943,000
11,943,000
11,943,000
11,943,000
OTHER INFORMATION ABOUT MANAGEMENT
Links to the applicable Corporate Governance Code and all necessary information about corporate governance
practices:
The Company's 2025 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 2025, 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 2025.
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 140.
Diversity policies apply to the election of the company’s manager, members of the management and
supervisory bodies
The Company has not approved a diversity policy applicable to the election of members of its manager, management,
and supervisory bodies, as the selection of candidates is carried out based on criteria of professional competence,
qualifications, impeccable reputation, and the ability to properly perform assigned functions. When proposing
candidates for membership in the Company’s management bodies, they are not discriminated against on the basis
of age, gender, education, or professional experience. The Company does not impose any restrictions on individuals
standing as candidates based on gender or age. The Company aims to ensure that the composition of its
VILVI GROUP ANNUAL REPORTS
2025
36
management and supervisory bodies provides a diversity of competencies necessary for effective corporate
governance.
Agreements between shareholders
The Company does not have data on mutual agreements between shareholders. In 2025, 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.
VILVI Group operational plans and forecasts
The Group’s strategic plan for 2026 is focused on increasing production capacity and improving operational efficiency.
The key strategic priorities are the full launch of the new cheese factory in Latvia and the integration of UAB
Marijampolės pieno konservai (hereinafter – MPK) into the Group’s operations, with the aim of increasing production
capacity and leveraging the Group’s synergy potential.
At the new Latvian cheese plant, raw milk processing will gradually reach up to 500 tons per day, while cheese and
cheese product production capacity will gradually increase to 1,500 tons per month.
Following the acquisition of MPK, the Group has become one of the largest dairy processing groups in the Baltic
States. The objective of MPK integration is to optimize production, logistics, and administrative processes. MPK
specializes in the production of canned milk, butter, and milk powder, and this transaction will enable the Group to
expand its product portfolio.
Upon implementation of the strategic initiatives, it is expected that the Group’s revenue will increase from EUR 287
million to EUR 450 million in 2026. Export sales are also projected to grow, with the share of exports in total revenue
increasing from 85% to 92% in 2026.
The strategic plan also provides for the management of operational risks, including fluctuations in raw milk prices,
cyclical market pricing, and the complexity of integration processes. By implementing the planned strategic
initiatives, the Company aims to strengthen its competitive position in both regional and international dairy markets
and to ensure long-term profitable growth.
VILVI Group research and development activities
The Company carries out research and development activities with the aim of improving production processes,
enhancing product quality, and expanding its range of higher value-added products. During the reporting period,
significant attention was devoted to the development of new products, the improvement of production technologies,
and the increase of operational efficiency. Research and development activities also included the creation of new
formulations, optimization of production processes, and the implementation of innovative solutions. The Company
plans to continue investing in research and development in order to strengthen its competitiveness in the market.
Events after the reporting period
AB Vilkyškių pieninė completed the transaction for acquisition of 100% of the shares in Private Limited Liability
Company MARIJAMPOLĖS PIENO KONSERVAI (MPK) on 16 January 2026. Control was obtained by entering into a
share sale and purchase agreement with the seller and transferring all MPK shares to the Company. MPK is a dairy
processing company operating two factories: in Marijampolė (canned milk and butter) and in Kalvarija (dry dairy
products). MPK specialises in production of canned milk, butter and milk powder; accordingly, this transaction will
enable the Group to broaden its product range and access new markets
More detailed information about this significant event is provided in Note 30 to the 2025 financial statements.
VILVI GROUP ANNUAL REPORTS
2025
37
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 ANNUAL REPORTS
2025
38
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 ANNUAL REPORTS
2025
39
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. volatility in
raw material and product prices, foreign
exchange rates and interest rates, affect
the Group's and Company's results or the
value of financial instruments held.
external
long-term
-
- Long-term contracts with suppliers.
- Pricing formulas in product sales
- Diversification of the product portfolio and market
- Management of foreign exchange rates.
VILVI GROUP ANNUAL REPORTS
2025
40
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 ANNUAL REPORTS
2025
41
- 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
2025
42
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
2025
43
REMUNERATION
− GENERAL INFORMATION | 44
− PRINCIPLES OF REMUNERATION DETERMINATION |
44
− BOARD MEMBERS’ REMUNERATION | 44
− REMUNERATION OF EMPLOYEES OF THE PARENT
COMPANY AND VILVI GROUP COMPANIES | 45
VILVI GROUP ANNUAL REPORTS
2025
44
General information
Vilkyškių pieninė AB remuneration report has been prepared for the reporting financial period of 2025, 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 updated version of the VILVI Group Remuneration Policy for employees was reviewed and approved at the
General Meeting of Shareholders on 29 April 2025.. 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.
The Annual General Meeting of Shareholders of the parent company Vilkyškių pieninė AB, held on 29 April 2025,
approved the 2024 remuneration report, which forms part of the annual management report. 100% of the
shareholders participating in the vote voted in favour, no comments on the remuneration information were raised,
and the decision was therefore adopted.
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 2024 – 2025
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.
VILVI GROUP ANNUAL REPORTS
2025
45
Annual salary before taxes of the Board members working under an employment contract, thousand EUR
Name, surname, position
2024
2025
Fixed salary
Variable
salary
Total
Fixed salary
Variable
salary
Total
Gintaras Bertašius,
126,9
-
126,9
136,4
-
136,4
CEO
Vilija Milaševičiūtė,
83,7
9,9
93,6
100,5
-
100,5
Director of Economics and
Finance
Sigitas Trijonis,
76,7
10,0
86,7
86,2
-
86,2
Director of the Investment
Projects Department
Rimantas Jancevičius,
83,5
10,2
93,7
100,3
-
100,3
Director of Raw Material
Purchase
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 2025 was equal to EUR 26,103 thousand (2024 – EUR 23,851 thousand).
Average monthly salary before taxes of the employees of Vilkyškių pieninė AB, EUR:
Staff group
2021
2022
2023
2024
2025
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
19
4,565
20
5,029
22
5,478
26
6,039
25
6,252
Specialists
147
1,506
150
1,777
150
2,038
161
2,078
149
2,565
Workers
274
1,059
292
1,253
252
1,507
213
1,859
235
2,129
Total:
440
1,365
462
1,581
424
1,884
400
2,183
409
2,542
Average monthly salary before taxes of the employees of VILVI Group (Lithuanian companies), EUR:
Staff group
2021
2022
2023
2024
2025
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
30
4,261
30
4,799
31
5,240
37
5,796
33
6,069
Specialists
310
1,434
310
1,711
319
1,961
361
2,064
328
2,391
Workers
527
1,020
544
1,209
569
1,435
540
1,650
523
1,892
Total:
867
1,281
884
1,508
919
1,746
938
1,958
884
2,237
One of the VILVI Group companies operates in Latvia, where the payroll calculation system differs from that applied
in Lithuania. In Latvia, the amount of taxes withheld from employees’ salaries is lower, whereas employer social
contributions are higher compared to Lithuania.
VILVI GROUP ANNUAL REPORTS
2025
46
Average monthly salary before taxes of the employees of VILVI Group (Latvian companies), EUR:
Staff group
2025
Number of
employees
Average
wage
Managers
9
3,770
Specialists
41
2,030
Workers
78
2,112
Total:
128
2,211
In the period of 2025, 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.
The variable part of remuneration (VPR) in VILVI Group is linked to employees’ performance, the achievement of the
Company’s and individual targets, quality of work, level of competence, and alignment with the Company’s and the
Group’s values. Such a remuneration structure encourages employees to achieve high performance results,
continuously develop their competencies, and contribute to the implementation of the Company’s strategic
objectives, thereby creating long-term value and ensuring sustainable performance of VILVI Group.
The VILVI Group Remuneration Policy does not provide for the possibility to reclaim variable remuneration paid to
employees or executives. Therefore, the Company did not exercise such a right during the reporting period.
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
47
SUSTAINABILITY
STATEMENT
SUSTAINABILITY OVERVIEW | page 48
ESRS 2 | GENERAL DISCLOSURES | page 49
ENVIRONMENT | page 62
- TAXONOMY OVERVIEW | page 63
- E1 CLIMATE CHANGE | page 71
- E2 POLLUTION | page 78
- E3 WATER AND MARINE RESOURCES | page 84
- E4 BIODIVERSITY AND ECOSYSTEMS | page 87
- E5 RESOURCE USE AND CIRCULAR ECONOMY | page 90
SOCIAL | page 95
- S1 OWN WORKFORCE | page 96
- S3 AFFECTED COMMUNITIES | page 113
- S4 CONSUMERS AND END-USERS | page 116
GOVERNANCE | page 122
- G1 BUSINESS CONDUCT | page 123
ANNEXES | page 126
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
48
SUSTAINABILITY OVERVIEW
In this Statement, we disclose the material topics relating to environmental, social and
governance (ESG) areas for the VILVI Group (the “Group”). We present detailed information on the
Group’s processes, policies, initiatives, key performance indicators and targets in each area. We
also identify the areas and parts of the value chain where we face greater challenges as we move
towards sustainability.
2025 was a year of rapid business growth and expansion for the VILVI Group – construction of a
new factory in Latvia was in full swing, and the acquisition of “Marijampolės pieno konservai”, UAB
was completed in January 2026. These steps have not only strengthened the Group’s position as
the largest dairy plant in the Baltic States, but will also have a direct impact on our sustainability
initiatives in the future. Next year, we will update our double materiality assessment and, once
again, identify the key impacts, risks, and opportunities; where necessary, we will review our
sustainability targets and the pace of their implementation. Meanwhile, in 2025, we maintained
stability in the area of sustainability proceeding with the fulfilment the commitments set in
previous years and improving the management processes. Following a review and update of the
financial materiality assessment, we have supplemented this Statement with material sub-topics
and related disclosures.
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 greenhouse gas (GHG) emissions and negative impacts, are growing. These changes
pose challenges to accurately assessing the increase in GHG emissions and to drawing up a
credible transition plan towards climate neutrality; the plan will be approved as soon as it is
possible to accurately forecast the increased levels of GHG emissions. In 2025, we continued to
systematically strengthen our sustainability governance model to make the impact, risk and
opportunity management an integral part of strategic management and decision-making.
VILVI GROUP’s long-term directions in the ESG areas:
ENVIRONMENT
To decrease environmental impact 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 the responsible use of extracted raw materials.
For more information, see page
62, Chapter “Environment”.
SOCIAL
To ensure the well-being of employees.
To strengthen the communities in which we operate.
To improve access to products and provide consumers with safe, high-quality
products.
For more information, see page
95, Chapter “Social”.
GOVERNANCE
To operate with transparency, fostering and cultivating a culture of responsible
business.
To ensure a whistleblowing and whistleblower protection.
To manage supplier relationships and strive to achieve a sustainable, resilient and
efficient supply chain.
For more information, see page
122, Chapter “Governance”.
VILVI GROUP’s Sustainable Development Goals
For several years now, we have been participating in
the initiative of the United Nations Sustainable
Development Goals (SDGs)
(https://unglobalcompact.org/sdgs).
From the 17 issues identified as the world’s greatest
sustainability challenges, we have selected those
areas where we believe we can make a positive
impact; we aim to turn negative impacts into positive
ones, or at least significantly reduce them. The
defined goals become our daily impetus to find
sustainable solutions.
For comments, questions or other information regarding
sustainability disclosures, please contact:
sustainability@vilvi.eu
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
49
GENERAL DISCLOSURES I ESRS 2
General basis for preparation of sustainability statements I BP-1
This chapter presents the consolidated sustainability information of
“Vilkyškių pieninė”, AB (the “VILVI GROUP” or the “Group”) for the year 2025,
prepared in accordance with the EU Corporate Sustainability Reporting
Directive (CSRD), the Law of the Republic of Lithuania on the Corporate and
Group Reporting (LCGR), the European Sustainability Reporting Standards
(ESRS), and forms an integral part of the 2025 Consolidated Management
Report (the “Management Report”). The Group began preparing
sustainability statements in accordance with the ESRS requirements in
2025. The Sustainability Statement for the 2024 financial year was the first
to be prepared in accordance with the ESRS. This Statement has been
prepared to ensure methodological continuity. The information contained
in this Statement covers the period from 1 January 2025 to 31 December
2025, and aligns with the scope of the Financial Statements. The
Sustainability Statement also includes the 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 corresponds to that of
the Financial Statements, and covers both the parent company, “Vilkyškių
pieninė”, AB, and the subsidiaries controlled by the parent company, both
directly and indirectly. The Group has no subsidiaries exempt from providing
individual or consolidated sustainability disclosures in accordance with
Directive 2013/34/EU.
This Sustainability Statement has been prepared on a consolidated basis
and covers the companies controlled by “Vilkyškių pieninė”, AB as of 31
December 2025. After the reporting period, “Vilkyškių pieninė”, AB
completed a business transaction and acquired the control of UAB
“Marijampolės pieno konservai”, UAB; given that the control was acquired
after the reporting period, this company is not included in the consolidation
scope of this Statement and will be included into reporting from the actual
period of acquisition. Detailed information on each of the Group’s
companies is not disclosed. This Statement covers the Group’s main value
chain, including the impacts, risks and opportunities (IROs) identified in our
operations and those of our suppliers, partners and customers (upstream
and downstream). For the second year in a row, the Sustainability Statement
has been prepared in accordance with the ESRS, enabling comparison of
the disclosures for 2024 and 2025. In submitting its Sustainability Statement,
the Group has not used the exemption from disclosure of specific classified
information on intellectual property, know-how, innovation outputs or
operational developments, as there was no need to do so.
The Group’s operations comprise various business segments; for further
information on these business segments, see the Management Report,
page 179., Section “VILVI GROUP Business Segments”. Sustainability
disclosures are not segmented – individual business segments do not
influence the Group’s sustainability targets or actions, given the similarity of
their operations and the synergies between them (cheese and cheese
products, fresh dairy products, dry dairy products, industrial cream). The
business segments are inextricably linked to create the greatest possible
value; for more information on the Group’s business model, see page 53.
List of phased-in disclosure requirements
Following the List of phased-in Disclosure Requirements, as set out in
Appendix C to ESRS 1, the Group has exercised an exemption and has not
disclosed the following information in the Statement of 2025:
Disclosure
requirement
Information
SBM-1, 40(b)
breakdown of total revenue by significant ESRS sector;
SBM-1, 40(c)
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;
E1-9
the anticipated financial effects from material physical and
transition risks and potential climate-related opportunities;
E2-6
the anticipated financial effects from pollution-related
impacts, risks and opportunities;
E3-5
the anticipated financial effects from water and marine
resources-related impacts, risks and opportunities;
E4-6
the anticipated financial effects from biodiversity and
ecosystem-related impacts, risks and opportunities;
E5-6
the 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.
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
50
Disclosures in relation to specific circumstances I BP-2
The information is presented for the calendar year ending
31 December 2025. Unless otherwise stated, the facts and figures (e.g. the
number of employees, other indicators) are given for the date indicated. The
Statement includes disclosures of the year 2025, comparative information
for 2024, and the change over the year.
In accordance with the ESRS and the guidelines of the European Financial
Reporting Advisory Group (EFRAG), in 2024, the Group carried out a double
materiality assessment (DMA), which informs the structure and disclosures
of this Statement (for more information, see page 58, Section “Double
Materiality Assessment”). The Statement discloses information about the
Group’s significant IROs related to the ESG factors of the Group, categorised
according to the ESRS topics. The Statement identifies the impacts that
were assessed to be material in at least one of the two dimensions, namely:
environmental and social impact materiality and financial materiality, in the
course of the DMA. Aspects of lower level materiality are not disclosed in this
Statement. The EU Taxonomy disclosures are provided in the Environmental
section. The Statement does not provide additional information required by
other legislation or other reporting standards.
In 2024–2025, the Group carried out the construction of a new cheese factory
in Latvia. Trial production at the factory began in 2025, with commercial
production starting in 2026. The 2024 DMA incorporated the new factory
solely based on the project’s progress at the time. Given that the factory will
be operating at full capacity by 2026 and thus will contribute significantly to
the Group’s operations, the 2026 DMA will be updated to fully reflect the
IROs of the operating factory, as well as their materiality in terms of both
impact materiality and financial materiality dimensions.
The definitions of the time periods used in the Sustainability Statement
aligns with those defined in the ESRS:
Definition of the period
The ESRS-defined period/The period applied by the
VILVI GROUP disclosing sustainability information
Short-term period
up to 1 year
Medium-term period
from 1 to 5 years
Long term period
longer than 5 years
Information from external sources was used to calculate Scope 3 GHG
emissions for indicators related to the upstream and downstream parts of
the supply chain (see page 75, “GHG Emissions Calculation Methodology”,
for further details on the use of this information). When presenting
indicators, information regarding uncertainty and margin of error, as well as
planned actions to improve accuracy, are included alongside the
information provided, where
relevant. Greenhouse gas emissions
quantification is subject to inherent uncertainty because of incomplete
scientific knowledge used to determine emissions factors and the values
needed to combine emissions of different gases.
List of disclosure requirements incorporated by reference:
ESRS disclosure requirement
Reference
Group strategy, business
segments, markets and customer
groups
SBM-1
See page 5, 15-18
Governing bodies and their
composition
GOV-1
See page 21, 23-28, 31-33
Competencies of the governing
bodies and senior management
GOV-2
See page 24-25, 29
Statement on due diligence
GOV-4
See page 126
List of data points that derive
from other legal acts
IRO-2, 2
ESRS
See page 127
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
51
The role of the administrative, management
and supervisory bodies and the information
provided to and sustainability matters
addressed by the undertaking’s
administrative, management and supervisory
bodies I GOV-1, GOV-2
Sustainability decisions are gradually being
integrated into the strategy and decision-
making processes of the Group. Sustainability
matters are increasingly being addressed in the
relevant governance bodies to ensure full
integration into the strategy and operations of
the Group in the future. The diagram below
outlines the Group’s decision-making process
regarding sustainability and its related
responsibilities.
- The Board oversees the Group’s strategic direction and determines the scope of its sustainability
ambitions.
- The Audit Committee assists the Board in overseeing financial and sustainability reporting.
- The Appointment and Remuneration Committee helps to integrate sustainability
requirements into the remuneration system and the assessment of management’s
competencies.
- The sustainability strategy and objectives are set by the senior management, which is
responsible for key issues related to integrating sustainability into the Group’s day-to-day
management. The Group’s senior management is directly responsible for managing IROs.
- The planning and implementation of sustainability actions is entrusted to the Management
and Quality Department of the Group, with the Head of the Department being responsible for
implementing policies to manage significant sustainability matters, overseeing IROs,
monitoring of set targets, employee engagement, and the incorporation of consumer and
customer feedback into managing impacts. This department oversees key sustainability
functions: environmental, human resources management, health and safety, adherence to
business ethics and governance standards, food safety and quality, and supply chain
management. The implementation, supervision and monitoring of sustainability functions are
carried out by the Unit of Sustainable Operations within the Management and Quality
Department.
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
52
Composition of the governing bodies by gender and independence, and the concentration of sustainability expertise:
Supervisory Board
Management Board
Nomination and Remuneration
Committee
Audit Committee
Female
Male
Female
Male
Female
Male
Female
Male
Members of the
governing body by
gender (headcount)
Proportion of
independent members
67%
29%
None of the members is an
administrative executive, and none
holds a stake in the Company’s
authorised capital
None of the members is an
administrative executive, and
none holds a stake in the
Company’s authorised capital
- Environment
Director of the Investment Projects
Department
- Human resources,
health and safety
CEO of “Vilkyškių pieninė”, AB
- Sustainable financing
Director of Finance, independent
member
- Accountability
Director of Finance
- Oversight of IROs
All members
All members
All members
All members
Analysis and approval of
sustainability statements
All members
All members
The Articles of Association of the entity and its governing bodies do not yet contain specific provisions regarding responsibility for managing IROs; no specific
control measures are currently in place either, and it is planned to integrate this information into the Group’s governance framework gradually.
In 2024, senior management, heads of units, specialists and staff representatives actively participated in the DMA process; in 2025, the setting of the impact
management targets has started, and the development of the model for monitoring sustainability targets is in progress, setting out clear responsibilities for
monitoring progress towards these targets for both governing bodies and senior management. In light of significant changes in the Group’s operations
(including the launch of the new cheese factory in Latvia and the acquisition of “Marijampolės pieno konservai”, UAB), the sustainability data management
procedure is being substantially revised and will be re-approved in 2026. The reviewed and updated outcomes of the financial materiality assessment under the
DMA have been approved by the Group’s Board. The Group’s Audit Committee and the Board approved the Sustainability Statement before its publication.
To enhance sustainability expertise at all levels, external experts are brought in to support training. In 2024, the Board held a sustainability session, and senior
management actively participated in the DMA process. In 2025, significant attention was paid to employee training: April was declared a Sustainability Month
to raise employees’ awareness across all ESG areas; in autumn, the focus was on food waste reduction and social responsibility. We aim to foster green skills
across all staff levels.
When planning and implementing sustainability initiatives, we aim to follow the integrated sustainability governance model, gradually incorporating it into all
sustainability-related activities.
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
53
Integration of sustainability-related performance in incentive schemes I GOV-3
The Group does not currently have an incentive mechanism linked to sustainability.
Statement on due diligence I GOV-4
The information is provided in the Annexes, see page 126.
Risk management and internal controls over sustainability reporting I GOV-5
To ensure sustainability and accountability, the Unit of Sustainable Operations regularly collaborates
with other units, responsible for finance, production, HR, technical solutions, procurement, quality and
other areas. This Unit is responsible for managing sustainability data and preparing the sustainability
statement.
Sustainability risks are managed at the Group level by integrating them into the overall risk
management framework (for more information, see page 37-42, Section “Risk Management”). 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 associated with
the slow pace of digitalisation has been included in the strategic risks of the Group, and the aim is to
manage its impact and accelerate digitalisation. The Unit of Sustainable Operations is responsible for
collecting sustainability data and monitoring indicators. Data is collected monthly, quarterly or annually,
depending on the significance thereof. To
ensure data quality, the methodology for data
collection, accuracy checks and accountability
is defined by internal processes, policies and
procedures; data is collected and evaluated at
the Group level. Starting in 2026, it is planned to
provide a regular summary of the data to senior
management for review. The specialists
responsible for the data are required to assess
the quality of the data collected and to
implement the necessary control measures.
The Internal Sustainability Audit Procedure was
approved in 2025 and serves as the basis for
conducting internal sustainability audits.
During internal sustainability audits, the entity’s
compliance in ESG areas is assessed in detail;
where necessary, a preventive and corrective
action plan is developed, and responsibilities for
implementing the changes are assigned.
During the reporting year, a comprehensive
sustainability audit was conducted at “Kelmės
pienas”, UAB, and an action plan was developed
to bring about positive change.
Strategy, business model and value chain I
SBM-1
The Group’s vision is to make higher-quality
dairy products and ingredients more accessible
worldwide, so that we can give people more
opportunities to enjoy them wherever they may
be; this meaningful goal forms the foundation
of the Group’s strategy. Sustainability continues
to be gradually integrated into the Group’s
strategy, with one of the key aspects of the
business model being the synergies between
the Group’s companies and the re-use of raw
materials.
Information on the product groups, markets
served and customer groups, including any
changes during the reporting period, is
provided on pages 8, 18.
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
54
All of the Group’s business segments belong to
high climate impact sectors (NACE code
105100); therefore, the net revenue from high
climate impact sectors is disclosed in Section
“Consolidated and Parent Company’s Separate
Financial Statements” on page 179, under
“Segments’ Results of 31 December 2025”, in the
“Revenue” line.
Number of employees by geographical areas
The information is provided on page 96.
The Group’s Business Model
The Group aims to create the greatest possible
value from every drop of milk through its
business model, whilst generating as little
pollution as possible. This is achieved by
creating as closed a cycle as possible – what
might be considered waste or a by-product at
one factory is utilised as a primary raw material
at another of the Group’s factories.
In the cheese production process of “Vilkyškių
pieninė”, AB, “Modest”, AB and “Baltic Dairy
Board”, SIA the residual product is whey. It is
broken down within the Group’s companies
and becomes the primary raw material for
“Kelmės pieninė”, AB. At this factory, whey
protein concentrate and whey protein isolate
are dried into a powder and become whey
protein concentrate, which is an important
product in athletes’ diets, or permeate, a key
ingredient in the confectionery and animal feed
industries. Most of the Group’s factories are
interconnected in this way.
The Group’s value chain is exceptionally broad:
the upstream segment comprises more than
600 suppliers, whilst the downstream segment
includes more than 260 customers from over 60
countries worldwide. Detailed information on
the IROs at each part of the value chain is
provided in the relevant sections of the
Sustainability Statement.
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
55
Outputs I SBM-1 42b
In terms of sustainability and ESRS, the Group’s
main outputs are the products. The value
created by the Group for its employees,
investors, business customers, end-users, and
other stakeholders consists of wages, earnings
before interest and taxes, and reduced GHG
emissions.
Inputs I SBM-1 42a
In terms of sustainability and ESRS, the Group’s
main inputs are raw materials (milk, whey and
other raw materials), energy and fuel,
chemicals, water, packaging, office supplies,
services and other materials required to support
its operations. Local communities are a source
of current and potential employees for the
Group, and the suppliers’ staff is the foundation
for ensuring the suppliers’ operations. We
collect and compile the necessary data
(sustainability and quality certificates, GHG
emissions) by actively managing our supplier
database and utilising a supplier risk
assessment model.
The Group’s total revenue is disclosed in the Section “Consolidated and Parent Company’s Separate
Financial Statements” of the Annual Report on page 178-179, under “Segments’ Results of operating
segments”. The Group does not operate in the gas, coal or oil production sectors.
Information prescribed by ESRS 2 SBM-1 paragraph 40(b) (breakdown of total revenue by significant
ESRS sector) and 40(c) (list of additional significant ESRS sectors) is not disclosed; it is subject to the
option of phase-in disclosures.
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
56
Interests and views of stakeholders I SBM-2
The Group has a wide range of stakeholders, both internal and external:
- Affected stakeholders are individuals, legal entities, organisations or groups whose interests are affected or could be affected – positively or
negatively – by the Group’s activities and its direct and indirect business relationships across its value chain.
- Primary users of sustainability statements are existing and potential investors, lenders and other creditors, including asset managers, credit
institutions, insurance undertakings, as well as other users of sustainability statements, including the Group’s business and social partners, civil
society and non-governmental organisations, governments, analysts and academics.
Below is a list of the Group’s key stakeholders. These stakeholders have been included in the DMA, and we are actively seeking to hear their views and take them
into account when assessing the materiality IROs. In the future, efforts will be made to gradually establish a regular dialogue with key stakeholders so that their
views are given due consideration when implementing or updating the DMA and ensuring a thorough review.
Stakeholder
Communication channels
Stakeholder interests
VILVI’s objectives
Affected stakeholder/user of
the Sustainability Statement
National
regulatory
authorities
Participation in legislative discussions,
consultations with public authorities, liaison
through associations, operational audits, media
communications, quarterly and annual reports.
Consistent compliance with legal requirements,
operational control and monitoring, evaluation
of reports, and transparent dialogue.
Transparent dialogue and compliance
with the legal requirements.
User of the Sustainability
Statement
Financial
institutions
Quarterly and annual reports, one-to-one
meetings and consultations, press releases.
Compliance with commitments, transparent
financial and operational performance, long-
term growth and stability, risk management,
commitments to more sustainable operations
and efforts to achieve them.
Open dialogue, reporting on results,
and the pursuit of sustainability goals
and achievements.
User of the Sustainability
Statement
Shareholders
and investors
Quarterly and annual reports, one-to-one
meetings and consultations, press releases, and
online information for investors 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 organisation.
Affected stakeholder
User of the Sustainability
Statement
Management
Communication via digital channels (intranet,
email, social media), regular meetings and open
discussions.
Long-term value creation for the Group,
product development prospects, commitments
to more sustainable operations and their
implementation.
Encouraging management
engagement and motivation in pursuit
of sustainable change, developing
competence and loyalty, and
strengthening the management’s
green skills.
Affected stakeholder
User of the Sustainability
Statement
Employees
Communication via digital channels (intranet,
email, social media), regular meetings and open
discussions, training and skills development
programmes, employee satisfaction and
engagement surveys, internal events and team-
building activities.
Fair pay, good and safe working conditions,
clear communication regarding the Group’s
objectives, opportunities for personal
development and career progression, a healthy
work-life balance, and the chance to engage in
meaningful work.
Encouraging employee engagement
and motivation, reduction of staff
turnover, fostering long-term
collaboration, and developing the staff’s
green skills.
Affected stakeholder
User of the Sustainability
Statement
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
57
Competitors
Marketing communications, media relations,
quarterly and annual reports.
Respect, integrity, transparency and ethical
business practices, and compliance with legal
requirements.
Fair and ethical competition;
compliance with legal requirements.
User of the Sustainability
Statement
Corporate
customers
Regular events (exhibitions, conferences, events),
service satisfaction surveys, digital communication
(newsletters, website, social media), direct contact,
tours of production facilities, surveys.
High product quality, transparent and detailed
information on ingredients and origin,
responsiveness to customer needs, prompt
service, competitive pricing, responsible and
sustainable operations, product innovation, and
sustainable supply chains.
Ensuring the supply of safe, high-
quality products, building trust in the
brand, strengthening customer loyalty,
responding to market changes and
needs, and communicating the
organisation’s sustainability
performance.
Affected stakeholder
User of the Sustainability
Statement
Suppliers (of
goods and
services)
Contract negotiations, regular supplier meetings,
quality audits and assessments, electronic
communication, and surveys.
Reasonable prices for goods and services,
guaranteed service provision and payment,
accessible, accurate and up-to-date
information, assurance of the quality of goods
and services, effective cooperation, and a
supply chain that meets sustainability
standards.
Long-term and reliable partnerships,
high-quality and safe raw materials,
sustainable supply chains, risk
management.
Affected stakeholder
User of the Sustainability
Statement
Suppliers of raw
materials (milk,
food additives,
and other raw
materials)
Contract negotiations, one-to-one meetings,
quality audits and assessments, electronic
communication, and surveys.
Reasonable prices, steady demand and prompt
payment.
Long-term and reliable partnerships,
high-quality and safe raw materials,
sustainable supply chains.
Affected stakeholder
User of the Sustainability
Statement
End-users
Marketing communications, media relations.
Product safety and quality, variety and
accessibility, a balanced diet, social
responsibility (transparency and minimising
environmental impact).
Positive image and credibility, along
with consistent communication about
sustainability efforts.
Affected stakeholder
User of the Sustainability
Statement
Communities
Public events and initiatives for local communities,
partnerships with local organisations, information
updates on sustainability activities, and support for
social and cultural projects.
Responsibility towards the environment and
local residents, reducing air and water
pollution, fostering safe neighbourhoods,
contributing to community development and
well-being, transparent operations and
communication, minimising environmental
impact.
Increasing the Group’s contribution to
the well-being of the local community,
contributing to environmental, social
and cultural projects, ensuring safe
neighbourhoods, reducing
environmental impact, raising of
awareness of sustainability efforts.
Affected stakeholder
User of the Sustainability
Statement
Media
Events, meetings, responses to enquiries, press
releases.
Transparency, accountability and dialogue.
Positive image and credibility, along
with consistent communication about
sustainability efforts.
User of the Sustainability
Statement
Non-
governmental
organisations
Community events, media communications,
quarterly and annual reports.
Cooperation, transparency, accountability,
minimising environmental impact.
Positive image and credibility, along
with consistent communication about
sustainability efforts, and dialogue.
User of the Sustainability
Statement
Educational
institutions
Individual appointments, joint projects, academic
events, career fairs, media communication.
Cooperation, sharing of expertise, career
opportunities, investment in research.
Attracting potential employees, synergy
between business and academia in
driving innovation, a positive image,
partnerships.
Affected stakeholder
User of the Sustainability
Statement
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
58
Double materiality assessment I IRO-1
The first assessment of the non-financial
materiality of ESG dimensions was carried out in
2022 with the aim of identifying the
sustainability aspects that form the basis for the
Group’s sustainability priorities. Following the
implementation of the CSRD and the ESRS, the
DMA serves as the basis for sustainability
reporting; consequently, it was conducted in
2024 in accordance with the EFRAG Materiality
Assessment Implementation Guidance. An
evaluation process was developed, which we
followed step by step:
1. Identification of the Group’s
environmental and social impacts.
To this end, the ESRS topics and impacts
assessed in 2022 were utilised, as well as
scientific and industry information, in order to
compile a list of impacts.
2. Assessment of the Group’s
environmental and societal impacts
(from inside the organisation to outside), arising
both from within the organisation and along
the value chain. The assessment covered the
actual/potential, negative/positive impacts on
the environment and human health in the
short, medium and long term, as well as the
risks and opportunities. Internal stakeholders
were most actively involved in this part of the
impact assessment. Specialists from various
fields (managers, employees, and employee
representatives) were divided into groups for
the DMA sessions. In assessing the impact on
the upstream and downstream segments of the
value chain, internal Group data was used, as
well as information obtained from experts with
close ties to the relevant participants in the
value chain. IROs were assessed both in relation
to the Group’s operations and within the value
chain. First and foremost, account was taken of
the negative impacts and their scale, scope,
irreversibility and likelihood, and, where
appropriate, of the positive impacts, and their
scale and scope. This was the method used for
identifying material impacts. A list of impacts
was compiled in accordance with ESRS,
grouping related impacts.
Applicable thresholds:
- the scale and scope of the impact were
assessed from 0 to 5 (ranging from “no
impact” to “absolute” or
global”universal”);
- the irreversibility of the impact was
assessed from 0 to 5 (ranging from
“very easily reversible” to
“irreversible/irremediable“);
- the likelihood of the impact was
assessed from 0 to 5 (ranging from “no
likelihood” to “several times a day”).
Both internal and external stakeholders were
consulted during the stakeholder survey. The
aim of this survey was to include all of the
Group’s stakeholders (see page 56). Some
stakeholders participated more actively in the
survey, whilst others were passive or did not get
involved. To ensure comprehensive coverage,
publicly available information and public
opinion have been taken into account. To take
into account the voiceless stakeholder—
nature—best practice was followed by referring
to relevant regulations and analysing other
available sources on environmental protection.
In the future, as the assessment methodology is
refined, it is planned to involve external experts
to obtain an even more detailed assessment.
3. Assessment of financial impact, risks
and opportunities
(from the outside into the organisation). The
starting point for financial materiality
assessment is the identification of 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. Based on the
results of the materiality assessment, risks and
opportunities were 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 the past future events were also
assessed. The assessment was not constrained
to matters that are within the control of the
entity, but also took into account the risks and
opportunities attributable to business
relationships beyond the scope of the financial
statements. The timeframes under assessment
were divided into short-term (up to 1 year),
medium-term (1 to 5 years) and long-term (5
years and longer) periods, as impacts and
actions, risks and opportunities may manifest
themselves differently across them.
Once the risks and opportunities were
identified, their materiality for disclosure
purposes was assessed. The assessment was
based on two criteria:
- The potential magnitude of the
financial impact, determined on the
basis of the relevant thresholds, rated
on a scale of 0 to 5 (ranging from “no
impact” to “critical impact”).
- Probability of occurrence rated on a
scale of 0 to 3 (ranging from “no
probability” to “several times a day”).
An impact is considered to be financially
material:
- If it triggers or could reasonably be
expected to trigger material financial
effects on the Group’s development,
financial position, financial
performance, cash flows, access to
finance or cost of capital over the short-
, medium- or long-term.
- Failure to disclose this information,
providing incorrect information or
concealing it could reasonably
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
59
influence the decisions taken by
stakeholders in light of the Group’s
sustainability report.
Applicable thresholds of financial materiality:
Materiality
Cause/effect
Thresholds of
financial
materiality
Critical
Possible suspension
of operations
>3 % of
turnover
Material
Major operational
disruptions,
requiring
considerable effort
to manage
1–3 % of
turnover
Important
Significant
operational
disruptions,
requiring
considerable effort
to manage
0.5–1 % of
turnover
Informative
Minor operational
disruptions
0.1–0.5 % of
turnover
Minimal
Business as usual,
no disruptions
Up to 0.1 % of
turnover
No impact
No impact
-
The DMA of 2024 involved stakeholders,
identified significant IROs, and underwent a
double assessment, including the financial
materiality assessment. In 2026, following the
completion of the DMA, a comparison of the
IROs assessment output will be included in the
sustainability statement for the following
financial year.
In the DMA assessment, the sustainability
matter becomes material if it meets one or both
of the materiality criteria (impact and financial
dimensions). A detailed description of the
relevant topics is provided under each topic in
accordance with the ESRS requirements. This
DMA is particularly important to the Group, as it
involved the IROs assessment across all relevant
areas at the Group level.
Nevertheless, in 2025, senior management
reviewed the IROs assessment of the DMA of
2024 and updated the financial materiality data.
Decisions taken:
- Due to changed circumstances—
significant amendments to the Labour
Code of the Republic of Lithuania,
whereby training on the prevention of
violence and harassment becomes
mandatory for all employees—the
impact materiality must be increased
for S1 “Own workforce”, sub-topic “Equal
treatment and opportunities for all”,
sub-sub-topic “Measures against
violence and harassment in the
workplace”.
- The sub-topic “Substances of very high
concern” of the topic “Pollution” has
become material from a financial
perspective and is disclosed in this
year’s statement.
- The positive impacts identified in 2024
were reassessed in detail, and a decision
was taken to reclassify most of them as
measures to mitigate negative impacts,
in other words, the designation of
“positive impacts” was abandoned.
The reviewed and updated DMA results have
been approved by the Group’s Board.
Disclosure requirements in ESRS covered by
the undertaking’s sustainability statement I
IRO-2
The list of datapoints in cross-cutting and
topical standards that derive from other EU
legislation is provided in the Annexes, on page
127.
Material impacts, risks and opportunities and
their interaction with strategy and business
model I SBM-3
During the DMA, the Group identified its
material impacts on the environment and
human health, and assessed the associated
risks and opportunities. The topics and sub-
topics (sub-sub-topics) set out below are
material to the Group in terms of their impact or
financial materiality.
During the DMA, no indications were identified
of a potential financial impact on the Group’s
current financial position, financial
performance and cash flows arising from
material risks and opportunities, and not
material risks or opportunities were identified
that could result in a significant risk of a
material adjustment within the next annual
reporting period to the carrying amounts of
assets and liabilities reported in the related
financial statements (SBM-3 48 (e)). The Group
decided to use the option of phase-in
disclosures and not to present the financial
impact by material risks and opportunities on
its financial position, financial performance and
cash flows over the short-, medium- and long-
term;
The Group has not carried out a business model
resilience analysis to assess material IROs (SBM-
3 48 (f)).
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
60
Double Materiality Assessment (DMA) results:
The most important material IROs are concentrated in the operations of the Group’s companies.
IROs that have been identified as material for the Group during the DMA, as well as information
on the management of material sustainability matters, are disclosed in the topical standards,
specifying the type of impact (actual/potential, positive/negative) and its location within the value
chain.
The DMA has not identified any indications of a
potential financial impact on the current financial
position, financial performance or cash flows due to
material risks and opportunities. No material risks or
opportunities have been identified that could result in
a risk of a material adjustment within the next annual
reporting period to the carrying amounts of assets
and liabilities reported in the related financial
statements. The Group has used the option of phase-
in disclosures and not to present the financial impact
by potential material risks and opportunities on the
Group’s financial position, financial performance and
cash flows over the short-, medium- and long-term.
Sustainability considerations have been incorporated
into the Group’s business model, but have not yet
been fully integrated into the Group’s strategy and
management – this is being implemented gradually
(for more information, see page 52). This materiality
assessment provides the basis for disclosures under
both the CSRD and the ESRS, as well as for the Group’s
future sustainability strategy and action plans within
its own operations and value chain. Following the
DMA, the Group now has a clearer path towards a
more sustainable organisation in each ESG area.
Assessment of Climate Risks
In 2025, an assessment of the physical and transitional
risks associated with climate change was carried out
to identify the potential impact of climate change on
the Group’s business continuity, financial
performance, infrastructure, supply chain and
reputation. The assessment was carried out in
accordance with Commission Delegated Regulation
(EU) 2021/2139 (Appendix A) and the
recommendations of the Task Force on Climate-
related Financial Disclosures (TCFD). The analysis
covered all of the Group’s companies in Lithuania and
Latvia, and the impact was assessed at the regional
level, taking into account the climate projections, risk
profiles and climate policies of the two countries.
Climate risks were assessed using different climate
change scenarios, based on the RCP and SSP
scenarios developed by the Intergovernmental Panel
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
61
on Climate Change. Two main scenarios were selected for the analysis—the scenario aligned with
the Paris Agreement (SSP1-2.6) and a high-emission scenario (SSP5-8.5)—enabling the
assessment of risk materialisation under different global emissions trajectories. Risks were
assessed over the short term (up to 2027), the medium term (2027–2032) and the long term (2032–
2050).
The analysis of physical risks utilised national and international data sources, including the
Lithuanian Hydrometeorological Service’s study on climate change risks, the Climate Impact
Explorer and the IPCC AR6 interactive atlas. All physical risks listed in Appendix A to Commission
Delegated Regulation (EU) 2021/2139 were assessed, following a screening of their relevance based
on the type and locations of the Group’s operations. The results were summarised at the Group
level, as no significant differences were identified between the risk profiles of the individual
companies.
The results of the assessment of physical climate risks indicate that the greatest potential impact
on the Group’s operations is posed by acute extreme weather events, particularly heatwaves,
heavy rainfall, floods, storms and strong winds, which could cause damage to infrastructure,
disruptions to energy supply, supply chain bottlenecks and temporary suspension of operations.
The materiality of these risks is assessed as moderate or high in the short, medium and long term,
and the impact of some of them is increasing in the longer term. The assessment also showed
that, in certain geographical locations, depending on local geological conditions, there may be a
significant risk of karstic sinkholes, which could directly affect the stability of buildings and the
safety of infrastructure. Chronic physical risks associated with long-term climate change, such as
heat stress, temperature variability and changing precipitation patterns, are in most cases
assessed as being of low or medium materiality, but in the long term may influence operational
planning, infrastructure maintenance requirements and cost structures.
The results of the transitional climate risk assessment indicate that political, regulatory and
market risks associated with changes in climate policy, emission reduction commitments and
shifting consumer and investor expectations may have the greatest potential impact on the
Group’s operations. In the short term, the most material impact is associated with the
implementation of sustainability reporting and emissions accounting requirements, which
increases the need for data collection and disclosure, as well as the adaptation of operational
processes and systems to regulatory requirements. In the medium and long term, the materiality
of some regulatory, technological and market risks is increasing or remains high, particularly due
to the need for investment in less-polluting technologies, stricter emission-reduction targets,
changes in consumer behaviour, and increased stakeholder focus on climate change issues.
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
62
ENVIRONMENT
- TAXONOMY OVERVIEW | page 63
- E1 CLIMATE CHANGE | page 71
- E2 POLLUTION | page 78
- E3 WATER AND MARINE RESOURCES | page 84
- E4 BIODIVERSITY AND ECOSYSTEMS | page 87
- E5 RESOURCE USE AND CIRCULAR ECONOMY | page 90
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
63
TAXONOMY OVERVIEW
The Group is actively analysing its activities in
accordance with the Taxonomy Regulation
(EU) 2020/852 and the related Climate
Delegated Regulation (EU) 2021/2139, as
amended by Delegated Regulations
(EU) 2022/1214 and (EU) 2023/2485, the
Environmental Delegated Act (EU) 2023/2486,
and the Disclosures Delegated Act
(EU) 2021/2178, with a view to identifying
potential taxonomy-eligible activities and
enhancing taxonomy indicators in the future.
The Group’s principal activities - milk processing
and food production - are not included in any of
the aforementioned Delegated Acts as
taxonomy-eligible activities. Nevertheless, the
Group systematically assesses its operations in
accordance with this process, by:
- identifying potential technical activities;
- carrying out a technical assessment to
verify compliance with the criteria for
climate change mitigation and/or
adaptation;
- assessing whether the activity causes
significant harm to other
environmental objectives;
- ensuring that the necessary protective
measures are implemented; and
- summarising performance against
targets and calculating taxonomy
indicators.
Each year, the Group reviews its list of
taxonomy-eligible activities and conducts a
technical assessment in accordance with the
current EU Taxonomy requirements. In 2025,
the Group actively analysed the Delegated Act
adopted by the European Commission on
4 July 2025, amending the Taxonomy
Disclosures, Climate and Environmental
Delegated Acts, as part of the Omnibus
Simplification Package. For the 2025 financial
year, the Group has chosen to disclose
taxonomy information in accordance with the
previously applicable requirements (the earlier
version of the Delegated Act), to ensure
continuity and comparability with previous
reporting years.
The guiding documents:
Fundamentals of the accounting policy:
In 2025, the VILVI GROUP discloses the following key
performance indicators (KPIs) required under the
Taxonomy:
Revenue, as the external revenue in accordance
with International Financial Reporting Standards
(IFRS), which corresponds to the consolidated sales
figures in the statements of comprehensive income
of “Vilkyškių pieninė”, AB.
Long-term investments (CAPEX under the
Taxonomy), as the increase in the value of property,
plant and equipment, and intangible assets before
depreciation, amortisation and impairment for the
previous financial year, as well as the acquisition of
assets managed under lease. Increase, as the
investments during the financial year (net of any
government grants received) into the total amount
of long-term investments presented in the
consolidated financial statements. This amount
excludes increases arising from business
combinations and obligations related to asset write-
downs, but includes advances and prepayments.
Operating expenditure (OPEX under the
Taxonomy), as direct non-capitalised costs
associated with R&D, building refurbishment
measures, short-term leases, maintenance and
repairs, and any other direct costs associated with
the day-to-day maintenance of property, plant and
equipment, carried out by the undertaking or a
third party from which services are purchased, and
which is necessary to ensure the uninterrupted and
efficient functioning of such assets.
Double counting:
All the indicators disclosed under the Taxonomy
avoid double counting, as each indicator is
attributed to different activities. Where necessary,
intra-group transactions are eliminated to avoid
double counting. VILVI GROUP’s activities are
assessed against the objective of climate change
mitigation, and are therefore disclosed only in
relation to this objective.
Internal reporting systems and processes are
continuously improved to align with the Taxonomy
reporting requirements.
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
64
List of taxonomy-aligned activities of the VILVI GROUP
Designation: CCM – Climate Change Mitigation; CCA – Climate Change Adaptation.
Activities
Taxonomy
code
Description of activities for
mitigation of climate change
Group’s activities
corresponding to the
description
Group’s companies
Taxonomy-
alignment with
mitigation
objective
Electricity generation using
solar photovoltaic
technology
CCM 4.1/CCA
4.1
Construction and operation of
electricity generation facilities that
produce electricity using solar
photovoltaic (PV) technology.
Installation and operation of
solar power plants.
“Vilkyškių pieninė”, AB
“Modest”, AB
“Kelmės pienas”, UAB
“Baltic Dairy Board”, SIA
Aligned
Construction, extension and
operation of waste water
collection and treatment
CCM 5.3
Construction, extension and
operation of centralised waste water
systems including collection (sewer
network) and treatment.
Operation and development of
treatment plants.
“Vilkyškių pieninė”,
AB
“Modest”,
AB
“Baltic Dairy Board”,
SIA
Not aligned
Collection and transport of
non-hazardous waste in
source segregated fractions
CCM 5.5
Separate collection and transport of
non-hazardous waste in single or
comingled fractions aimed at
preparing for reuse or recycling.
Collection and preparation of
non-hazardous waste for reuse
or recycling.
“Vilkyškių pieninė”, AB
“Modest”, AB
“Kelmės pieninė”, AB
“Kelmės pienas”, UAB
“Baltic Dairy Board”, SIA
Aligned
Transport by motorbikes,
passenger cars and
commercial vehicles
CCM 6.5/CCA
6.5
Purchase, financing, renting, leasing
and operation of vehicles designated
as category M1, N1, both falling under
the scope of Regulation (EC)
No 715/2007 of the European
Parliament and of the Council, or L
(2- and 3-wheel vehicles and
quadricycles).
Purchase and operation of
electric vehicles owned by the
Group.
“Vilkyškių pieninė”, AB
“Modest”, AB
Aligned
Construction of new
buildings
CCM 7.1
Development of building projects for
residential and non-residential
buildings by bringing together
financial, technical and physical
means to realise the building
projects for later sale as well as the
construction of complete residential
or non-residential buildings, on own
account for sale or on a fee or
contract basis.
Construction of new buildings.
“Vilkyškių pieninė”, AB
“Baltic Dairy Board”, SIA
Not aligned
Renovation of existing
buildings
CCM 7.2/CCA
7.2
Construction and civil engineering
works or preparation thereof.
Renovation of buildings.
“Vilkyškių pieninė”, AB
“Modest”, AB
Not aligned
Installation, maintenance
and repair of energy
efficiency equipment
CCM 7.3/CCA
7.3
Individual renovation measures
consisting in installation,
Installation, maintenance and
repair of energy efficiency
equipment.
“Baltic Dairy Board”, SIA
Not aligned
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
65
maintenance or repair of energy
efficiency equipment.
Installation, maintenance
and repair of charging
stations for electric vehicles
in buildings and parking
spaces attached to buildings
CCM 7.4/CCA
7.4
Installation, maintenance and repair
of charging stations for electric
vehicles in buildings and parking
spaces attached to buildings.
Installation and operation of
charging stations for electric
vehicles.
“Vilkyškių pieninė”, AB
“Modest”, AB
“Kelmės pienas”, UAB
“Baltic Dairy Board”, SIA
Aligned
Installation, maintenance
and repair of instruments
and devices for measuring,
regulation and controlling
energy performance of
buildings
CCM 7.5/CCA
7.5
Installation, maintenance and repair
of instruments and devices for
measuring, regulation and
controlling energy performance of
buildings.
Installation of an energy
efficiency monitoring device.
“Vilkyškių pieninė”, AB
Aligned
Acquisition and ownership
of buildings
CCM 7.7/CCA
7.7
Buying real estate and exercising
ownership of that real estate.
Acquisition and use of
buildings.
“Vilkyškių pieninė”, AB
Not aligned
Professional services related
to energy performance of
buildings
CCM 9.3
Professional services related to
energy performance of buildings.
Purchased energy performance
measurement services.
Purchased energy performance
measurement services.
“Vilkyškių pieninė”,
AB
“Modest”,
AB
“Kelmės pieninė”,
AB
“Kelmės pienas”,
UAB
“Baltic Dairy Board”,
SIA
Aligned
The table presents an overview of taxonomy-eligible activities and taxonomy non-eligible according to the environmental objectives for 2025. No activities have
been identified that meet the criteria for the following environmental objectives: climate change adaptation, sustainable use and protection of water and marine
resources, transition to a circular economy, pollution prevention and control, protection and restoration of biodiversity and ecosystems.
Environmental Objectives
Share of revenue, %
Share of capital expenditure, %
Share of operational expenditure, %
Taxonomy-
aligned activity
Taxonomy-
non-aligned
activity
Taxonomy-
aligned activity
Taxonomy-non-
aligned activity
Taxonomy-aligned
activity
Taxonomy-
non-aligned
activity
Climate Change Mitigation (CCM)
0.01
0
3.43
30.70
0.08
0.08
Climate Change Adaptation (CCA)
0
0
0
0
0
0
Protection of Water and Marine Resources (WTRD)
0
0
0
0
0
0
Circular Economy (CE); Pollution Prevention and
Control (PPC)
0
0
0
0
0
0
Protection of Biodiversity and Ecosystems (BIO)
0
0
0
0
0
0
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
66
Revenue in accordance with the Taxonomy Regulation
“CCM” – Climate Change Mitigation-related Taxonomy-aligned activity;
“Y” – Yes, Taxonomy-eligible and Taxonomy-aligned activity; “N” – No, Taxonomy-eligible but not Taxonomy-aligned activity
“N/EL” – Taxonomy-non-eligible activity for the relevant objective; “EL” – Taxonomy-eligible activity for the relevant objective; “-” – criterion does not apply.
Revenue in accordance with the Taxonomy Regulation
Financial year 2025
Substantial contribution criteria
DNSH criteria (“Does Not
Significantly Harm”)
Minimum safeguards
Proportion of revenue of Taxonomy
-
aligned economic activities, 2024
Enabling activity
Transitional activity
Transitional activity
Economic activities in accordance with the
Taxonomy Regulation
Code of
the
Taxono
my-
eligible
activity
Revenue
Share of revenue
Climate change mitigation
Climate change adaptation
Water
Pollution
Circular economy
Biodiversity
Climate change mitigation
Climate change adaptation
Water
Pollution
Circular economy
Biodiversity
thousand
EUR
%
Y,
N,
N/
EL
Y,
N,
N/E
L
Y, N,
N/E
L
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 economic activities
A.1 Environmentally sustainable activities (Taxonomy-aligned)
Collection and transport of non-hazardous waste in
source segregated fractions
CCM 5.5
25.5
0.01
Y
N
N/E
L
N/EL
N/EL
N/EL
-
Y
-
-
Y
-
Y
0.01
-
-
Installation, maintenance and repair of instruments
and devices for measuring, regulation and
controlling energy performance of buildings
CCM
7.5/
CCA 7.5
2,5
0.01
Y
N
N/EL
N/EL
N/EL
N/EL
-
Y
-
-
-
-
Y
0
E
-
A.1 Total
28
0.01
0.01
Of which enabling
2.5
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
Total revenue of Taxonomy-aligned activities
(A.1+A.2)
28
0.01
0.01
B. Taxonomy-non-eligible activities
Revenue of Taxonomy-non-eligible activities
286,903
99.99
99.99
Total (A+B)
286,931*
100
100
*This indicator is presented in the „Consolidated and Separate Statement of Profit or Loss“ section of the consolidated financial statements, page 159.
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
67
Capital expenditure (CAPEX under the Taxonomy) in accordance with the Taxonomy Regulation
“CCM” – Climate Change Mitigation-related Taxonomy-aligned activity;
“Y” – Yes, Taxonomy-eligible and Taxonomy-aligned activity; “N” – No, Taxonomy-eligible but not Taxonomy-aligned activity
“N/EL” – Taxonomy-non-eligible activity for the relevant objective; “EL” – Taxonomy-eligible activity for the relevant objective; “-” – criterion does not apply.
Capital expenditure (CAPEX under the Taxonomy) in accordance with the Taxonomy Regulation
Financial year 2025
Substantial contribution
criteria
DNSH criteria (“Does Not Significantly
Harm”)
Minimum safeguards
Proportion of CAPEX of Taxonomy-
aligned activities, 2024
Enabling activity
Transitional activity
Economic activities in accordance with the
Taxonomy Regulation
Code of
the
Taxono
my-
eligible
activity
CAPEX under Taxonomy
Proportion of CAPEX under
Taxonomy
Climate change mitigation
Climate change adaptation
Water
Pollution
Circular economy
Biodiversity
Climate change mitigation
Climate change adaptation
Water
Pollution
Circular economy
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 economic activities
A.1 Environmentally sustainable activities (Taxonomy-aligned)
Electricity generation using solar photovoltaic
technology
CCM
4.1/CCA
4.1
1,003
2.87
Y
N
N/
EL
N/
EL
N/
EL
N/
EL
-
Y
-
-
Y
Y
Y
0.82
-
-
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
commercial vehicles
CCM 6.5
/CCA 6.5
192
0.55
Y
N
N/
EL
N/
EL
N/
EL
N/
EL
-
Y
-
Y
Y
-
Y
0.69
-
T
Installation, maintenance and repair of charging
stations for electric vehicles in buildings and
parking spaces attached to buildings
CCM
7.4/CCA
7.4
4
0.01
Y
N
N/
EL
N/
EL
N/
EL
N/
EL
Y
Y
-
-
-
-
Y
0.03
E
-
Installation, maintenance and repair of instruments
and devices for measuring, regulation and
controlling energy performance of buildings
CCM
7.5/CCA
7.5
0
0
Y
N
N/
EL
N/
EL
N/
EL
N/
EL
-
Y
-
-
-
-
Y
E
-
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
E
-
A.1 Total
1,199
3.43
1.54
Of which enabling
4
0.01
0.03
Of which transitional
192
0.55
0
A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
Construction, extension and operation of waste
water collection and treatment
CCM 5.3
479
1.37
EL
EL
N/
N/
N/
N/
0.52
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
68
EL
EL
EL
EL
Construction of new buildings
CCM 7.1
9,270
26.49
EL
EL
N/
EL
N/
EL
N/
EL
N/
EL
14.9
4
Renovation of existing buildings
CCM
7.2/CCA
7.2
134
0.38
EL
EL
N/
EL
N/
EL
N/
EL
N/
EL
1.78
Installation, maintenance and repair of energy
efficiency equipment
CCM
7.3/CCA
7.3
854
2.44
EL
EL
N/
EL
N/
EL
N/
EL
N/
EL
0
Acquisition and ownership of buildings
CCM
7.7/CCA
7.7
5
0.01
EL
EL
N/
EL
N/
EL
N/
EL
N/
EL
0.41
A.2 Total
10,742
30.70
17.8
8
Total CAPEX of Taxonomy-eligible activities
(A.1+A.2)
11,941
34.12
19.0
9
B. Taxonomy-non-eligible activities
CAPEX of Taxonomy-non-eligible activities
23,054
65.88
80.9
9
Total (A+B)
34,995*
100
100
*This indicator is presented in Note 12 of the „Notes to the Consolidated Financial Statements“ on page 185.
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
69
Operating expenditure (OPEX under the Taxonomy) in accordance with the Taxonomy Regulation
“CCM” – Climate Change Mitigation-related Taxonomy-aligned activity;
“Y” – Yes, Taxonomy-eligible and Taxonomy-aligned activity; “N” – No, Taxonomy-eligible but not Taxonomy-aligned activity
“N/EL” – Taxonomy-non-eligible activity for the relevant objective; “EL” – Taxonomy-eligible activity for the relevant objective; “-” – criterion does not apply.
Operating expenditure (OPEX under the Taxonomy) in accordance with the Taxonomy Regulation
Financial year 2025
Substantial contribution
criteria
DNSH criteria (“Does Not Significantly
Harm”)
Minimum safeguards
Proportion of OPEX of Taxonomy
-
aligned activities, 2024
Enabling activity
Transitional activity
Economic activities in accordance with the
Taxonomy Regulation
Code of
the
Taxono
my-
eligible
activity
OPEX under Taxonomy
Proportion of OPEX under
Taxonomy
Climate change mitigation
Climate change adaptation
Water
Pollution
Circular economy
Biodiversity
Climate change mitigation
Climate change adaptation
Water
Pollution
Circular economy
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 economic activities
A.1 Environmentally sustainable activities (Taxonomy-aligned)
Electricity generation using solar photovoltaic
technology
CCM
4.1/CCA
4.1
0.5
0.01
Y
N
N/
EL
N/
EL
N/
EL
N/
EL
-
Y
-
-
Y
Y
Y
0
-
-
Collection and transport of non-hazardous waste in
source segregated fractions
CCM 5.5
189
2.66
Y
N
N/
EL
N/
EL
N/
EL
N/
EL
-
Y
-
-
Y
-
Y
2.23
-
-
Transport by motorbikes, passenger cars and
commercial vehicles
CCM
6.5/CCA
6.5
8
0.12
Y
N
N/
EL
N/
EL
N/
EL
N/
EL
Y
Y
-
Y
Y
-
Y
0.09
-
T
Installation, maintenance and repair of charging
stations for electric vehicles in buildings and
parking spaces attached 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
-
Installation, maintenance and repair of instruments
and devices for measuring, regulation and
controlling energy performance of buildings
CCM
7.5/CCA
7.5
0
0
Y
N
N/
EL
N/
EL
N/
EL
N/
EL
-
Y
-
-
-
-
Y
0
E
-
Professional services related to energy performance
of buildings
CCM 9.3
21
0.30
Y
N
N/
EL
N/
EL
N/
EL
N/
EL
-
Y
-
-
-
-
Y
0
-
-
A.1 Total
219
3.08
2.32
Of which enabling
21
0.30
0
Of which transitional
8
0.12
0
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
70
A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
Construction, extension and operation of waste
water collection and treatment
CCM 5.3
30
0.43
EL
EL
N/
EL
N/
EL
N/
EL
N/
EL
0.37
Construction of new buildings
CCM 7.1
0
0
EL
EL
N/
EL
N/
EL
N/
EL
N/
EL
0
Renovation of existing buildings
CCM
7.2/CCA
7.2
105
1.48
EL
EL
N/
EL
N/
EL
N/
EL
N/
EL
1.87
Installation, maintenance and repair of energy
efficiency equipment
CCM
7.3/CCA
7.3
0
0
EL
EL
N/
EL
N/
EL
N/
EL
N/
EL
0
Acquisition and ownership of buildings
CCM
7.7/CCA
7.7
65
0.91
EL
EL
N/
EL
N/
EL
N/
EL
N/
EL
0
A.2 Total
200
2.82
3.37
Total OPEX of Taxonomy-eligible activities
(A.1+A.2)
419
5.91
5.69
B. Taxonomy-non-eligible activities
OPEX of Taxonomy-non-eligible activities
6,683
94.09
94.3
1
Total (A+B)
7,102
100
100
Contextual information on the KPIs established in the Taxonomy Regulation
All KPIs are disclosed based on the criteria for the climate change mitigation objective.
The proportion of revenue associated with Taxonomy-aligned activities in 2025 amounted to 0.01% and remained at the same level compared to 2024 (2024:
0.01%). The Group generates Taxonomy-aligned revenue from the collection of separately collected non-hazardous waste at the place of generation and its sale
for secondary use.
The proportion of capital expenditures associated with Taxonomy-aligned activities (Taxonomy-aligned CAPEX) in 2025 amounted to 34% and increased by 15
percentage points compared to 2024, or by EUR 4,563 thousand. The main changes were as follows: Capital expenditures meeting the technical screening
criteria for Taxonomy-aligned activities increased significantly:
- Electricity generation using solar photovoltaic technology (4.1) rose by EUR 684 thousand due to the intensive installation of new rooftop solar power
plants at AB „Modest“ and SIA „Baltic Dairy Board“; Construction, extension and operation of wastewater collection and treatment systems (5.3)
increased by EUR 479 thousand due to the extension of wastewater systems carried out by SIA „Baltic Dairy Board“.
- Capital expenditures not meeting the technical screening criteria for Taxonomy-aligned activities increased in the following areas: Construction of new
buildings (7.1) rose by EUR 3,472 thousand due to intensive investments in the construction of the cheese factory by SIA „Baltic Dairy Board“; Installation,
maintenance and repair of energy efficiency equipment (7.3) increased by EUR 854 thousand due to the implementation of a heat recovery system at
SIA „Baltic Dairy Board“.
The proportion of operating expenditures associated with Taxonomy-aligned activities (Taxonomy-aligned OPEX) in 2025 amounted to 5.91% and increased by
0.22 percentage points, an increase of 105.89 thousands EUR.
Disclosure of nuclear and fossil gas related activities under the Taxonomy
The Group does not carry out any nuclear energy related activities (4.26–4.28 under Taxonomy) or fossil gas related activities (4.29–4.31 under Taxonomy).
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
71
CLIMATE CHANGE I ESRS E1
Material impacts, risks and opportunities and their interaction with strategy and business model I ESRS 2 SBM-3
Currently, the Group’s strategy does not include integrated climate change objectives; it is planned to introduce them gradually.
Description of the processes to identify and assess material climate-related impacts, risks and opportunities | ESRS 2 IRO-1
The table shows the material impacts, risks and opportunities associated with the organisation’s operations and value chain. It specifies whether the impact is
actual (already occurring) or potential (possible), its nature—positive or negative —the location of the impact— own operations (OO) or value chain (VC)—
the relevant time period, a brief description, and the associated risks and opportunities.
Impact
Description of the impact
Part of the
value chain
Estimated time
period
Risks (R) and opportunities (O)
E1 CLIMATE CHANGE
Sub-topic: Climate change adaptation
Not identified
OO, VC
Short, medium,
long-term
R Acute and chronic climate-related physical events pose risks of
operational disruption.
R Physical climate risks arising from climate change may give rise to
financial risks, for example, increased costs of managing operational
or supply chain disruptions, and increased cooling costs.
Sub-topic: Climate change mitigation
Actual impact:
GHG emissions
The use of non-renewable energy
sources, the generation of heat and
steam, the use of refrigeration
equipment, the use of fossil fuels and
the operation of the vehicle fleet result
in greenhouse gas emissions and have
a negative impact on climate change.
OO, VC
Short, medium,
long-term
R: With growing regulatory pressure from the EU and Lithuania to
transition to renewable energy sources, the transformation of energy
production requires effective alternatives to renewable energy sources
and significant investment, which may contribute to the slow pace of
the transition.
In 2024, the DMA of the Group highlighted a positive impact outlined in its 2024 Sustainability Statement, namely the energy from renewable energy sources.
Having reviewed the assessment in detail, the Group decided to regard the use of renewable energy as a measure to mitigate negative impacts and to list this
aspect under the opportunities. For more information on the DMA, see page 58.
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
72
The Group is aware of the fact that its activities
have an impact on climate change. So far, the
Group has not carried out a resilience analysis to
assess the extent to which its strategy and
business model are resilient to climate change.
This is planned for 2027. In 2025, the assessment
of the impact of climate change on the
organisation in accordance with the
recommendations of the Task Force on
Climate-Related Financial Disclosures (TCFD)
was performed. For more information on the
climate risk assessment, see page 60.
Information on climate change risks is also
disclosed in the Group’s overall risk assessment,
on page 37-42. Further information on the
processes for identifying and assessing IROs
can be found on page 58, in the Section “Double
Materiality Assessment”.
Transition plan for climate change mitigation
I E1-1
The Group supports the Paris Agreement on
climate change and is committed to working to
ensure that global warming does not exceed
the 1.5-degree threshold. As a representative of
the manufacturing industry, the Group
contributes to climate change through the CO₂
emissions generated by its operations (due to
the significant energy resources consumed and
its vehicle fleet). At the same time, we use a raw
material—milk—supplied to us by the livestock
sector, which is also a significant source of GHG
emissions. Climate change has been identified
as a key area of impact; the energy and climate
change mitigation sub-topics are financially
material, and the costs of climate change
adaptation are likely to skyrocket, which means
that this sub-topic may also become of critical
financial materiality in the future.
The Group has not yet prepared a transition
plan. Its preparation was originally scheduled to
begin in 2025, but, in view of the strategic
development projects currently underway, it
has been postponed until 2027. The Group plans
to align its transition plan with an emissions-
reduction pathway consistent with limiting
global warming to 1.5 °C and the European
Climate Law (Regulation (EU) 2021/1119), which
sets interim targets for 2030 and 2050.
Policies related to climate change mitigation and
adaptation I E1-2
The Group’s Environmental Policy is the key
document guiding the implementation of its
environmental principles and objectives. The
Environmental Policy was prepared taking into
account the interests of key stakeholders, in
accordance with applicable legal requirements and
established best practice.
In the area of climate change, the Environmental
Policy outlines:
The Group’s endorsement of the initiative “Business
Ambition for 1.5 °C” by the UN and other
international organisations, the Paris Agreement,
and the EU’s climate targets, which aim to limit the
global temperature increase to 1,5 °C and achieve net
zero GHG emissions by 2050.
The Group’s objectives related to climate change
mitigation and adaptation:
- To achieve climate neutrality by 2050;
- To set and approve GHG emission
reduction targets for Scopes 1, 2 and 3 for
the period 2025–2026, have them validated
by the Science Based Targets initiative
(SBTi). This objective has been postponed
until 2026–2027, by which time the Group’s
strategic business development projects
will have been implemented.
- The Group planned to prepare the
transition plan during 2025–2026, but, in
view of the implementation of the Group’s
strategic development projects, its
preparation has been postponed until
2026–2027.
Key areas of impact related to climate change:
- Air pollution caused by GHG;
-
A significant amount of energy and
natural resources used;
-
Generation of production waste, surface
wastewater, and other waste during
operations.
The policy sets out the principles for mitigating
adverse impacts:
-
Reduce air pollution by consistently
decreasing GHG emissions and other air
pollutants through transitioning to
renewable energy sources, introducing
advanced heating, steam production,
cooling, and transportation technologies,
and managing odour dispersion. We
assess every aspect of the impact, conduct
regular monitoring, and adapt the policy in
line with the results of our analysis.
-
Increase the efficiency of energy and
natural resource use by applying the
principle of prioritising energy efficiency,
and implementing solutions that reduce
the consumption of electricity, fossil fuels
and water both in production and
throughout the supply chain.
The Group is committed to implementing its
Environmental Policy in accordance with the
principles of responsibility, prevention and
continuous improvement. The implementation of
the policy is based on a comprehensive analysis of
operations, a risk assessment, and a systematic
approach to minimising environmental impact.
How we operate in the field of environmental
protection:
-
We conduct our operations in compliance
with all mandatory environmental
legislation;
-
We work together with other stakeholders
interested in improving environmental
protection, including business partners,
government bodies, organisations and the
communities in which we operate;
-
We regularly review our environmental
impact, monitor and assess our
performance, continuously improve our
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
73
Environmental Policy, and keep the public
informed of our progress;
- We take actions to prevent pollution;
- We foster our employees’ competence and
a responsible attitude towards
environmental protection.
The Environmental Policy was approved by order of
the CEO of the Group’s parent company, and is
mandatory for all the Group’s employees. The policy
is publicly available on the Group’s website.
Actions and resources in relation to climate
change policies I E1-3
The Group’s biggest challenges in reducing
GHG emissions and achieving climate neutrality
by 2050 are selecting more climate-friendly
energy sources and transport options. The
Group's activities require significant energy
resources. Its factories are designed for a
specific energy source, so a transition to more
sustainable solutions would have a significant
financial impact on the Group’s operations.
Nevertheless, the Group is looking for solutions:
- Since 2024, autonomous solar power
plants have been operating on the roofs
of the Group’s factories (“Vilkyškių
pieninė”, AB, “Kelmės pieninė”, AB and
“Modest”, AB). In 2025, solar power
plants were installed on the roof of the
newly built factory of “Baltic Dairy
Board”, SIA. In 2026–2027, the potential
of and demand for additional
renewable energy generation will be
assessed.
- The passenger car fleet is being
renewed with electric vehicles. In 2025,
4 electric passenger cars were
purchased, bringing the total number
of electric vehicles to 32 % of the total
passenger car fleet. In 2026–2027, the
transition of light-duty vehicles to
electric vehicles will continue, and the
potential for heavy-duty vehicles
powered by more sustainable fuels will
be assessed.
- To ensure a continuous power supply,
the UPS technology is used.
- Heat exchange technologies are
analysed annually and gradually
implemented, enabling a reduction in
electricity consumption.
- Between 2025 and 2030, opportunities
for implementing additional energy
solutions that will enable the transition
to cleaner energy sources will be
identified and assessed.
- In 2025, energy efficiency assessments
of buildings were carried out at all the
Group’s companies, except “Pieno
logistika”, AB, and further analysis and
planning of measures to improve
energy efficiency will continue.
Although the Group does not currently have an
approved transition plan, it is actively
developing measures and investments to
reduce its environmental impact and adapt to
climate change. Once construction of the new
factory in Latvia is complete and the planned
production volumes are reached, the company
will seek SBTi validation. Since the Group does
not have an approved transition plan, the results
of achieving GHG emissions reduction targets
are not measured, as 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
climate change mitigation data in accordance
with approved procedures, and assesses the
effectiveness of the measures taken.
In 2025, the Group ran educational initiatives for
its staff to raise awareness and engage them on
the issue of climate change.
In 2025, the Group did not allocate any
significant capital or operating expenditure for
decarbonisation measures (EUR 0);
consequently, data on these costs is not
reflected in the financial statement items or in
the Taxonomy indicators.
There was no actual negative impact in 2025
that would require compensation for damages.
Targets related to climate change mitigation and
adaptation I E1-4
By 2050, the Group aims to achieve climate
neutrality, in line with the Paris Agreement’s goal of
limiting global warming to 1.5
°C above pre-
industrial levels
-
It was planned to set GHG emission
reduction targets for Scopes 1, 2, and 3 for
2025–2026 and in accordance with the
SBTi methodology. However, this target
has been postponed until 2027, when the
Group’s strategic business development
projects will have been implemented, and
business volumes will have stabilised.
-
The transition plan was supposed to be
prepared during 2025–2026, setting out
the key measures for reducing GHG
emissions and adapting to climate
change. This target has been postponed
until 2026–2027, by which time the
Group’s strategic business development
projects will have been implemented.
The targets were reviewed by the Group’s senior
management.
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
74
Energy consumption and mix I E1-5
The Group generates energy from natural gas and liquefied petroleum gas (LPG). Most of it is used to produce steam for industrial processes. Until 2023, all the
electricity purchased by the Group was green, i.e. generated from renewable energy sources. Given the significant cost difference of green energy, a decision
was made to discontinue the purchase of renewable energy whilst simultaneously developing in-house solar power projects on the factory roofs. In 2024, the
Group began operating its own solar power plants on the roofs of most of its factories. In 2025, solar power plants were also installed on the roof of the “Baltic
Dairy Board” SIA factory, and some of the electricity purchased that year was green.
Energy consumption and mix
Units
2025
2024
Change 2025/2024
Calculation details:
Data collection: energy specialists from the
Group’s companies are responsible for data
collection; data is collected, compiled and
verified in accordance with the approved
procedures. The data is based on purchase
invoices and consumption-recording
devices/meters; no assumptions are made in
the calculations. The consolidated data is
published annually in the Sustainability
Statement.
Direct energy sources: direct energy
consumption comprises all energy generated
by the Group from natural gas and LPG and
used for its own purposes.
Indirect energy sources include purchased
energy, such as grid electricity and grid heat.
Energy production from non-renewable
sources: consumption of natural gas and LPG
in the production of steam and heat.
Energy production from renewable sources:
electricity generated by the Group’s own solar
power plants.
1. Fuel consumption from coal and coal products
MWh
Not applicable
Not applicable
-
2. Fuel consumption from crude oil and petroleum
products
MWh
21,345
20,332
1,013
3. Fuel consumption from natural gas
MWh
53,666
43,729
9,937
4. Fuel consumption from other fossil sources
MWh
Not applicable
Not applicable
-
5. Consumption of purchased or acquired
electricity, heat, steam, and cooling from fossil
sources
MWh
23,228
32,165
-8,937
6. Total fossil energy consumption (calculated as
the sum of lines 1 to 5)
MWh
98,239
96,226
-2,013
Share of fossil sources in total energy consumption
%
82
91
-9
7. Consumption f rom nuclear sources
MWh
Not applicable
Not applicable
-
Share of consumption from nuclear sources in
total energy consumption
%
Not applicable
Not applicable
-
8. Fuel consumption for renewable sources,
including biomass (also comprising industrial and
municipal waste of biologic origin, biogas,
renewable hydrogen, etc.)
MWh
Not applicable
Not applicable
-
9. Consumption of purchased or acquired
electricity, heat, steam, and cooling from
renewable sources
MWh
20,000
8,593
11,407
10. Consumption of self-generated non-fuel
renewable energy.
MWh
889
504
385
11. Total renewable energy consumption
MWh
20,890
9,097
11,793
Share of renewable sources in total energy
consumption
%
17.5
8.6
8.9
Total energy consumption (calculated as the sum
of lines 6 and 11)
MWh
119,129
105,323
13,806
Energy production by the Group
Energy production from non-renewable sources
MWh
75,011
64,062
10,949
Energy production from renewable sources
MWh
889
504
385
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
75
Energy intensity based on net revenue
Units
2025
2024
Change 2025/2024
Energy intensity: total energy consumption
(MWh) associated with activities in high
climate impact sectors, divided by the
Group’s net revenue (EUR). All the Group’s
business segments belong to high climate
impact sectors (NACE code 105100). For more
information, see pages 16-17.
Energy intensity (total energy consumption divided
per net revenue)
MWh/
million
EUR
396
429
-33
Gross Scopes 1, 2, 3 and Total GHG emissions I E1-6
GHG emissions
Units
2025
2024
Change 2025/2024
Calculation details:
The Group’s consolidated GHG emissions
report has been prepared in accordance with
the Greenhouse Gas Protocol: A Corporate
Accounting and Reporting Standard –
Revised Edition, WRI/WBCSD) (the “GHG
Protocol”) and is aligned with the ESRS
requirements. The emission factors used in
the calculations are derived from the latest
databases of Lithuania’s National Inventory
Report (NIR), the UK Department for
Environment, Food and Rural Affairs (DEFRA),
the Waste and Resources Action Programme
(WRAP), and other qualified emission factor
databases. Secondary data is used for the
calculations, as no primary data is currently
available from suppliers (0 % of the data used
is obtained from suppliers).
The methodology for calculating GHG
emissions involves selecting relevant
Emission Factors (EFs) that are used to
convert activity data into GHG emissions. The
EFs have been selected for the period under
review. The relevant Global Warming
Potential (GWP) indicators have also been
chosen, using the Intergovernmental Panel
on Climate Change (IPCC) Fifth Assessment
Report: Climate Change (5AR).
All GHG types, including CO₂, CH₄, N₂O, HFCs,
PFCs, SF₆, have been assessed, upon
converting them into CO₂ equivalent. The
Group does not use biofuel in its operations;
therefore, biogenic emissions are not
assessed separately.
Scope 1 GHG emissions
Gross Scope 1 GHG emissions
t
CO
2
eq.
22,250
18,010
4,240
Percentage of Scope 1 GHG emissions from
regulated emission trading schemes
t
CO2eq.
Not applicable
Not applicable
Not applicable
Scope 2 GHG emissions
Indirect (Scope 2) location-based GHG emissions
t
CO2eq.
3,635
5,275
-1,640
Indirect (Scope 2) market-based GHG emissions
t
CO
2
eq.
5,247
11,783
-6,536
Scope 3 GHG emissions
Gross Scope 3 GHG emissions
t
CO
2
eq.
558,293
432,737
125,556
Purchased raw materials, goods and services (C1)
t
CO2eq.
510,171
404,314
105,857
Capital goods (C2)
t
CO
2
eq.
18,999
4,601
14,398
Fuel production and transportation (C3)
t
CO2eq.
5,212
4,411
801
Upstream transportation and distribution (C4)
t
CO
2
eq.
3,993
3,046
947
Waste/wastewater generated in operations and its
treatment (C5)
t
CO2eq.
262
209
53
Business travelling (C6)
t
CO
2
eq.
54
56
-2
Employee commuting (C7)
t
CO2eq.
889
830
59
Upstream leased assets (for own use) (C8)
t
CO
2
eq.
Included in
Scope 1 and
Category C1 of
Scope 3
Included in Scope
1 and Category C1
of Scope 3
Included in Scope 1
and Category C1 of
Scope 3
Downstream transportation and distribution (C9)
t
CO2eq.
7,621
6,156
1,465
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
76
Processing of sold intermediate products (C10)
t
CO
2
eq.
11,075
9,095
1,980
All the Group’s companies and operations are
included in the calculations; the GHG
inventory covers Scope 1, 2 and relevant
Scope 3 categories (as disclosed in the table).
The parent company’s GHG emissions
account for 15 % of the Group’s total emissions
(assessed using the location-based method).
The Group determines the boundaries of its
entities in accordance with the principle of
operational control.
When compiling operational data, its level of
detail, quality and reliability were analysed,
and opportunities for improvement were
identified. Following the calculations, the
necessary measures have been planned to
ensure data quality and completeness.
Use of sold products (C11)
t
CO2eq.
Not applicable
Not applicable
Not applicable
End-of-life treatment of sold products (C12)
t
CO
2
eq.
18
19
-1
Downstream leased assets (for the needs of others)
(C13)
t
CO2eq.
Not applicable
Not applicable
Not applicable
Franchises (C14)
t
CO
2
eq.
Not applicable
Not applicable
Not applicable
Investments (C15)
t
CO2eq.
Not applicable
Not applicable
Not applicable
Total GHG emissions (location-based)
t
CO
2
eq.
584,365
456,022
128,343
Total GHG emissions (market-based)
t
CO2eq.
585,977
462,530
123,447
GHG emissions other than Scope 1–3
t
CO
2
eq.
Not applicable
Not applicable
Not applicable
GHG intensity
Total GHG emissions (location-based) per unit of
net income
t
CO
2
eq./
million
EUR
2,036
1,858
178
Total GHG emissions (market-based) per unit of net
revenue
t
CO2eq.
/million
EUR
2,042
1,885
157
Scope 1 emissions: direct GHG emissions that originate from sources owned by the Group. Scope 1 GHG emissions consist of emissions from energy production using natural gas
and LPG, transport fuels, and air conditioning and refrigeration processes. Data sources used for emissions calculations: the company’s financial accounting documents (invoices,
meter readings, internal accounting systems). The emissions were calculated by multiplying the reported consumption figures by the relevant EFs specified in the national
sources.
Scope 2 emissions: indirect GHG emissions from the generation of purchased electricity and heat. The emissions were calculated by multiplying the purchased energy amount
by the relevant EFs specified in the national and international sources. The emissions determined using the location-based method were calculated based on average EF for the
country of operation, while the market-based method also took into account the purchased green electricity. Contractual arrangements and guarantees of origin were used for
the purchase of electricity, confirming the procurement of green electricity generated from renewable energy sources, which accounted for 67 % (29% in 2024) of all the purchased
energy, and for 65% (26 % in 2024) of Scope 2 emissions (calculated using the location-based method). Data sources used for emissions calculations: the company’s financial
accounting documents (invoices, meter readings, internal accounting systems).
Scope 3 emissions: emissions from sources not owned or controlled by the Group. These are the cradle-to-gate emissions generated by all raw materials, goods and services
purchased by the Group (C1), including capital goods (C2), their transport and distribution (C4), production and transportation of fuel (C3), treatment of waste and wastewater
generated during operations (C5), business travelling (C6), employee commuting (C7), property leased for own use (C8) (included in Scope 1 and Category 1 of Scope 3),
transportation and distribution of sold products outside the Group (C9), processing of sold intermediate products (C10), and managing the packaging put on the market (C12).
Data sources used for emissions calculations: the Group’s financial accounting records (invoices, internal accounting systems), which specify the quantities of raw materials,
products and services purchased and/or consumed during the year, as well as the quantities of waste and wastewater generated during operations. In the calculations, the
quantity of the main raw material—milk—purchased in 2025 was converted based on its fat and protein content, thus resulting in 434,692 tonnes (351 607,40 tonnes in 2024).
Furthermore, the data obtained during preliminary calculations and assessments was based on assumptions made by management, including those regarding employee
commuting, transportation distances, and the processing of intermediate products. The emissions were calculated by multiplying the operation data by the relevant EFs specified
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
77
in the national and international sources.
The methods applied to the calculation of Scope 3 emissions:
- Average data method and cost-based method (C1);
- Average data method (C3, C7, C10);
- Cost-based method (C2, C4);
- Method based on the type, quantity and treatment method of waste/wastewater, and cost-based method (C5);
- Method based on the distance and hotel accommodation (C6);
- Distance-based method (C9);
- Method based on the quantity of sold product packaging, the type of packaging and the method of disposal (C12).
Upstream leased assets (for own use) (C8): The Group leases premises and equipment foe own needs; the electricity, heat and fuel required for their operation, which the Group
purchases and consumes in the course of its operations, are included and accounted for in Scope 1 GHG calculations. Lease-related expenses (EUR) include payments for services
accounted for as the operating expenditure, and are therefore recorded in Category C1 of Scope 3. In accordance with the GHG Protocol, lease-related indirect GHG emissions are
not assessed separately because the projected quantities are insignificant; instead, they are included in Category 1 of Scope 3 and calculated using the cost-based method.
Use of sold products (C11): No GHG emissions are directly emitted during the consumption of the dairy products manufactured by the Group. The Group generates indirect use
phase emissions through the storage and consumption of its dairy products. As the reporting of emissions from the indirect use phase is optional under the GHG Protocol, this
category is reported as “not applicable”.
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 complexity of data collection and calculation, the assumptions made, and the high level of uncertainty. At the
time of the assessment, most suppliers had not calculated their relevant emissions, so it was not possible to obtain information on their specific GHG emissions from the primary
sources. For the reasons mentioned above, the cost-based method was applied, the accuracy of which is lower than that of other methods.
GHG emissions intensity:
- Total GHG emissions (location-based) (t CO
2
eq) / the Group’s net income (million EUR)
- Total GHG emissions (market-based) (t CO
2
eq) / the Group’s net income (million EUR)
The Group’s net revenue is presented in the consolidated financial statements under the section “Consolidated and Separate Statement of Profit (Loss)”, p. 159.
There are plans to expand and refine the methods for calculating GHG emissions to improve the quality of Scope 3 data by directly involving the actors in the upstream and
downstream 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 I E1-7
Not performed by the Group.
Internal carbon pricing I E1-8
Not performed by the Group.
Anticipated financial effects from material physical and transition risks and potential climate-related opportunities I E1-9
The Group does not disclose this information by making use of the option of phase-in disclosures.
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
78
POLLUTION I ESRS E2
Description of the processes to identify and assess material pollution-related impacts, risks and opportunities I IRO-1
The table shows the material impacts, risks and opportunities associated with the organisation’s operations and value chain. It specifies whether the impact is
actual (already occurring) or potential (possible), its nature—positive or negative —the location of the impact—own operations (OO) or value chain (VC)—
the relevant time period, a brief description, and the associated risks and opportunities.
Impact
Description
Part of the
value chain
Estimated time
period
Risks (R) and opportunities (O)
E2 POLLUTION
Sub-topic: Air pollution
Actual impact:
Air pollution and odour
Potential impact:
Air pollution caused by technical
incidents
Air pollution (particulate matter) from energy
generation (steam production in our own boiler
houses) and our vehicle fleet negatively impacts the
environment. Raw material production processes and
transport emissions contribute to air pollution and
odours.
Potential air pollution and incidents caused by
technical faults must be managed. The same risk
applies to the upstream value chain.
OO, VC
OO, VC
Short, medium,
long-term
Short, medium,
long-term
Sub-topic: Water pollution
Potential impact:
Wastewater pollution caused by
technical incidents
The production process generates industrial
wastewater, which must be treated using the
companies’ own treatment facilities (“Vilkyškių
pieninė”, AB, “Modest”, AB, “Baltic Dairy Board”, SIA). A
failure of a wastewater treatment plant can negatively
impact the environment
OO, VC
Short, medium,
long-term
R: Potential incidents at wastewater treatment
plants caused by technical faults could have
reputational and financial consequences
Sub-topic: Substances of concern
OO, VC
Short, medium,
long-term
R: Potential spillages of chemical substances
caused by technical faults could have
reputational and financial consequences
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
79
As one of Lithuania’s largest dairy processing
companies, the Group generates both air and
wastewater pollution. Air pollutants and odours
are released during production, and incoming
traffic also contributes to ongoing air pollution
on the factory premises. Industrial wastewater is
generated at all of the Group’s factories. To
measure the Group’s actual environmental
impact, we comply with the laws and
regulations of the Republic of Lithuania and
implement approved monitoring programmes
at our sites. Further information is provided in
the calculation methodology of pollution
metrics on page 81. When assessing the risks
and opportunities associated with pollution in
the Group’s operations, we rely on the
information and expertise of specialists in the
technical departments, projected production
volumes and their potential impact on pollution
risks. To identify the IROs in the upstream and
downstream value chain of the Group, we rely
on publicly available sources of information, as
well as data from suppliers and business
customers. In 2024, the DMA of the Group
highlighted a positive impact outlined in its
2024 Sustainability Statement, namely the
creation of secondary raw material. Having
reviewed the assessment in detail, the Group
decided to regard this as a measure to mitigate
negative impacts. Material impacts were
assessed during the DMA, and it was found that
the material sub-topics under the Pollution
topic are Air pollution and Water pollution. In
2025, following a review of financial materiality,
the sub-topic of Substances of concern has
been identified as material and is therefore
disclosed in this Sustainability Statement.
Policies related to pollution I E2-1
The Group’s Environmental Policy is the key policy
governing environmental matters within the
Group.
In the area of pollution, the Environmental Policy
outlines:
Main areas of impact:
- Air pollution is caused by GHG emissions
and other pollutants resulting from the use
of non-renewable energy sources, the
generation of heat and steam, the use of
refrigeration equipment, the use of fossil
fuels, transportation, and potential odours.
- Waste and wastewater generation is
significant in the production process.
The Group’s efforts and operating principles in the
area of pollution:
- Reduce air pollution by consistently
decreasing GHG emissions and other air
pollutants through transitioning to
renewable energy sources, introducing
advanced heating, steam production,
cooling, and transportation technologies,
and managing odour dispersion. We
assess every aspect of the impact, conduct
regular monitoring, and adapt the policy in
line with the results of our analysis.
- Reduce the volume of waste and
wastewater by striving to optimise
production processes and preventing
waste generation, and ensuring the safe,
responsible and environmentally sound
management of waste and wastewater at
all stages of operations.
- Safe use of chemicals by applying the
precautionary practice when using
chemicals, avoiding hazardous
compounds, seeking alternatives and
implementing safe management
solutions.
How we operate in the field of environmental
protection:
- We comply with all applicable legal
requirements, international standards and
voluntary commitments in the field of
environmental protection.
- We regularly assess the environmental
impact of our operations, identify key risks,
and implement measures to reduce,
prevent or eliminate any negative impact.
-
We follow the principle of hierarchy of
mitigation and strive to minimise the
Group’s impact on the environment and
ecosystems. Where it is not possible to
avoid or mitigate impacts, we consider
possible measures for offsetting impacts
and restoring the environment that would
be consistent with the principle of “no net
loss of biodiversity” and, where applicable,
would have a net positive impact through
the application of pollution prevention,
damage-reducing technologies and, where
necessary, impact remediation or
environmental rehabilitation measures.
-
We adhere to the principle of avoiding
disturbance to protected areas and
ensuring the integrity of species and
habitats of high ecological value; where this
cannot be avoided, we implement all
necessary mitigation and compensation
measures.
-
We ensure transparent communication,
and train and engage our employees,
partners, suppliers and local communities
in the pursuit of our environmental goals.
The Environmental Policy was approved by order of
the CEO of the Group’s parent company, and is
mandatory for all the Group’s employees. The
policy is publicly available on the Group’s website.
Actions and resources related to pollution I
E2-2
Air pollution control
“Vilkyškių pieninė”, AB holds an Integrated
Pollution Prevention and Control (IPPC) permit.
It was issued to the company based on its
operations, where more than 200 tonnes of milk
are processed per day. The levels of carbon
monoxide, nitrogen oxides, sulphur oxides,
particulate matter, volatile organic compounds
and other pollutants emitted into the air are
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
80
monitored in accordance with the values
specified in the IPPC permit.
“Kelmės pienas”, UAB holds a pollution permit
for the management of ambient air pollution.
The amount of nitrogen oxides emitted into the
ambient air is controlled in accordance with the
permit.
Due to increased production volumes, “Modest”,
AB has submitted an application for the IPPC
permit.
Other companies of the Group are not required
to hold emission permits. However, they
conduct an inventory of air pollution sources
and take measurements in accordance with
national legislation.
At the dry milk products factory “Kelmės
pieninė”, AB, loose, dusty products are
manufactured; it is therefore very important to
minimise the release of solid particles into the
air and the environment. Air contaminated with
particulate matter from the dryers is directed
into cyclones, where it is thoroughly cleaned
before being released into the environment; the
air filters are regularly maintained.
“Pieno logistika”, AB operates in the logistics
sector; therefore, transport-related pollution is
included in the Group’s GHG emissions
volumes. This company does not cause any
other air pollution. All of the Group’s factories
are equipped with air filters that are maintained
at regular intervals.
“Baltic Dairy Board”, SIA was issued a pollution
permit, under which emissions of pollutants
into the air are monitored and a pollution
charge is paid.
All the Group’s companies pay a pollution tax on
emissions from mobile sources of air pollution
based on fuel consumption, and keep relevant
records.
Wastewater pollution control
The Group is actively implementing
technological solutions for the reuse of water,
which lay the groundwork for reducing both the
volume and intensity of wastewater. As it is not
currently possible to measure the volume of
reused water, the decision has been postponed,
with its further implementation planned for
2026.
The wastewater generated during production
at “Vilkyškių pieninė”, AB is treated in the
company’s own mechanical and biological
treatment plants. The wastewater treatment
efficiency is up to 99 %. The automatic effluent
control system prevents excess sewage sludge
from entering the environment along with the
treated effluent. To conserve water, reduce the
volume of wastewater and minimise the
amount of pollutants released into the
environment, wastewater treatment plants
have been successfully installed, enabling the
water used in production processes to be
reused. These measures have resulted in the
reduction of the wastewater volume by 30 %.
The project has been co-funded by the EU.
Treated effluent is discharged into the natural
environment in accordance with the
permissible pollution limits set out in the IPPC
permit.
The wastewater generated during the
production of fresh dairy products at “Kelmės
pienas”, UAB is discharged into the treatment
plants of the municipal utility company “Kelmės
vanduo”, UAB.
The wastewater generated during production
at “Kelmės pieninė”, AB is discharged into the
wastewater treatment facilities of the municipal
utility company “Tauragės vandenys”, UAB.
The wastewater generated during production
at “Modest”, AB is discharged into the municipal
sewage system, which is operated by “Tauragės
vandenys”, UAB. 2024 “Kelmės pieninė”, AB and
“Modest”, AB installed primary wastewater
treatment plants on their shared factory site,
which began operating in the Q4 of 2024. The
purpose of primary wastewater treatment is to
treat the wastewater before discharging it into
the sewerage system operated by “Tauragės
vandenys”, UAB.
All the Group’s companies that generate
wastewater monitor the pollutants discharged
in their wastewater.
“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
activities; therefore, this sub-topic is not
relevant to the company.
“Vilkyškių pieninė”, AB and “Modest”, AB
operate wastewater treatment plants where
sludge is produced. This is a by-product which,
within the supply chain, becomes a secondary
raw material and is sold for electricity
generation at biogas power stations, as well as
being supplied to farms holding waste
management permits as fertiliser. As part of the
DMA, the risk of wastewater being discharged
into municipal treatment plants and placing an
additional burden on them was also evaluated;
to this end, wastewater pollutant monitoring is
conducted continuously to ensure compliance
with regulatory standards.
Funding for measures relating to air and water
pollution control is not allocated as a separate
budget line. Measures for pollution control and
prevention are funded from the total cost of
production. No significant additional capital or
operating expenditure have been allocated for
pollution reduction measures in 2025; all
measures are implemented using existing
resources. More information regarding the
expenses of this project on page 67.
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
81
Targets related to pollution I E2-3
The Group operates in accordance with the legal acts of the Republic of Lithuania governing pollution control. It aims to reduce the wastewater intensity by
cutting water consumption, including through the implementation of water reuse technologies. Efforts are currently in progress to find the most suitable
solution for accurately measuring the volume of reused water. Although such data should have been started to be recorded from 2025 onwards, technical
constraints make this impossible; therefore, the implementation of this process has been postponed until 2026. Once the accounting solution has been
implemented, specific targets for reducing wastewater intensity will be set.
Pollution of air, water and soil I E2-4
“Vilkyškių
pieninė”, AB
“Modest”, AB
“Kelmės
pieninė, AB
“Kelmės pienas”,
UAB
“Baltic Dairy
Board”, SIA
Total:
Calculation details:
Air pollution:
The key metrics are disclosed, as calculated in
accordance with the calculation methods set
out in the inventories of air pollution sources.
The figures refer to those companies where
measurements are carried out. Laboratory
measurements are carried out regularly, and
the results are continuously recorded and
monitored in accordance with the procedures
approved by the Group, as well as Lithuanian
regulations and monitoring programmes.
Responsibility for monitoring performance
indicators has been entrusted to specialists in
the technical departments of each Group
company. “Pieno logistika”, AB is the logistics
company and generates no air pollution
emissions subject to the ESRS E2-4 disclosure
requirements.
2025
2024
2025
2024
2025
2024
2025
2024
2025
2024
2025
2024
Air pollution, t/year
Carbon
monoxide
(CO)
2.19
1.99
1.78
1.78
2.34
2.12
0.54
0.55
0.78
0.39
7.63
6.83
Nitrogen
oxides (Nox)
2.92
2.65
2.37
2.38
3.11
2.83
1.38
1.40
1.27
0.53
11.05
9.79
Sulphur
dioxide (SO2)
0
0
0.02
0.02
0.02
0.02
-
-
0
0
0.04
0.04
Particulate
matter
0.03
0.03
-
-
-
-
-
-
0
0
0.03
0.03
Wastewater pollution, t/year
Wastewater pollution:
Wastewater pollutants are calculated on the
basis of data from wastewater analyses carried
out in licensed laboratories and in accordance
with the pollutant calculation methods
established by the Republic of Lithuania.
Where direct measurements are not carried
out, the indicators are calculated using the
assumptions, standard EFs and activity data
set out in legislation and methodologies.
Note: Due to a technical error, the COD
indicator for wastewater pollution in 2024 was
incorrectly aggregated. The previous report
stated 364.39 t/year, whereas the corrected
data show the accurate total to be 424.88
t/year.
BOD7
1.09
0.95
78.05
194.50
15.91
54.24
108.13
143.79
1.74
0.73
204.92
394.21
Materials in
suspension
0.17
0.26
31.83
100.97
6.62
6.5
-
-
1.66
1.07
40.28
108.80
Petroleum
products
0.001
0.002
-
-
-
-
-
-
-
-
0.001
0.002
ChDS
10.87
9.41
187.59
60.49
26.85
142.54
157.78
206.29
6.33
6.15
389.42
424.88
Total
phosphorus
0.05
0.11
0.47
2.06
0.83
2.31
1.04
2.83
0.16
0.13
2.55
7.44
Total
nitrogen
3.93
1.75
3.67
7.21
2.36
3.68
4.86
7.38
1.26
0.68
16.08
20.70
Ammonium
nitrogen
0.72
0.10
-
-
-
-
0.2
0.28
-
-
0.92
0.38
Oils
2.05
1.13
2.33
103.90
1.26
2.42
25.39
8.11
-
-
31.03
115.56
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
82
Substances of concern and substances of very high concern I E2-5
Substances of concern in this disclosure are defined in accordance with Regulation (EC) No 1272/2008 of the European Parliament and of the Council on
classification, labelling and packaging (CLP) of substances and mixtures, based on the classification provided by suppliers in the safety data sheets (SDS) for
substances/mixtures. The hazard classes are determined in accordance with the provisions of the aforementioned Regulation.
The disclosed information covers the chemical substances/mixtures used in the Group’s operations. The Group does not use substances of concern directly in
its production processes, as ingredients in its products. Chemical substances and mixtures are used for the disinfection and cleaning of production sites and
facilities, to ensure compliance with hygiene standards, and for laboratory testing. To guarantee the highest standards of product quality and safety, tests are
carried out regularly, following the disinfection of the facilities.
As substances of concern are not incorporated into the finished products, the chemicals used do not become part of the products and are discharged as
pollutants in the wastewater. The quantities of chemical substances/mixtures released are considered equivalent to the quantities of materials consumed.
During the reporting period, the total amount of purchased chemicals/mixtures amounted to 1,928 tonnes, while the amount consumed was 1,861 tonnes.
The table below shows the quantities of substances of concern by hazard class, specifying the quantities purchased and used. Chemical substances/mixtures
that fall into more than one hazard class are listed in several rows in the table. As most chemical substances/mixtures have more than one hazard class, the
quantities in individual rows are duplicated and therefore cannot be aggregated.
Hazard class of chemical
substances (according
to the CLP Regulation)
“Vilkyškių pieninė”,
AB
“Modest”, AB
“Kelmės pieninė, AB
“Kelmės pienas”,
UAB
“Baltic Dairy Board”,
SIA
Total
Purchased,
t
Used, t
Purchased,
t
Used, t
Purchased,
t
Used, t
Purchased,
t
Used, t
Purchased,
t
Used, t
Purchased,
t
Used, t
Acute toxicity,
Categories 1–4 (if
swallowed/in contact
with skin/inhaled)
253.930
255.709
210.729
210.470
247.880
246.518
79.186
78.188
89.370
85.022
881.095
875.907
Skin corrosion
(irritation), Categories 1–
2
734.791
744.701
354.261
348.026
260.057
258.686
156.018
154.885
190.689
132.590
1,695.816
1,638.889
Serious damage to eyes
(eye irritation),
Categories 1–2
439.947
445.451
200.476
189.849
6.070
6.006
40.989
41.639
120.958
90.005
808.440
772.950
Respiratory or skin
sensitisation, Category 1
0.073
0.086
68.900
65.909
0.000
0.000
0.001
0.000
3.024
3.154
71.998
69.149
Germ cell mutagenicity,
Categories 1–2
0.006
0.006
4.003
2.003
0.001
0.001
0.015
0.015
0.000
0.000
4.025
2.025
Carcinogenicity,
Categories 1–2
3.127
3.022
4.031
2.034
0.004
0.003
0.008
0.008
0.000
0.000
7.170
5.067
Reprotoxicity,
Categories 1–2
0.011
0.018
0.021
0.024
0.210
0.205
0.000
0.000
0.000
0.000
0.242
0.246
Aspiration toxicity,
Category 1
0.024
0.029
0.057
0.061
0.052
0.035
0.000
0.000
0.000
0.000
0.133
0.124
STOT 1 -single exposure,
Categories 1–2
7.001
6.800
4.700
4.762
5.224
5.188
1.861
1.809
22.496
19.801
41.282
38.361
STOT-repeated
exposure, Categories 1–2
9.383
9.308
0.079
0.082
0.000
0.000
0.000
0.000
47.590
48.127
57.053
57.517
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
83
Hazardous to the
aquatic environment –
Acute, Category 1
11.977
11.832
20.411
19.891
0.460
0.460
16.446
17.155
51.645
50.245
100.940
99.582
Hazardous to the
aquatic environment –
Chronic, Categories 1–4
27.865
28.023
34.944
34.084
5.478
5.377
33.751
34.308
55.213
53.598
157.252
155.390
Total quantity of
hazardous chemicals
purchased, t
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
1 – Specific Target Organ Toxicity-repeated exposure.
In accordance with the laws of the Republic of Lithuania, the Group submits reports on chemical substances and mixtures to the AIVIKS information system.
The Group is preparing a Guide to Good Practice for Chemical Substances and plans to implement it across the Group’s companies during 2026.
Substances of very high concern (SVHCs), as defined under the REACH Regulation (EC) No 1907/2006, are identified on the basis of the European Chemicals
Agency (ECHA) Candidate List and information provided by suppliers. During the reporting period, the Group did not identify any SVHCs, as defined in the
REACH Regulation.
Anticipated financial effects from pollution-related impacts, risks and opportunities I E2-6
The Group does not disclose this information by making use of the option of phase-in disclosures.
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
84
WATER AND MARINE RESOURCES I ESRS E3
Description of the processes to identify and assess material water and marine resources-related impacts, risks and opportunities I IRO-1
The table shows the material impacts, risks and opportunities associated with the organisation’s operations and value chain. It specifies whether the impact is
actual (already occurring) or potential (possible), its nature—positive or negative —the location of the impact—own operations (OO) or value chain (VC)—
the relevant time period, a brief description, and the associated risks and opportunities.
Impact
Description
Part of the
value chain
Estimated time
period
Risks (R) and opportunities (O)
E3 WATER AND MARINE RESOURCES
Sub-topic: Water resources
Sub-sub-topic: Water consumption
Actual impact:
High water consumption
The Group’s production processes consume significant
amounts of water, negatively impacting water resources. In
the Group’s upstream value chain, a significant amount of
water is also consumed for producing the necessary raw
materials.
OO, VC
Short, medium,
long-term
O: Implementation of technological solutions
that increase opportunities for water reuse
The Group’s core business is milk processing. Due to the nature of the production process, large quantities of water are used in this activity. Material impacts
were assessed during the Group’s DMA. For more information, see page 58. For disclosing the Water and Marine Resources topic, the Group utilised internal
data, the parameters of the technological solutions applied, and information obtained from local residents. To identify the IROs in the upstream and downstream
value chain of the Group, we rely on publicly available sources of information, as well as data from suppliers and business customers.
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
85
Actions and resources related to water and marine resources I E3-2
The dairy industry consumes large quantities of water; consequently, the use of this resource
is directly linked to the Group’s industry and is an integral part of its business model. Due to
the nature of dairy production technology, the amount of water taken in is less than the
amount of wastewater discharged; therefore, the Group has already implemented
technological solutions to conserve water: the clean-in-place (CIP) technologies have been
installed at all of the Group’s factories, which allow water used for cleaning equipment to be
regenerated. In 2024, “Vilkyškių pieninė”, AB completed the installation of the technology
that purifies rinse water so that it can be reused in production processes. Data on reused
water is not currently being recorded due to technical difficulties. The Group aims to begin
recording the volume of reused water in 2026, assess the potential for further increases in
reuse, and set targets.
“Vilkyškių pieninė”, AB, “Kelmės pienas”, UAB and “Baltic Dairy Board”, SIA obtain their water
from their own groundwater wells. Well monitoring is carried out in accordance with
approved monitoring programmes. The operation of own wells does not affect the quantity
or quality of water used by residents. The Group does not currently have a specific procedure
in place for managing the impact on consumers and end-users, as processes in this area have
not yet been established. “Kelmės pieninė”, AB and “Modest”, AB are supplied with water by
“Tauragės vandenys”, UAB. “Pieno logistika”, AB is active in logistics activities; therefore, this
sub-topic is not relevant to the company.
Targets related to water and marine resources I E3-3
In 2026, the Group will assess the effectiveness of secondary water use and the potential for
setting further targets.
Policies related to water and marine resources I E3-1
The Group’s Environmental Policy is the key policy governing
environmental matters within the Group.
In the area of water consumption, the Environmental Policy
outlines:
Main areas of impact:
-
A significant amount of energy and natural resources
used.
The Group’s efforts and objectives in the field of water and marine
resources:
-
Increase the efficiency of energy and natural resource use
by applying the principle of prioritising energy efficiency,
and implementing solutions that reduce the
consumption of electricity, fossil fuels and water both in
production and throughout the supply chain.
-
The Environmental Policy was approved by order of the
CEO of the Group’s parent company, and is mandatory for
all the Group’s employees. The policy is publicly available
on the Group’s website.
How we operate in the field of environmental protection:
-
We comply with all applicable legal requirements,
international standards and voluntary commitments in
the field of environmental protection.
-
We regularly assess the environmental impact of our
operations, identify key risks, and implement measures to
reduce, prevent or eliminate any negative impact.
-
We follow the principle of hierarchy of mitigation and
strive to minimise the Group’s impact on the environment
and ecosystems. Where it is not possible to avoid or
mitigate impacts, we consider possible measures for
offsetting impacts and restoring the environment that
would be consistent with the principle of “no net loss of
biodiversity” and, where applicable, would have a net
positive impact through the application of pollution
prevention, damage-reducing technologies and, where
necessary, impact remediation or environmental
rehabilitation measures.
-
We adhere to the principle of avoiding disturbance to
protected areas and ensuring the integrity of species and
habitats of high ecological value; where this cannot be
avoided, we implement all necessary mitigation and
compensation measures.
-
We ensure transparent communication, and train and
engage our employees, partners, suppliers and local
communities in the pursuit of our environmental goals.
The Environmental Protection Policy is approved by an order of
the Chief Executive Officer of the Group’s parent company and is
mandatory for all Group employees. The policy is publicly
available on the Group’s website.
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
86
Water consumption I E3-4
Water consumption
Units
2025
2024
Change 2025/2024
Calculation details:
The source of water consumption data is meter readings
and water purchase documents, where an external
supplier supplies water. Data collection has been entrusted
to specialists in the Technical Department, who are guided
by the approved data management procedure.
Some of the supplied water is reused, and technologies for
water reuse have been installed at each site; however, the
volume of reused water was not recorded in 2024–2025,
and this information is scheduled to be disclosed in the
2026 Sustainability Statement.
The Group’s sites are not located in areas at risk due to
water-related hazards. Water is not stored on the premises.
Total water consumption
m3
979,177
878,952
100,225
Total water recycled and
reused
m3
Not assessed
Not assessed
Not assessed
Water consumption in areas
at water risk
m3
Not applicable
Not applicable
Not applicable
Total water stored and
changes in storage
m3
Not applicable
Not applicable
Not applicable
Amount of water required to
produce 1 tonne of product
m3
10
10
-
Water consumption per unit
of revenue
m3/million
EUR
3,413
3,581
-168
Anticipated financial effects from water and marine resources-related risks and opportunities I E3-5
The Group does not disclose this information by making use of the option of phase-in disclosures.
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
87
BIODIVERSITY AND ECOSYSTEMS ESRS E4
Description of processes to identify and assess material biodiversity and ecosystem-related impacts, risks and opportunities I IRO-1
The table shows the material impacts, risks and opportunities associated with the organisation’s operations and value chain. It specifies whether the impact is
actual (already occurring) or potential (possible), its nature—positive or negative —the location of the impact—own operations (OO) or value chain (VC)—
the relevant time period, a brief description, and the associated risks and opportunities.
Impact
Description
Part of the
value chain
Estimated time
period
Risks (R) and opportunities (O)
E4 BIODIVERSITY AND ECOSYSTEMS
Sub-topic: Impacts and dependencies on ecosystem services
Actual impact:
Extraction of ecosystem-
dependent raw materials
The extraction of all the Group’s key raw materials (milk,
water, vegetable oil, cocoa, paper, and wooden packaging)
in the upstream value chain negatively impacts ecosystems.
VC
Medium, long-
term
R: Dependence on raw materials whose
extraction has an impact on ecosystems gives
rise to substitution risks and, consequently,
financial risks.
R: Rapidly tightening/changing regulations at
EU and Lithuanian level are driving the search
for alternative raw materials, accelerating the
pace of procurement of certified raw materials,
and, at the same time, increasing the need for
investment, which may give rise to financial
risks.
Although none of the Group’s factories is located within the EU’s Natura 2000 network of special areas of conservation, the protection of biodiversity and
ecosystems is an important issue for the Group. The Group may have a direct negative impact on biodiversity and ecosystems due to wastewater discharge;
however, the impact is managed through wastewater monitoring and regular testing of sewage sludge. For more information, see page 80.
Milk processing is an activity in which the production of the main raw material (milk) is closely linked to ecosystems and their vitality. In its operations, the Group
also uses other raw materials that may impact ecosystems, including water, vegetable oil, cocoa, packaging paper, and wood.
Material impacts were assessed during the Group’s DMA. For more information, see page 58. In assessing the IROs relating to biodiversity and ecosystems, the
Group used internal company data and drew on information from the market, the industry, customers and raw material certification schemes.
Transition plan and consideration of biodiversity and ecosystems in strategy and business model E4-1
The Group has not drawn up a plan for biodiversity and ecosystems. The DMA was carried out in 2024, which identified the key areas of this topic; work will now
continue gradually to develop a restructuring plan and align it with the business strategy.
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
88
Material impacts, risks and opportunities and
their interaction with strategy and business
model I ESRS 2 SBM-3
Currently, the Group’s strategy does not include
integrated biodiversity and ecosystem
objectives; it is planned to introduce them
gradually. Changing EU regulations and
customer expectations are making this area
increasingly relevant; the Group is responding
accordingly and planning its actions.
Policies related to biodiversity and ecosystems I
E4-2
In the area of the biodiversity and ecosystems, the
Group’s Environmental Policy defines:
Main areas of impact:
- Impact on biodiversity, ecosystems and
animal welfare while sourcing the Group’s
key raw materials (milk, water, vegetable oil,
cocoa, paper and wooden packaging) in the
upstream value chain.
The Group’s objectives in the area of biodiversity
and ecosystems:
- To protect ecosystems, biodiversity and
animal welfare by assessing the
environmental impact of sourcing key raw
materials (milk, water, vegetable oil, cocoa,
wood and paper) on the environment,
striving to source from responsible sources,
adhering to the principles of species and
habitat integrity, and avoiding
deforestation and disturbance of protected
areas.
How we plan to implement our Environmental
Policy:
- We comply with all applicable legal
requirements, international standards and
voluntary commitments in the field of
environmental protection.
- We regularly assess the environmental
impact of our operations, identify key risks,
and implement measures to reduce,
prevent or eliminate any negative impact.
- We follow the principle of hierarchy of
mitigation and strive to minimise the
Group’s impact on the environment and
ecosystems. Where it is not possible to
avoid or mitigate impacts, we consider
possible measures for offsetting impacts
and restoring the environment that would
be consistent with the principle of “no net
loss of biodiversity” and, where applicable,
would have a net positive impact through
the application of pollution prevention,
damage-reducing technologies and, where
necessary, impact remediation or
environmental rehabilitation measures.
- We are committed to protecting
biodiversity, animal welfare and natural
ecosystems, particularly in the upstream
value chain of raw materials extraction.
- We adhere to the principle of avoiding
disturbance to protected areas and
ensuring the integrity of species and
habitats of high ecological value; where this
cannot be avoided, we implement all
necessary mitigation and compensation
measures.
- We ensure transparent communication,
and train and engage our employees,
partners, suppliers and local communities
in the pursuit of our environmental goals.
The Environmental Policy was approved by order of
the CEO of the Group’s parent company, and is
mandatory for all the Group’s employees. The
policy is publicly available on the Group’s website.
The Group’s Supplier Code of Conduct sets out
the requirements in the field of environmental
protection:
- The supplier must comply with all
environmental laws and regulations
applicable to their activities.
- The supplier must actively seek to reduce its
negative impact on the environment and
increase its positive impact – they must
strive for the control and reduction of
greenhouse gas emissions, control and
reduction of waste, protection of water
resources, use of renewable energy sources,
energy efficiency, management of
hazardous materials (storage, use, waste
disposal) and circularity in their respective
fields of activity. The supplier must have an
approved environmental policy, measure
their impacts and risks.
-
The supplier must make every effort to
ensure that their activities do not harm the
soil, pollute water and air, do not emit
harmful noise, conserve natural resources,
do not threaten access to clean drinking
water, do not make it difficult to use
sanitary facilities, and do not harm people’s
health.
VILVI GROUP Sustainable Procurement Policy
It is planned to be approved in 2026.
VILVI GROUP Deforestation Policy
It is planned to be approved in 2026.
Actions and resources related to biodiversity
and ecosystems I E4-3
The Group’s main raw material is milk;
consequently, the greatest impact on
ecosystems occurs in the upstream supply
chain, on farms. At present, the Group has no
formal requirements for farmers regarding soil
management, but plans to introduce
appropriate measures by 2030.
Raw materials that are sensitive to biodiversity
and ecosystems, of which the Group is a
purchaser, include cocoa and vegetable (palm)
oil. These raw materials are more often sourced
from regions where their extraction may have a
negative impact on biodiversity and
ecosystems. The Group aims to manage this
potential impact in two ways:
1. The Group selects raw material
suppliers exclusively from the EU
member states, thereby ensuring that
suppliers are subject to the EU
Deforestation Regulation (EUDR),
which prevents raw materials linked to
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
89
deforestation from being imported into
the EU after 2021.
2. The Group aims to increase its use of
certified, ecosystem-sensitive raw
materials (cocoa, vegetable oil) to
ensure that the supply is not linked to
negative impacts on the environment
and people. In 2024, “Kelmės pienas”,
UAB was certified to the Rainforest
Alliance standard; in 2025, the
certificate was renewed, and the
company began using certified cocoa
in its production. “Vilkyškių pieninė”, AB
and “Kelmės pienas”, UAB have
implemented the Roundtable on
Sustainable Palm Oil (RSPO) standard,
and began using certified palm oil in its
production.
ESRS E4 Biodiversity and ecosystems is closely
linked to ESRS E3 Water and marine resources.
The information on the latter is disclosed on
page 84.
The Group is not currently undertaking any
specific activities relating to the conservation of
biodiversity or ecosystems; consequently, no
funds are allocated specifically to this area. The
Group’s action plans do not currently include
biodiversity offsets. This is based on the fact that
significant adverse impacts on biodiversity and
ecosystems have been identified in the
upstream value chain, rather than in the
Group’s own operations, and are managed
through measures to avoid and mitigate the
impacts, such as increasing the use of certified
raw materials and compliance with the
requirements of the EUDR.
In view of this, no residual unavoidable impacts
requiring biodiversity mitigation offsets have
been identified.
As biodiversity offsets are not applied, local and
indigenous knowledge and nature-based
solutions are not currently used in this context.
Targets related to biodiversity and ecosystems I
E4-4
The use of raw materials associated with
deforestation:
- 100 % of the raw materials used by 2026 are
EUDR-compliant (the entry into force of the
Deforestation Regulation has been
postponed to 30 December 2026; therefore,
the target is adjusted to: 100 % of raw
materials used by 30 December 2026 (from
the effective date of the regulation) are
EUDR-compliant).
2. Increasing the use of certified raw materials
- 50 % use of RSPO-certified palm oil by 2030.
Start of the RSPO certification – 2025; result
for 2025 is 8 %. Due to changes in activity
volume, the targets will be reviewed at the
end of 2026.
- Use of Rainforest Alliance-certified cocoa;
the aim was to set targets by 2025. The
setting of targets has been postponed due
to fluctuating operational volumes; targets
will be set in 2026–2027.
The Procurement Department is responsible for
monitoring and compiling data relating to
biodiversity and ecosystems. The data is regularly
reviewed and monitored, and the targets set and
progress towards them are reviewed annually
(discussed, adjusted as necessary and approved) by
senior management.
Impact metrics related to biodiversity and
ecosystems change I E4-5
The Group’s negative impact occurs in the
upstream value chain, not necessarily at
primary (e.g. milk) suppliers, but often at
secondary raw material suppliers who extract
materials that may affect ecosystems (e.g. cocoa
and vegetable oil). Therefore, the Group does
not consider it possible to disclose tangible
metrics.
Anticipated financial effects from
biodiversity and ecosystem-related risks and
opportunities I E4-6
The Group does not disclose this information by
making use of the option of phase-in
disclosures.
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
90
RESOURCE USE AND CIRCULAR ECONOMY I ESRS E5
Description of the processes to identify and assess material resource use and circular economy-related impacts, risks and opportunities I IRO-1
The table shows the material impacts, risks and opportunities associated with the organisation’s operations and value chain. It specifies whether the impact is
actual (already occurring) or potential (possible), its nature - positive or negative - the location of the impact - own operations (OO) or value chain (VC)—the
relevant time period, a brief description, and the associated risks and opportunities.
Impact
Description
Part of the
value chain
Estimated time
period
Risks (R) and opportunities (O)
E5 RESOURCE USE AND CIRCULAR ECONOMY
Sub-topic: Resources inflows, including resource use
Actual impact:
Significant quantities of
primary raw materials
The Group uses large quantities of
resources (e.g. packaging), which has a
negative impact on the environment.
OO, VC
Short, medium,
long-term
R: The changing, rapidly tightening regulations on the use of
secondary raw materials in packaging and on packaging
recyclability, for which the packaging manufacturing market is not
prepared—a projected supply shortage—pose financial risks in the
medium and long term.
R: Rapidly tightening/changing regulations at EU and national
level are influencing the search for alternative raw materials,
investment needs and a high degree of dependence on
fluctuations in raw material prices.
Sub-topic: Resource outflows related to products and services
Actual impact:
Significant quantities of
packaging
The Group releases a large volume of
packaging onto the market, which
negatively impacts the environment both
within its own operations and in the
downstream value chain.
OO, VC
Short, medium,
long-term
Sub-topic: Waste
Actual impact:
Generation of non-hazardous
and hazardous waste
Production generates both non-
hazardous and hazardous waste, which
has a negative impact on the
environment. This impact is perceived
both in the upstream and downstream
value chain.
OO, VC
Short, medium,
long-term
R: In the longer term, customer requirements and regulations may
change, resulting in an increased need for investment in waste
management and the development of zero-waste systems.
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
91
Material impacts were assessed during the
Group’s DMA. For more information, see page
58. In the DMA of resource use and the circular
economy, the Group utilised internal data and
drew on information from the market, the
industry, customers, raw material certification
schemes and consumer practices. In 2024, the
DMA of the Group highlighted positive impacts
outlined in its 2024 Sustainability Statement,
namely the creation/use of secondary raw
materials, and measures to reduce food waste.
Having reviewed the assessment in detail, the
Group decided to regard these aspects as
measures to mitigate negative impacts. For
more information on the DMA, see page 58.
Policies related to resource use and circular
economy I E5-1
In the area of circular economy, the Group’s
Environmental Policy defines:
Main areas of impact:
- Waste and wastewater generation is
significant in the production process.
- Due to the use of branded product
packaging the Group releases a large
volume of packaging onto the market.
The Group’s environmental management
principles:
- Reduce the volume of waste and
wastewater by striving to optimise
production processes and preventing waste
generation, and ensuring the safe,
responsible and environmentally sound
management of waste and wastewater at
all stages of operations.
Manage packaging use responsibly by optimising
packaging use, promoting the use of recyclable
and sustainable materials, and applying the
principles of the circular economy to reduce
environmental impact at both the production and
consumption stages.
The Environmental Policy was approved by order of
the CEO of the Group’s parent company, and is
mandatory for all the Group’s employees. The
policy is publicly available on the Group’s website.
The Group’s companies have adopted waste-
sorting procedures (not publicly disclosed) that set
out mandatory waste-sorting methods and
responsibilities.
VILVI GROUP Sustainable Procurement Policy
It is planned to be approved in 2026.
VILVI GROUP Food Waste Prevention Policy
It is planned to be approved in 2026.
Actions and resources related to resource use
and circular economy I E5-2
The circularity of raw materials
The circular economy and circularity have been
integrated into the Group’s business model and
strategy. For more information, see page 53. The
Group aims to create the maximum possible
value from a drop of milk. This can be achieved
by creating as closed a cycle as possible – what
might be considered waste or a by-product at
one factory is utilised as a primary raw material
at another of the Group’s factories. In the cheese
production process of “Vilkyškių pieninė”, AB
and “Modest”, AB the residual product is whey.
It is broken down and becomes the main raw
material for “Kelmės pieninė” AB. At this factory,
whey protein concentrate and whey protein
isolate are dried into a powder and become
whey protein concentrate, which is an
important product in athletes’ diets, or
permeate, a key ingredient in the confectionery
and animal feed industries. Most of the Group’s
factories are interconnected in this way.
“Kelmės pienas”, AB gives whey to the electricity
industry and to animal feed.
The Group’s operations include practical
examples of a sustainable production model,
whereby products are used as raw materials for
the manufacture of new products at another of
the Group’s plants or elsewhere. The circular
business model example given above is one of
the main ones, but there are many other
practical examples within the Group’s
operations in which raw materials are reused.
This includes cases where what might
otherwise be considered a waste product is
successfully used as a raw material in the
manufacture of another product. For example,
the whey left over from the production of fresh
products is reused as a value-added raw
material in yoghurt production, whilst the
cheese trimmings left over from cutting cheese
to the required shape are grated to create a new
product, and so on. One of the food safety
objectives at every Group factory is to reduce
food waste. For more information, see p. 92).
This also applies to projects involving the reuse
of water and heat exchange.
Packaging
The Group uses large quantities of packaging
(purchasing ready-made items). EU-wide
regulations on packaging are changing rapidly,
and this is creating new risks. For example, the
forthcoming regulations on the use of recycled
materials in food packaging are sparking
debate among both food manufacturers and
packaging suppliers. At present, the use of
recycled materials in food packaging is not
permitted under Lithuanian legislation;
therefore, in order to comply with future EU
requirements, amendments to the legal
framework are necessary, as is ensuring the
availability of such materials on the market. To
manage these risks, the Group continuously
monitors regulatory changes and maintains
close cooperation with its packaging suppliers.
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
92
The search for more sustainable
packaging solutions is the responsibility
of the Group’s Procurement
Department. We are constantly looking
for ways to reduce the use of plastic and
paper by optimising the material
content, size or thickness of packaging.
Solutions are being sought to gradually
replace multi-packs with single-packs.
This is an area of ongoing development
in which the Group works closely with
packaging manufacturers and
suppliers. In 2024, the Packaging
Strategy was drawn up, setting out
measures to increase the recyclability of
packaging and the use of secondary
raw materials, reduce packaging
weight, choose more sustainable raw
materials, and continue educating
consumers on packaging sorting and
food waste reduction. The Group will
disclose its change initiatives and the
positive impact achieved in its annual
sustainability statement.
Packaging generated during
production at the Group’s companies is
managed and recorded in accordance
with established environmental
requirements in the Product,
Packaging and Waste Accounting
Information System (GPAIS). Particular
attention is paid to the conservation of
natural resources, which is why
consumers are encouraged to recycle
dairy product packaging with clear
instructions on the packaging on how
to do this correctly. Sorting is made
easier by perforations that indicate
where multi-layer packaging should be
separated.
Changes were implemented in 2024, as
required by the EU Single-Use Plastic
Directive (2019/904/EU). The
requirement that beverage caps must
be attached to the packaging affected the liquid products packaging line – a new production line was installed
to meet the new requirements. In 2025, packaging projects continued in line with the Group’s approved
Packaging Strategy.
Reducing food waste is a key focus for the VILVI GROUP, which is achieved through prevention, processing and
the reuse of leftovers. In line with the principles of sustainability, the Group is constantly seeking solutions and
implementing technologies that enable it to reduce waste more effectively and recycle residual products. The
aim is to ensure that every production surplus is put to good use. By utilising the latest technologies, such as
process optimisation and innovative processing solutions, we ensure that food waste is kept to a minimum and
resources are used as efficiently as possible. This makes it possible to incorporate production residues into new
products or utilise them in other areas, such as biogas production or animal feed.
High-quality products that cannot be released onto the market are sold to staff at a nominal price, thereby
providing an additional benefit to staff whilst also helping to achieve the goals of reducing food waste. Products
that are fit for consumption are also donated to charitable organisations, thereby contributing to the well-being
of the community. These solutions help to reduce waste and create added value from both a social and an
environmental perspective.
Educational initiatives help to foster a conscious approach to reducing food waste in both personal and
professional life.
The importance of reducing food waste is also reflected in the pyramid shown above, which illustrates the
hierarchy of food use – ranging from prevention and support for social organisations to energy production and
waste disposal. The Group aims to operate at the top levels of the pyramid, prioritising prevention, recycling and
the use of residues in animal feed.
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
93
In 2025, the Group continued to engage
with employees and consumers,
promoting a responsible approach to
food residues. Educational initiatives
help to foster a conscious approach to
reducing food waste in both personal
and professional life.
Waste
Across the Group, waste generated
during production is managed and
recorded in accordance with
established environmental
requirements using the GPAIS and the
AIVIKS systems. Waste is sorted,
temporarily stored, collected,
transported and treated in such a way
as to avoid any adverse impact 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 company within the Group has
entered into contracts with waste
management operators, and has
adopted internal procedures (not
publicly disclosed) governing the
generation, sorting, temporary storage,
labelling and recording of waste, as well
as the retention of accounting
documents, which set out
responsibilities and processes. The vast
majority of the wastewater generated
during production is reused in the
Group’s subsequent production
processes. Only a small proportion of
the whey is sold to energy-generating
companies licensed to carry out this
activity, where it is used to produce
energy.
Targets related to resource use and circular economy I E5-3
1. Recyclability of packaging
100 % recyclable plastic and composite packaging in 2030; the result of 2024 – 96 %, the result of 2025 – 96 %.
2. The use of recycled plastic in packaging
Plastic contact-sensitive packaging*; 7.5 % in 2030, 40 % in 2040
Single-use 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.
The targets were set out by the VILVI GROUP Packaging Strategy working group and approved by senior management.
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
94
Resource inflows I E5-4
Units
2025
2024
Change
2025/2024
Calculation details:
Total combined weight of products and technical and biological materials used
during the reporting period is calculated based on the Group’s information
available in internal databases, including: milk purchased by the Group, used water
and whey, purchased food additives, consumed fuel, and packaging. The data has
been 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 used during the reporting period.
The share of sustainably sourced raw materials is calculated as the proportion of all
certified materials (which ensure sustainable sourcing) in the total quantity of
products and technical and biological materials used during the reporting period.
It includes FSC-certified packaging and the food additives certified by the
Rainforest. The 2024 indicator “Share of sustainably sourced raw materials
(certification scheme)” has been recalculated due to a calculation error identified
in the previous report.
Quantity of reused or recycled secondary components, secondary intermediate
products and secondary materials: whey concentrates produced by “Vilkyškių
pieninė”, AB and used in further production at “Kelmės pieninė”, AB.
Information on resource inflows is tracked by monitoring the movement of raw
materials; the Finance, Procurement and Sustainable Operations departments are
responsible for this, in accordance with the approved Operational Data
Management Procedure.
Total combined weight of
products and technical and
biological materials used during
the reporting period
t
558,077
376,672
181,405
Of which, primary raw
materials
t
435,291
260,426
174,865
Of which, processed raw
materials
t
122,786
112,296
10,490
Of which, packaging
t
3,953
3,950
3
Share of sustainably sourced raw
materials (certification schemes)
%
0.58 (FSC, RA,
RSPO)
0.67 (FSC,
RA)
-0.09
Quantity of reused or recycled
secondary components,
secondary intermediate
products and secondary
materials
t
107,481
102,998
4,483
Resource outflows I E5-5
Units
2025
2024
Change
2025/2024
Calculation details:
Waste data is continuously monitored by the Group’s environmental specialist;
data is collected in accordance with the approved data management procedure;
the data is presented in reports submitted via AIVIKS and GPAIS systems, as well
as information provided by waste management operators regarding the
recyclability of waste. The data is assessed based on estimates provided by waste
management operators.
Packaging waste: Packaging imported by the Group’s companies, packaging
rejected or used during the production process, and other packaging.
Hazardous waste: waste generated during the maintenance of equipment,
laboratory testing and other activities.
Production waste: Waste generated during the production processes of the
Group’s companies and sludge produced during wastewater treatment. This
waste is significant to the Group’s operations and is characteristic of the food
production sector as a whole.
Other waste: non-hazardous waste generated during equipment maintenance.
Unprocessed waste: waste used to generate energy or disposed of in landfills.
Recycled waste: waste used for recycling, composting or biogas production.
Packaging waste
t
246.72
207.59
39.13
Hazardous waste
t
21.77
12.18
9.59
Production waste
t
13,266.08
6,782.82
6,483.26
Other waste
t
55.67
48.59
7.08
Total
t
13,590.24
7,051.20
6,539.04
Unprocessed waste
%
0.26
0.32
-0.06
Recycled waste
%
99.74
99.68
0.06
Anticipated financial effects from resource use and circular economy-related impacts, risks and opportunities I E5-6
The Group does not disclose this information by making use of the option of phase-in disclosures.
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
95
SOCIAL
- S1 OWN WORKFORCE | page 96
- S3 AFFECTED COMMUNITIES | page 113
- S4 CONSUMERS AND END-USERS | page 116
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
96
OWN WORKFORCE I ESRS S1
WORKING CONDITIONS
Interests and views of stakeholders ESRS 2 SBM-2
The information is disclosed on page 56, in Section “Interests and views of stakeholders”.
Material impacts, risks and opportunities and their interaction with strategy and business model ESRS 2 SBM-3
The table shows the material impacts, risks and opportunities associated with the organisation’s operations and value chain. It specifies whether the impact is
actual (already occurring) or potential (possible), its nature - positive or negative - the location of the impact - own operations (OO) or value chain (VC) - the
relevant time period, a brief description, and the associated risks and opportunities.
Impact
Description
Part of the
value chain
Estimated
time period
Risks (R) and opportunities (O)
S1 OWN WORKFORCE
Sub-topic: Working conditions
Sub-sub-topic: Secure employment
Actual impact:
Jobs in the region
The Group is one of the largest employers in the
regions where it operates, making a significant
contribution to job creation in the area.
OO
Medium,
long-term
R: The automation of production creates a
new risk, namely a shortage of skilled workers
in the region who are capable of working with
automated processes.
Sub-sub-topic: Working time
Actual impact:
Shift work schedule,
physical exertion and
irregular working hours
Shift work schedules (night work, weekend work),
heavy physical exertion, and irregular working hours
due to fluctuating production volumes affect staff
motivation and turnover.
OO
Short,
medium,
long-term
R: A staff shortage caused by the unpopularity
of night shifts can lead to financial risks.
Sub-sub-topic: Social dialogue; freedom of association, the existence of works councils and the information, consultation and participation rights of
workers
Potential impact:
Insufficient employee
representation
Potentially insufficient employee involvement in
decision-making processes at Group companies that
have not established works councils.
OO
Short,
medium,
long-term
R: Insufficient employee engagement and
representation can lead to higher staff
turnover, which in turn creates financial risks
(due to the costs associated with turnover).
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
97
In the 2024 Sustainability Statement, the sub-topic of Adequate wages was treated separately. Following a review of the structure of the topics presented in the
preparation of the 2025 Sustainability Statement, it was decided that this sub-topic would no longer be highlighted, as wages that comply with legal
requirements and are regularly reviewed are considered standard business practice at the Group rather than a positive impact. In the 2024 Sustainability
Statement, Working time and Social dialogue were presented as separate sub-topics. In the 2025 Sustainability Statement, to align the structure with the ESRS
requirements, they are presented as sub-sub-topics. The change is of a structural nature and does not affect the content of the information.
In the DMA of 2024, the Group identified the positive impacts outlined in the 2024 Sustainability Statement, namely, secure and safe employment, stable wages
that are regularly increasing, equitable remuneration for overtime, on public holidays for employees working on an hourly basis. Having reviewed the assessment
in detail, the Group decided to treat these aspects as key business assumptions rather than as positive impacts. Because of this change the sub-topic of Adequate
wages is no longer listed in the table, as well as other related IROs. For more information on the DMA , see page 58.
Policies related to own workforce I S1-1
The Code of Ethical Employment has been approved, setting out the Group’s core principles of employment:
- employment is freely chosen;
- the workers’ freedom of peaceful association and the right to collective bargaining are respected;
- working conditions are safe meet basic human needs;
- the Group does not use child labour;
- the Group pays to all its employees no less than the minimum wage established by law;
- overtime is voluntary;
- no discrimination is tolerated;
- permanent labour relations are pursued;
- no harsh or inhumane treatment is allowed.
This policy applies to all employees of the Group companies; it has been drawn up in accordance with the Ethical Trading Initiative’s ETI Base Code, and is publicly available on
the Group’s website.
The Group does not have separate approved policies on human trafficking, forced labour and child labour, as these matters are regulated by the laws of the Republic of Lithuania.
Other policies adopted by the Group relating to its own workforce are as follows:
- The Remuneration Policy, for more information, see page 108.
- The Occupational Health and Safety Policy, adopted in each company of the Group, setting out the fundamental principles of health and safety: the aim to achieve
zero accidents and occupational diseases; the obligation for every employee to be aware of the essential principles of health and safety and apply them at work;
mandatory compliance with the legal requirements and regulations; the principles for organising health and safety activities within the company; engagement of
employee representatives; monitoring; and employee training;
- The Human Rights Policy, adopted by the Group and publicly available on the Group’s website. It is based on the UN Universal Declaration of Human Rights and defines
the basic principles to be followed when working with people. The Human Rights Policy establishes that the Group respects human rights, ensures safe working
conditions, fair remuneration and freedom of association, promotes employee engagement, and does not tolerate discrimination in any form: we do not discriminate
based on race, skin colour, gender, language, nationality, religion, political or other beliefs, property, social or other status, age, disability, sexual orientation or gender
identity.
At present, the Group has not adopted specific commitments regarding the inclusion of vulnerable groups; however, the same principles apply to all employees, ensuring equality
and non-discrimination. All employees of the Group companies are subject to this policy;
The Equal Opportunities Policy and the Policy on the Prevention of Violence and Harassment in the Workplace are disclosed in the Section “Equal treatment and opportunities
for all”. For more information, see page 106.
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
98
Processes for engaging with own workers
and workers' representatives about impacts I
S1-2
In 2024, employee representatives were directly
involved in the DMA and in determining the
materiality of the impacts. Employees were
directly involved in the stakeholder survey.
Although not all companies within the Group
have established works councils, and there are
no trade unions or collective agreements in
place, the aim is to foster active dialogue. For
more information on the works councils
operating within the Group companies, see
Section “Social dialogue” on page 99.
The main principle of communication is to
through regular meetings, regardless of the
employees’ level/grade. Line managers
communicate with employees directly, by email
or other means approved by the Group (e.g.
Other communication channels are used with
production staff), key information is published
on the Group’s intranet, and employee opinion
surveys are conducted as required. No staff
surveys were conducted in 2025.
One of the most important matters is
occupational health and safety (OHS). In every
company, employees are represented by OHS
representatives, and OHS committees are
elected to address the key safety and health
issues. The HR Manager is responsible for
involving employee representatives in OHS
matters and for ensuring overall staff
engagement within the Group.
In 2025, works councils were elected at
“Vilkyškių pieninė”, AB and “Modest”, AB. Works
councils are currently in operation at the
following Group companies: “Vilkyškių
pieninė”, AB, “Modest”, AB and “Kelmės
pienas”, AB.
Processes to remediate negative impacts and
channels for own workers to raise concerns I
S1-3
Employees can raise concerns via the Group’s
Trust Line, available on the Group’s website, and
at every Group company, via a physical
reporting box. This Trust Line allows staff and
other stakeholders to raise any concerns
confidentially and anonymously. Illegal
activities and potential breaches of legislation
within the Group companies can also be
reported in accordance with the Law of the
Republic of Lithuania on the Protection of
Whistleblowers—all necessary information is
available on the Group’s website. Employees are
provided with further information about the
reporting channels through training.
Employees may, where necessary, make use of
all other mechanisms available on the market to
contact public authorities through their
available channels. For more information on
reporting channels, see page 124.
Taking action on material impacts and
approaches to mitigating material risks and
pursuing material opportunities related to
own workforce, and effectiveness of those
actions and approaches I S1-4
To manage material impacts on the own
workforce, procedural measures are being
implemented, such as initiating internal
controls, setting up a team to assess and correct
identified risks or impacts, and putting control
mechanisms in place. For further information,
see page 108. The Group regularly surveys
psychosocial factors, analyses the results and
takes corrective action. The survey is conducted
every two years, most recently in 2024.
Secure employment
The Group is one of the largest employers in the
regions where all its factories are located. The
Group companies are valued for their stability
and their commitment to the employees and
local communities. The Group aims to foster
long-term employment relationships and a
motivated workforce, and reviews salaries
annually. The automation of production
processes poses the risk of a shortage in highly
skilled employees capable of managing
automated processes. There has also been a
shortage of workers for a number of years,
caused by a decline in the working-age
population in these regions. In its search for
recruitment opportunities, the Group aims to
attract skilled professionals from larger cities or
remote areas by offering a package of additional
benefits.
The recruitment, onboarding and integration
systems are constantly being improved. The
employment and termination processes are set
out under the Group’s approved procedure. A
structured onboarding process is in place to
introduce the corporate culture to new
employees, enhance the effectiveness of their
integration and training, and boost their
motivation to work for the Group.
Working time
The accounting principles of working time have
been approved in the Payroll System, which is
communicated to all employees. The Group has
adopted the Description of the Procedure for
the Monitoring, Control and Supervision of
Working Time Records, which sets out the
procedure for assigning overtime (ensuring that
overtime can only be voluntary), the procedure
for monitoring work schedules with adequate
rest periods, and the procedure and
responsibilities for monitoring overtime
indicators. The purpose of this document is to
ensure that employees’ working hours comply
with the requirements of the Labour Code of
the Republic of Lithuania and other relevant
legislation. A challenge for regional operations
is the staff turnover due to emigration or people
moving to larger cities in search of better job
opportunities. In recent years, there has been a
risk of staff shortages due to unfavourable work
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
99
schedules involving night shifts. The
manufacturing sector is characterised by
irregular working hours, which negatively
impact employees. This is mitigated by paying
greater attention to planning production and
rest periods.
To optimise employees’ work schedules, the
Group launched a pilot project in 2025 that
utilises AI for production scheduling.
Adequate wages
The Group’s remuneration system is based on
the principles of gender equality, non-
discrimination and fair pay, and is underpinned
by Lithuanian legislation and the Group’s
Remuneration Policy. The remuneration system
clearly defines the categories of employees and
their assigned positions, and the pay provisions
are applied to prevent discrimination on the
grounds of gender or any other grounds. Men
and women are paid the same wage for the
same work or for work of equal value. We value
transparent and clear remuneration, which is
why we use the services of Korn Ferry Hay
Group, the world’s leading provider of accurate
remuneration data and analysis. Korn Ferry Hay
Group’s compensation surveys enable
benchmarking the VILVI GROUP’s wages
against remuneration paid in the local market,
and helps ensuring competitive and fair
salaries. As early as 2024, the Group began
preparing for the implementation of the EU Pay
Transparency Directive, continuing its efforts in
2025, by conducting the remuneration analysis
and identifying areas for improvement, opting
for systemic solutions, assessing opportunities
and resources, and implementing necessary
changes to the remuneration system.
For employees who are paid on an hourly basis,
the approved system of qualification grades
applies, setting out specific qualification
requirements for each grade of positions in
technical, production, laboratory, and other
departments/units.
In 2025, implementation of the employee
performance evaluation system for
administrative staff began, with full
implementation planned for 2026.
Employees may be awarded bonuses for
carrying out additional duties or tasks. Given the
different ages, educational backgrounds, place
of residence, family circumstances and other
factors of the staff, the Group aims to provide a
balanced package of additional benefits that
meets the needs of the employees. Various
incentives are offered to employees:
- 24/7 accident insurance;
- social benefits in the event of the death
of a family member;
- supermarket gift vouchers to celebrate
the birth of a child or a wedding;
- gifts for birthdays, anniversaries, major
public holidays or retirement;
- transportation of employees to the
workplace or travel compensation from
a remote location;
- incentives to promote health,
professional development and a sense
of community.
The Group assesses whether employee
remuneration is in line with fair market rates.
The reliable WagendIcator methodology
(www.wageindicator.org) was used to select the
benchmark. According to this methodology, the
minimum monthly wage in Lithuania and
Latvia exceeds the living wage. The lower band
of the indicator is used for comparison when
assessing the adequate standard of living.
During the most recent assessment of 2024, the
Group carried out an assessment in accordance
with Directive 2013/24/EU of the European
Parliament and of the Council and determined
that salaries paid across the Group are in line
with the adequate wage levels, whereby the
lowest remuneration within the Group is higher
than the minimum wage. This assessment is
still valid in 2025, as there have been no changes
to the regulations in this area, and the lowest
salary paid within the Group remains higher
than the minimum wage. Nevertheless, it has
become standard practice of the Group to
review staff remuneration at least once a year.
Having monitored market trends, the Group
plans to refine its decent wage methodology in
the future, should the need arise, in order to
assess the level of decent wages more
accurately in the regions in which it operates,
and to find a solution that will enable more
precise assessments to be made.
Social dialogue
The Group’s Code of Ethical Employment and
Human Rights Policy stipulate that we respect
our employees’ right to establish and join or not
to join associations, trade unions, and to engage
in collective bargaining. Works councils are
currently in operation at the following Group
companies: “Vilkyškių pieninė”, AB,
“Modest”, AB and “Kelmės pienas”, AB. Under
the laws of the Republic of Latvia, works
councils are not mandatory at “Baltic Dairy
Board”, SIA, while at “Kelmės pieninė”, AB, the
establishment of works councils is not
mandatory under the laws of the Republic of
Lithuania due to the small number of
employees.
In 2026, the Group drafted the Description of
the Procedure for the Involvement of Employee
Representatives in the Employer’s Decision-
Making Process. All Group companies operating
in Lithuania must follow this procedure, which
involves informing and consulting works
councils or employee representatives on
matters relating to the implementation and
protection of employees’ labour, social and
economic rights and interests. In accordance
with this documents, the CEO of each Group
company is responsible for the employee
engagement, whilst the Head of the HR Unit is
responsible for overseeing these procedures.
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
100
The Description of the Procedure was approved
in early 2026.
The Group acknowledges the risks posed by
insufficient social dialogue; therefore, in the
Group companies where no works councils
have been established, the most active dialogue
with employees takes place through employee
OHS representatives, and where necessary,
employee surveys are conducted to ascertain
their views; no surveys were carried out in 2025.
During the DMA of 2024, employee
representatives were actively involved in the in-
person discussions, and an online employee
survey was conducted. Employees may also be
involved in examining concerns raised via the
confidential Trust Line. Complaints received via
this reporting channel are examined under the
procedure approved by the Group, which is not
public but is available to all employees on the
Group’s intranet.
Health and safety
The Group complies with all laws and
regulations governing OHS, has appointed
responsible persons and implemented
processes to ensure the compliance with the
OHS regulations and internal rules procedure,
and performs regular staff training, certification,
and drills. Risk assessments, training and
briefings are carried out regularly across the
Group’s companies. Employees are provided
with all the necessary personal protective
equipment.
To encourage employees to take better care of
their health, various projects and programmes
are in place:
- Employees are granted one day off work
per year to undergo a compulsory health
check, at the employer’s expense.
- All Group employees are covered by 24/7
accident insurance.
- The administrative staff are offered
additional health and wellness incentives:
an extra day off for health and wellness
(paid for by the employer), access to
comprehensive health checks and
specialist consultations, and use of a gym,
dental services, rehabilitation and other
services.
- All staff are encouraged to have a free eye
test and get flu vaccinations.
To prevent potential chronic occupational
diseases and protect employees’ health, an
ergonomics project is being implemented,
where employees are provided with ergonomic
aids designed to help prevent health risks
(massagers, posture support tools, etc.), and
workplace improvements are implemented to
help preserve health and prevent injuries and
other possible effects on health.
During the training sessions, we encourage
employees to pay more attention to their health
and acquire the necessary skills.
To prevent accidents, all the Group companies
adhere to the Occupational Health and Safety
Policy. Accidents are recorded in accordance
with established procedures, and for each
incident, the situation is carefully analysed, the
causes are identified, and the necessary
changes and measures are immediately
implemented to prevent similar occurrences in
the future. The Group is aware that, in the event
of an accident, there is a risk of psychological
and emotional distress for the team members;
it therefore takes proactive measures to
manage this risk and ensure employees’ well-
being.
A psychosocial factors survey is conducted
every two years (the most recent was in 2024).
The aim of this survey is to identify the
psychosocial challenges employees face at
work, assess their impact on employees’
emotional well-being and the working
environment, and identify areas where further
changes or preventive measures are needed. Its
findings help shape effective policies and action
plans to ensure employees’ safety, health, and
emotional well-being.
Furthermore, regular staff OHS training is
provided, preventive and control measures are
implemented in accordance with occupational
risk assessments, accident information is
analysed at the management level, and first-aid
training is provided. In 2025, greater emphasis
was placed on identifying and addressing OHS
non-conformities, as well as on employee
training. To this end, a complementary
procedure was approved, and additional
human resources were allocated.
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
101
Targets related to managing material impacts, advancing positive impacts, as well as to risks and opportunities I S1-5
The Group’s main targets are to reduce the Total Recordable Incident Rate (TRIR) and maintain the employee turnover rate.
1.
Number of accidents
TRIR (number of accidents involving employees per 1 million hours worked) <
2. Following the recalculation of the TRIR indicator in accordance with ESRS requirements, a decision
was taken to review and revise the TRIR target to <
2.5. The result for 2025 was 2.98 (3.19 in 2024).
2.
Employee turnover
In view of the Group’s planned rapid growth, the target for employee turnover was reviewed in 2025. The new target is to keep turnover below 30
% by 2028. Considering the
Group’s quick development (the new factory in Latvia and the acquisition of “Marijampolės pieno konservai”,
UAB), factors that could influence the changes have been assessed.
The 2025 result is 19% (22% in 2024).
The targets are set by the Management and Quality Department of the Group and approved by senior management. At present, these targets are not discussed with
employees' representatives. In future, we plan to coordinate our targets with them and regularly share information about the results.
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
102
Characteristics of the undertaking’s employees I S1-6
Units
2024
2025
Change 2025/2024
Calculation details:
Number of employees: number of
employees employed under an
employment contract as of 31
December 2025. The figure does not
include employees on
maternity/paternity leave, parental
leave or military service. The number of
employees is recorded in the internal
IT system. The number of employees is
presented in the financial statements,
page 166.
Employee turnover: the number of
employees who left the Group during
the financial year / the number of
employees at the start of the financial
year.
Female
Male
Female
Male
Female
Male
All employees
headcount
1,012
938
74
By gender*
headcount
511
501
492
446
19
55
Share of employees
%
50.5
49.5
52
48
-1.5
1.5
Employees by contract type
Permanent employees
headcount
991
911
80
By gender*
headcount
500
491
475
436
25
55
Temporary employees
headcount
21
27
-6
By gender*
headcount
11
10
17
10
6
0
Full-time employees
headcount
953
866
87
By gender*
headcount
476
477
448
418
28
59
Part-time employees
headcount
59
72
-13
By gender*
headcount
35
24
44
28
-9
-4
Employees working non-
guaranteed hours
headcount
0
0
0
By gender*
headcount
0
0
0
0
0
0
Employees by country
Lithuania
headcount
884
878
6
Latvia
headcount
128
60
68
Employee turnover
Number of employees who
left the Group
headcount
191
205
-14
By gender*
headcount
83
108
-
-
nevertinama
nevertinama
Total employee turnover
%
19
21.85
-2.85
*The breakdown of data by gender does not include the category of other gender, as the Group operates in regions where such gender registration in identity documents is not legally recognised.
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
103
Characteristics of non-employee workers in the undertaking’s own workforce I S1-7
The Group does not have any non-employees who are classified as its own workforce.
Collective bargaining coverage and social dialogue I S1-8
Units
2025
2024
Change 2025/2024
Calculation details:
Coverage of collective agreements: there
are no collective agreements in the
Group.
Social dialogue: the share of employees
at the companies based in Lithuania who
are represented on works councils. The
coverage in Latvia is not disclosed, as less
than 10 % of the Group’s employees work
in this region. In Latvia, works councils
have not been established, and their
establishment is not mandatory under
applicable legislation.
Lithuania
Latvia
Lithuania
Latvia
Lithuania
Latvia
Coverage of collective
agreements:
%
0
0
0
Social dialogue (works
councils)
%
94
0
19.5
0
74.5
-
Adequate wages I S1-10
Units
2025
2024
Change 2025/2024
Calculation details:
All the Group’s employees are paid
adequate wages in accordance with
Directive (EU) 2022/2041.
Lithuania
Latvia
Lithuania
Latvia
Lithuania
Latvia
Adequate wage benchmark
%
100
100
100
100
-
-
Social protection I S1-11
Units
2025
2024
Pokytis 2025/2024
Calculation details:
All the Group’s employees are covered
by social protection in accordance with
the laws of the Republics of Lithuania
and Latvia (compulsory health
insurance, parental leave, retirement,
etc.), and also by accident insurance.
Lithuania
Latvia
Lithuania
Latvia
Lithuania
Latvia
Social protection against loss
of income due to major life
events, coverage for
employees
%
100
100
100
100
-
-
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
104
Health and safety metrics I S1-14
Units
2025
2024
Change 2025/2024
Calculation details:
Application of a legally compliant OSH management system:
all the Group’s employees are subject to the OSH system in
accordance with the laws of the Republic of Lithuania and the
Republic of Latvia.
Number of accidents: accidents occurring on the way to/from
work and accidents recorded in the workplace.
Number of accidents resulting in temporary incapacity for
work: all accidents recorded within the Group (on the way
to/from work and in the workplace) resulted in temporary
incapacity for work.
TRIR per million hours worked: an overall indicator of
recordable work-related incidents (TRIR = Number of
Incidents x 1,000,000 / total number of hours worked in a
year). In 2024, the TRIR indicator was calculated in accordance
with international OSH practice (TRIR = Number of Incidents x
200,000 / total number of hours worked in a year), whereas
this Statement takes the ESRS requirements into account -
accident rates are presented per one million hours worked. A
retrospective recalculation of the indicator has also been
performed.
Number of days lost to injuries, accidents, fatalities or illness:
the data are provided by the internal payroll IT software.
Application of a legally
compliant OSH management
system
%
100
100
-
Number of accidents
count
13
10
3
Of which accidents on the
way to/from work
count
8
5
3
Of which accidents in the
workplace
count
5
5
-
Of which, fatal accidents
count
0
0
-
Number of accidents resulting
in temporary incapacity for
work
count
13
10
3
Total number of hours worked
h
1,676,823
1,569,732
107,091
TRIR per million hours worked:
2.98
3.19
-0.21
Number of days lost to injuries,
accidents, fatalities or illness
count
15,518
13,440
2,078
Remuneration metrics I S1-16
Units
2025
2024
Change 2025/2024
Calculation details:
The percentage gender pay gap between employees is calculated
using the following formula: ((Average gross hourly pay level of male
employees - average gross hourly pay of female employees) /
Average gross hourly pay level of male employees) x 100. In 2024, this
metrics was calculated across the Group as the difference between
the average monthly wage of male and female employees,
expressed as a percentage of the average monthly wage of male
Lithuania
Latvia
Lithuania
Latvia
Lithuania
Latvia
Percentage gender
pay gap between
employees
%
8.79
8.62
0.17
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
105
Ratio between the
remuneration of the
highest paid
individual and the
median remuneration
for the employees
%
6.65
7.13
-0.48
employees. In the previous report, the indicator was calculated as
the ratio of the highest-paid individual’s remuneration to the
average remuneration of employees, whereas in this report it has
been retrospectively recalculated in line with ESRS requirements,
the impact of the change is not material.
The ratio between the remuneration of the highest paid individual
and the median remuneration for the employees is calculated by
dividing the total remuneration of the highest paid individual for the
whole year by the average total annual remuneration of all
employees (excluding the highest paid individual). In 2024, this
metrics was disclosed for the entire Group (covering Lithuania and
Latvia). In 2025, this indicator is revised to show the figures for
Lithuania and Latvia separately.
The lowest wage is the lowest wage paid to employees (a basic salary
including fixed additional payments guaranteed to all employees).
In 2025, no compensation was paid to employees.
Lowest wage
Eur
1,226
1,091
1,139
1,177
87
-86
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
106
EQUAL TREATMENT AND EQUAL OPPORTUNITIES FOR ALL
Interests and views of stakeholders I ESRS 2 SBM-2
The information is disclosed on page 56, in Section “Interests and views of stakeholders”.
Material impacts, risks and opportunities and their interaction with strategy and business model I ESRS 2 SBM-3
The table shows the material impacts, risks and opportunities associated with the organisation’s operations and value chain. It specifies whether the impact is actual (already
occurring) or potential (possible), its nature - positive or negative - the location of the impact - own operations (OO) or value chain (VC) - the relevant time period, a brief
description, and the associated risks and opportunities.
Impact
Description
Part of the
value chain
Estimated time
period
Risks (R) and opportunities (O)
S1 OWN WORKFORCE
Sub-topic: Equal treatment and opportunities for all
Sub-sub-topic: Gender equality and equal pay for work of equal value
Actual impact:
The distribution of stereotypical
“male” and “female”
professions
Actual impact:
Workload distribution by
gender
Stereotypical norms and market-driven perceptions of
typical “male” and “female” jobs have a negative impact on
gender balance in certain positions.
There is a disparity in the distribution of men and women
across jobs with varying levels of physical exertion, where
men are more likely to perform physically demanding work.
As a result, women’s opportunities to work in certain roles
are diminishing, and efforts to ensure gender equality are
being undermined.
OO
OO
Medium,
long-term
Medium,
long-term
O: Automation of workplaces.
O: Automation of workplaces.
Sub-sub-topic: Training and skills development
Actual impact:
Career, professional
development and learning
opportunities
Providing employees with opportunities for professional
development and training has a positive impact on their
motivation, skills and career prospects.
OO
Short, medium,
long-term
Sub-sub-topic: Measures against violence and harassment in the workplace
Potential impact: Instances
of discrimination and violence
Instances of behaviour that negatively impact human rights
that may arise among employees.
OO
Short, medium,
long-term
R: Incidents of violence and harassment that
may pose risks to human rights.
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
107
The material IROs identified by the DMA. The
impacts that are material for the Group are not
specific to the manufacturing industry or the
Group’s strategy or business model – these
issues are observed across the entire market.
The distribution of stereotypical gender-specific
roles is evident across the entire market,
starting with the choice of study programmes;
for example, in the Group’s Technical
Department, the vast majority of employees are
men, whilst in the Laboratory or Accounting
Unit, they are women, and so on. The
attractiveness of a profession to one gender or
another is also determined by the physical
demands inherent in the job/position.
In 2024, as part of its DMA, the Group identified
a positive impact it had disclosed in the 2024
Sustainability Statement, namely, ensuring
fairness in remuneration grades for hourly staff.
Having reviewed the assessment in detail, the
Group decided to treat this aspect as a key
business assumption rather than as a positive
impact. For more information on the DMA, see
page 58.
Policies related to own workforce I S1-1
The Group’s Equal Opportunities Policy sets out
the principles of equal opportunities within the
Group, as well as the conditions and procedures for
their implementation. Key principles are as follows:
- The Group prohibits direct and indirect
discrimination, harassment, sexual
harassment, and instruction to
discriminate on the basis of gender, race,
nationality, language, origin, social status,
age, sexual orientation, disability, ethnicity,
membership in a political party or
association, religion, faith, beliefs or views,
intention to have a child(ren), as well as on
other grounds not related to the
occupational characteristics of the
employees.
- All employees are given equal
opportunities at work. Recruitment is
based solely on professional qualifications
and the ability to perform the job
effectively.
-
All employees are provided with
opportunities to learn, develop their skills,
and pursue professional advancement.
-
Wages are determined on the basis of
objective criteria, related to the employee’s
qualification, the degree of assigned
responsibilities, the nature of the work
performed, the results achieved and other
gender-neutral criteria.
-
Employees are paid the same salary for
work of equal value.
-
The principles of protection of employees
apply.
-
The measures implementing equal
opportunities are in place.
-
The equal opportunities process is
monitored.
At present, the Group’s Equal Opportunities Policy
does not include specific commitments regarding
positive action for vulnerable groups. In practice,
however, the Group adheres to the principles of
equal opportunities for all employees, regardless
of their social or demographic background.
This policy was adopted in accordance with the
requirements of Article 26 of the Labour Code of
the Republic of Lithuania and the Law of the
Republic of Lithuania on Equal Opportunities, and
approved by a decision of the CEO of the parent
company. It applies to all the Group employees
and is available on the Group’s website.
Policy on the Prevention of Violence and
Harassment in the Workplace (not publicly
available) sets out effective measures to create a
safe working environment for all the Group’s
employees, by:
-
protecting the 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 the psychosocial risk assessment.
The policy sets out how to identify cases of violence
and harassment in the workplace, outlines the
implementation of preventive measures, and
defines rules of conduct for employees and
reporting procedures. It was approved by a
decision of the CEO of the parent company. The
policy is available to all the Group’s employees on
the Group’s intranet.
The Human Rights Policy, adopted in 2022, sets
out the key human rights provisions. The policy
was drawn up in accordance with the UN Universal
Declaration of Human Rights. It applies to all the
Group’s employees.
Other relevant Group’s policies:
- The Remuneration Policy, setting out the key
principles of the remuneration system.
- The Supplier Code of Conduct, setting out the
requirements that suppliers must implement
within their organisations in the social area. It is
publicly available on the Group’s website.
Processes for engaging with own workers
and workers' representatives about impacts I
S1-2
In cases of adverse impact, reports received via
the Group’s reporting channels are examined in
accordance with the approved reporting
procedures and the established investigation
process. For more information, see page 124.
Where necessary, and whilst maintaining
confidentiality, relevant staff members are
involved in this process, as provided for in the
procedure. All policy changes are agreed with
employee representatives (existing works
councils or OHS representatives) at the Group’s
companies. Consultations take place during the
drafting or reviewing the policies. Responsibility
for employee engagement lies with the head of
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
108
each Group company, in accordance with this
procedure.
Processes to remediate negative impacts and
channels for own workers to raise concerns I
S1-3
Employees can raise concerns via the Group’s
Trust Line, available on the Group’s website, and
at every Group company, via a physical
reporting box. This Trust Line allows staff and
other stakeholders to raise any concerns
confidentially and anonymously. Illegal
activities and potential breaches of legislation
within the Group companies can also be
reported in accordance with the Law of the
Republic of Lithuania on the Protection of
Whistleblowers—all information is available on
the Group’s website. The protection of
whistleblowers is ensured in accordance with
the internal procedures set out in the Trust Line
Operating Procedures (not publicly available).
Employees are provided with further
information about the reporting channels
through training. Employees may, where
necessary, make use of all other mechanisms
available on the market to contact public
authorities through their available channels. For
more information on reporting channels, see
page 124.
To mitigate the negative impact identified
during the DMA, the Group is implementing
measures designed to reduce gender
stereotypes associated with professions or jobs.
Staff recruitment, the hiring process, skills
assessment and professional development are
carried out based on gender-neutral criteria.
When publishing job advertisements, the
Group presents information about the
vacancies in a gender-neutral manner, thereby
ensuring equal opportunities for all candidates.
To reduce the gender imbalance in the
distribution of workloads, where men tend to be
assigned the more physically demanding tasks
in production, the automation of production
processes is being implemented. However, this
process requires investment and is time-
consuming, while also presenting new risks,
namely, a shortage of skilled workers in the
region capable of operating automated
equipment. Where possible, simpler solutions
are also implemented to ease the f workload.
Taking action on material impacts and
approaches to mitigating material risks and
pursuing material opportunities related to
own workforce, and effectiveness of those
actions and approaches I S1-4
To manage material impacts on the own
workforce, procedural measures are being
implemented, such as initiating internal
controls, setting up a management team to
assess and correct identified risks or impacts,
and putting control mechanisms in place. The
Group regularly surveys psychosocial factors,
analyses the results and takes corrective action.
The Group has not currently set aside any
specific financial or other resources for the
purpose of managing material impacts on its
employees. Activities relating to staff (training,
OHS measures, social initiatives, etc.) are funded
from general operating expenses.
Gender equality and equal pay for work of equal
value
The Group has adopted key policies ensuring
that we are aware of the principles of work and
cooperation that are most important to us
inside the Group, but are able to inform the
communities around us, the partners we work
with, and other stakeholders, about them. To
ensure that the Group’s approach is reflected in
its operations, procedures have been
established to support it, responsible persons
have been appointed, and control mechanisms
have been put in place. The Group has adopted
a whole range of different policies (Human
Rights Policy, Equal Opportunities Policy, Policy
on the Prevention of Violence and Harassment
in the Workplace, Rules on the Processing of
Personal Data, IT Security Policy, Code of Ethical
Employment), which help to ensure that
attention is paid to human rights at every stage
of the organisation’s operations. During the
DMA, the Group assessed the key IROs in the
area of human rights. The Group planned to
start conducting human rights risk
assessments at some of its companies in 2025,
but these measures were postponed. An
assessment of the impact on human rights was
incorporated into the internal sustainability
audit procedure approved in 2025; the internal
sustainability audit was carried out at “Kelmės
pienas”, UAB in 2025, and similar audits are
progressively rolled out across the Group’s other
companies. A comprehensive human rights risk
assessment and a due diligence policy is
planned for the future.
The Group’s Remuneration Policy and pay
system ensure that men and women in the
same role receive equal pay for the same or
equivalent work. The Group comprises staff with
different skills and roles who perform a variety
of tasks, which is why the pay structure is
diverse. This means that gender pay gaps may
arise from the distribution of roles according to
their functions, responsibilities, and
qualification requirements, rather than from
men and women being paid differently for the
same work or work of equal value.
Pay gaps may also be influenced by the
traditional gender-based distribution of
occupations in the labour market, which is also
reflected in an organisation’s job structure. The
Group regards these aspects as structural
factors of the labour market.
In 2024, the Group began systematic
preparations to implement the EU Pay
Transparency Directive and continued this work
in 2025. Employees paid at an hourly rate are
paid the same rate regardless of gender, and
the job grading system ensures that
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
109
remuneration is determined by the employees’
qualifications and abilities. Nevertheless, there
is a gender pay gap within the administration.
The Group aims to address this disparity by
continuously analysing pay data and taking
targeted measures to ensure equal pay for work
of equal value.
Due to the nature of production operations,
some jobs involve greater physical exertion. In
practice, these jobs are more often performed
by men; however, the allocation of roles is based
on the nature of the work and the employees’
abilities, rather than on gender.
The Group aims to reduce disparities in physical
workload and the associated risks by gradually
automating production processes,
implementing ergonomic solutions, and
adopting other technical measures that help
balance the workload and improve working
conditions for all employees.
The Group assessed it compliance with
Directive (EU) 2022/2381 on improving the
gender balance among directors of listed
companies and related measures, which
promotes diversity in corporate governance
bodies. The current results show that the Group
does not meet the requirements set out in the
Directive because the number of female
members on the Group’s governing bodies is
insufficient. The Group’s management is
holding discussions on this matter and drawing
up an action plan to ensure future compliance
and promote gender diversity in governing
bodies.
Training and skills development
The Group focuses not only on maintaining and
improving the physical and emotional well-
being of its employees, but also on developing
their skills and opening up career opportunities.
The Group has adopted a learning procedure
designed to foster an environment of growth
and development, encouraging knowledge
sharing and collaboration.
The Group organises targeted staff training in
line with its objectives, staff needs and
competence expectations. Organisation-wide
training is provided for both specialised,
professional and generic competencies.
Cooperation with various academic and
training institutions is used to enable
employees to acquire the competencies they
lack, both internally and externally, through
training courses, seminars or conferences.
In 2025, significant attention was paid to
developing employees’ professional and
specialised knowledge, as well as their general
competencies, such as personal leadership
skills, effective planning, and meeting
management. Employees of the Group’s
companies operating in Lithuania were also
trained on prevention of psychosocial violence.
The approach of the Group is that upskilling
helps maintain competitiveness and the pace of
innovation. The risk of excessive training is that
it may reduce staff engagement, so finding the
right balance is the aim. An annual survey is
conducted to identify learning needs and areas,
and training plans are developed based on the
survey results.
Nevertheless, there are also market challenges:
not only is there a noticeable trend of a sharp
decline in the number of students wishing to
study dairy processing technologies, but it is
also challenging to attract engineering
graduates to 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.
Measures against violence and harassment in
the workplace
The Group does not tolerate any form of
violence or other attempts to cause harm. The
Policy on the Prevention of Violence and
Harassment in the Workplace was adopted, and
since 2024, significant attention has been paid
to training on the prevention of violence and
harassment, by training the staff on how to
distinguish between different types of
behaviour that can have a negative impact and
informing them of the options available for
raising concerns. In 2025, the Group’s
companies operating in Lithuania
implemented the training on the prevention of
violence and harassment, which was completed
by more than 90 % of employees. This training is
now a mandatory part of the onboarding
process and will be repeated yearly for all
employees. Staff are informed about the
reporting channels available for raising
concerns.
Targets related to managing material
impacts, advancing positive impacts, as well
as to risks and opportunities I S1-5
The main objective relating to this sub-topic is
employee turnover, the target of which is
outlined above. No other targets have been set
in this area.
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
110
Diversity metrics I S1-9
Vnt.
2025
2024
Change 2025/2024
Calculation details:
Senior management are the heads of the
departments.
Middle management are the heads of the units.
The gender breakdown of the Board, Supervisory
Board and Committees is presented on page 52.
All data is recorded in the Group’s staff internal IT
systems.
The figures include employees on pregnancy
leave, maternity/paternity leave, parental leave or
military service.
Female
Male
Female
Male
Female
Male
Senior management
vnt.
3
8
3
8
-
-
Share
proc.
27
73
27
73
-
-
Middle management
vnt.
13
10
13
10
-
-
Share
proc.
57
43
57
43
-
-
All employees by age group
Younger than 30
vnt.
50
49
54
53
-4
-4
Share
proc.
4.93
4.93
5.76
5.65
-0,83
-0,72
30–50 years
vnt.
239
244
237
193
2
51
Share
proc.
23.57
24.26
25.27
20.58
-1,7
3.68
Older than 50
vnt.
222
208
201
200
21
8
Share
proc.
21.79
20.51
21.43
21.32
0.36
-0.81
Persons with disabilities I S1-12
Units
2025
2024
Change 2025/2024
Calculation details:
The number of employees with disabilities
working for the Group at the end of the
reporting year.
The Group does not use additional performance
indicators designed to analyse the inclusion of
people with disabilities.
Share of employees with
disabilities
%
6
7.6
-1.6
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
111
Training and skills development metrics I S1-13
Units
2025
2024
Change 2025/2024
Calculation details:
Employees who participated in regular performance and career
development reviews.
In 2025, 180 employees (153 employees assessed by the
qualification grades and 27 administrative employees) were
promoted or their grade was changed. This accounted for 17.75 %
of the Group’s total number of employees at the end of the
reporting year. The performance of 73 % of the Group’s non-
administrative employees is assessed by the qualification grades.
The qualification grade of 153 employees was upgraded,
representing approximately 21 % of non-administrative staff
assessed by the qualification grades.
Average number of training hours per employee: the number of
training hours during the reporting period divided by the average
number of employees during the reporting period.
Average number of training hours per employee by gender:
average number of training hours per employee during the
reporting period, by gender.
Female
Male
Female
Male
Female
Male
Employees who
participated in
regular performance
and career
development
reviews
headco
unt
88
92
129
not
assessed
not
assessed
Share
%
17.75
7.3
10.45
Average number of
training hours per
employee
hours
13
19
-6
By gender
hours
6.6
6.4
not
assessed
not
assessed
not
assessed
not
assessed
Work-life balance metrics I S1-15
Units
2025
2024
Change 2025/2024
Calculation details:
Percentage of employees who have made use of family-
related leave: calculated percentage of female/male
employees of the Group companies at the end of the
reporting year, compared to the number of female/male
employees entitled to family-related leave (pregnancy leave,
maternity/paternity leave, parental leave).
Female
Male
Female
Male
Female
Male
Percentage of
employees entitled
to family-related
leave
%
100
100
100
100
-
-
Percentage of
employees who
have made use of
family-related leave
%
11.93
2.24
9
By gender
%
13.53
10.32
3.83
0.45
9.7
9.87
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
112
Incidents, complaints and severe human rights impacts I S1-17
Units
2025
2024
Change 2025/2024
Calculation details:
Number of complaints filed through
channels for people in the undertaking’s
own workforce to raise concerns: the
number of complaints received via the
Group’s reporting channels – the Trust Line
and the Whistleblowing Channel. During
the reporting period, three reports were
received via the Trust Line; none of them
were classified as complaints or human
rights-related incidents.
The number of complaints
filed through channels for
people in the undertaking’s
own workforce to raise
concerns
count
3
0
3
Of which, the number of
incidents of discrimination
count
0
0
-
Of which, the number of
confirmed incidents of
discrimination
count
0
0
-
Total amount of fines,
penalties, and compensation
for damages as a result of the
incidents and complaints
disclosed above
EUR
0
0
-
Number of severe human
rights incidents connected to
the own workforce
count
0
0
-
Total amount of fines,
penalties and compensation
for damages for the severe
human rights incidents
connected to the own
workforce
EUR
0
0
-
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
113
AFFECTED COMMUNITIES I ESRS S3
Interests and views of stakeholders I ESRS 2 SBM-2
Community representatives were involved in the DMA process. For more information, see page 56, Section “Interests and views of stakeholders”.
Material impacts, risks and opportunities and their interaction with strategy and business model I ESRS 2 SBM-3
The table shows the material impacts, risks and opportunities associated with the organisation’s operations and value chain. It specifies whether the impact is
actual (already occurring) or potential (possible), its nature—positive or negative —the location of the impact—own operations (OO) or value chain (VC)—
the relevant time period, a brief description, and the associated risks and opportunities.
Impact
Description
Part of the
value chain
Estimated time
period
Risks (R) and opportunities (O)
S3 AFFECTED COMMUNITIES
Sub-topic: Communities’ economic, social and cultural rights
Sub-sub-topic: Adequate food
Actual impact:
Improving access to food, food
aid
The Group improves access to food for end-users and
supports local communities through food initiatives, thereby
strengthening its positive impact on society.
OO, VC
Medium, long-term
O: Improving access to food aid through the
establishment of a support programme.
Sub-sub-topic: Security-related impacts
Actual impact:
Noise from heavy goods
vehicles and road safety
“Vilkyškių pieninė”, AB and “Kelmės pienas”, UAB, which
operate in small town centres, are faced with heavy goods
vehicle traffic that causes noise and makes traffic
conditions around the factory premises more difficult. This
may negatively impact members of the local community.
OO
Short, medium,
long-term
R: Traffic incidents and accidents can lead to
financial and reputational risks.
The DMA has identified the sub-sub-topic of Adequate food under the sub-topic of Communities’ economic, social and cultural rights as a material matter,
directly linked to the Group’s strategy and business model. In pursuit of its mission—to improve access to food—the Group is causing a direct positive impact
through its core product. By providing food aid to the community, the Group makes a positive contribution.
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
114
The Group’s IROs in the sub-topic of
Communities’ economic, social and cultural
rights, identified as material during the DMA,
are set out below. For more information on the
DMA, see page 58.
Policies related to affected communities I S3-1
The Group’s Support Policy (not publicly available)
sets out the objectives, priorities and process for
providing support to affected communities.
The Group’s areas of support align with the SDGs:
- Zero hunger – support for projects and
activities carried out by organisations
combating poverty and hunger, as well as
aid and charitable foundations working in
this field, with the aim of achieving
objectives that benefit society. (SDG 2)
- Local communities – strengthening
cooperation with communities in the
regions where the Group operates, with a
view to contributing to economic
development and improving living
standards, as well as boosting local
employment, social inclusion and
reducing economic inequality. (SDG 8 and
SDG 10).
- Good Health – support for projects and
activities that benefit the community and
promote healthy eating and physical
activity. (SDG 3)
- Quality education – support for
educational institutions, with a view to
improving the quality of study
programmes relevant to the Group’s
business areas, promoting the
attractiveness and popularity of these
study programmes and/or professional
careers in the manufacturing sector and
industry, and fostering research activity in
these fields. (SDG 4)
Support may not be granted for:
funding of political parties, public figures, political
advertising and/or political campaigns;
activities that may harm all or any part of the public
(extreme and high-risk sports, gambling, alcoholic
beverages, tobacco and other intoxicating
substances, etc.);
activities and/or projects that are incompatible
with the values of the Group;
beneficiaries who committed material breaches 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 the
provision of support
- The Group’s areas of support align with
the SDGs:
Support is provided to applicants whose activities
or projects create value in the regions where the
Group operates, prioritising initiatives in the
municipalities of Tauragė, Kelmė, Pagėgiai and
Bauska.
- The objectives of the project/activity
eligible for support must be consistent
with the Group’s funding priorities.
The importance of the applicant project and the
problem it addresses must be justified, clearly
demonstrating the necessity. The beneficiary must
have sufficient resources to carry out the planned
activities.
- The results must be clear, realistic and
measurable, with measures in place to
ensure the project’s objectives are
achieved. The project must create added
value, enhance the Group’s visibility and
reputation, and ensure that information is
communicated appropriately in
accordance with the brand requirements.
Forms of support:
- financial support; and
- in-kind aid provided in the form of
products manufactured by the Group.
- The decision on providing/not providing
support is taken by the support
assessment team.
The decision is based on:
VILVI Group’s Support Policy (not publicly
available);
VILVI Group’s Rules on Providing Support (not
publicly available).
The Group’s Code of Business Conduct sets out
the principles governing how the Group interacts
and cooperates with stakeholders, including local
communities. The Group’s factories are located
across the regions, which is why cooperation with
local residents—many of whom work for the
Group—is so important. We aim to build close
community ties and maintain the trust of local
population.
The Group’s Environmental Policy states that, in
applying environmental principles, we take into
account the interests of the communities in which
we operate. We work closely with local
communities and other stakeholders who are
committed to improving environmental
protection.
Processes for engaging with affected
communities about impacts I S3-2
The Group is actively involved in the
communities in which it operates. Although the
Group has not currently established a specific
procedure for involving local communities in its
decision-making, it actively engages in the
initiatives of local communities and
organisations. The closest ties have been forged
with the local communities in and around the
parent company “Vilkyškių pieninė”, AB, located
in the municipalities of Vilkyškiai and Pagėgiai.
Processes to remediate negative impacts and
channels for affected communities to raise
concerns I S3-3
Community representatives can raise any
concerns via the Group’s reporting channels:
the Trust Line, available on the Group’s website,
and a physical Trust Line box located at the
security post of each factory. Community
members can also access the Whistleblowing
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
115
Channel on the Group’s website, through which
they can submit reports in accordance with the
Law of Republic of Lithuania on Whistleblower
Protection.
A designated entity within the Group is
responsible for the operation and maintenance
of these channels, the review of reports
received, and the coordination of follow-up
actions, ensuring the confidentiality of
communications, impartial assessment of the
reports and a timely response.
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 I S3-4
“Vilkyškių Pieninė”, AB has received complaints
from residents regarding noise caused by
heavy-duty vehicles and unsafe traffic
conditions around the factory premises in the
town of Vilkyškiai. It is planned to resolve this
situation in 2027–2028, following the
completion of the construction project for a
new administrative building in Tauragė, when
the Group’s administration will be relocated
from Vilkyškiai to Tauragė, and safer traffic
conditions for heavy-duty vehicles will be
created in the vacated spaces.
The DMA has not identified any adverse
impacts caused by the Group on communities;
therefore, there are no other specific situations
that would require to remediate negative
impacts. A positive impact is achieved by
supporting communities in accordance with
the approved Support Policy. Through close
cooperation, the communities of Vilkyškiai,
Pagėgiai, Tauragė and Kelmė have been
supported with funding and products for
several years now, including in 2025.
Targets related to managing material
negative impacts, advancing positive
impacts, and managing material risks and
opportunities I S3-5
Currently, the Group has not set any specific
targets related to managing material impacts
on local communities. To enhance its positive
impact on neighbouring communities, the
Group has adopted the Support Policy (not
publicly available). For more information, see
page 114.
No action plans, additional commitments or
formalised measures designed to manage
material risks and opportunities relating to the
impact on local communities were drawn up
during the reporting period.
The Group regards this topic as an area for
further development, and plans an in-depth
analysis, taking into account the 2026 DMA
update and the future business context.
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
116
CONSUMERS AND END-USERS | ESRS S4
PERSONAL SAFETY OF CONSUMERS AND/OR END-USERS
Interests and views of stakeholders I ESRS 2 SBM-2
The DMA sought to gather the views of both direct business clients and end-users of the products; therefore, these stakeholders were included in the
assessment. For more information, see page 56, Section “Interests and views of stakeholders”.
Material impacts, risks and opportunities and their interaction with strategy and business model I ESRS 2 SBM-3
The table shows the material impacts, risks and opportunities associated with the organisation’s operations and value chain. It specifies whether the impact is actual (already
occurring) or potential (possible), its nature—positive or negative —the location of the impact—own operations (OO) or value chain (VC)—the relevant time period, a brief
description, and the associated risks and opportunities.
Impact
Description
Part of the
value chain
Estimated time
period
Risks (R) and opportunities (O)
S4 CONSUMERS AND END-USERS
Sub-topic: Personal safety of consumers and/or end-users
Sub-sub-topic: Health and safety
Not identified
OO, VC
Medium,
long-term
R: Failure to comply with storage
conditions at the downstream value
chain may negatively impact
consumers.
R: A product recall may lead to
financial and reputational risks.
Sub-topic: Social inclusion of consumers and/or end-users
Sub-sub-topic: Access to products and services
Actual impact
Increased accessibility
The Group develops product lines tailored to different consumer
segments (e.g. healthier product lines, lower-priced products, and
sports products), thereby increasing the accessibility of dairy
products to a broader share of consumers.
OO, VC
Medium,
long-term
O: Increased accessibility of products
to a broader consumer segment.
R: potential product safety or quality
issues that may lead to product recalls
and reputational damage.
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
117
During the DMA, it was established that, within the topic of Consumers and end-users, the material sub-topic is Personal safety of consumers and/or end-users,
and the material sub-topic is Health and safety. For more information on the DMA, see page 58.
As the Group produces food products, food safety and quality are, in essence, among its most important areas of impact. This topic is not specifically included
in the Group’s strategic objectives or business model, as it forms the foundation of the entire food manufacturing industry. To ensure business continuity, food
safety and quality must be guaranteed.
In 2024, the DMA of the Group highlighted the positive impacts outlined in its 2024 Sustainability Statement, namely food safety and quality standards. Having
reviewed the assessment in detail, the Group decided to treat this aspect as a key business assumption and a measure to mitigate negative impacts, rather than
as a positive impact. For more information on the DMA, see page 58.
Policies related to consumers and end-users I S4-1
The VILVI GROUP’s Food Safety and Quality Policy outlines guidelines and principles in order to ensure food safety and quality and foster a food security culture in the Group's
companies and its environment.
The policy was approved by a decision of the CEO of the parent company, and the Head of the Quality Unit is responsible for it implementation. All the Group employees must
adhere to this policy. It is available to all stakeholders on the Group’s website.
The policy sets out the key principles of food safety and quality:
- We responsibly create and supply to the market safe and high-quality food products that meet food safety standards, the legal and other assumed requirements of the
buyer's countries, the regulations and legal acts of the European Union and the Republic of Lithuania.
- We aim to meet the needs of consumers and business clients, and therefore we monitor the competitive environment, the discoveries of scientists, and apply this when
creating new products and improving products which the consumers already got to like.
- We maintain communication and close contact with all interested parties, we strive for timely, reliable and transparent communication, especially with business clients,
partners and suppliers of raw materials.
- We work only with reliable suppliers of raw materials, materials and services that ensure stable quality, authenticity and safety indicators of the supplied raw materials.
In this way, we ensure the authenticity of the dairy products produced, protecting consumers from counterfeit products that do not meet the composition requirements.
- We are constantly improving our food safety and quality management system, and we monitor our processes on a daily basis to enhance its efficiency and effectiveness.
- We continuously maintain the competence of employees in the field of food safety culture, focusing on the importance of hygiene and risks to food safety, and improving
mutual communication and feedback.
- We encourage employees’ independence, initiative, understanding and responsibility for the quality of manufactured products, and foster mutual respect and
communication based on the Group’s values.
- We ensure occupational safety in the work environment.
- We are continually improving production technologies and seeking solutions that enable us to produce the highest-quality dairy products.
- We aim to reduce our impact on the environment, so we responsibly use the existing infrastructure and constantly update it, coordinate resource management, and
assess potential risks.
- We aim to share the accumulated knowledge with all the most important interested parties: consumers, business clients and partners.
Other Group policies related to customers and consumers, which ensure smooth operations and address stakeholder interests, include:
- Business Ethics Policy (for more information, see p. 146);
- Human Rights Policy (for more information, see p. 118);
- Environmental Protection Policy (for more information, see p. 85).
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
118
All these policies are approved at the Group level, are binding for all Group employees, and are publicly available on the Group’s website.
To ensure that suppliers adhere to comparable ethical standards, the Group has also approved a Supplier Code of Conduct, which all approved suppliers are required to
review and comply with.
The Supplier Code of Conduct is publicly available on the Group’s website. It is based on the OECD Guidelines for Multinational Enterprises and sets out the key
requirements for the Group’s approved suppliers, including general, social and environmental requirements, as well as anti-corruption requirements.
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 I S4-2, S4-3
End-users may submit their comments, complaints or feedback at any time via the reporting channels of the Group: the general quality telephone number,
email, the reporting channels available on the Group’s website, and the social media platforms. Customer feedback and complaints are actively analysed, and a
dialogue is initiated to clarify the circumstances. Complaints are recorded, analysed and addressed in accordance with the Group’s approved Complaints
Guidelines and Non-Conformity Management Procedure (not publicly available). We recognise the risk that comments, complaints or concerns communicated
publicly on the social media platforms are often unfounded or misleading. However, whilst we do not restrict users’ freedoms, we do not interfere with their
communications, responding, where necessary to the comments received.
When information is submitted via the Group’s communication channels, it is always acknowledged and responded to. Reports received through the Group’s
reporting channels are handled in accordance with the Group’s Trust Line Operating Procedures (not publicly available), which provides for the protection of
whistleblowers.
We cooperate closely with our business clients to gather information about their specific needs and labelling requirements. This ensures that expectations are
met right from the selection of raw materials and throughout the production processes Annual customer and consumer surveys are conducted and the
resulting data is used for further analysis of needs. The Director of the Management and Quality Department is responsible for coordinating these processes.
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 I S4-4
Fostering a culture of food safety and ensuring product safety and quality is one of the Group’s top priorities. Production at the Group’s factories is carried out
and monitored in accordance with the highest food safety and quality standards and legal regulations. The Group has implemented Food Safety and Quality
Management Systems, and adheres to the approved Food Safety and Quality Policy. The Group is subject to audits by regulatory and certification bodies, second-
party audits by existing and potential customers and their representatives, and inspections by the State Food and Veterinary Service (VMVT).
All of the Group's manufactured dairy products are labelled in Lithuanian and in the languages of the countries to which they are exported. The Group maintains
a product labelling and communication policy, which sets out the principles of labelling and communication, as well as procedures for the provision of
information, communication, and compliance with regulatory requirements.
The Group has not currently identified any specific measures or financial resources aimed at remediation of the material impacts on consumers or end-users.
Customer satisfaction is analysed and complaints are handled in accordance with the Group’s internal procedures, following business-as-usual approach.
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
119
The Group has implemented the following Food Safety and Quality Management Systems:
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
Organic production certificate
RSPO Certification
Rainforest Alliance Certification
National Standard (LV)
Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities I S4-5
The target is to have zero product recalls. The result of 2025 is 0 (0 in 2024).
Measurable food safety and quality targets and objectives are set annually for each Group company and approved by the relevant company’s management. The Quality Unit is
responsible for ensuring that objectives are met. The approved plan sets out the measures to be taken, the implementation deadlines and the performance indicators.
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
120
GOVERNANCE
- G1 BUSINESS CONDUCT | page 123
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
121
BUSINESS CONDUCT ESRS G1
Material impacts, risks and opportunities and their interaction with strategy and business model I ESRS 2 SBM-3
The table shows the material impacts, risks and opportunities associated with the organisation’s operations and value chain. It specifies whether the impact is actual (already
occurring) or potential (possible), its nature—positive or negative —the location of the impact— own operations (OO) or value chain (VC)—the relevant time period, a brief
description, and the associated risks and opportunities.
Impact
Description
Part of the
value chain
Estimated time
period
Risks (R) and opportunities (O)
G1 BUSINESS CONDUCT
Sub-topic: Corporate culture
-
-
OO
Medium, long-
term
R: Incidents of unethical conduct by
employees can lead to financial and
reputational risks.
R: The Group's corporate culture and values
may not be acceptable to all employees, which
could increase the risk of staff turnover.
Sub-topic: Protection of whistle-blowers
Actual impact:
Easily accessible reporting
channels
The Group’s reporting channels are accessible to all
stakeholders, ensuring anonymous and confidential
reporting, and protecting whistle-blowers.
OO, VC
Medium, long-
term
R: Non-functional channels or failure to
comply with the applicable procedures may
result in reputational and financial risks.
The Double Materiality Assessment (DMA) identified the Corporate culture, the Protection of whistle-blowers and the Management of relationships with
suppliers including payment practices as material sub-topics under the Business Conduct topic. In the DMA of 2024, the Group identified the positive impacts
that were reported in the 2024 Sustainability Statement, namely, a corporate culture that fosters ethical business practices, secure reporting channels and
protection for whistle-blowers, and well-defined payment practices and supply chain risk management. Having reviewed the assessment in detail, the Group
decided to treat these aspects as key business assumptions and as measures to mitigate negative impacts, rather than as positive impacts. For more information
on the DMA, see page 58.
The role of the administrative, management and supervisory bodies I GOV-1
The information is provided on page 52.
Description of the processes to identify and assess material impacts, risks and opportunities I ESRS 2 – IRO-1
The information is provided on page 58, in Section “Double Materiality Assessment”.
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
122
Business conduct policies and corporate culture
I G1-1
The Group’s Code of Business Conduct sets out
the key principles of ethical business conduct
applicable to all Group employees:
- The way we interact and maintain
relationships with all the Group’s
stakeholders.
- The Group’s core working principles are
transparency, trust, accountability and
cooperation.
- The Group applies a zero tolerance to any
form of corruption, and adheres to the rules
on giving/receiving gifts.
- We monitor conflicts of interest and strive to
prevent them within the Group.
- The Group does not support political parties
or engage in political activities.
- The Group’s internal information that is not
made public is confidential, protected by
the Group, and must not be disclosed to
third parties.
The Group has not adopted a specific policy on
preventing corruption or bribery, but it does not
tolerate any form of corruption. This principle is
enshrined in the Group’s Code of Business
Conduct, which all employees follow to promote
transparency and responsible business practices.
The Code is publicly available on the Group’s
website.
Once a year, the Group organises business conduct
training for the units at risk of corruption and
bribery, namely the Procurement, Baltic Sales, and
Export. The aim of the training is to strengthen
anti-corruption skills and operational transparency.
During the training, the Group’s Code of Business
Conduct is presented in detail, along with
situations that pose a risk of corruption and the
possible solutions of handling them.
The Group has approved the Employee Code of
Conduct, which sets out provisions governing
employee conduct in the areas of human rights,
health and safety, corruption, conflicts of interest,
secure data use, anti-money laundering measures,
environmental stewardship and responsible work
organisation. The Code is available to all employees
on the Group’s intranet.
To ensure that its suppliers adhere to the same
high ethical standards, the Group has adopted the
Supplier Code of Conduct, which is presented to
and must be acknowledged by all suppliers
approved by the Group. The Supplier Code of
Conduct is publicly available on the Group’s
website. The Code has been drawn up in
accordance with the OECD Guidelines for
Multinational Enterprises and sets out the key
requirements in the general, social and
environmental areas, and anti-corruption matters
for suppliers approved by the Group.
The Group has several reporting channels in place:
Trust Line, as a physical anonymous reporting box,
and the Trust Line email address
(pasitikėjimo.linija@vilvi.eu) allow employees and
external stakeholders to report potential violations
or to raise concerns with regard to food safety and
quality, business conduct, ethical employment,
human rights, equal opportunities, violence and
harassment at work, or environmental protection.
All reports are reviewed in accordance with the
Group’s Trust Line Operating Procedures (not
publicly available). A designated entity within the
Group is responsible for the operation and
maintenance of these channels, the review of
reports received, and the coordination of follow-up
actions, ensuring the confidentiality of
communications, impartial assessment of the
reports and a timely response.
The Trust Line Operating Procedures (not publicly
available) set out the process for assessing,
reviewing and the decision-making process of
whistleblowing, ensuring a prompt, independent
and objective examination thereof.
The process of refining the corporate culture,
which began in 2024, continued actively at the
Group’s management level in 2025, and the revised
values were presented to all employees across the
Group.
Management of relationships with suppliers I
G1-2
The Group does not have a specific policy aimed
at preventing late payments, particularly to
small and medium-sized enterprises (SMEs),
but adheres to the principle of making all
payments on time and in accordance with the
contractual terms. The Group has appointed
designated employees who ensure that
payments are monitored and processed on
time. A policy on payment practices was
planned for 2025, which aimed to ensure timely
payments, especially to SME suppliers. However,
due to the implementation of other priority
projects, this target was postponed to 2026.
The Group has approved procedures governing
the management of procurement and supplier
relations for goods and services that affect food
safety and quality, with the Procurement Unit
serving as the procurement authority (not
publicly disclosed). All units are required to
follow these procedures for purchasing
purposes Most of the Group’s procurement is
handled by the Procurement Unit. 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 2025, over 90 % of suppliers on the list of
trusted suppliers signed a declaration
confirming their acceptance of the Group’s
Supplier Code of Conduct. Plans to implement
the supply chain management model were
scheduled for 2025, but were postponed due to
the ongoing digitalisation process. The supply
chain management model is scheduled for
rollout in 2026. It will cover the responsible
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
123
sourcing of raw materials, minimising environmental and human impact, and the comprehensive
assessment of sustainability risks among suppliers.
The Supplier Risk Assessment Model currently used by the Group:
Prevention and detection of corruption and bribery I G1-3
The Group has not adopted a formal anti-corruption and anti-bribery policy, but the key provisions are
set out in the Group’s Code of Business Conduct. 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 has not yet implemented any procedures to prevent allegations or incidents of
corruption and bribery, but plans to do so in 2026.
The Group pays all applicable taxes, maintains
accurate accounts and adheres to a transparent
remuneration policy. It also ensures
transparency in its procurement processes and
requires potential and existing suppliers to
operate transparently and ethically.
Every new customer goes through a screening
process, and no transactions are processed
where bribes are solicited or non-transparent
behaviour is suggested. The Group has clearly
and publicly set out its principles of business
conduct and cooperation in the Code of
Business Conduct, and the Supplier Code of
Conduct is communicated to partners and
suppliers. Employees in high-risk departments
who are involved in procurement or sales
receive additional training on the Code of
Business Conduct. When there is a change in
team members, training for new employees is
provided immediately. The training covers the
basic business conduct practices of the Group,
expectations of employees in the area of
business conduct, guidelines on participation in
political activities, provisions on political
participation, rules on receiving and giving gifts,
and information on reporting channels.
Training is not currently provided to members
of supervisory bodies.
The Group unconditionally complies with the
approved sanctions. In 2025, the Group drafted
the Policy on the Prevention of Money
Laundering and Terrorist Financing, which will
be approved in 2026. This policy establishes the
principles, responsibilities and procedures
designed to prevent the Group’s activities,
products or services from being used for money
laundering or terrorist financing.
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
124
Reporting channels
The Group has reporting channels through which both employees and other stakeholders can raise any concerns:
- Trust Line, where all stakeholders can raise any concerns. Reports may also be submitted anonymously. The approved Trust Line Operating Procedures
ensures that all reports received through this line are handled confidentially and in accordance with specified timeframes and proceedings. The
examination of notifications is carried out by responsible persons who are independent of the departments whose activities may be related to the case
in question. Once a year, the responsible persons provide the Group’s management with a summary of reports received, examined and confirmed, as
well as a breakdown of these reports by risk area. This ensures proper monitoring of internal controls. The Trust Line is available to all stakeholders via
the VILVI Group’s website.
- Through the Whistleblowing Channel, all stakeholders can confidentially report illegal actions and possible violations of legal acts in companies of the
Group. The reports are submitted and processed in accordance with the requirements set out in the Law of the Republic of Lithuania on the Protection
of Whistleblowers. The Whistleblowing Channel is accessible via the Contacts section on the Group’s website.
Both reporting channels are available to all stakeholders on the Group’s website. In order to provide access to reporting channels for employees who make less
use of online solutions, the Group companies have made it possible to access these channels via a physical Trust Line box located at the security post of each
factory. The filing and examination of reports received through these channels are carried out in accordance with the procedures for examining reports received
through the reporting channels.
Incidents of corruption or bribery I G1-4
Unit
2025
2024
Change
2025/2024
Calculation details:
Reports received through the Group’s
reporting channels are filed and
examined in accordance with the
approved procedures for examining
reports received through the reporting
channels. No reports relating to
corruption or bribery were received in
2025.
Number of convictions for violation of anti-corruption and anti-
bribery laws
pcs.
0
0
-
Number of fines for infringements of anti-corruption and anti-
bribery laws
Eur
0
0
-
Total number and nature of confirmed cases of corruption or
bribery
pcs.
0
0
-
Number of confirmed cases of employment termination or
disciplinary action for corruption or bribery-related incidents
pcs.
0
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
0
-
Training for functions at risk
Unit
2024
2025
Change 2025/2024
Calculation details:
Functions with a heightened risk of corruption and bribery are
departments/units responsible for procurement and sales.
Scope of the risk functions
covered by the training
%
100
100
-
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
125
Political influence and lobbying activities I G1-5
The Code of Business Conduct confirms that the Group has decided to remain politically neutral and not to provide any financial support to political parties,
groups or politicians. The Code also sets out rules of conduct for employees involved in political activities, with a view to avoiding any associations or potential
reputational risks. The director of the Group’s parent company is responsible for overseeing this area. The Group is not dissociated from the legislative process
and participates in it as a member of the Association of Lithuanian Dairy Processing Companies “Pieno centras”. This association 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.
During the reporting period and the two years prior to it, none of the Group’s governing body members held positions in public administration institutions or
regulatory authorities.
Payment practices I G1-6
Payment practices are defined in the concluded business contracts. The Group has not adopted a separate policy or procedure to formalise payment
practices, but plans to do so in 2026. The average payment term for the invoices in 2025 is 30 days.
Main categories of suppliers and payment practices:
- 90% of the Group's invoices consist of modification suppliers' invoices, with a payment term of 5–25 days. 70% of these invoices were paid within 20–25
days, while 30% were paid within 5–25 days. 95% of the invoices were paid within 5–25 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.
- Standard company terms and conditions apply to service providers and other invoices, with priority given to wages and payments for services.
The Group is not involved in any legal proceedings or disputes regarding its payment practices.
The average payment period was calculated based on data from all supplier invoices for 2025."
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
126
ANNEXES
Statement on due diligence I GOV-4
Key elements of due diligence
Sections and pages of the Sustainability
Statement
Link to
People
Environment
Embedding due diligence in governance, strategy and business model
ESRS 2 GOV-2, pp. 51–53
ESRS 2 GOV-3, p. 53
ESRS 2 SBM-3, pp. 59-60
ESRS 2 SBM-3 E1, p. 71
ESRS 2 SBM-3 E4, p. 88
ESRS 2 SBM-3 S1, pp. 96–97, 106-107
ESRS 2 SBM-3 S3, pp. 113–114
ESRS 2 SBM-3 S4, pp. 116–117
ESRS 2 SBM-3 G1, p. 121
Engaging with affected stakeholders in all key steps of the due diligence
ESRS 2 GOV-2, pp. 51–53
ESRS 2 SBM-2, pp. 56–57
ESRS 2 IRO-1, pp. 58–59
ESRS 2 MDR-P E1-2, pp. 72-73
ESRS 2 MDR-P E2-1, p. 79
ESRS 2 MDR-P E3-1, p. 85
ESRS 2 MDR-P E4-2, p. 88
ESRS 2 MDR-P E5-1, p. 91
ESRS 2 MDR-P S1-1, p. 97, 107
S1-2, pp. 98, 107-108
ESRS 2 MDR-P S3-1, p. 114
S3-2, pp. 114
ESRS 2 MDR-P S4-1, pp. 117-118
S4-2, p. 118
G1-1, pp. 122
Identifying and assessing adverse impacts
ESRS 2 IRO-1, pp. 58–59
ESRS 2 SBM-3, pp. 59-60
ESRS 2 SBM-3 E1, p. 71
ESRS 2 SBM-3 E4, p. 88
ESRS 2 SBM-3 S1, pp. 96–97, 106-107
Taking actions to address those adverse impacts
ESRS 2 MDR-A E1-3, pp. 73
ESRS 2 MDR-A E2-2, pp. 79–80
ESRS 2 MDR-A E2-3, p. 81
ESRS 2 MDR-A E4-3, pp. 88–89
ESRS 2 MDR-A E5-2, pp. 91–93
ESRS 2 MDR-A S1-4, pp. 98-100, 108–109
E1-1, p. 72
E4-1, p. 87
G1-1, p. 122
G1-2, pp. 122-123
G1-3, pp. 123–124
Tracking the effectiveness of these efforts and communicating
ESRS 2 MDR-M E1-5, pp. 74–75
ESRS 2 MDR-M E1-6, pp. 75–77
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
127
ESRS 2 MDR-M E2-4, p. 81
ESRS 2 MDR-M E3-4, p. 86
ESRS 2 MDR-M E4-5, p. 89
ESRS 2 MDR-M E5-4, p. 94
ESRS 2 MDR-M E5-5, p. 94
ESRS 2 MDR-M S1-8, p. 103
ESRS 2 MDR-M S1-9, p. 110
ESRS 2 MDR-M S1-10, p. 103
ESRS 2 MDR-M S1-11, p. 103
ESRS 2 MDR-M S1-12, p. 110
ESRS 2 MDR-M S1-13, p. 111
ESRS 2 MDR-M S1-14, p. 104
ESRS 2 MDR-M S1-15, p. 111
ESRS 2 MDR-M S1-16, pp. 104-105
ESRS 2 MDR-M S1-17, p. 112
G1-4, p. 124
G1-5, p. 125
G1-6, p. 125
E1-4, p. 73
E2-3, p. 81
E3-3, p. 85
E4-4, p. 89
E5-3, p. 93
S1-5, p. 101, 109
S3-5, p. 115
List of datapoints that derive from EU legislation I 2 ETAS IRO-2
DISCLOSURE REQUIREMENT AND
RELATED DATAPOINT
SFDR REFERENCE*
PILLAR 3 REFERENCE
BENCHMARK REGULATION
REFERENCE
EU CLIMATE LAW REFERENCE
ESRS 2 GOV1 Board’s gender
diversity, paragraph 21 (d)
Indicator number 13
of Table #1 of Annex I
-
Commission Delegated Regulation (EU)
2020/1816, Annex II
-
ESRS 2 GOV1 Percentage of board
members who are independent,
paragraph 21 (e)
-
-
Commission Delegated Regulation (EU)
2020/1816, Annex II
-
ESRS 2 GOV-4 Statement on due
diligence, paragraph 30
Indicator number 10
of Table #3 of Annex
I
-
-
-
ESRS 2 SBM-1 Involvement in
activities related to fossil fuel
activities, paragraph 40 (d)
Indicator number 4
of Table #1 of Annex I
Article 449a of Regulation (EU) No 575/2013;
Commission Implementing Regulation (EU)
2022/2453, Table 1: Qualitative information on
Environmental risk, and Table 2: Qualitative
information on Social risk
Commission Delegated Regulation (EU)
2020/1816, Annex II
-
ESRS 2 SBM-1 Involvement in
activities related to chemical
production, paragraph 40 (d)
Indicator number 9
of Table #2 of Annex
I
-
Commission Delegated Regulation (EU)
2020/1816, Annex II
-
ESRS 2 SBM-1 Involvement in
activities related to controversial
weapons, paragraph 40 (d) iii
Indicator number 14
of Table #1 of Annex I
-
Delegated Regulation (EU) 2020/1818,
Article 12(1)
Delegated Regulation (EU) 2020/1816,
-
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
128
Annex II
ESRS 2 SBM-1 Involvement in
activities related to cultivation and
production of tobacco, paragraph
40 (d) iv
-
-
Delegated Regulation (EU) 2020/1818,
Article 12(1); Delegated Regulation (EU)
2020/1816, Annex II
-
ESRS E1-1 Transition plan to reach
climate neutrality by 2050,
paragraph 14
-
-
-
Regulation (EU) 2021/1119, Article
2(1)
ESRS E1-1 Undertakings excluded
from Paris-aligned Benchmarks,
paragraph 16 (g)
-
Article 449a;
Regulation (EU) No 575/2013; Commission
Implementing Regulation (EU) 2022/2453,
Template 1: Banking book- Climate Change
transition risk: Credit quality of exposures by
sector, emissions and residual maturity;
Delegated Regulation (EU) 2020/1818,
Article12.1 (d) to (g), and Article 12.2
-
ESRS E1-4 GHG emission reduction
targets, paragraph 34
Indicator number 4
of Table #2 of Annex
I
Article 449a;
Regulation (EU) No 575/2013; Commission
Implementing Regulation (EU) 2022/2453,
Template 3: Banking book- Climate Change
transition risk: alignment metrics;
Delegated Regulation (EU) 2020/1818,
Article 6
-
ESRS E1-5 Energy consumption
from fossil sources disaggregated
by sources (only high climate
impact sectors), paragraph 38
Indicator number 5
of Table #1 of Annex
I;
Indicator number 5
of Table #2 of Annex
I
-
-
-
ESRS E1-5 Energy consumption and
mix, paragraph 37
Indicator number 5
of Table #1 of Annex I
-
-
-
ESRS E1-5 Energy intensity
associated with activities in high
climate impact sectors, paragraphs
40 to 43
Indicator number 6
of Table #1 of Annex I
-
-
-
ESRS E1-6 | Gross Scope 1, 2, 3 and
Total GHG emissions, paragraph 44
Indicators number 1
and 2 of Table #1 of
Annex I
Article 449a; Regulation (EU) No 575/2013;
Commission Implementing Regulation (EU)
2022/2453, Template 1: Banking book- Climate
Change transition risk: Credit quality of
exposures by sector, emissions and residual
maturity;
Delegated Regulation (EU) 2020/1818,
Articles 5(1), 6 and 8(1)
-
ESRS E1-6 Gross GHG emissions
intensity, paragraphs 53 to 55
Indicator number 3
of Table #1 of Annex I
Article 449a; Regulation (EU) No 575/2013;
Commission Implementing Regulation (EU)
2022/2453, Template 3: Banking book- Climate
Change transition risk: alignment metrics;
Delegated Regulation (EU) 2020/1818,
Article 8(1)
-
ESRS E1-7 GHG removals and
carbon credits, paragraph 56
-
-
-
Regulation (EU) 2021/1119, Article
2(1)
ESRS E1-9 Exposure of the
benchmark portfolio to climate-
related physical risks, paragraph 66
-
-
Delegated Regulation (EU) 2020/1818,
Annex II; Delegated Regulation (EU)
2020/1816, Annex II
-
ESRS E1-9 Disaggregation of
monetary amounts by acute and
chronic physical risk, paragraph 66
(a);
ESRS E1-9 | Location of significant
assets at material physical risk;
paragraph 66 (c)
-
Article 449a; Regulation (EU) No 575/2013;
Commission Implementing Regulation (EU)
2022/2453, paragraphs 46 and 47; Template 5:
Banking book- Climate change physical risk:
Exposures subject to physical risk
-
-
ESRS E1-9 Breakdown of the
carrying value of its real estate
assets by energy-efficiency classes,
paragraph 67 (c)
-
Article 449a; Regulation (EU) No 575/2013;
Commission Implementing Regulation (EU)
2022/2453, paragraph 34; Template 2: Banking
book- Climate Change transition risk: Loans
-
-
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
129
collateralised by immovable property - Energy
efficiency of the collateral
ESRS E1-9 Degree of exposure of
the portfolio to climate- related
opportunities, paragraph 69
-
-
Commission Delegated Regulation (EU)
2020/1818, Annex II
-
ESRS E2-4 Amount of each
pollutant listed in Annex II of the E-
PRTR Regulation (European
Pollutant Release and Transfer
Register) emitted to air, water and
soil, paragraph 28
Indicator number 8
of Table #1 of Annex
I;
Indicator number 1, 2
and 3 of Table #2 of
Annex I
-
-
-
ESRS E3-1 Water and marine
resources, paragraph 9
Indicator number 7
of Table #2 of Annex
I
-
-
-
ESRS E3-1 Dedicated policy,
paragraph 13
Indicator number 8
of Table #2 of Annex
I
-
-
-
ESRS E3-1 Sustainable oceans and
seas, paragraph 14
Indicator number 12
of Table #2 of Annex
I
-
-
-
ESRS E3-4
Total water recycled and reused,
paragraph 28 (c)
Indicator number 6.2
of Table #2 of Annex
I
-
-
-
ESRS E3-4
Total water consumption in m
3
per
net revenue on own operations,
paragraph 29
Indicator number 6.1
of Table #2 of Annex
I
-
-
-
ESRS 2- IRO 1 - E4, paragraph 16 (a) i
Indicator number 7
of Table #1 of Annex I
-
-
-
ESRS 2- IRO 1 - E4, paragraph 16 (b)
Indicator number 10
of Table #2 of Annex
I
-
-
-
ESRS 2- IRO 1 - E4, paragraph 16 (c)
Indicator number 14
of Table #2 of Annex
I
-
-
-
ESRS E4-2
Sustainable land / agriculture
practices or policies, paragraph 24
(b)
Indicator number 11
of Table #2 of Annex
I
-
-
-
ESRS E4-2
Sustainable oceans / seas practices
or policies, paragraph 24 (c)
Indicator number 12
of Table #2 of Annex
I
-
-
-
ESRS E4-2
Policies to address deforestation,
paragraph 24 (d)
Indicator number 15
of Table #2 of Annex
I
-
-
-
ESRS E5-5
Non-recycled waste, paragraph 37
(d)
Indicator number 13
of Table #2 of Annex
I
-
-
-
ESRS E5-5
Hazardous waste and radioactive
waste, paragraph 39
Indicator number 9
of Table #1 of Annex I
-
-
-
ESRS 2 - SBM3- S1
Indicator number 13
-
-
-
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
130
Risk of incidents of forced labour,
paragraph 14 (f)
of Table #3 of Annex
I
ESRS 2 - SBM3- S1
Risk of incidents of child labour,
paragraph 14 (g)
Indicator number 12
of Table #3 of Annex
I
-
-
-
ESRS S1-1
Human rights policy commitments,
paragraph 20
Indicator number 9
of Table #3; Indicator
number 11 of Table #1
of Annex I
-
-
-
ESRS S1-1
Due diligence policies on issues
addressed by the fundamental
International Labour Organisation
Conventions 1 to 8, paragraph 21
-
Commission Delegated Regulation (EU)
2020/1816, Annex II
-
ESRS S1-1
Processes and measures for
preventing trafficking in human
beings, paragraph 22
Indicator number 11
of Table #3 of Annex
I
-
-
-
ESRS S1-1
Workplace accident prevention
policy or management system,
paragraph 23
Indicator number 1
of Table #3 of Annex
I
-
-
-
ESRS S1-3
Grievance/complaints handling
mechanisms, paragraph 32 (c)
Indicator number 5
of Table #3 of Annex
I
-
-
-
ESRS S1-14
Number of fatalities and number
and rate of work-related accidents,
paragraph 88 (b) and (c)
Indicator number 2
of Table #3 of Annex
I
-
Commission Delegated Regulation (EU)
2020/1816, Annex II
-
ESRS S1-14
Number of days lost to injuries,
accidents, fatalities or illness,
paragraph 88 (e)
Indicator number 3
of Table #3 of Annex
I
-
-
-
ESRS S1-16
Unadjusted gender pay gap,
paragraph 97 (a)
Indicator number 12
of Table #1 of Annex I
-
Commission Delegated Regulation (EU)
2020/1816, Annex II
-
ESRS S1-16
Excessive CEO pay ratio, paragraph
97 (b)
Indicator number 8
of Table #3 of Annex
I
-
-
-
ESRS S1-17
Incidents of discrimination,
paragraph 103 (a)
Indicator number 7
of Table #3 of Annex
I
-
-
-
ESRS S1-17 Non-respect of UNGPs
on Business and Human Rights and
OECD guidelines, paragraph 104 (a)
Indicator number 10
of Table #1; Indicator
number 14 of Table
#3 of Annex I
-
Delegated Regulation (EU) 2020/1816,
Annex II; Delegated Regulation (EU)
2020/1818, Article 12(1)
-
ESRS 2 - SBM3- S2
Significant risk of child labour or
forced labour in the value chain,
paragraph 11 (b)
Indicators number 12
and 13 of Table #3 of
Annex I
-
-
-
ESRS S2-1
Human rights policy commitments,
paragraph 17
Indicator number 9
of Table #3; Indicator
number 11 of Table #1
of Annex I
-
-
-
ESRS S2-1 Policies related to value
chain workers, paragraph 18
Indicators number 11
and 4 of Table #3 of
Annex I
-
-
-
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
131
ESRS S2-1 Non-respect of UNGPs on
Business and Human Rights and
OECD guidelines, paragraph 19
Indicator number 10
of Table #1 of Annex I
-
Delegated Regulation (EU) 2020/1816,
Annex II; Delegated Regulation (EU)
2020/1818, Article 12(1)
-
ESRS S2-1
Due diligence policies on issues
addressed by the fundamental
International Labour Organisation
Conventions 1 to 8, paragraph 19
-
-
Commission Delegated Regulation (EU)
2020/1816, Annex II
-
ESRS S2-4
Human rights issues and incidents
connected to its upstream and
downstream value chain,
paragraph 36
Indicator number 14
of Table #3 of Annex
I
-
-
-
ESRS S3-1
Human rights policy commitments,
paragraph 16
Indicator number 9
of Table #3; Indicator
number 11 of Table #1
of Annex I
-
-
-
ESRS S3-1
Non-respect of UNGPs on Business
and Human Rights, ILO principles
or and OECD guidelines, paragraph
17
Indicator number 10
of Table #1 of Annex I
-
Delegated Regulation (EU) 2020/1816,
Annex II; Delegated Regulation (EU)
2020/1818, Article 12(1)
-
ESRS S3-4
Human rights issues and incidents,
paragraph 36
Indicator number 14
of Table #3 of Annex
I
-
-
-
ESRS S4-1 Policies related to
consumers and end-users,
paragraph 16
Indicator number 9
of Table #3; Indicator
number 11 of Table #1
of Annex I
-
-
-
ESRS S4-1
Non-respect of UNGPs on Business
and Human Rights and OECD
guidelines, paragraph 17
Indicator number 10
of Table #1 of Annex I
-
Delegated Regulation (EU) 2020/1816,
Annex II; Delegated Regulation (EU)
2020/1818, Article 12(1)
-
ESRS S4-4
Human rights issues and incidents,
paragraph 35
Indicator number 14
of Table #3 of Annex
I
-
-
-
ESRS G1-1
United Nations Convention against
Corruption, paragraph 10 (b)
Indicator number 15
of Table #3 of Annex
I
-
-
-
ESRS G1-1
Protection of whistle-blowers,
paragraph 10 (d)
Indicator number 6
of Table #3 of Annex
I
-
-
-
ESRS G1-4
Fines for violation of anti-
corruption and anti-bribery laws,
paragraph 24 (a)
Indicator number 17
of Table #3 of Annex
I
-
Delegated Regulation (EU) 2020/1816,
Annex II
-
ESRS G1-4
Standards of anti-corruption and
anti-bribery, paragraph 24 (b)
Indicator number 16
of Table #3 of Annex
I
-
-
-
ANNUAL STATEMENTS OF THE VILVI GROUP 2025
132
Contents of Disclosure Requirements I ESRS 2 IRO-2
List of Disclosure Requirements
Page
List of disclosure requirements
Page
ESRS 2 General disclosures
ESRS 2 SBM-3-E1 Material impacts, risks and opportunities and their
interaction with strategy and business model
p. 71
BP-1 General basis for preparation of sustainability statements
p. 49
ESRS 2 IRO-1-E1 Description of the processes to identify and assess material
climate-related impacts, risks and opportunities
pp. 71-72
BP-2 Disclosures in relation to specific circumstances
p. 50
E1-2 Policies related to climate change mitigation and adaptation
pp. 72-73
GOV-1 The role of the administrative, management and supervisory bodies
pp. 51–53
E1-3 Actions and resources in relation to climate change policies
p. 73
GOV-2 Information provided to and sustainability matters addressed by the
undertaking’s administrative, management and supervisory bodies
pp. 51–53
E1-4 Targets related to climate change mitigation and adaptation
p. 73
GOV-3 Integration of sustainability-related performance in incentive schemes
p. 53
E1-5, Energy consumption and mix
pp. 74–75
GOV-4 Statement on due diligence
p. 53
E1-6 Gross Scopes 1, 2, 3 and Total GHG emissions
pp. 75–77
GOV-5 Risk management and internal controls over sustainability reporting
p. 53
E1-7 GHG removals and GHG mitigation projects financed through carbon
credits
p. 77
SBM-1 Market position, strategy, business model(s) and value chain,
pp. 53–55
E1-8 Internal carbon pricing
p. 77
SBM-2 Interests and views of stakeholders
pp. 56–57
E1-9 Anticipated financial effects from material physical and transition risks
and potential climate-related opportunities
p. 77
SBM-3 Material impacts, risks and opportunities and their interaction with strategy
and business model(s)
pp. 59–60
E2 – Pollution
IRO-1 Description of the processes to identify and assess material impacts, risks and
opportunities
pp. 57–59
ESRS 2 IRO-1-E2 Description of the processes to identify and assess material
pollution-related impacts, risks and opportunities
pp. 78-79
IRO-2 Disclosure Requirements in ESRS covered by the undertaking’s sustainability
statements
p. 59
E2-1 Policies related to pollution
p. 79
E1 – Climate Change
E2-2 Actions and resources related to pollution
pp. 79–80
ESRS 2 GOV-3-E1 Integration of sustainability-related performance in incentive
schemes
p. 53
E2-3 Targets related to pollution
p. 81
E1-1 Transition plan for climate change mitigation
pp. 72
E2-4 Pollution of air, water and soil
p. 81
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E2-5 Substances of concern and substances of very high concern
pp. 82-83
E4-6 Anticipated financial effects from biodiversity and ecosystem-related
risks and opportunities
p. 89
E2-6 Anticipated financial effects from pollution-related impacts, risks and
opportunities
p. 83
E5 Resource use and circular economy
E3 – Water and marine resources
ESRS 2 IRO-1-E5 Description of the processes to identify and assess material
resource use and circular economy-related impacts, risks and opportunities
pp. 90-91
ESRS 2 IRO-1-E3 Description of the processes to identify and assess material water
and marine resources-related impacts, risks and opportunities
p. 84
E5-1 Policies related to resource use and circular economy
p. 91
E3-1 Policies related to water and marine resources
p. 85
E5-2 Actions and resources related to resource use and circular economy
pp. 91–93
E3-2 Actions and resources related to water and marine resources
p. 85
E5-3 Targets related to resource use and circular economy
p. 93
E3-3 Targets related to water and marine resources
p. 85
E5-4 Resource inflows
p. 94
E3-4 Water consumption
p. 86
E5-5 Resource outflows
p. 94
E3-5 Anticipated financial effects from water and marine resources-related risks
and opportunities
p. 86
E5-6 Anticipated financial effects from resource use and circular economy-
related risks and opportunities
p. 94
E4 – Biodiversity and ecosystems
S1 – Own workforce
ESRS 2 SBM-3-E4 Material impacts, risks and opportunities and their interaction of
with strategy and business model
p. 88
ESRS 2 SBM-2-S1 Interests and views of stakeholders
p. 96, 106
E4-1 Transition plan and consideration of biodiversity and ecosystems in strategy
and business model
p. 87
ESRS 2 SBM-3-S1 Material impacts, risks and opportunities and their
interaction with strategy and business model
pp. 96-97,
106-107
ESRS 2 IRO-1-E4 Description of processes to identify and assess material
biodiversity and ecosystem-related impacts, risks and opportunities
p. 87
S1-1 Policies related to own workforce
p. 97, 107
E4-2 Policies related to biodiversity and ecosystems
p. 88
S1-2 Processes for engaging with own workers and workers' representatives
about impacts
pp. 98,
107-108
E4-3 Actions and resources related to biodiversity and ecosystems
pp. 88-89
S1-3 Processes to remediate negative impacts and channels for own
workers to raise concerns
p. 98, 108
E4-4 Targets related to biodiversity and ecosystems
p. 89
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
pp. 98-
100, 108-
109
E4-5 Impact metrics related to biodiversity and ecosystems change
p. 89
S1-5 Targets related to managing material negative impacts, advancing
positive impacts, and managing material risks and opportunities
p. 101, 109
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S1-6 Characteristics of the undertaking’s employees
p. 102
S3-1 Policies related to affected communities
p. 114
S1-7 Characteristics of non-employee workers in the undertaking’s own workforce
p. 103
S3-2 Processes for engaging with affected communities about impacts
p. 114
S1-8 Collective bargaining coverage and social dialogue
p. 103
S3-3 Processes to remediate negative impacts and channels for affected
communities to raise concerns
pp. 114-114
S1-9 Diversity metrics
p. 110
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
p. 115
S1-10 Adequate Wages
p. 103
S3-5 Targets related to managing material negative impacts, advancing
positive impacts, and managing material risks and opportunities
p. 115
S1-11 Social protection
p. 103
S4 – Consumers and end-users
S1-12 Persons with disabilities
p. 110
ESRS 2 SBM-2-S4 Interests and views of stakeholders
p. 116
S1-13 Training and skills development metrics
p. 111
ESRS 2 SBM-3-S4 Material impacts, risks and opportunities and their
interaction of with strategy and business model
pp. 116-117
S1-14 Health and safety metrics
p. 104
S4-1 Policies related to consumers and end-users
pp. 117-118
S1-15 Work-life balance metrics
p. 111
S4-2 Processes for engaging with consumers and end-users about
impacts
p. 118
S1-16 Compensation metrics (pay gap and total compensation)
pp. 104-105
S4-3 Processes to remediate negative impacts and channels for
consumers and end-users to raise concerns
p. 118
S1-17 Incidents, complaints and severe human rights impacts
p. 112
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
p. 118-119
S3 – Affected communities
S1-5 Targets related to managing material negative impacts, advancing
positive impacts, and managing material risks and opportunities
p. 119
ESRS 2 SBM-2-S3 Interests and views of stakeholders
p. 113
G1 – Business conduct
ESRS 2 SBM-3-S3 Material impacts, risks and opportunities and their interaction
with strategy and business model
pp. 113-114
ESRS 2 SBM-2-G1 Interests and views of stakeholders
p. 121
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135
ESRS 2 GOV-1-G1 The role of the administrative, supervisory and management
bodies
p. 121
ESRS 2 IRO-1-G1 Description of the processes to identify and assess material
impacts, risks and opportunities
p. 121
G1-1 Corporate culture and business conduct policies
pp. 122
G1-2 Management of relationships with suppliers
pp. 122-123
G1-3 Prevention and detection of corruption and bribery
pp. 123–124
G1-4 Confirmed incidents of corruption or bribery
pp. 124
G1-5 Political influence and lobbying activities
p. 125
G1-6 Payment practices
p. 125
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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
VILVI GROUP ANNUAL REPORTS
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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
2025
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 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 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 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 2025.
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 are shareholders of
the Company on the day of the General Meeting,
their authorized representatives, or persons
with whom the voting rights transfer
agreement has been concluded shall have the
right to participate and vote at 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.
he Company’s General Meetings of
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 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: board
3.1. Functions and liability of the board
The board should ensure the implementation of the company’s strategy and good corporate governance
with due regard to the interests of its shareholders, employees and other interest groups.
3.1.1
The 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 board is also responsible
for the approval of the company’s strategy.
Yes
The board ensures the implementation of the
Company's strategy.
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3.1.2
As a collegial management body of the company,
the 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 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
board (except for the Company’s Group entity,
Pieno logistika AB, where a board is not
currently formed, but it is planned to establish a
board in 2026.), 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 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 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 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 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 board ensures compliance with applicable
laws, regulations, and standards.
3.1.5
When appointing the manager of the company,
the 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 board takes into account the candidate’s
qualifications, experience, and competence.
3.2. Formation of the board
3.2.1
The members of the 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 board, it should be ensured that the
members of the 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 Board of
Vilkyškių pieninė AB have the necessary variety
of knowledge, opinions, and experience to
perform their tasks properly (2 board members
have economic education, 2 - technical
education, 1 - management education and 1 -
has education related to agriculture). In other
group companies, board members also possess
the necessary professional experience and
competencies.
There is one woman on the board of Vilkyškių
pieninė AB and one on the board of Modest AB
and one on the board of Baltic Dairy SIA Board
of the Company Group; and two women on the
board of Kelmės pieninė AB and on the board
Kelmės pienas UAB of the Company Group.
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3.2.2
Names and surnames of the candidates to become
members of the 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
board or individual members of the 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 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 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 board: education, qualifications,
professional experience, current position, etc.
3.2.3
All new members of the board should be
familiarized with their duties and the structure and
operations of the company.
Yes
After the election, all members of the 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 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 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 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 board or its individual member.
3.2.5
Chair of the 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 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 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
board. Should a member of the board attend less
than a half of the meetings of the 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 2025, the board members attended the board
meetings (a quorum was present during all
meetings), with each member devoting
sufficient time to perform the duties of the
board member.
There were no board members who attended
less than half of the board meetings during
fiscal year of 2025.
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3.2.7
In the event that the 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 board are
deemed as independent. The 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 board for
their activity and participation in the meetings of
the board.
Yes
Members of the 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 board with
tantiemes approved by the general meeting of
shareholders. No tantiemes were paid to board
members in 2025.
3.2.9
The members of the 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 board act in
good faith with respect to the Company,
following the interests of the Company and not
their own or those of third parties, adhering to
the principles of honesty, reasonableness,
confidentiality, and responsibility, trying to
remain independent during the decision-
making.
3.2.10
Every year the board should carry out an
assessment of its activities. It should include
evaluation of the structure of the board, its work
organization and ability to act as a group,
evaluation of the competence and work efficiency
of each member of the board, and evaluation
whether the board has achieved its objectives. The
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 board is carry out an assessment
of its activities, review the 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 board of the company
The rules of procedure of the supervisory board, if it is formed at the company, and of the board should
ensure efficient operation and decision-making of these bodies and promote active cooperation between
the company’s management bodies.
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4.1
The 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 board and the supervisory board. The 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 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 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
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.
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 board, particularly in such cases where issues
concerning the removal of the 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
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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 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 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.
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
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 management
report of 2025.
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5.1.6
With a view to ensure the independence and
impartiality of the committees, the members of the
collegial body who are not members of the
committees should normally have a right to
participate in the meetings of the committee only
if invited by the committee. A committee may
invite or request that certain employees of the
company or experts would participate in the
meeting. Chair of each committee should have the
possibility to maintain direct communication with
the shareholders. Cases where such practice is to
be applied should be specified in the rules
regulating the activities of the committee.
Yes
The members of the collegial body, who are not
members of the Committee, shall participate in
the meetings of the committees, if necessary, at
the invitation of the respective Committee. If
necessary, the Committee may invite relevant
Company personnel, responsible for the matters
discussed in the Committee, to attend the
meeting. The chairman of the committee is also
provided with the possibility to communicate
with the shareholders as necessary.
5.2. Nomination committee
5.2.1
The key functions of the nomination committee
should be the following:
1) to select candidates to fill vacancies in the
membership of supervisory and management
bodies and the administration and recommend the
collegial body to approve them. The nomination
committee should evaluate the balance of skills,
knowledge and experience in the management
body, prepare a description of the functions and
capabilities required to assume a particular
position and assess the time commitment
expected;
2) assess, on a regular basis, the structure, size and
composition of the supervisory and management
bodies as well as the skills, knowledge and activity
of its members, and provide the collegial body with
recommendations on how the required changes
should be sought;
3) devote the attention necessary to ensure
succession planning.
Yes
The functions of the Nomination Committee
specified in this recommendation are
essentially performed by the Nomination and
Remuneration Committee of 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
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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
regarding the remuneration policy (taking into
account the EU Pay Transparency Directive; in
2025, the Committee also submitted relevant
proposals), regularly reviews it, and oversees 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.
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 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
The Company did not have internal auditors in
2025. External auditors shall regularly present
their activity plans and reports to the Audit
Committee.
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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 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.
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
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
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7.3
With a view to avoid potential conflicts of interest,
the remuneration policy should provide that
members of the collegial bodies which perform the
supervisory functions should not receive
remuneration based on the company’s
performance.
Yes
The approved Remuneration Policy does not
provide for the possibility to receive
remuneration depending on the Company's
performance.
7.4
The remuneration policy should provide sufficient
information on the policy regarding termination
payments. Termination payments should not
exceed a fixed amount or a fixed number of annual
wages and in general should not be higher than
the non-variable component of remuneration for
two years or the equivalent thereof. Termination
payments should not be paid if the contract is
terminated due to inadequate performance.
Yes
The Company adheres to the requirements of
applicable laws (provisions of the Labor Code of
the Republic of Lithuania) regarding
termination payments.
7.5
In the event that the financial incentive scheme is
applied at the company, the remuneration policy
should contain sufficient information about the
retention of shares after the award thereof. Where
remuneration is based on the award of shares,
shares should not be vested at least for three years
after the award thereof. After vesting, members of
the collegial bodies and heads of the
administration should retain a certain number of
shares until the end of their term in office, subject
to the need to compensate for any costs related to
the acquisition of shares.
Not
applicable
The Company has no system of employee
incentivisation or remuneration with Company
shares.
7.6
The company should publish information about
the implementation of the remuneration policy on
its website, with a key focus on the remuneration
policy in respect of the collegial bodies and
managers in the next and, where relevant,
subsequent financial years. It should also contain a
review of how the remuneration policy was
implemented during the previous financial year.
The information of such nature should not include
any details having a commercial value. Particular
attention should be paid on the major changes in
the company’s remuneration policy, compared to
the previous financial year.
Yes
The implementation of the Remuneration
Policy is disclosed in the Remuneration Report,
which is published on the Company's website.
7.7
It is recommended that the remuneration policy or
any major change of the policy should be included
on the agenda of the general meeting of
shareholders. The schemes under which members
and employees of a collegial body receive
remuneration in shares or share options should be
approved by the general meeting of shareholders.
Yes
In the event of a material change in the
remuneration policy, such change shall be
included in the agenda of the general meeting
of shareholders.
The Company does not employ schemes under
which the remuneration is provided in shares or
share options, or other rights to purchase shares
or receive remuneration based on the changes
in the share price.
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.
VILVI GROUP ANNUAL REPORTS
2025
152
8.2
The corporate governance framework should
create conditions for stakeholders to participate in
corporate governance in the manner prescribed by
law. Examples of participation by stakeholders in
corporate governance include the participation of
employees or their representatives in the adoption
of decisions that are important for the company,
consultations with employees or their
representatives on corporate governance and other
important matters, participation of employees in
the company’s authorized capital, involvement of
creditors in corporate governance in the cases of
the company’s insolvency, etc.
Yes
All stakeholders are provided with the possibility
to participate in corporate governance in the
manner prescribed by law.
8.3
Where stakeholders participate in the corporate
governance process, they should have access to
relevant information.
Yes
The stakeholders involved in the corporate
governance process shall be granted access to
the necessary information, without prejudice to
the interests of the Company and other related
parties.
8.4
Stakeholders should be provided with the
possibility of reporting confidentially any illegal or
unethical practices to the collegial body
performing the supervisory function.
Yes
The Company provides the possibility to
confidentially report any illegal or unethical
practices to the collegial body performing the
supervisory function.
Principle 9: Disclosure of information
The corporate governance framework should ensure the timely and accurate disclosure of all material
corporate issues, including the financial situation, operations and governance of the company.
9.1
In accordance with the company’s procedure on
confidential information and commercial secrets
and the legal acts regulating the processing of
personal data, the information publicly disclosed by
the company should include but not be limited to
the following:
Yes
9.1.1
operating and financial results of the company;
Yes
On a quarterly basis, the Company reports its
operating and financial results on the
Company’s website and through the
information disclosure system used by Nasdaq
Vilnius.
9.1.2
objectives and non-financial information of the
company;
Yes
Information on the Company’s activities,
objectives and corporate governance is
disclosed through press releases and
notifications on material events, as well as on
the Company’s website, and the information
disclosure system used by Nasdaq Vilnius.
9.1.3
persons holding a stake in the company or
controlling it directly and/or indirectly and/or
together with related persons as well as the
structure of the group of companies and their
relationships by specifying the final beneficiary;
Yes
Information is provided on the Company’s
website and in its interim and annual reports.
9.1.4
members of the company’s supervisory and
management bodies who are deemed
independent, the manager of the company, the
shares or votes held by them at the company,
participation in corporate governance of other
companies, their competence and remuneration;
Yes
Information is provided on the Company’s
website and in its interim and annual reports.
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.
VILVI GROUP ANNUAL REPORTS
2025
153
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.
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.
VILVI GROUP ANNUAL REPORTS
2025
154
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 board of the
company.
Yes
The 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 board of the
company when considering which audit firm
should be proposed to the general meeting of
shareholders.
Yes
In 2025, the audit firm provided consulting
services to the Company on transfer pricing
matters between related parties.
VILVI GROUP ANNUAL REPORTS
2025
155
FINANCIAL
STATEMENTS:
− MANAGEMENT’S STATEMENT | 157
CONSOLIDATED AND THE PARENT
COMPANY’S SEPARATE:
− STATEMENTS OF FINANCIAL POSITION | 158
− STATEMENTS OF PROFIT OR LOSS | 159
− STATEMENTS OF OTHER COMPREHENSIVE INCOME |
160
− SEPARATE STATEMENT OF CHANGES IN EQUITY | 161
− CONSOLIDATED STATEMENT OF CHANGES IN EQUITY |
162
− STATEMENTS OF CASH FLOWS | 163
− NOTES TO FINANCIAL STATEMENTS | 165
VILVI GROUP ANNUAL REPORTS 2025 |  |
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“
OP „Corporate Bank plc“ Lithuanian branch
AS „Citadele banka“ Lithuanian branch
SC „Citadele bank“
VILVI GROUP ANNUAL REPORTS 2025 | |
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, 3 April 2026
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)
VILVI GROUP ANNUAL REPORTS 2025 | |
CONSOLIDATED AND SEPARATE STATEMENTS OF FINANCIAL POSITION
EUR ‘000
GROUP | COMPANY | ||||
At 31 December | At 31 December | ||||
2025 | 2024 | Assets | Note | 2025 | 2024 |
Investment property | 14 | 8,673 | 8,045 | ||
Property, plant and equipment | 12 | 18,376 | 18,731 | ||
Right-of-use assets | 12,13 | 1,904 | 2,270 | ||
Intangible assets | 15 | 20 | 30 | ||
Investments in subsidiaries | 16 | 27,389 | 27,388 | ||
Non-current amounts receivable | 17 | 2,319 | 1,404 | ||
Non-current assets | 58,681 | 57,868 | |||
Inventories | 18 | 7,605 | 7,104 | ||
Trade and other receivables | 19 | 42,435 | 22,383 | ||
Prepayments | 20 | 1,947 | 483 | ||
Cash and cash equivalents | 21 | 2,688 | 13,286 | ||
Current assets | 54,675 | 43,256 | |||
Total assets | 113,356 | 101,124 | |||
Equity | |||||
Share capital | 3,463 | 3,463 | |||
Share premium | 3,301 | 3,301 | |||
Reserves | 1,208 | 1,262 | |||
Retained earnings | 62,298 | 51,470 | |||
Equity attributable to owners of the Company | 70,270 | 59,496 | |||
Non-controlling interest | - | - | |||
Equity | 22 | 70,270 | 59,496 | ||
Liabilities | |||||
Borrowings | 23 | - | 5,778 | ||
Lease liabilities | 23 | 912 | 1,190 | ||
Government grants | 24 | 1,191 | 1,387 | ||
Deferred income tax liabilities | 25 | 1,185 | 1,318 | ||
Non-current liabilities | 3,288 | 9,673 | |||
Borrowings | 23 | 5,778 | 1,771 | ||
Lease liabilities | 23 | 564 | 614 | ||
Income tax payable | - | - | |||
Trade and other payables | 26 | 33,456 | 29,570 | ||
Current liabilities | 39,798 | 31,955 | |||
Liabilities | 43,086 | 41,628 | |||
Total equity and liabilities | 113,356 | 101,124 | |||
The notes on pages 165 to 216 form an integral part of these separate and consolidated financial statements, which were issued and signed on 3 April 2026.
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
VILVI GROUP ANNUAL REPORTS 2025 | |
CONSOLIDATED AND SEPARATE STATEMENTS OF PROFIT OR LOSS
EUR ‘000
GROUP | COMPANY | ||||
2025 | 2024 | 2025 | 2024 | ||
Revenue | 1 | 322,037 | 262,079 | ||
- | - | Cost of sales | 2 | -317,345 | -245,737 |
Gross profit | 4,692 | 16,342 | |||
Other operating income | 3 | 23,434 | 12,890 | ||
- | - | Distribution expenses | 6 | -4,458 | -3,547 |
- | - | Administrative expenses | 7 | -4,587 | -6,023 |
- | - | Other operating expenses | 4 | -3,029 | -2,695 |
Other gain (loss) – net | 5 | 580 | 545 | ||
Results of operating activities | 16,632 | 17,512 | |||
Finance income | 1,189 | 124 | |||
- | - | Finance costs | -732 | -579 | |
- | - | Finance costs, net | 9 | 457 | -455 |
Profit (loss) before income tax | 17,089 | 17,057 | |||
- | Income tax | 10 | 144 | -698 | |
Profit (loss) for the reporting year | 17,233 | 16,359 | |||
Attributable to: | |||||
Shareholders of the Company | 17,233 | 16,359 | |||
Non-controlling interest | - | - | |||
Profit (loss) for the reporting year | 17,233 | 16,359 | |||
Basic and diluted earnings per share (in EUR) | 11 | 1.44 | 1.37 | ||
The notes on pages 165 to 216 form an integral part of these separate and consolidated financial statements.
VILVI GROUP ANNUAL REPORTS 2025 | |
CONSOLIDATED AND SEPARATE STATEMENTS OF OTHER COMPREHENSIVE INCOME
GROUP | COMPANY | |||
2025 | 2024 | EUR ‘000 | 2025 | 2024 |
Profit (loss) for the reporting year | 17,233 | 16,359 | ||
Other comprehensive income | ||||
Profit (loss) due to the revaluation of tangible fixed assets | - | 268 | ||
- | - | Deferred income tax liability | -10 | -51 |
- | Other comprehensive income for the year, net of | -10 | 217 | |
Total comprehensive income for the year | 17,223 | 16,576 | ||
Attributable to: | ||||
Shareholders of the Company | 17,223 | 16,576 | ||
Non-controlling interest | - | - | ||
Total comprehensive income for the year | 17,223 | 16,576 | ||
The notes on pages 165 to 216 form an integral part of these separate and consolidated financial statements.
VILVI GROUP ANNUAL REPORTS 2025 | |
SEPARATE STATEMENT OF CHANGES IN EQUITY
EUR ‘000
Share capital | Share premium | Revaluation reserve | Legal reserve | Retained earnings | Total | |
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 | - | - | 217 | - | - | 217 |
Total comprehensive income for the year | - | - | 217 | - | 16,359 | 16,576 |
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 |
Balance at 1 January 2025 | 3,463 | 3,301 | 916 | 346 | 51,470 | 59,496 |
Profit (loss) for the period | - | - | - | - | 17,233 | 17,233 |
Other comprehensive income | - | - | -10 | - | - | -10 |
Total comprehensive income for the year | - | - | -10 | - | 17,233 | 17,223 |
Depreciation, write-off of revalued assets | - | - | -44 | - | 44 | - |
Transactions with owners recognised directly in equity | ||||||
Dividends | - | - | - | - | -6,449 | -6,449 |
Total transactions with owners recognised directly in equity | - | - | - | - | -6,449 | -6,449 |
Balance at 31 December 2025 | 3,463 | 3,301 | 862 | 346 | 62,298 | 70,270 |
The notes on pages 165 to 216 form an integral part of these separate and consolidated financial statements.
VILVI GROUP ANNUAL REPORTS 2025 | |
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 2024 | ||||||||
Net profit (loss) | ||||||||
Other comprehensive income | ||||||||
Total comprehensive income for the year | ||||||||
Depreciation, write-off of revalued assets | - | |||||||
Transactions with owners recognised directly in equity | ||||||||
Dividends | - | - | - | |||||
Total transactions with owners recognised directly in equity | - | - | - | |||||
At 31 December 2024 | ||||||||
At 1 January 2025 | ||||||||
Net profit (loss) | ||||||||
Other comprehensive income | - | - | - | |||||
Total comprehensive income for the year | - | |||||||
Depreciation, write-off of revalued assets | - | |||||||
Transactions with owners recognised directly in equity | ||||||||
Dividends | - | - | - | |||||
Total transactions with owners recognised directly in equity | - | - | - | |||||
Total transactions with owners | - | - | - | |||||
At 31 December 2025 | ||||||||
The notes on pages 165 to 216 form an integral part of these separate and consolidated financial statements.
VILVI GROUP ANNUAL REPORTS 2025 | |
CONSOLIDATED AND SEPARATE STATEMENTS OF CASH FLOWS
EUR ‘000
GROUP | COMPANY | ||||
2025 | 2024 | Note | 2025 | 2024 | |
Cash flows from operating activities | |||||
Profit (loss) for the year | 17,233 | 16,359 | |||
Adjustments for: | |||||
Depreciation of property, plant and equipment | 12 | 2,389 | 1,879 | ||
Loss (gain) on change in fair value of investment property | 14 | -496 | -449 | ||
Amortisation of intangible assets | 15 | 10 | 2 | ||
- | - | Amortisation and write-off of grants | 24 | -204 | -177 |
- | Change in inventory write-down allowance | 18 | -1,155 | 899 | |
- | - | Loss (gain) from disposal and write-off of property, plant and equipment | -29 | -69 | |
Dividend income | 3 | -18,428 | -8,993 | ||
- | Income tax expenses | 10 | -144 | 698 | |
Financial performance result | 9 | -457 | 455 | ||
-1,281 | 10,604 | ||||
- | Change in inventories | 655 | 985 | ||
Change in non-current amounts receivable | 17 | -3 | 618 | ||
- | - | Change in trade and other receivables and prepayments | -4,254 | -5,154 | |
Change in trade and other payables | 22,453 | 21,644 | |||
17,570 | 28,697 | ||||
- | - | Interest paid | -515 | -524 | |
- | - | Income tax paid | - | - | |
Net cash flows generated from operating activities | 17,055 | 28,173 | |||
VILVI GROUP ANNUAL REPORTS 2025 | |
CONSOLIDATED AND SEPARATE STATEMENTS OF CASH FLOWS (CONT.)
EUR ‘000
GROUP | COMPANY | ||||
2025 | 2024 | Note | 2025 | 2024 | |
Cash flows from investing activities | |||||
- | - | Payments for acquisition of property, plant and equipment | -1,691 | -2,421 | |
- | Payments for acquisition of intangible assets | - | -30 | ||
Proceeds from sale of property, plant and equipment | 268 | 350 | |||
Acquisition of ownership interest in subsidiary | 16 | -1 | -16,070 | ||
- | Loans granted | -14,043 | - | ||
Government grants | 24 | 8 | 893 | ||
Repayment of loans | 13,131 | 600 | |||
- | Funds for the acquisition of the right of claim | -16,170 | - | ||
- | - | Net cash flows (used in) investing activities | -18,498 | -16,678 | |
Cash flows from financing activities | |||||
Proceeds from borrowings | 23 | - | 7,166 | ||
- | - | Repayments of borrowings | 23 | -1,771 | -3,542 |
- | - | Lease payments | -935 | -985 | |
- | - | Payment of dividends | -6,449 | -3,702 | |
Net cash flows (used in) financing activities | -9,155 | -1,063 | |||
- | Net increase (decrease) in cash and cash equivalents | -10,598 | 10,432 | ||
Cash and cash equivalents as at 1 January | 13,286 | 2,854 | |||
Cash and cash equivalents as at 31 December | 21 | 2,688 | 13,286 | ||
The notes on pages 165 to 216 form an integral part of these separate and consolidated financial statements.
VILVI GROUP ANNUAL REPORTS 2025 | |
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 2025, 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 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 | 2,091,967 |
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 2024 and 31 December 2025, Gintaras Bertašius did not hold shares in Vilkyškių pieninė AB, 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 Vilkyškių pieninė AB).
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 2025 The Company owns 99.7% of shares with voting rights in the subsidiary Modest, AB (at 2024: 99.7%).
The Parent also controls the subsidiary Kelmės Pieninė AB, which is engaged in production of dry milk products – WPC80, MPC, permeate, and whey powder. At 2025 The Company owns 100% of shares with voting rights in the subsidiary Kelmės Pieninė AB (at 2024: 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 2025 Kelmės Pieninė AB owns 100% of shares in Kelmės Pienas UAB (at 2024: 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 2025 Kelmės Pienas UAB owns 59.0% of shares with voting rights in Pieno Logistika AB (at 2024: 59.0%).
VILVI GROUP ANNUAL REPORTS 2025 | |
The Parent also controls the subsidiary Baltic Dairy Board SIA, which is engaged in production of cheese products, industrial cream and milk/whey separation. At 2025 The Company owns 100% of shares with voting rights in the subsidiary Baltic Dairy Board SIA (at 2024: 100%).
As at 31 December 2025, the Group had 1,012 (31 December 2024: 938) employees.
As at 31 December 2025, the Company had 409 (31 December 2024: 400) 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 2025 or 31 December 2024, 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. For impairment of loans granted and other receivables, see Note 29.
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 recognised as a liability or a receivable in the period in which they are declared.
Dividends received are classified as cash flows from operating activities, taking into account their nature and the Company’s business model. The Company considers that the receipt of dividends is related to its ordinary activities and forms part of its operating cash flow generation.
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.
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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.
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 items recognised directly in equity or in other comprehensive income, in which case it is recognised in equity or other comprehensive income.
Current income tax is calculated in accordance with the tax legislation of the countries in which the Group and the Company operate, using tax rates enacted or substantively enacted at the reporting date. A standard income tax rate of 16% is applied to companies registered in the Republic of Lithuania. Tax losses, except for those arising from the disposal of securities and/or derivative financial instruments, may be carried forward indefinitely, provided that the activities generating those losses are not significantly changed. The amount of losses carried forward that can be used in a reporting period may not exceed 70% of taxable income for the period, after deducting non-taxable income and allowable deductions.
The procedure for carrying forward losses arising from the disposal of securities and/or derivative financial instruments has not changed; such losses may be carried forward for a period of 5 years and may only be used to offset taxable income from transactions of a similar nature.
Group entities operating in the Republic of Latvia are subject to income tax upon distribution of profits.
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A 20% income tax is applied to distributed profits (including dividends, dividend-equivalent income and deemed distributions), as well as to deemed distributed profits (such as non-business expenses and similar items).
The 20% income tax rate is applied to the gross taxable base. The gross taxable base for the tax period is calculated by dividing the net taxable base (distributed profits and deemed distributed profits) by a coefficient of 0.8.
Deferred tax is calculated on temporary differences between the carrying amounts of assets and liabilities in the financial statements and their tax bases. Deferred tax is not recognised for temporary differences arising on the initial recognition of assets and liabilities in a transaction that affects neither accounting profit nor taxable profit nor income tax expense.
Deferred income tax is measured using the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at the reporting date.
Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences or tax losses can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
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 revenues and expenses relating to transactions with other segments. The Group has three reportable segments based on different product groups: cheese, cheese products and other products, dry milk products, and fresh milk products.
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:
a)
Standards and amendments to the existing standards that became effective on 1 January 2025
There are no standards, amendments to standards or interpretations that are effective for annual periods commencing on 1 January 2025 and that would have a material impact on the Group’s financial statements.
Amendments to IAS 21 “The Effects of Changes in Foreign Exchange Rates” – “Lack of Exchangeability” (issued on 15 August 2023 and effective for annual periods beginning on or after 1 January 2025). The amendments clarify the concept of lack of exchangeability and establish principles for determining the applicable exchange rate when exchangeability is not available, as well as expand disclosure requirements.
b)
Standards and Amendments to Existing Standards Effective After 1 January 2026
Several new standards, amendments to standards, and interpretations will become effective for annual periods beginning after 1 January 2026 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 IFRS 9 “Financial Instruments” and IFRS 7 “Financial Instruments: Disclosures” (issued on 30 May 2024 and effective for annual periods beginning on or after 1 January 2026). The amendments: (a) clarify the date of recognition and derecognition of financial assets and financial liabilities, including an exception for certain transactions settled through electronic payment systems; (b) Provides additional guidance for assessing whether a financial asset meets the criterion of solely payments of principal and interest (SPPI); (c) introduce additional disclosure requirements for financial instruments with contractual cash flow characteristics that may vary (e.g. instruments linked to ESG targets); and (d) update disclosures relating to equity instruments measured at fair value through other comprehensive income.
VILVI GROUP ANNUAL REPORTS 2025 | |
IFRS 18 “Presentation and Disclosure in Financial Statements”, issued by the IASB on 9 April 2024 and effective for annual reporting periods beginning on or after 1 January 2027, replaces IAS 1 “Presentation of Financial Statements”. The standard introduces new requirements for the presentation and disclosure of information in financial statements, particularly in the statement of profit or loss, including defined categories (operating, investing and financing), new subtotals and disclosure requirements for management-defined performance measures (MPMs). The Group and the Company are assessing the impact of this standard on their financial statements.
Annual Improvements to IFRS Standards (issued in July 2024 and effective for annual periods beginning on or after 1 January 2026). The improvements clarify and align certain requirements of IFRS Standards. Amendments to IFRS 7 clarify disclosure requirements related to the derecognition of financial assets, aligning the wording with IFRS 13, and clarify that application examples do not represent all possible scenarios. IFRS 16 is amended to clarify that gains or losses arising from the derecognition of a lease liability are recognised in accordance with IFRS 9. In addition, requirements in IFRS 9 and IFRS 15 relating to the initial recognition of trade receivables are aligned, the definition of a “de facto agent” in IFRS 10 is clarified, and outdated references to the cost method in IAS 7 are removed. These amendments are primarily of a clarifying and editorial nature and are not expected to have a significant impact on the financial statements.
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
As at 31 December 2025 and 2024, the Company/Group assessed whether there were any indicators of impairment of property, plant and equipment. The assessment was performed taking into account the use of the assets, operating performance and market conditions. No indicators of impairment were identified and, therefore, no impairment test was performed.
Assumptions and results of impairment test performed by the Group in respect of goodwill as at 31 December 2025 and 2024 are disclosed in Note 15.
VILVI GROUP ANNUAL REPORTS 2025 | |
Revaluation of buildings
In assessing property, consideration was also given to the fair values determined by independent valuers , including building price increases and the assumptions applied in their determination. This assessment requires significant management judgement and is considered a significant accounting estimate.
The Group and the Company measure buildings at revalued amounts, less subsequent accumulated depreciation and impairment losses.
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.
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,
VILVI GROUP ANNUAL REPORTS 2025 | |
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 to maintain a sufficient level of cash and cash equivalents and to secure financing through appropriate credit facilities in order to ensure that the Group and the Company are able to meet their obligations on time and in line with their strategic plans. Liquidity risk is managed by continuously monitoring cash flows and preparing short-term and long-term cash flow forecasts.
The Group’s/Company’s seek to maintain a balance between continuity of funding and flexibility by diversifying funding sources and regularly assessing changes in financing conditions. Given that operations generate sufficient cash flows, management continuously monitors the liquidity ratios of the Group and the Company, establishes risk tolerance limits and, where necessary, applies preventive measures to mitigate liquidity risk.
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.
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, industrial cream 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);
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. Compared to the 2024 financial statements, the Group merged the cheese and cheese products segment with the industrial cream segment, as both product groups belong to the same cash-generating unit.
VILVI GROUP ANNUAL REPORTS 2025 | |
Results of operations of the operating segments at 31 December 2025:
EUR ‘000 | Cheese, cheese products and other | Dry milk products | Fresh milk products | Total |
Revenue | 202,164 | 54,980 | 29,787 | 286,931 |
Cost of sales | -194,979 | -41,437 | -26,677 | -263,093 |
Gross profit | 7,185 | 13,543 | 3,110 | 23,838 |
Other operating income | 386 | |||
Distribution, administrative and other operating expenses | -13,176 | |||
Other gain (loss) – net | 83 | |||
Operating result | 11,131 | |||
Finance income | 1,168 | |||
Finance costs | -1,499 | |||
Finance costs, net | -331 | |||
Profit (loss) before income tax | 10,800 |
VILVI GROUP ANNUAL REPORTS 2025 | |
Results of operations of the operating segments at 31 December 2024:
EUR ‘000 | Cheese, cheese products and other | Dry milk products | Fresh milk products | Total |
Revenue | 175,417 | 39,859 | 30,153 | 245,429 |
Cost of sales | -151,097 | -26,882 | -25,669 | -203,648 |
Gross profit | 24,320 | 12,977 | 4,484 | 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 |
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 2025 and 2024, 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 2025:
GROUP | COMPANY | |||
EUR ‘000 | Revenue | Assets | Revenue | Assets |
Lithuania | 41,798 | 103,043 | 82,563 | 77,552 |
European Union (excluding Lithuania) | 168,961 | 79,829 | 163,570 | 29,699 |
Other countries | 76,172 | 6,105 | 75,904 | 6,105 |
286,931 | 188,977 | 322,037 | 113,356 | |
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 | |
Information on major clients. In 2025, the Group had one client with sales revenue representing 12.5% of its total revenue (In 2024, the Group had one client with sales revenue representing 12.0% of total revenue).
2.
Cost of sales
Thousand EUR
VILVI GROUP ANNUAL REPORTS 2025 | |
GROUP | COMPANY | |||
2025 | 2024 | 2025 | 2024 | |
-217,410 | -166,667 | Raw materials | -189,864 | -160,141 |
- | - | Resale cost of goods produced by the subsidiaries | -104,496 | -67,796 |
-14,768 | -11,543 | Employee expenses, including social security contributions | -5,096 | -4,668 |
-3,591 | -3,270 | Depreciation and grants’ amortisation | -1,473 | -1,047 |
-10,679 | -7,371 | Milk collection and transportation costs | -9,459 | -6,179 |
-8,096 | -7,125 | Gas, electricity, water | -2,281 | -2,099 |
-1,965 | -2,025 | Transport costs | -1,965 | -2,025 |
-6,584 | -5,647 | Other | -2,711 | -1,782 |
-263,093 | -203,648 | -317,345 | -245,737 | |
2025, the Group’s inventory write-down to net realizable change in value amounted to EUR 1,692 thousand, the Company’s - amounted to EUR 1,151 thousand (in 2024, the Group’s change was EUR -1,196 thousand and the Company’s EUR -884 thousand).
3.
Other operating income
Thousand EUR
GROUP | COMPANY | |||
2025 | 2024 | 2025 | 2024 | |
296 | 242 | Income from rendering of services | 4,572 | 3,448 |
- | - | Dividends | 18,428 | 8,993 |
16 | 16 | Income from accounting services | 388 | 388 |
74 | 90 | Other income | 46 | 61 |
386 | 348 | 23,434 | 12,890 | |
4.
Other operating costs
Thousand EUR
GROUP | COMPANY | |||
2025 | 2024 | 2025 | 2024 | |
-330 | -240 | Cost of services rendered | -2,948 | -2,688 |
-96 | -17 | Other expenses | -81 | -7 |
-426 | -257 | -3,029 | -2,695 | |
5.
Other gain (loss) – net
Thousand EUR
GROUP | COMPANY | |||
2025 | 2024 | 2025 | 2024 | |
83 | 106 | Gain (loss) from disposal of raw materials, non-current assets | 84 | 96 |
- | - | Gain (loss) from fair value change of investment property | 496 | 449 |
83 | 106 | 580 | 545 | |
6.
Distribution expenses
Thousand EUR
VILVI GROUP ANNUAL REPORTS 2025 | |
GROUP | COMPANY | |||
2025 | 2024 | 2025 | 2024 | |
-2,681 | -2,106 | Logistics and transport services | -1,328 | -820 |
-484 | -455 | Marketing and advertising services | -380 | -381 |
-1,400 | -1,367 | Personnel expenses, including social security contributions | -1,400 | -1,367 |
-100 | -43 | Depreciation expenses | -73 | -23 |
-1,519 | -1063 | Other selling expenses | -1,277 | -956 |
-6,184 | -5,034 | -4,458 | -3,547 | |
Other selling expenses consist of commission fees, exhibition expenses, insurance, business travel, and other costs.
7.
Administrative expenses
Thousand EUR
GROUP | COMPANY | |||
2025 | 2024 | 2025 | 2024 | |
-2,739 | -3,653 | Personnel expenses, including social security contributions and change in vacation reserve | -2,217 | -3,047 |
-196 | -138 | Depreciation and amortisation, including amortisation of subsidies | -143 | -84 |
-644 | -512 | Services received | -270 | -195 |
-433 | -323 | Taxes, other than income tax | -230 | -241 |
-169 | -129 | Veterinary services | -116 | -78 |
-655 | -296 | Consultation services | -584 | -236 |
4 | 11 | Inventory write-down, reversal | 4 | 11 |
-206 | -182 | Security | -76 | -68 |
-1 | -28 | Fines and interest paid on late payments | - | -20 |
568 | -335 | Movement in the impairment of receivables and write-off of bad debts | 568 | -335 |
-390 | -285 | Computer expenses | -368 | -271 |
-54 | -58 | Fuel | -47 | -51 |
-44 | -72 | Repair expenses | -44 | -63 |
-83 | -51 | Fee for membership in association | -83 | -51 |
-45 | -37 | Stock exchange expenses | -42 | -34 |
-139 | -119 | Insurance | -64 | -53 |
-54 | -48 | Bank charges | -40 | -39 |
-1,286 | -1,646 | Other* | -835 | -1,168 |
-6,566 | -7,901 | -4,587 | -6,023 | |
In 2025, the Group’s and the Company’s social security contributions payable by an employer amounted to EUR 137 thousand and EUR 68 thousand, respectively (2024: EUR 129 thousand and EUR 72 thousand, respectively). Social security amount includes social security contributions on vacation and pension reserves.
Other* administrative expenses comprise various minor and individually insignificant costs related to the administrative activities of the Group and the Company (including premises maintenance, consulting services, training, subscriptions, employee welfare, etc.).
VILVI GROUP ANNUAL REPORTS 2025 | |
8.
Services provided by the audit firm to the Company and the Group
Thousand EUR
GROUP | COMPANY | |||
2025 | 2024 | 2025 | 2024 | |
105 | 97 | UAB PricewaterhouseCoopers financial statement audit services under the agreements | 75 | 69 |
25 | 23 | Audit services of financial statements of other independent auditors under the agreements | - | - |
57 | 42 | Other services | 57 | 42 |
187 | 162 | Total | 132 | 111 |
9.
Finance costs, net
Thousand EUR
GROUP | COMPANY | |||
2025 | 2024 | 2025 | 2024 | |
Finance income | ||||
976 | 110 | Interest | 1,027 | 117 |
192 | 8 | Other | 162 | 7 |
1,168 | 118 | Total finance income | 1,189 | 124 |
Finance costs | ||||
-1,140 | -1,301 | Interest | -438 | -436 |
-120 | -110 | Interest on lease | -77 | -88 |
-21 | -31 | Factoring charges | -15 | -31 |
-216 | -39 | Foreign exchange loss | -202 | -24 |
-2 | - | Other | - | - |
-1,499 | -1,481 | Total finance costs | -732 | -579 |
-331 | -1,363 | 457 | -455 | |
The Group’s and the Company’s financial income in 2025 amounted to EUR 1,168 thousand and EUR 1,189 thousand, respectively (2024: EUR 118 thousand and EUR 124 thousand, respectively). Financial income increased significantly due to the assignment of claim rights agreement signed on 14 February 2025 with Šiaulių Bankas AB (see Note 30), under which the Company acquired the Bank’s claim rights to the debt of Marijampolės pieno konservai UAB.
10.
Income tax expenses
Recognised in profit or loss (thousand EUR)
GROUP | COMPANY | |||
2025 | 2024 | 2025 | 2024 | |
Current year income tax expenses | ||||
-3 | -1,185 | Reporting period | - | - |
Deferred income tax expenses | ||||
144 | -826 | Change in deferred income tax | 144 | -698 |
141 | -2,011 | 144 | -698 | |
Reconciliation of effective income tax rate (thousand EUR)
VILVI GROUP ANNUAL REPORTS 2025 | |
GROUP | COMPANY | |||
2025 | 2024 | 2025 | 2024 | |
10,800 | 27,680 | Profit for the year | 17,089 | 17,057 |
1,728 | 4,152 | Income tax calculated at a rate of 16% | 2,734 | 2,558 |
- | - | Dividend income | -2,948 | -1,349 |
-246 | -258 | Other non-taxable income | -27 | -223 |
- | -7 | Charity expenses deductible twice for tax purposes | - | -6 |
- | -688 | Investment project relief | - | -605 |
454 | 217 | Unused tax loss utilisation | - | 259 |
88 | 56 | The impact of the future change in the tax rate | 67 | 40 |
69 | 183 | Other expenses not deductible for tax purposes | 30 | 24 |
-2189 | -1,553 | Applied corporate income tax relief in accordance with Article 58, paragraph 16, subparagraph 3. | - | - |
-45 | -91 | Other expenses deductible for tax purposes | - | - |
-141 | 2,011 | Income tax expenses (benefit) | -144 | 698 |
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.
Latvia applies corporate income tax only upon profit distribution, at an effective rate of 25%. At the end of the reporting period, Baltic Dairy Board SIA had retained earnings of EUR 730 thousand. If all retained earnings were distributed, an additional corporate income tax liability of EUR 183 thousand would arise. Management has not made a decision regarding dividend payments by Baltic Dairy Board SIA in the near future; therefore, no deferred tax liability has been recognized.
11.
Earnings per share
GROUP | COMPANY | |||
2025 | 2024 | 2025 | 2024 | |
10,936 | 25,654 | Net profit attributable to holders of ordinary shares of the Parent, EUR ‘000 | 17,233 | 16,359 |
11,943 | 11,943 | Number of issued shares calculated based on the weighted average unit cost method, ‘000 units | 11,943 | 11,943 |
0.92 | 2.15 | Basic earnings (loss) per share (EUR | 1.44 | 1.37 |
The diluted earnings per share are the same as basic earnings per share.
VILVI GROUP ANNUAL REPORTS 2025 | |
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 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 |
Balance at 1 January 2025 | 2,968 | 23,004 | 72,473 | 3,847 | 37,864 | 140,156 |
Additions | 1,480 | 7 | 5,039 | 584 | 27,885 | 34,995 |
Increase in value | 6 | 25 | - | 3 | - | 34 |
Revaluation | - | - | - | - | - | - |
Disposals | - | - | -574 | -68 | - | -642 |
Reclassifications | -267 | 15,406 | 43,697 | -40 | -58,796 | - |
Balance at 31 December 2025 | 4,187 | 38,442 | 120,635 | 4,326 | 6,953 | 174,543 |
Depreciation and impairment losses | ||||||
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 |
Balance at 1 January 2025 | 602 | 5,707 | 39,465 | 2,747 | - | 48,521 |
Depreciation charge for the year | 503 | 741 | 4,223 | 273 | - | 5,740 |
Disposals | - | - | -261 | -61 | - | -322 |
Reclassifications | -220 | - | 237 | -17 | - | - |
Balance at 31 December 2025 | 885 | 6,448 | 43,664 | 2,942 | - | 53,939 |
Net book amount | ||||||
At 1 January 2024 | 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 |
At 31 December 2025 | 3,302 | 31,994 | 76,971 | 1,384 | 6,953 | 120,604 |
* for more details on right-of-use assets, see Note 13.
Reclassifications from construction in progress relate to the completion of the construction and installation of a new cheese production facility in Bauska (Latvia), on the premises of the Group’s subsidiary Baltic Dairy Board SIA.
** In 2025, capitalised borrowing costs amounted to EUR 1,634 (applicable interest rate - 6-month EURIBOR + margin, which averaged 3.82% during the reporting period) (2024: EUR 363 thousand). Future capital expenditures amount to EUR 2,000 thousand (2024: EUR 15,749 thousand). See also Note 27 for additional details.
VILVI GROUP ANNUAL REPORTS 2025 | |
COMPANY | ||||||
Right-of-use assets* | Land and buildings | Plant and machinery | Other assets | Construction in progress | Total | |
Cost/revalued amount | ||||||
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 |
Balance at 1 January 2025 | 2,854 | 7,813 | 30,686 | 1,241 | 1,683 | 44,277 |
Additions | 501 | - | 22 | 47 | 1,465 | 2,035 |
Increase in value | 5 | - | - | - | - | 5 |
Disposals | - | - | -395 | -49 | - | -444 |
Reclassifications (a) | -808 | 800 | 935 | 0 | -1,058 | -131 |
Balance at 31 December 2025 | 2,552 | 8,613 | 31,248 | 1,239 | 2,090 | 45,742 |
Depreciation and impairment losses | ||||||
Balance at 1 January 2024 | 539 | 1,970 | 18,738 | 1,178 | - | 22,425 |
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 | 19,628 | 1,002 | - | 23,277 |
Balance at 1 January 2025 | 584 | 2,063 | 19,628 | 1,002 | - | 23,277 |
Depreciation charge for the year | 340 | 284 | 1,687 | 78 | - | 2,389 |
Disposals | - | - | -162 | -42 | - | -204 |
Reclassifications | -276 | - | 276 | - | - | - |
Balance at 31 December 2025 | 648 | 2,347 | 21,429 | 1,038 | - | 25,462 |
Net book amounts | ||||||
At 1 January 2024 | 1,483 | 5,124 | 4,615 | 181 | 8,450 | 19,853 |
At 31 December 2024 | 2,270 | 5,750 | 11,058 | 239 | 1,683 | 21,000 |
At 31 December 2025 | 1,904 | 6,266 | 9,819 | 201 | 2,090 | 20,280 |
* For more details on right-of-use assets, see Note 13.
(a) Amount of EUR 131 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 30,679 thousand as at 31 December 2025 (31 December 2024: EUR 12,922 thousand);
Machinery and equipment with a carrying value as of 31 December 2025 amounting to EUR 77,825 thousand (as of 31 December 2024, EUR 30,412 thousand) (see Note 23).
VILVI GROUP ANNUAL REPORTS 2025 | |
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 6,266 thousand as at 31 December 2025 (31 December 2024: EUR 5,249 thousand);
Machinery and equipment with a carrying value as of 31 December 2025 amounting to EUR 9,208 thousand (as of 31 December 2024, EUR 10,469 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 2025 amounting to EUR 16,932 thousand (as of 31 December 2024, EUR 14,217 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 2025 amounting to EUR 13,038 thousand (as of 31 December 2024, EUR 12,006 thousand).
Depreciation
Depreciation was included in the following line items (thousand EUR):
GROUP | COMPANY | |||
2025 | 2024 | 2025 | 2024 | |
5,455 | 4,741 | Cost of finished products | 2,076 | 1,628 |
285 | 225 | Distribution and administrative expenses | 210 | 154 |
- | - | Other operating expenses | 103 | 97 |
5,740 | 4,966 | 2,389 | 1,879 | |
Revaluation of Buildings
The Group and the Company measure buildings at revalued amounts, less subsequent accumulated depreciation and impairment losses.
In the opinion of management, there have been no significant changes either in the real estate market in the country or in the operations of the Company, and therefore the fair value of investment property has not changed significantly. In 2025, valuations of certain Group buildings were performed:
A valuation performed by an independent valuer, UAB Korporacija „Matininkai“, covered the determination of the fair value of buildings and structures owned by the Company, located at Gaurės g. 23 and Gaurės g. 31O, Tauragė, as at 1 October 2025. Using the market (comparative) approach, the total market/fair value of the Company’s buildings and structures at the valuation date amounted to EUR 2,663 thousand.
A valuation performed by an independent valuer, UAB Korporacija „Matininkai“, covered the determination of the market value of the whey processing production asset complex (property, plant and equipment, including both immovable and movable assets) owned by the Group and the Company, located at Gaurės g. 23, Tauragė, as at 1 October 2025. Using the income approach (discounted cash flow method) and the cost approach, the total market/fair value of the Group’s and the Company’s whey processing production asset complex at the valuation date amounted to EUR 39,800 thousand.
Based on the valuations of the Group’s buildings and structures, a revaluation of the Group’s and the Company’s assets was performed as at 31 December 2024. No revaluation of the Group’s and the Company’s assets was performed in 2025, as, in the opinion of management, there were no significant changes either in the real estate market in the country or in the operations of the Group and the Company, and the fair value of buildings did not change significantly. Accordingly, movements in the revaluation reserve arose only from depreciation and disposals of revalued assets, as presented below:
GROUP | COMPANY | |||
2025 | 2024 | 2025 | 2024 | |
3,445 | 1,808 | Balance at the beginning of the reporting period | 1,090 | 1,061 |
- | 1,787 | Profit (loss) from the revaluation of long-term assets | - | 268 |
-149 | -150 | Depreciation or write-off of revalued assets. | -52 | -239 |
3,296 | 3,445 | Balance as of the end of the reporting period | 1,038 | 1,090 |
The classification of the Group’s and the Company’s revalued assets within the fair value hierarchy is presented below:
VILVI GROUP ANNUAL REPORTS 2025 | |
GROUP | COMPANY | |||
2025 | 2024 | 2025 | 2024 | |
25,811 | 10,733 | Hierarchy level 2 (a) | 6,266 | 5,750 |
6,183 | 6,564 | Hierarchy level 3 (b) | - | - |
31,994 | 17,297 | 6,266 | 5,750 | |
(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.
f the Group’s buildings were measured under the cost model, their carrying amount as at 31 December 2025 would have been EUR 28,698 thousand (revalued amount: EUR 31,994 thousand) (31 December 2024: EUR 13,852 thousand; revalued amount: EUR 17,297 thousand).
If the Company’s buildings were measured under the cost model, their carrying amount as at 31 December 2025 would have been EUR 5,228 thousand (revalued amount: EUR 6,266 thousand) (31 December 2024: EUR 4,660 thousand; revalued amount: EUR 5,750 thousand).
13.
Leases
Amounts recognised in profit or loss were as follows (thousand EUR):
GROUP | COMPANY | |||
2025 | 2024 | 2025 | 2024 | |
503 | 335 | Depreciation of right-of-use assets | 340 | 318 |
120 | 110 | Interest expenses (included in finance costs) | 77 | 88 |
29 | 35 | Expenses related to short-term leases (included in cost of sales and general and administrative expenses) | 25 | 24 |
58 | 64 | 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) | 4 | 7 |
32 | 13 | Expenses related to variable lease payments not included in lease liabilities (included in cost of sales, general and administrative expenses, other operating expenses) | 32 | 13 |
742 | 557 | 478 | 450 | |
Movements in right-of-use assets during 2025 and 2024 are disclosed in Note 12.
Lease liabilities, including the breakdown of lease liabilities by maturity are disclosed in Note 23.
VILVI GROUP ANNUAL REPORTS 2025 | |
14.
Investment property
Thousand EUR
2025 | 2024 | |
Balance at 1 January | 8,045 | 6,903 |
Additions | 132 | 39 |
Net gain/(loss) on fair value adjustment | 496 | 449 |
Transfer from long-term tangible assets used for the needs of the owner | - | 654 |
Balance at 31 December | 8,673 | 8,045 |
Investment property is leased to tenants under operating lease contracts. Costs related to the maintenance of investment property are borne by the tenants. Lease payments are fixed. The lease agreements do not include variable lease payments that depend on an index or a rate. Investment property comprises production, storage and administrative facilities leased to subsidiaries. Under 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 cash flow assessment covers periods beyond this date, assuming the extension of lease agreements. The lease agreements are 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
31/12/2025 | 31/12/2024 | |
Hierarchy level 2 (a) | 2,490 | 2,514 |
Hierarchy level 3 (b) | 6,183 | 5,531 |
8,673 | 8,045 |
a)
The Company’s investment property, which is used for the production and storage of mould-ripened, processed, smoked and mozzarella cheese, as well as cream, is measured using the market (comparative) approach and is classified within Level 2 of the fair value hierarchy. The fair value was determined based on a valuation performed by an independent valuer, UAB Korporacija „Matininkai“, as at 1 October 2025. General-purpose buildings were valued using the market (comparative) approach. Under this approach, adjustments are made, where necessary, to reflect differences between the property being valued and comparable or similar properties, taking into account factors such as timing, location and other conditions affecting value. The valuation was based on selected comparable properties that are similar to the subject property. The data used includes purchase and sale transactions that occurred over the last 36 months. The same valuation method was applied in the valuation performed as at 1 December 2024.
b)
The Company's “nvestment property, 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 1 October 2025. From the valuation date until management’s assessment as of 31 December 2025, all assumptions and changes have been evaluated. 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 13.19% (2024 – 14.54%). 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 2026-2030, 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.
VILVI GROUP ANNUAL REPORTS 2025 | |
The forecasted production costs have been calculated based on historical production levels, 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 5% annually from 2026 to 2030.
The same method was applied in the evaluation conducted on 1 December 2024.
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 1.35 percentage points in 2025 compared to 2024 would result in an increase of EUR 3.5 million in the asset value.
Income changes: if sales income increased by 1%, the asset value would increase by EUR 2,0 million. If sales income decreased by 1%, the asset value would decrease by EUR 2,1 million.
Production cost changes: if raw material costs decreased by 1%, the asset value would increase by EUR 0,3 million. If raw material costs increased by 1%, the asset value would decrease by EUR 0,4 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)
31/12/2025 | 31/12/2024 | |
Within one year | 330 | 330 |
Between 1 and 5 years | 281 | 611 |
611 | 941 |
In 2025, the Company’s rental income amounted to EUR 330 thousand (2024: EUR 330 thousand). Rental income is included in other operating income.
The Company’s investment property with the carrying amount of EUR 8,673 thousand as at 31 December 2025 (31 December 2024: EUR 8,045 thousand) was pledged to the banks as a security for bank borrowings.
15.
Intangible assets
Thousand EUR
VILVI GROUP ANNUAL REPORTS 2025 | |
GROUP | ||||
Goodwill | Computer software | Other intangible assets | Total | |
Cost | ||||
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 |
Balance at 1 January 2025 | 6,915 | 581 | 17 | 7,513 |
Disposals | - | -4 | - | -4 |
Balance at 31 December 2025 | 6,915 | 577 | 17 | 7,509 |
Amortisation and impairment | ||||
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 |
Balance at 1 January 2025 | 2,749 | 548 | 16 | 3,313 |
Amortisation charge for the year | - | 11 | - | 11 |
Disposals | - | -4 | - | -4 |
Balance at 31 December 2025 | 2,749 | 555 | 16 | 3,320 |
Net book amounts | ||||
At 1 January 2024 | 4,166 | - | 2 | 4,168 |
At 31 December 2024 | 4,166 | 33 | 1 | 4,200 |
At 31 December 2025 | 4,166 | 22 | 1 | 4,189 |
Amortisation charge for the year was included in administrative expenses.
The Group’s software and other intangible assets that are fully amortised but still in use had an acquisition cost of EUR 679 thousand as at 31 December 2025 (31 December 2024: EUR 683 thousand).
VILVI GROUP ANNUAL REPORTS 2025 | |
COMPANY | ||||
Goodwill | Computer software | Other intangible assets | Total | |
Cost | ||||
Balance at 1 January 2024 | - | 656 | 17 | 673 |
Additions | - | 30 | - | 30 |
Disposals | - | - | - | - |
Reclassifications | - | - | - | - |
Balance at 31 December 2024 | - | 686 | 17 | 703 |
Balance at 1 January 2025 | - | 686 | 17 | 703 |
Additions | - | - | - | - |
- | -4 | - | -4 | |
Balance at 31 December 2025 | - | 682 | 17 | 699 |
Amortisation and impairment | ||||
Balance at 1 January 2024 | - | 656 | 15 | 671 |
Amortisation charge for the year | - | 1 | 1 | 2 |
Balance at 31 December 2024 | - | 657 | 16 | 673 |
Balance at 1 January 2025 | - | 657 | 16 | 673 |
Amortisation charge for the year | - | 9 | 1 | 10 |
Disposals | - | -4 | - | -4 |
Balance at 31 December 2025 | - | 662 | 17 | 679 |
Net book amounts | ||||
At 1 January 2024 | - | - | 2 | 2 |
At 31 December 2024 | - | 29 | 1 | 30 |
At 31 December 2025 | - | 20 | - | 20 |
Amortisation charge for the year was included in administrative expenses.
The Company’s software and other intangible assets that are fully amortised but still in use had an acquisition cost of EUR 669 thousand as at 31 December 2025 (31 December 2024: EUR 673 thousand).
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:
31/12/2025 | 31/12/2024 | |
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 Kelmės pienas UAB
The recoverable value of the cash-generating unit of Kelmės pienas UAB fresh milk products was determined on 31 December 2025. 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:
VILVI GROUP ANNUAL REPORTS 2025 | |
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 2% (2024: growth rate of 1%).
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 13.19% (2024: 14.38%).
The annual revenue growth rate is projected to be 0.4% in 2026 and 5% during 2027-2030. Growth of revenue in 2027-2030 is projected due to the expected increase in production volumes, introduction of new products to the market, and expansion into the new markets. An increase in gross profit is expected in 2026 due to a decrease in raw milk prices.
The basic components of the working capital: inventory requirement, trade receivables and trade payables are taken as the factual amounts at the end of 2025. Subsequently (starting from 2026), 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 2025 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 (14.19% instead of 13.19%), 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.
16.
Investments in subsidiaries
EUR ‘000 | 31/12/2025 | 31/12/2024 |
Cost of shares of Modest AB | 1,992 | 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 | 16,741 |
27,389 | 27,388 |
The Company acquired control over Modest AB in 2006. The ownership interest held by the Company was 99.7% as at 31 December 2025 (31 December 2024: 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 2025 (31 December 2024: 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 2025 (31 December 2024: 100%).
As at 31 December 2025 (and 31 December2024), no indicators of impairment of investments in subsidiaries were identified. The operating result of the subsidiary Modest AB deteriorated significantly during the reporting year 2025, however, the Company assessed that this change is not of a permanent nature. Furthermore, considering that the Company’s equity exceeds the carrying amount of the investment, no indicators of impairment were identified.
VILVI GROUP ANNUAL REPORTS 2025 | |
Key financial indicators of Pieno Logistika AB:
EUR ‘000 | 31/12/2025 | 31/12/2024 |
Total assets | 520 | 573 |
Shareholders’ equity | 111 | 82 |
Net profit (loss) | 28 | 15 |
Key financial indicators of Modest AB:
EUR ‘000 | 31/12/2025 | 31/12/2024 |
Total assets | 9,292 | 12,091 |
Shareholders’ equity | 6,581 | 9,012 |
Net profit (loss) | -2,431 | 3,348 |
17.
Non-current amounts receivable
Thousand EUR
GROUP | COMPANY | ||||
31/12/2025 | 31/12/2024 | Note | 31/12/2025 | 31/12/2024 | |
Financial instruments | |||||
- | - | 28 | Loans granted to related parties (a) | 1,229 | 1,170 |
912 | - | Loans granted to related parties (b) | 912 | - | |
912 | - | 2,141 | 1,170 | ||
Non-financial assets | |||||
194 | 241 | Non-current amounts receivable from farmers (c) | 178 | 234 | |
2 | 2 | Other non-current amounts receivable | - | - | |
196 | 243 | 178 | 234 | ||
1,108 | 243 | 2,319 | 1,404 | ||
The Group and the Company measure loans granted to related parties using the expected credit loss (ECL) model, taking into account the borrowers’ financial position, repayment history, and other relevant factors indicative of credit risk.
As at 31 December 2025 and 2024, the assessment performed indicated that there had been no significant increase in credit risk for loans to related parties, therefore, no impairment losses were recognised.
(a) In December 2021, a loan was granted to the subsidiary Baltic Dairy Board SIA. As at 31 December 2025, the outstanding balance of the loan was EUR 980 thousand (31 December 2024: EUR 980 thousand) and interest was EUR 249 thousand (31 December 2024: EUR 190 thousand). The loan is to be repaid by 31 January 2028.
(b) Loans receivable by the Group and the Company from other related parties amounted to EUR 912 thousand as at 31 December 2025 (31 December 2024 - none). The loan was granted for working capital financing purposes and bears interest at market rates. The loan is repayable by 31 December 2027.
(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.
VILVI GROUP ANNUAL REPORTS 2025 | |
18.
Inventories
Thousand EUR
GROUP | COMPANY | |||
31/12/2025 | 31/12/2024 | 31/12/2025 | 31/12/2024 | |
10,111 | 8,272 | Finished products | 4,622 | 4,702 |
1,442 | 890 | Products in transit | 1,442 | 890 |
11,553 | 9,162 | 6,064 | 5,592 | |
590 | 427 | Raw materials | 147 | 170 |
5,110 | 4,388 | Consumables | 1,394 | 1,342 |
382 | 277 | Work in progress | - | - |
17,635 | 14,254 | 7,605 | 7,104 | |
Raw materials include raw milk and other materials used in the production.
As at 31 December 2025, the Group’s materials (packaging, auxiliary materials, etc.) written down to net realisable value amounted to EUR 11 thousand (31 December 2024: EUR 15 thousand).
As at 31 December 2025, the Company’s materials (tare, packaging, auxiliary materials, etc.) written down to net realisable value amounted to EUR 11 thousand (31 December 2024: EUR 15 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 2025, the Group's and the Company's inventories (finished products) written down to net realisable value amounted to EUR 722 thousand and EUR 350 thousand, respectively (31 December 2024: EUR 2,414 thousand and EUR 1,501 thousand, respectively). Inventory write-down due to expected changes in sales prices in export markets. Accordingly, for the same reasons, the impairment was partially reversed in 2025.
As at 31 December 2025, the Company’s inventories (cheese and cheese products) with a carrying amount of EUR 7,605 thousand were pledged to banks (31 December 2024: EUR 7,104 thousand).
19.
Trade and other receivables
Thousand EUR
GROUP | |||
Note | 31/12/2025 | 31/12/ 2024 | |
Trade receivables | 15,974 | 18,089 | |
Impairment losses | -58 | -629 | |
Trade receivables from other related parties | 6,001 | - | |
MPK claim rights | 30 | 16,427 | - |
Financial assets | 38,344 | 17,460 | |
Taxes receivable (other than income tax) | 1,885 | 4,912 | |
Other receivables | 26 | 39 | |
Total trade and other receivables | 40,255 | 22,411 | |
VILVI GROUP ANNUAL REPORTS 2025 | |
COMPANY | |||
Note | 31/12/2025 | 31/12/ 2024 | |
Trade receivables | 12,760 | 14,385 | |
Impairment losses | -58 | -629 | |
MPK claim rights | 30 | 16,427 | - |
Trade receivables from related parties | 28 | 10,009 | 5,596 |
Financial assets | 39,138 | 19,352 | |
Taxes receivable (other than income tax) | 1,297 | 3,031 | |
Other receivables | 2,000 | - | |
Total trade and other receivables | 42,435 | 22,383 | |
Trade and other receivables are non-interest bearing and their settlement term is 30 days.
Taxes receivable consist of VAT receivable.
Other receivables of the Group and the Company as at 31 December 2025 amounting to EUR 16,170 thousand relate to an assignment of receivables agreement concluded with AB Šiaulių bankas on 14 February 2025 (see Note 30).
As at 31 December 2025, the Company’s trade receivables were pledged (31 December 2024: the Group’s/Company’s receivables were not pledged) (see 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 | ||||
31/12/2025 | 31/12/2024 | Note | 31/12/2025 | 31/12/2024 | |
1,380 | 560 | (a) | Prepayments | 495 | 412 |
1,021 | 151 | Advance income tax | 43 | 71 | |
- | - | 28 | Prepayments to related parties | 1,409 | - |
2,401 | 711 | 1947 | 483 | ||
(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 | |||
31/12/2025 | 31/12/2024 | 31/12/2025 | 31/12/2024 | |
2,546 | 18,751 | Cash at bank | 2,449 | 13,165 |
239 | 121 | Cash on hand | 239 | 121 |
2,785 | 18,872 | 2,688 | 13,286 | |
As at 31 December 2025, cash held in the bank accounts of the Group and the Company amounting to EUR 2,732 thousand and EUR 2,688 thousand, respectively, was pledged as collateral for bank loans (31 December 2024: EUR 13,364 thousand and EUR 13,286 thousand, respectively).
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 2025 and 2024, 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.
VILVI GROUP ANNUAL REPORTS 2025 | |
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.
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 2025, the Company’s/ Group’s legal reserve amounted to EUR 346 thousand (31 December 2024: 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 2025, dividends of EUR 0.54 per share were paid out to the shareholders (2024: dividends of EUR 0.310 per share were paid out to the shareholders).
23.
Borrowings and lease liabilities
GROUP | COMPANY | ||||
31/12/2025 | 31/12/2024 | Note | 31/12/2025 | 31/12/2024 | |
40,973 | 27,077 | Non-current borrowings | 27,28 | - | 5,778 |
- | 6,203 | Loan issued at a discount | - | - | |
1,678 | 1,551 | Lease liabilities | 13 | 912 | 1,190 |
42,651 | 34,831 | Non-current | 912 | 6,968 | |
12,575 | 3,649 | Current bank borrowings and other borrowings | 27,28 | 5,778 | 1,771 |
9,414 | - | Loan issued at a discount | - | - | |
876 | 742 | Lease liabilities | 13 | 564 | 614 |
22,865 | 4,391 | Current | 6,342 | 2,385 | |
65,516 | 39,222 | Total borrowings and lease liabilities | 7,254 | 9,353 | |
As of 31 December 2025, the Company and Group had unused short-term credit limits totaling EUR 8 million (as of 31 December 2024, the Company and Group had unused short-term credit limits totaling EUR 3 million). As of 31 December 2025, 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 “Citadele Banka” AS amounting to EUR 2,464 thousand (for the construction and equipment of the Baltic Dairy Board SIA new cheese factory). On December 30, 2025, a credit agreement was signed with Citadele Bank for obtaining a EUR 10 million loan to acquire milk processing equipment. The loan is expected to be received in Q3 2026. 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.
VILVI GROUP ANNUAL REPORTS 2025 | |
Under agreements with banks and the Latvian State Development finance institution AS “Attīstības finanšu institūcija Altum”, the Company and the Group are required to comply with financial covenants, including the ratios of financial debt and net financial debt to EBITDA (ranging from ≤3.5 to ≤4.5), equity (from ≥30% to ≥35%) and DSCR (≥1.2). These ratios are calculated based on the consolidated financial statements. In 2025, the Group and the Company complied with the above-mentioned covenants, except for the net financial debt to EBITDA ratio in respect of OP Corporate Bank plc (in 2024, the Company and the Group complied with all of the above-mentioned covenants).
In addition to financial covenants, the Group is also committed to complying with other contractual obligations, such as not borrowing from third parties/other financial institutions without the consent of the respective banks, not providing guarantees for other entities (except for Group entities), not exceeding the agreed annual investment limits, etc. Certain of the above-mentioned contractual conditions were not complied with in 2025. At year-end, waivers for these breaches were obtained from OP Corporate Bank plc and Citadele Bank, while AS “Attīstības finanšu institūcija Altum” (loan issued at a discount) granted its waiver at the beginning of 2026. As a result, the Group’s subordinated loan was classified as a current liability. In November 2025, the Company informed Swedbank AB about actions for which the bank’s approval had not been obtained. As the Company did not receive the approvals by 31 December 2025, the long-term portion of the loan was reclassified as short-term. On 21 January 2026, the Bank announced that it does not intend to impose sanctions regarding the credit agreement.
Borrowings by maturity (thousand EUR):
GROUP | COMPANY | |||
31/12/2025 | 31/12/2024 | 31/12/2025 | 31/12/2024 | |
21,989 | 3,649 | Within 1 year | 5,778 | 1,771 |
40,973 | 33,280 | Between 1 and 5 years | 0 | 5,778 |
62,962 | 36,929 | 5,778 | 7,549 | |
In 2025, the Group’s borrowings were subject to annual effective interest rate of 4.42% (2024: 3.60%).
In 2025, the Company’s borrowings were subject to annual effective interest rate of 7.10% (2024: 5.60%).
Lease liabilities (thousand EUR):
GROUP | COMPANY | |||
31/12/2025 | 31/12/2024 | 31/12/2025 | 31/12/2024 | |
876 | 742 | Within 1 year | 564 | 614 |
1,678 | 1,551 | Between 1 and 5 years | 912 | 1,190 |
2,554 | 2,293 | 1,476 | 1,804 | |
The right-of-use assets recognised in relation to lease liabilities is disclosed in Notes 12 and 13.
VILVI GROUP ANNUAL REPORTS 2025 | |
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 2025 | 614 | 1,190 | 1,771 | - | 5,778 | 9,353 |
Cash inflows - proceeds from borrowings | - | - | - | - | - | - |
Cash outflows - repayments of borrowings | - | - | -1,771 | - | - | -1,771 |
Additions - lease | 321 | 286 | - | - | - | 607 |
Repayments – lease | -935 | - | - | - | - | -935 |
Other non-cash changes (reclassification of current/non-current portion, impairment, write-offs) | 564 | -564 | 5,778 | - | -5,778 | - |
At 31 December 2025 | 564 | 912 | 5,778 | - | - | 7,254 |
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 2025 | 742 | 1,551 | 3,649 | - | 33,280 | 39,222 |
Cash inflows - proceeds from borrowings | - | - | 252 | - | 30,414 | 30,666 |
Cash outflows - repayments of borrowings | - | - | -3,900 | - | -173 | -4,073 |
Additions - lease | 776 | 1,004 | - | - | - | 1,780 |
Repayments – lease | -1,519 | - | - | - | - | -1,519 |
Other non-cash changes (reclassification of current/non-current portion, impairment, write-offs) | 877 | -877 | 21,988 | - | -22,548 | -560 |
At 31 December 2025 | 876 | 1,678 | 21,989 | - | 40,973 | 65,516 |
VILVI GROUP ANNUAL REPORTS 2025 | |
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 |
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 |
24.
Government grants
Thousand EUR
GROUP | COMPANY | |||
31/12/2025 | 31/12/2024 | 31/12/2025 | 31/12/2024 | |
4,043 | 3,598 | Opening net book amount | 1,387 | 671 |
1,768 | 901 | Grants received | 8 | 893 |
-463 | -445 | Amortisation recognised in profit or loss and write-off of grants | -204 | -177 |
-9 | -11 | Write-off of grants upon disposal of assets | - | - |
5,339 | 4,043 | Closing net book amount | 1,191 | 1,387 |
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.
VILVI GROUP ANNUAL REPORTS 2025 | |
In December 2022, Vilkyškių Pieninė AB entered into a grant agreement with the National Paying Agency under the Lithuanian Ministry of Agriculture for the acquisition of equipment. The Company was awarded funding of EUR 1 million 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.
Amount of EUR 90 thousand was received in 2023.
Amount of EUR 60 thousand was received in 2024.
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, Modest AB and Vilkyškių pieninė AB 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.
The Latvian Government, through the Latvian state development finance institution AS “Attīstības finanšu institūcija Altum”, has contributed to the cheese production project of Baltic Dairy Board SIA, a subsidiary of Vilkyškių pieninė AB, by granting EUR 10 million in non-repayable loan financing. Upon completion of the project, the financing will be recognised as a grant if the conditions set out in the agreement are met and the specified targets are achieved:
Number of new employees – 57, with such number maintained annually; minimum monthly salary – not less than EUR 1,760.52;
Annual export revenue – EUR 16,000 thousand;
Annual research and development (R&D) expenditure – EUR 260 thousand.
If Baltic Dairy Board SIA meets the conditions of the grant and achieves the required performance indicators for three consecutive years, the funding will be recognised (i.e. the loan is derecognised upon fulfilment of the conditions) and accounted for as a grant in equal annual instalments. Until the grant conditions are fulfilled, the received funding is recognised as a liability.
The cheese plant project was completed in December 2025, and the first assessment of compliance with the performance indicators will be carried out after 12 calendar months (at the beginning of 2027). As at the end of 2025, Baltic Dairy Board SIA had already achieved part of the required indicators (creation of new jobs and incurrence of part of the R&D expenses). Therefore, based on management’s assessment, the Company is expected to meet all conditions in the first year of assessment, allowing one-third of the grant to be recognised.
During 2025, the Group additionally received grants of EUR 1,760 thousand for the Baltic Dairy Board SIA cheese production project: EUR 560 thousand from the Latvian state development finance institution AS “Attīstības finanšu institūcija Altum” and EUR 1,200 thousand from EU funds.
25.
Deferred income tax assets (liabilities)
Deferred income tax assets and liabilities calculated at a 17% tax rate in 2025 (2024: 16%) relate to the following line items (thousand EUR):
VILVI GROUP ANNUAL REPORTS 2025 | |
COMPANY | ||||||
Assets | Liabilities | Net value | ||||
31/12/2025 | 31/12/2024 | 31/12/2025 | 31/12/2024 | 31/12/2025 | 31/12/2024 | |
Property, plant and equipment | - | - | 2,469 | 2,023 | 2,469 | 2,023 |
Vacation reserve | -290 | -300 | - | - | -290 | -300 |
Allowance for doubtful receivables | -10 | -101 | - | - | -10 | -101 |
Inventories | -61 | -243 | - | - | -61 | -243 |
Government grants | -69 | -60 | - | - | -69 | -60 |
Right-of-use asset | -15 | -24 | 14 | 23 | -1 | -1 |
Tax loss carry forward | -853 | - | - | - | -853 | - |
Deferred income tax (assets)/liabilities | -1,298 | -728 | 2,483 | 2,046 | 1,185 | 1,318 |
Deferred tax assets and liabilities of the Group and the Company as at 31 December 2025 were calculated using a tax rate of 17% applicable from 2026 under the laws of the Republic of Lithuania (31 December 2024: 16%) and a tax rate of 25% applicable under the laws of the Republic of Latvia. The 25% rate applies to deferred tax assets and liabilities related to Baltic Dairy Board SIA. An increase in the income tax rate by 1 percentage point resulted in the remeasurement of deferred tax assets and liabilities. The impact of this change in the tax rate on the carrying amount of deferred tax for the Group and the Company amounted to EUR 100 thousand and EUR 77 thousand, respectively.
The Group’s deferred tax assets and liabilities relate to the following line items (thousand EUR):
GROUP | ||||||
Assets | Liabilities | Net value | ||||
31/12/2025 | 31/12/2024 | 31/12/2025 | 31/12/2024 | 31/12/2025 | 31/12/2024 | |
Property, plant and equipment | - | - | 3,069 | 2,609 | 3,069 | 2,609 |
Vacation reserve | -364 | -370 | - | - | -364 | -370 |
Allowance for doubtful receivables | -10 | -101 | - | - | -10 | -101 |
Inventories | -68 | -243 | - | - | -68 | -243 |
Government grants | -69 | -60 | - | - | -69 | -60 |
Tax loss carry forward | -868 | - | - | - | -868 | - |
Right-of-use asset | -14 | -23 | 13 | 22 | -1 | -1 |
Fair value adjustment to assets and liabilities of Baltic Dairy Board SIA | - | - | 259 | 225 | 259 | 225 |
Deferred income tax (assets)/liabilities | -1,393 | -797 | 3,341 | 2,856 | 1,948 | 2,059 |
COMPANY | ||||
01/01/2025 | Recognised in profit or loss | Recognised in equity | 31/12/2025 | |
Property, plant and equipment | 2,023 | 436 | 10 | 2,469 |
Vacation reserve | -300 | 10 | - | -290 |
Allowance for doubtful receivables | -101 | 91 | - | -10 |
Inventories | -243 | 182 | - | -61 |
Government grants | -60 | -9 | - | -69 |
Right-of-use asset | -1 | - | - | -1 |
Tax loss carry forward | - | -853 | - | -853 |
Deferred income tax (assets)/liabilities | 1,318 | -143 | 10 | 1,185 |
VILVI GROUP ANNUAL REPORTS 2025 | |
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 |
Allowance for doubtful receivables | - | -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 |
GROUP | ||||
01/01/2025 | Recognised in profit or loss | Recognised in equity | 31/12/2025 | |
Property, plant and equipment | 2,609 | 427 | 33 | 3,069 |
Vacation reserve | -370 | 6 | - | -364 |
Allowance for doubtful receivables | -101 | 91 | - | -10 |
Inventories | -243 | 175 | - | -68 |
Government grants | -60 | -9 | - | -69 |
Tax loss carry forward | - | -868 | - | -868 |
Right-of-use asset | -1 | - | - | -1 |
Adjustment to assets and liabilities of Baltic Dairy Board SIA | 225 | 34 | - | 259 |
Deferred income tax (assets)/liabilities | 2,059 | -144 | 33 | 1,948 |
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 |
Allowance for doubtful receivables | - | -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 |
Thousand EUR
VILVI GROUP ANNUAL REPORTS 2025 | |
GROUP | COMPANY | |||
31/12/2025 | 31/12/2024 | 31/12/2025 | 31/12/2024 | |
Deferred income tax assets/(liability) | ||||
0/1,282 | 0/704 | Deferred income tax assets (liability), which will be realised within 12 months | 0/438 | 0/319 |
1,393/-4,623 | 796/-3,559 | Deferred income tax assets (liability), which will be realised after 12 months | 1,298/-2,921 | 727/-2,364 |
-1,948 | -2059 | Net deferred income tax assets (liability) | -1,185 | -1318 |
In accordance with Article 46¹(1)(1) of the Law on Corporate Income Tax of the Republic of Lithuania, the investment project tax incentive may be applied by reducing taxable profit over four tax periods following the tax period in which the incentive arose. The Group and the Company do not recognise deferred tax assets in respect of the investment project incentive.
GROUP | COMPANY | |||
2025 | 2024 | 2025 | 2024 | |
753 | 724 | Opening balance of the investment project tax incentive | 753 | 627 |
1,190 | 4,427 | Investment project tax incentive generated during the year | 1162 | 4,087 |
- | -4,398 | Investment project tax incentive utilised during the year | - | -3,961 |
1,943 | 753 | Closing balance of the investment project tax incentive | 1,915 | 753 |
The amount of unused tax incentives as at 31 December 2025 amounted to EUR 1,943 thousand for the Group and EUR 1,915 thousand for the Company (31 December 2024: EUR 753 thousand for both the Group and the Company).
26.
Trade and other payables
Thousand EUR
GROUP | COMPANY | ||||
31/12/2025 | 31/12/2024 | Note | 31/12/2025 | 31/12/2024 | |
Financial instruments | |||||
18,321 | 15,050 | Trade payables | 12,467 | 11,126 | |
- | - | Trade payables to related parties | 28 | 16,729 | 14,896 |
18,321 | 15,050 | 29,196 | 26,022 | ||
Non-financial instruments | |||||
5,606 | 5,116 | Employment-related liabilities | 2,971 | 2,850 | |
1,927 | 492 | Advance amounts received | 1,037 | 491 | |
75 | 74 | Dividends payable | 1 | 1 | |
1,000 | 610 | Taxes payable, other than income tax | 132 | 102 | |
302 | 359 | Accrued expenses and provisions | 115 | 103 | |
- | - | Other amounts payable | 4 | 1 | |
8,910 | 6,651 | 4,260 | 3,548 | ||
27,231 | 21,701 | 33,456 | 29,570 | ||
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):
VILVI GROUP ANNUAL REPORTS 2025 | |
GROUP | COMPANY | |||
31/12/2025 | 31/12/2024 | 31/12/2025 | 31/12/2024 | |
2,000 | 49,952 | Acquisition of PP&E | 2,000 | 813 |
5,294 | 6,405 | Purchase of raw materials | 4,722 | 5,561 |
7,294 | 56,357 | 6,722 | 6,374 | |
The amounts related to the acquisition of property, plant and equipment are associated with construction and production equipment works carried out by Baltic Dairy Board SIA.
As at 31 December 2025, the Group/Company were pledged as collateral for bank loans (see Note 23), together with the following additional security measures:
GROUP:
immovable property with the carrying amount of EUR 30,679 thousand;
movable property with the carrying amount of EUR 77,825 thousand;
inventories in turnover with the carrying amount of EUR 7,605 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 4,643 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 7,871 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 9,208 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 5,778 thousand as at 31 December 2025 (the surety agreements were signed in 2021, 2022, 2023 and 2025).
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 33,420 thousand as at 31 December 2025.
surety issued to Op Corporate bank to secure fulfilment of financial liabilities of Kelmės Pieninė AB in amount of EUR 14,349 thousand as at 31 December 2025.
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 3 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:
VILVI GROUP ANNUAL REPORTS 2025 | |
Purchases of raw materials, products, non-current assets and services, interest expenses (thousand EUR)
GROUP | COMPANY | |||
2025 | 2024 | 2025 | 2024 | |
- | - | Kelmės Pieninė AB | 45,517 | 37,830 |
- | - | Kelmės Pienas UAB | 3,839 | 4,501 |
- | - | Modest AB | 55,607 | 50,181 |
- | - | Pieno Logistika AB | 241 | 148 |
- | - | Baltic Dairy Board SIA | 3,732 | 1231 |
1 | 2 | Management personnel | 1 | 2 |
1,909 | 1,170 | Other related parties | 1,886 | 1,170 |
1,910 | 1,172 | 110,823 | 95,063 | |
(ii) Transactions with related parties:
Sale of raw materials, products, non-current assets and services, interest income (thousand EUR)
GROUP | COMPANY | |||
2025 | 2024 | 2025 | 2024 | |
- | - | Kelmės Pieninė AB | 16,671 | 7,350 |
- | - | Kelmės Pienas UAB | 6,234 | 6,982 |
- | - | Modest AB | 52,261 | 41,492 |
- | - | Pieno Logistika AB | 40 | 70 |
- | - | Baltic Dairy Board SIA | 16,065 | 7,937 |
5,893 | 23 | Other related parties | 5,783 | 23 |
5,893 | 23 | 97,054 | 63,854 | |
During 2025, dividends received by the Company amounting to EUR 18,428 thousand were offset against amounts payable to related parties (see Note 3).
VILVI GROUP ANNUAL REPORTS 2025 | |
(iii) Year-end balances of transactions with related parties:
GROUP | COMPANY | |||
31/12/2025 | 31/12/2024 | 31/12/2025 | 31/12/2024 | |
- | - | Trade and other amounts payable | 16,728 | 14,896 |
- | - | (Kelmės Pieninė AB) | 16,368 | 11,424 |
- | - | (Kelmės Pienas UAB) | 360 | - |
- | - | (Modest AB) | - | 3,466 |
- | - | (Pieno Logistika AB) | - | 6 |
- | - | Trade and other receivables | 5,418 | 5,597 |
- | - | (Kelmės Pienas UAB) | - | 440 |
- | - | (Pieno Logistika AB) | 73 | - |
- | - | (Modest AB) | 451 | - |
- | - | (Baltic Dairy Board SIA) | 4,894 | 5,157 |
- | - | Loan receivable (Baltic Dairy Board SIA, including interest) | 1,229 | 1,170 |
237 | 124 | Trade and other payables (to other related parties) | 237 | 124 |
6,710 | - | Trade receivables (from other related parties) | 6,001 | - |
912 | - | Loan receivable (including interest and administration fee from other related parties) | 912 | - |
16,427 | - | Claim rights against other related parties (including interest and administration fees) | 16,427 | - |
As at 31 December 2025 and 31 December 2024, the Group and the Company had no receivables subject to expected credit losses.
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:
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 2028. The outstanding balance of the loan was EUR 980 thousand as at 31 December 2025. Interest receivable in 2025 was EUR 249 thousand.
Loans receivable by the Group and the Company from other related parties amounted to EUR 912 thousand as at 31 December 2025 (31 December 2024: none).
In 2025, personnel expenses included payments of EUR 1,107 thousand and EUR 1,043 thousand to the Group‘s and the Company‘s management personnel, including social security contributions (2024: EUR 1,080 thousand and EUR 783 thousand, respectively).
In 2025, the Group’s and the Company’s payments for employees to Pillar III investment funds under the defined plan for contributions amounted to EUR 259 thousand and EUR 241 thousand (2024 Group/Company: EUR 419 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 2025 as financial assets measured at amortised cost. The maximum exposure to credit risk at the reporting date was as follows:
VILVI GROUP ANNUAL REPORTS 2025 | |
GROUP | |||
Net book amount | |||
EUR ‘000 | Note | 31/12/2025 | 31/12/2024 |
Non-current amounts receivable | 17 | 912 | - |
Trade amount receivable | 19 | 21,917 | 17,460 |
MPK claim right | 19 | 16,427 | - |
Other amount receivable | 19 | 26 | 4,951 |
Cash and cash equivalents | 21 | 2,785 | 18,872 |
42,067 | 41,283 | ||
COMPANY | |||
Net book amount | |||
EUR ‘000 | Note | 31/12/2025 | 31/12/2024 |
Non-current amounts receivable | 17 | 2,141 | 1,170 |
Trade amount receivable | 19 | 22,711 | 19,352 |
MPK claim right | 19 | 16,427 | - |
Other amount receivable | 19 | 2,000 | 3,031 |
Cash and cash equivalents | 21 | 2,688 | 13,286 |
45,967 | 36,839 | ||
Other receivables of the Group and the Company as at 31 December 2025 amounting to EUR 16,170 thousand relate to an assignment of claim agreement signed on 14 February 2025 with Šiaulių bankas AB (see Note 30), under which the Company acquired the bank’s claim against Marijampolės pieno konservai UAB (hereinafter – MPK). The claim was acquired at its nominal value. MPK’s assets pledged to the bank are transferred to the Company under the Mortgage and Pledge Rights Assignment Agreement dated 27 February 2025.
The transaction was carried out with the strategic objective of becoming the main creditor of MPK as a preparatory step towards the planned acquisition of control over MPK. The acquired claim is classified as a financial asset measured at amortised cost because:
the Company’s business model is to hold the asset in order to collect contractual cash flows
contractual cash flows meet the criterion of payments of principal and interest, i.e., they consist solely of payments of principal and interest.
On initial recognition, the asset was measured at fair value, which was equal to the transaction price of EUR 16,170 thousand (nominal value). In the opinion of management, the transaction price represents fair value, as the transaction was entered into with an independent third party under market conditions.
On initial recognition, there were no objective indications of credit impairment: MPK was operating, bankruptcy had not been declared, and the transfer price (nominal value) did not include any discount that would reflect incurred credit losses.
On initial recognition, no significant increase in credit risk was identified at initial recognition; therefore, the asset was classified in Stage 1 for expected credit losses. Expected credit losses are measured as 12-month expected credit losses.
In the opinion of management, the fair value of the claim as at 31 December 2025 is equal to its carrying amount, taking into account the short period since acquisition, the ongoing operations of MPK and the planned acquisition of control.
In 2026, the Group/Company plans to refinance the acquired claim against Marijampolės pieno konservai UAB through a bank.
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:
VILVI GROUP ANNUAL REPORTS 2025 | |
GROUP | ||||
EUR ‘000 | Total amount | Impairment | Total amount | Impairment |
31/12/2025 | 31/12/2025 | 31/12/2024 | 31/12/2024 | |
Related parties: | ||||
Not past due | 23,340 | - | - | - |
23,340 | - | - | - | |
Other parties: | ||||
Not past due | 13,055 | - | 15,509 | - |
Past due 0-30 days | 2,282 | - | 2,002 | -341 |
Past due 31-60 days | 456 | - | 165 | - |
More than 60 days | 181 | -58 | 413 | -288 |
15,974 | -58 | 18,089 | -629 | |
39,314 | -58 | 18,089 | -629 | |
The Group and the Company recognise impairment allowances for trade and other receivables in accordance with the expected credit loss (ECL) model under IFRS 9. The simplified approach is applied to trade receivables, under which lifetime expected credit losses are recognised irrespective of changes in credit risk, independently of changes in credit risk.
Impairment is calculated using a provision matrix, whereby receivables are grouped based on ageing categories (current, 1–30 days past due, 31–60 days past due, 61–90 days past due and more than 90 days past due). Different expected credit loss rates are applied to each group based on: historical customer default experience, customer payment behaviour, assessment of the financial condition of debtors, the ageing structure of receivables, and economic conditions that may affect recoverability.
The model incorporates the following key parameters:
probability of default, determined based on historical customer default rates;
loss given default, representing the proportion of receivables expected to be unrecoverable;
exposure at default, corresponding to the carrying amount of the receivable.
Expected credit losses also incorporate forward-looking information, including anticipated economic conditions and sector-specific risks that may affect customers’ ability to settle their obligations. Where receivables are individually significant or where there has been a significant increase in credit risk, impairment is assessed on an individual basis.
Expected credit losses on loans granted are assessed using the general model, taking into account changes in credit risk since initial recognition.
When assessing loans granted to MPK, it is taken into account that they are secured by pledged assets whose value exceeds the loan-related claim. For this reason, expected credit losses are insignificant; therefore, no impairment allowances for these loans were recognized during the reporting period.
VILVI GROUP ANNUAL REPORTS 2025 | |
COMPANY | ||||
EUR ‘000 | Total amount | Impairment | Total amount | Impairment |
31/12/2025 | 31/12/2025 | 31/12/2024 | 31/12/2024 | |
Related parties: | ||||
Not past due | 27,421 | - | 2,982 | - |
Past due 0-30 days | 1,115 | - | - | - |
Past due 31-60 days | 41 | - | 1,366 | - |
More than 60 days | - | - | 2,420 | - |
28,577 | - | 6,768 | - | |
Other parties: | ||||
Not past due | 9,928 | - | 11,815 | - |
Past due 0-30 days | 2,188 | - | 1,991 | -341 |
Past due 31-60 days | 456 | - | 165 | - |
More than 60 days | 188 | -58 | 412 | -288 |
12,760 | -58 | 14,383 | -629 | |
41,337 | -58 | 21,151 | -629 | |
Movements on the account of provisions for impairment of trade and other receivables during the year were as follows:
GROUP | EUR ‘000 | COMPANY | ||
2025 | 2024 | Net book amount | 2025 | 2024 |
-629 | -307 | Balance at 1 January | -629 | -307 |
- | -461 | Impairment losses recognised | - | -461 |
- | 12 | Write-off of bad debts | - | 12 |
571 | 127 | Impairment losses reversed | 571 | 127 |
-58 | -629 | Balance at 31 December | -58 | -629 |
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 2025, the balance of bad debts amounted to EUR 58 thousand (as of 31 December 2024 - EUR 629 thousand).
Liquidity risk
The table below analyses financial liabilities, including interest charged thereon, based on their contractual maturities:
At 31 December 2025 | 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 | 62,962 | -70,454 | -3,974 | -20,575 | -6,602 | -39,304 |
Other borrowings | - | - | - | - | - | - |
Lease liabilities | 2,554 | -2,720 | -526 | -436 | -806 | -951 |
Factoring | - | - | - | - | - | - |
Trade payables | 18,321 | -18,321 | -18,321 | - | - | - |
83,837 | -91,495 | -22,821 | -21,011 | -7,408 | -40,255 | |
VILVI GROUP ANNUAL REPORTS 2025 | |
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 2025 | 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 | 5,778 | -5,976 | -641 | -5,334 | 0 | 0 |
Lease liabilities | 1,476 | -1,566 | -351 | -261 | -489 | -465 |
Factoring | - | - | - | - | - | - |
Trade payables | 29,196 | -29,196 | -29,196 | - | - | - |
36,450 | -36,738 | -30,189 | -5,595 | -489 | -465 | |
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 | |
As at 31 December 2025, the Group’s and the Company’s current assets exceeded the current liabilities by EUR 12,978 thousand and EUR 14,887 thousand, respectively. As at 31 December 2025, the Group’s and the Company’s borrowings and lease liabilities totalled EUR 65,516 thousand and EUR 7,254 thousand, respectively. According to the current loan and other agreements with banks, in 2026, the Group should repay EUR 8,667 thousand, of which EUR 2,106 thousand will be extended, and the Company – EUR 1,556 thousand (see Note 23).
Foreign exchange risk
Exposure to foreign exchange risk at the exchange rates effective at 31 December 2025:
GROUP (COMPANY) | ||||
EUR ‘000 | USD | PLN | ||
2025 | 2024 | 2025 | 2024 | |
Trade and other receivables, net of tax | 640 | 1,819 | 39 | - |
Cash and cash equivalents | - | - | - | - |
Trade payables | - | - | - | - |
Net exposure | 640 | 1,819 | 39 | - |
During the year the exchange rates against the euro were as follows:
VILVI GROUP ANNUAL REPORTS 2025 | |
Average | ||
2025 | 2024 | |
USD | 1.1294 | 1.0823 |
PLN | 4.2394 | 4.3059 |
The exchange rates against the euro applied as at 31 December:
Average | ||
2025 | 2024 | |
USD | 1.1757 | 1.0444 |
PLN | 4.2263 | 4.2655 |
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 2025, 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.
Interest rates applied to the Group’s and the Company’s financial instruments as at 31 December 2025 were as follows:
GROUP | COMPANY | |||
Net book amount | EUR ‘000 | Net book amount | ||
31/12/2025 | 31/12/2024 | 31/12/2025 | 31/12/2024 | |
Financial instruments with fixed interest rates | ||||
- | - | Loan granted to Baltic Dairy Board SIA | 980 | 980 |
16,427 | - | Right of claim | 16,427 | - |
912 | - | Loan to related parties | 912 | - |
17,339 | - | 18,319 | 980 | |
GROUP | COMPANY | |||
Net book amount | EUR ‘000 | Net book amount | ||
31/12/2025 | 31/12/2024 | 31/12/2025 | 31/12/2024 | |
Financial instruments with variable interest rates | ||||
-62,962 | -36,929 | Bank borrowings | -5,778 | -7,549 |
-2,554 | -2,293 | Lease liabilities | -1,476 | -1,804 |
-65,516 | -39,222 | -7,254 | -9,353 | |
-48,177 | -39,222 | 11,065 | -8,373 | |
In 2025, the Group paid interest of EUR 1,140 thousand on 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 2024 was performed using the same basis.
VILVI GROUP ANNUAL REPORTS 2025 | |
GROUP | COMPANY | |||
Profit (loss) | Impact (EUR ’000) | Profit (loss) | ||
100 bp | 100 bp | 100 bp | 100 bp | |
increase | decrease | increase | decrease | |
At 31 December 2025 | ||||
-482 | 482 | Financial instruments bearing variable interest rates | 111 | -111 |
At 31 December 2024 | ||||
-392 | 392 | Financial instruments bearing variable interest rates | -84 | 84 |
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 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 2025 | GROUP | |||
EUR ’000 | Level 1 | Level 2 | Level 3 | Total |
Non-current amounts receivable | - | - | 912 | 912 |
Trade and other receivables | - | - | 38,344 | 38,344 |
Cash and cash equivalents | 2,785 | - | - | 2,785 |
Borrowings and lease liabilities | - | - | -65,516 | -65,516 |
Trade and other payables | - | - | -18,321 | -18,321 |
2,785 | - | -44,581 | -41,796 | |
At 31 December 2024 | GROUP | |||
EUR ’000 | Level 1 | Level 2 | Level 3 | Total |
Trade and other receivables | - | - | 17,460 | 17,460 |
Cash and cash equivalents | 18,872 | - | - | 18,872 |
Borrowings and lease liabilities | - | - | -39,223 | -39,223 |
Trade and other payables | - | - | -15,050 | -15,050 |
18,872 | - | -36,813 | -17,941 | |
VILVI GROUP ANNUAL REPORTS 2025 | |
At 31 December 2025 | COMPANY | |||
EUR ’000 | Level 1 | Level 2 | Level 3 | Total |
Non-current amounts receivable | - | - | 2,141 | 2,141 |
Trade and other receivables | - | - | 39,138 | 39,138 |
Cash and cash equivalents | 2,688 | - | - | 2,688 |
Borrowings and lease liabilities | - | - | -7,254 | -7,254 |
Trade and other payables | - | - | -29,196 | -29,196 |
2,688 | - | 4,829 | 7,517 | |
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 | |
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 2025 and 31 December2024.
The Group and the Company comply with the requirements of the Law on Companies of the Republic of Lithuania regarding the level of equity (equity must not be less than 1/2 of the share capital specified in the Articles of Association). In 2025, the equity of both the Group and the Company significantly exceeded share capital – by 25 times and 20 times, respectively.
The Group is also subject to externally imposed capital requirements set by banks. These require that the ratio of (equity less revaluation reserve) to total assets is not less than 30%. Management continuously monitors and ensures compliance with these requirements within the Group. In 2025, this ratio amounted to 47%. Further information is provided in Note 22.
30.
Business merger that took place after the reporting period
Vilkyškių pieninė AB completed the transaction for acquisition of 100% of the shares in Private Limited Liability Company MARIJAMPOLĖS PIENO KONSERVAI (MPK) on 16 January 2026. MPK is a dairy processing company operating two factories:
In Marijampolė, where condensed milk and butter are produced; and
In Kalvarija, where various types of milk powder are produced.
As Vilkyškių pieninė AB obtained control of MPK only after the close of the 2025 reporting period, the financial results of MPK have not been consolidated into the financial statements as of 31 December 2025. The operating results, assets and liabilities of the acquired company will be consolidated from 16 January 2026.
VILVI GROUP ANNUAL REPORTS 2025 | |
Below, the information about business merger is provided. The initial accounting for business merger at the time of transaction’s completion date has not yet been finalised:
The acquisition of MPK represents a strategic step towards expansion of production capacity and product portfolio of Vilvi Group. Following the acquisition of MPK, the Group has become one of the largest dairy processing groups in the Baltic states. MPK specialises in production of canned milk, butter and milk powder; accordingly, this transaction will enable the Group to broaden its product range and access new markets. Control was obtained by entering into a share sale and purchase agreement with the seller and transferring all MPK shares to the Company for the agreed consideration on the day when the transaction was completed. Completion of the transaction required approval from the Competition Council, which was received in November 2025, as well as fulfilment of other conditions set out in the preliminary share sale and purchase agreement, all of which were fulfilled in full on 16 January 2026, when the transaction was completed by entering into the share sale and purchase agreement for Private Limited Liability Company MARIJAMPOLĖS PIENO KONSERVAI.
Real value of consideration transferred on the acquisition day | Thousand, EUR |
Cash consideration | 7,500 |
Set-off of pre-existing dealings (a) | 16,170 |
Total real value of consideration transferred on the acquisition day: | 23,670 |
c)
At the time of acquisition, the Group held an outstanding loan granted to MPK. Prior to acquiring MPK, Vilkyškių pieninė AB had pre-existing dealings with MPK: in February 2025, the Company entered into an agreement with the principal creditor of MPK (Šiaulių bankas) and took over the rights of claim in respect of MPK financial obligations to the bank for an amount of EUR 16,170 thousand. Its remaining balance on the day of acquisition was EUR 16,170 thousand. Therefore, Vilkyškių pieninė AB became the principal creditor of MPK by purchasing the debts of MPK and its subsidiary from the bank.
This assignment of rights of claim is treated as a separate transaction, as it was entered into prior to the share acquisition. The MPK debts taken over by the Group at the time of acquisition are not included in the list of assumed liabilities presented herein. This intercompany obligation will be eliminated upon consolidation, since, once MPK becomes a subsidiary, the intercompany debt and corresponding claim will cease to exist at group level.
As the Group already held a right of claim against MPK at the time of acquisition, this loan was treated as factually settled in the consolidated financial statements upon obtaining control. Since the loan had been granted on market terms, its real value did not differ significantly from its book value. Accordingly, this loan has been included into the transferred consideration and removed from the acquired net assets.
According to the concluded share sale and purchase agreement, the total consideration for MPK shares is fixed and amounts to EUR 7,500 thousand. The agreement does not provide for any conditional (contingent) components of consideration that would depend on future performance conditions or results, nor were any other tangible or intangible assets transferred, including any business or subsidiaries of the acquiring business entity. The agreement provides for the possibility to adjust the purchase price after the transaction’s completion in the event that certain deviations from pre-agreed financial indexes are identified; at present, the Company has no basis to consider that such adjustments will apply. Accordingly, no conditional consideration or received obligation has been recognised. Should it be determined in the future that the purchase price has to be adjusted, the relevant changes will be reflected in the financial statements in accordance with applicable accounting standards.
VILVI GROUP ANNUAL REPORTS 2025 | |
The initial list of the acquired assets and liabilities of MPK and their assessment have not been finalised yet. Therefore, only preliminary values of main groups are presented below:
For each main group of acquired assets or assumed liabilities, the amounts recognized at the acquisition date | Thousand, EUR |
Cash and cash equivalents | 16 |
2,750 | |
Non-current tangible assets | 23,118 |
Intangible assets: xxxxx | - |
Reserves | 11,858 |
Receivable amounts | 7,063 |
Payable amounts | -10,618 |
Employee remuneration and liabilities of other related benefits | -2,098 |
Loans | -2,832 |
Deferred profit tax asset (liability) | 3 |
Acquired net assets: | 29,260 |
Add: good standing (negative good standing) | -5,590 |
Value of acquired net assets: | 23,670 |
Note: The values stated above are preliminary. Real values will be determined after completion of independent valuations and a detailed review of MPK assets and liabilities.
Based on a preliminary assessment, the real value of the net identified assets taken over at the time of acquisition may exceed the transferred consideration; accordingly, it is probable that a profit will result form purchase below the market price. Based on preliminary estimates, the profit amounts to approximately EUR 5,590 thousand, which would be recognized in the statement of profit (loss) under other income.
The main reasons for the gain arising from the transaction are as follows: MPK was a financially distressed company whose main creditor (AB Artea Bank) agreed to sell its position. Vilkyškių pieninė AB first took over MPK’s debts from the bank, thereby becoming the main creditor and gaining negotiating power. The transaction was essentially of a rescue nature – the former shareholders of MPK were motivated to sell MPK shares due to debt obligations and limited prospects for business continuity.
During the purchase price allocation, no significant separately identifiable intangible assets (such as trademarks, customer lists, or similar) were identified. Final information regarding the recognized gain will be disclosed upon completion of the PPA assessment.
The financial asset position (EUR 2,750 thousand) includes receivables that were collected after the balance sheet date – in January 2026.
Property, plant and equipment (EUR 23,118 thousand) mainly consists of buildings and structures, machinery and equipment, and vehicles. An independent valuation of buildings has been initiated, and preliminary values have been determined based on actual transaction prices of completed deals or the mass valuation of buildings performed by the State Enterprise Centre of Registers as of 1 January 2026. The values of buildings and structures will be adjusted upon receipt of the independent valuation. The fair value analysis of machinery and equipment is still ongoing. For vehicles, the value of milk trucks has been updated based on market experience of similar asset sales.
The fair value of inventories (EUR 11,858 thousand) has been determined on a preliminary basis. The finished goods position was analysed based on actual sales prices and selling costs in January 2026; however, a more detailed analysis will be performed, as the inventory held at the valuation date is expected to be realized over a period longer than one month.
Based on preliminary data, there are significant receivable amounts on the acquisition day in MPK balance sheet. The real value of receivable amounts at the acquisition date is EUR 7,063 thousand, with a total gross nominal value of EUR 7,063 thousand; the best estimate of the cash flows not expected to be collected is EUR 0 thousand. At present, the possibilities to collect receivable amounts are being assessed.
No contingent liabilities assumed as part of MPK acquisition have been identified at this stage that would require separate recognition. Should a more detailed assessment reveal any such liabilities (e.g., legal disputes, warranties or environmental obligations) existent on the acquisition day as a result of prior activities of MPK, the Company will disclose the required information. If any significant contingent liability of MPK cannot be assessed reliably at the acquisition date, the Company will state the nature of such liability and the reasons why its real value could not be determined reliably.
The acquisition-related costs as of 31 December 2025 amount to EUR 213 thousand These costs were recognised in the profit/ loss statement of the Group for 2025 in the line item of administrative expenses. No additional costs related to issue of equity instruments were incurred.
Vilkyškių pieninė AB acquired 100% of the shares in MPK; accordingly, no minority interest arises at the acquisition date. This acquisition was not carried out in stages, and prior to completion of the transaction, Vilkyškių pieninė AB held no ownership interest in MPK.
Some portions of the aforementioned information cannot be disclosed at this stage, as the initial accounting for business merger has not yet been finalised. This includes the final amount of transferred consideration, a detailed list of acquired assets and liabilities at real value, and a precise estimate of the cash flows from receivable amounts. Independent asset valuations are currently in progress, information is being coordinated with the seller, and audited financial data for MPK for 2025 are pending. All relevant information will be presented in subsequent financial statements upon finalisation of the accounting for business merger.