CONFIRMATION BY RESPONSIBLE PERSONS
March 2024
Telšiai
We, AB “Žemaitijos pienas” general director Robertas Pažemeckas and senior accountant Dalia
Gecienė, hereby confirm that, in so far as we are aware, the attached 2023 AB „Žemaitijos pienas“
consolidated audit report and company financial statements prepared in accordance with International
Financial Reporting Standards adopted in the European Union are true and correctly reflect the assets,
liabilities, financial status, income or losses, and cash flows of the company and the group of
enterprises while the consolidated annual statement provides proper overview of business
development and activities and status of the company and the group of enterprises as well as
description of the main encountered risks and uncertainties.
General director Robertas Pažemeckas
Senior accountant Dalia Gecienė
1
ŽEMAITIJOS PIENAS AB
Consolidated Annual Report,
Financial Statements,
and Consolidated Financial statements
for the year end
ed
31 December 20
2
3
ŽEMAITIJOS PIENAS, AB
Registration number 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER, 2023
2
CONTENTS
PAGE
CONSOLIDATED AND COMPANY’S ANNUAL REPORT-----------------------------------------
3 - 31
FINANCIAL STATEMENTS AND CONSOLIDATED FINANCIAL STATEMENTS:
STATEMENTS OF FINANCIAL POSITION -------------------------------------------------
32
STATEMENTS OF COMPREHENSIVE INCOME------------------------------------------
33
STATEMENTS OF CHANGES IN EQUITY-------------------------------------------------- 34-35
STATEMENTS OF CASH FLOW----------------------------------------------------------------
36
EXPLANATORY NOTES---------------------------------------------------------------------------
37-82
AB “ŽEMAITIJOS PIENAS”
Company code 180240752, Sedos Str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S
ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER, 2023
3
CONTENTS
I.
GENERAL INFORMATION
-------------------------------------------------------------------------
----------
4
II. INFORMATION ON SALE OF SECURITIES BY THE ISSUE AT THE REGULATED
MARKET
---------------------------------------------------------------------------------
--------------------------------
6
III.
REVIEW OF THE ACTIVITY OF THE GROUP OF COMPANIES, RISKS AND
PERSPECTIVES
------------------------------------------------------------------------------------
------------
10
IV.
OTHER
INFORMATION
-------------------------------------------------------------------------
------------
30
ŽEMAITIJOS PIENAS, AB
Registration number 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER, 2023
4
GENERAL INFORMATION
Reporting period for which the report is developed
Consolidated semi-annual report are prepared and provided for period of 2023, moreover, the report contains
the significant events occurred after the end of the reporting period. This document refers to ŽEMAITIJOS
PIENAS, AB (hereinafter referred to as the Company or Issuer), Šilutės Rambynas, ABF (hereinafter referred
to as the Group Company or Associated Company), and in cases when facts on both Companies are described
and/or specified, the Companies shall refer to as the Companies of the Group.
Brief history of the Company
The beginning of ŽEMAITIJOS PIENAS, AB dates back to 1924, when Telšiai dairy plant of high capacity
was incorporated. In the end of 1984 Telšiai dairy plant activity moved to new premises and operated until
opening and privatization of Telšiai cheese plant which was one of the largest in the Baltic States.
ŽEMAITIJOS PIENAS, AB was registered in the Register of Legal Entities on 23 June 1993 in Telšiai
District Board and on 16 October 1998 it was re-registered in the Ministry of Agriculture of the Republic of
Lithuania. Upon the decision of the General Meeting of Shareholders of 1 May 2004, it was reorganized by
way of division, separating a part of assets, rights and liabilities, and establishing Žemaitijos pieno investicija,
AB. Upon the decision of the General Meeting of Shareholders of 18 December 2019, the Company was
reorganized by merging the Public Limited Liability Company Baltijos mineralinių vandenų kompanija,
which after the merging on 10 January 2020 was deregistered from the Register of Legal Entities.
Company information and contact details
Data on AB “ŽEMAITIJOS PIENAS” are collected and stored in the Register of Legal Entities of the State
Enterprise Centre of Registers.
Name of the Company: Joint-stock company ŽEMAITIJOS PIENAS
Legal status: Joint-stock company
Company code: 180240752
VAT number: LT802407515
Authorized share capital: 12,103,875 EUR
Address: Sedos g. 35, Telšiai, Lietuva
Telephone number: + 370 444 22201
Fax number: + 370 444 74897
E-mail address: info@zpienas.lt
Internet site: www.zpienas.lt
Stock trading code: ZMP1L
ISIN number: LT0000121865
GENERAL INFORMATION
ŽEMAITIJOS PIENAS, AB
Registration number 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER, 2023
5
LEI number: 5299005U9E85Y55OHK45
STRUCTURE OF THE GROUP
ŽEMAITIJOS PIENAS, AB branches:
Name of the branch Information
Vilnius Branch Id. number 123809154, address: Algirdo Str. 40, Vilnius
Kaunas Branch Id. number 134853981, address: Europos Ave. 36, Kaunas
Telšiai Branch Id. number 110893017, address: Sedos str. 35, Telšiai
Panevėžys Branch Id. number 148133399, address: J. Janonio Str. 9, Panevėžys
Branches of the Company fulfil the functions related to sale of goods (dairy products) within the set territory
of the branch and take other actions or fulfil orders of the Company.
The Company has no incorporated representative offices.
Name of the company: Joint-stock company (firm) Šilutės Rambynas
Legal status: Joint-stock company (firm)
Company code: 277141670
VAT number: LT714167015
Authorized share capital: 2,493,028.50 EUR
Address: Klaipėdos g. 3, Šilutė, Lietuva
Telephone number: + 370 441 77442
ŽEMAITIJOS PIENAS, AB
ŽEMAITIJOS PIENAS, AB Vilniaus branch
ŽEMAITIJOS PIENAS, AB Kauno branch
ŽEMAITIJOS PIENAS, AB Telšių branch
ŽEMAITIJOS PIENAS, AB Panevėžio branch
Šilutės Rambynas, ABF
ŽEMAITIJOS PIENAS, AB
Registration number 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER, 2023
6
Fax number: + 370 441 77443
E-mail: info@rambynas.lt
Associated company – Šilutės Rambynas, ABF
The basic activity of Šilutės Rambynas, ABF is the production and sale of fermented cheese and cheese
products, as well as the production and sale of pasteurized cream, pasteurized whey and concentrated whey
(NACE: C 10.5. Manufacture of dairy products; C 10.51. Operation of dairies and cheese making).
Furthermore, the company provides transportation and storage Services, Services related to servicing of milk
buying-up points and other Services.
Šilutės Rambynas, ABF has no incorporated branches and representative offices.
Basic objectives and nature of economic activities
The Companies of the Group pursue economic and commercial activities (production, trade, provision of
services, etc.) in order to get benefit for themselves and their shareholders. The objectives of the activity are
the organisation and pursuing of the activities provided for in the Articles of Association to earn income and
profit, satisfy the property interests of shareholders and the interests of employees. The main activity of AB
ŽEMAITIJOS PIENAS is production of dairy products (fermented cheeses and cheese products, packaged
cheeses and cheese products, processed cheeses and cheese products, creams, curd creams, butter milk
product spreads, mixed spreads, milk fat, pasteurized cream, buttermilk, whey, dried milk products, fresh
milk products (milk, cream, curds, curd products, yoghurts, desserts, cheese curds, glazed cheese curds,
fermented milk products) (EVRK, group 10.5 "Manufacture of dairy products", class 10.51 "Operation of
dairies and cheese making") and sale of such products in Lithuanian and foreign markets.
According to the ICB (Industry Classification Benchmark) widely used global company activity
classification standard, ŽEMAITIJOS PIENAS, AB refers to the companies - everyday consumer goods -
food, beverages and tobacco.
On 16 July 2004 the Company concluded a contract with Šiaulių bankas, AB, under which management of
securities accounts of the Company was delegated to Šiaulių bankas, AB competence as of 23 July 2004. The
register (accounting) of securities of Šilutės Rambynas is kept by Šiaulių bankas, AB under the contract dated
of 16 July 2004.
ŽEMAITIJOS PIENAS, AB shares
ISIN number: LT0000121865
Abbreviation: ZMP1L
List / segment: Baltic Secondary List
Nominal value: EUR 0.29
Name of securities: Ordinary registered shares
INFORMATION OF SALES OF SECURITIES BY THE ISSUER AT THE REGULATED MARKET
ŽEMAITIJOS PIENAS, AB
Registration number 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER, 2023
7
Issued number (pcs.): 41,737,500
Listed issued number: 41,737,500
Number of shares with voting rights: 41,737,500
Listing start date: 13-10-1997
Shares listed in supplementary list 13-10-1997
Share capital: EUR 12,103,875
Only the shares issued by the Company are quoted on the supplementary list of NASDAQ OMX Vilnius
(hereinafter referred to as Vilnius Stock Exchange) (Ticker symbol: ZMP1L). Securities of ŽEMAITIJOS
PIENAS, AB were first time listed at Vilnius Stock Exchange on 13 October 1997. ISIN code of the
securities: LT0000121865.
Below is the schedule of the Company's securities trading on the public exchange, from which it can be seen
that from 2 January 2023 until 29 December 2023 the price of the shares decreased during the year, the
change at the end of the reporting period is – EUR 0.11 or - 6.11 %. During reporting period, 234,080 units
of shares were transferred in transactions. Capitalization of ŽEMAITIJOS PIENAS, AB shares on 31
December 2023 was EUR 70.54 million, compared to 2022 the value of the Company's capital decreased by
EUR 4,59 million.
During the reporting period, the sales volumes of shares and their price dynamics are demonstrated in the
diagram (see below).
Historical data on shares is presented in the table below (see below):
ŽEMAITIJOS PIENAS, AB
Registration number 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER, 2023
8
Securities of the Issuer have not been sold at other stock exchanges and other organized regulated markets.
Šilutės Rambynas, ABF shares
ISIN number: LT LT0000109217
LT 0000118945
LT 0000125668
Nominal value: EUR 2.90
Name of securities: Ordinary registered shares
Issued number (pcs.): 859,665
Listed issued number: Non-listed
Number of shares with voting rights: 859,665
Securities (shares) of Šilutės Rambynas, ABF
Šilutės Rambynas, ABF shares are not traded on the Vilnius Stock Exchange and other organized regulated
markets.
ŽEMAITIJOS PIENAS, AB owns 87.82% of Šilutės Rambynas, ABF ordinary registered shares (has both
property and non-property rights without any restrictions), Šilutės Rambynas, ABF does not own
ŽEMAITIJOS PIENAS, AB shares. Both Companies do not hold shares of each other neither based on orders
nor on other contractual bases.
Dividends
ŽEMAITIJOS PIENAS, AB
Registration number 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER, 2023
9
The Ordinary General Meeting of Shareholders of ŽEMAITIJOS PIENAS, AB of 21 April 2023 decided to
allocate part of the profit to employee bonuses in the amount of EUR 200,000 and did not pay dividends to
the shareholders. The shareholders of Šilutės Rambynas, ABF also did not pay dividends.
Authorised capital
As of 31 December 2023 the authorised capital of ŽEMAITIJOS PIENAS, AB consisted of:
All shares of the Company are fully paid up and were not the subject to restrictions on stock reassignment
(in so far as the Issuer knows) over the course of the reporting period. The Issuer is unaware of any individual
agreements between the shareholders, which may result in restrictions on stock reassignment and (or) voting
rights. According to the data available to the Company there are no shareholders who would have special
control rights.
As of 31 December 2023, the authorized capital of Šilutės Rambynas, ABF consisted of:
All Šilutės Rambynas, ABF shares are fully paid up and are subject to no restrictions on stock reassignment
(in so far as the Issuer knows). The Issuer is also unaware of any individual agreements between the
shareholders, which may result in restrictions on stock reassignment and (or) voting rights. According to the
Company’s knowledge there are no shareholders who would have special control rights.
Acquisition and disposal of own shares
On 21 April 2023, the General Meeting of Shareholders decided to allocate a reserve for the purchase of own
shares and set the conditions for the buy-back of shares. Purpose of the share acquisition: cancellation of
shares in order to increase each investor's ownership interest in the Company's capital. Nevertheless, during
the Reporting Period, the Company did not implement this decision by buying its own shares. The Company
also did not dispose of any of its own shares or enter into any other transactions during the period under
review, e.g. there were no pledges or other encumbrances on, or other restrictions or limitations over, the
shares and there are no disputes or claims. At the end of the reporting period, the Company held 222,020
treasury shares acquired in 2022, representing 0.53% of the total number of shares of AB ŽEMAITIJOS
PIENAS quoted on the NASDAQ OMX Vilnius Stock Exchange.
ABF Šilutės Rambynas has not bought back its own shares and does not hold its own shares on any other
basis. Šilutės Rambynas has no subsidiaries. It does not buy its own shares.
Type of
shares
Number of shares
(pcs.)
Nomina value
(EUR)
Total nominal
value (EUR)
Share of the authorized
capital (%)
Ordinary
registered
shares
41,737,500 0.29 12,103,875 100
Type of
shares
Number of
shares (pcs.)
Nominal value
(EUR)
Total nominal
value (EUR)
Share of the authorized
capital (%)
Ordinary
registered
shares
859,665 2.90 2,493,028.50 100
ŽEMAITIJOS PIENAS, AB
Registration number 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER, 2023
10
Product safety and international recognition
In 2023, ŽEMAITIJOS PIENAS AB invested in the renewal and modernisation of the equipment of
individual production units in order to: optimise production processes, ensure the efficiency of the
management of food safety risk factors in the production process.
The company was assessed in 2023 against the requirements of international standards for food safety and
quality management:
1. On 24 January 2023. Bureau Veritas auditors carried out a remote risk assessment of the processes in
the Mineral Water Division in accordance with BRC requirements. The remote assessment led to the
renewal of the certification with an extended scope of certification.
2. On 7-10 March 2023, Bureau Veritas carried out a risk assessment of the Company’s processes in
accordance with the FSSC requirements.
3. On 4 April 2023, the US Force conducted an audit to assess the Mineral Water Production Division’s
compliance with NATO requirements.
4. On 7-10 August 2023. Global Quality Certification Agency conducted a process assessment of the
Company’s individual divisions and confirmed compliance with the requirements of the BRC standard.
5. On 7-11 August 2023, Global Quality Certification Agency conducted an assessment of all the
Company’s processes and confirmed compliance with the requirements of the IFS standard.
6. On 6 September 2023, Halal Correct carried out an assessment of individual processes against the Halal
requirements and a renewed certificate was issued.
7. An unannounced audit of the Company’s mineral water production department took place on 10-11
September 2023. The assessment was carried out by the certification company Bureau Veritas Lit.
8. On 9 September 2023, an annual inspection of the organic dairy production processes was carried out
by Ekoagros.
Conclusion of the audits: ŽEMAITIJOS PIENAS AB complies with the requirements of the above
international food safety standards, which are recognised by the Global Food Safety Initiative (GFSI).
ŽEMAITIJOS PIENAS AB keeps pace with global trends in sustainability, environmental protection and
circular production:
Optimisation of the amount of packing and packaging materials used is ongoing;
The possibility of reducing the amount of plastic used in the packaging of products without affecting
the safety and quality of the product itself is being evaluated. Work started in mid-2023 has led to a
reduction of 2,500 kg of plastic on the market;
Tests are underway to replace multi-component plastics labelled “7Other” with single-component, more
recyclable plastics;
OVERVIEW OF ECONOMIC ACTIVITIES OF THE GROUP COMPANIES, RISKS AND OUTLOOK
ŽEMAITIJOS PIENAS, AB
Registration number 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER, 2023
11
Following evaluation and logistical considerations for packaging the product, corrugated cardboard
boxes made from 100% recycled cardboard are used, or by replacing part of the corrugated cardboard
with recycled cardboard;
The change in corrugated cardboard box designs has facilitated the packaging of the products and eliminated
the use of adhesive tape. The changes were made in order to reduce the amount of corrugated cardboard, to
facilitate the work of the staff, to optimise the packaging materials available and to meet the requirements of
the shelves of the supermarkets. Change in the design of the two boxes from mid-2023. The company
continues to focus on meeting consumer expectations by developing products with a focus on functionality.
According to research, lactose intolerance is present in 32% of the Lithuanian population. Some consumers
are also allergic to casein, a milk protein.
With this in mind, we were the first in Lithuania to bring to market a unique product: A2 MILK WITHOUT
LACTOSE, which is suitable for consumers who previously wanted to consume it but could not.
We carried out genetic studies, selected herds of cows with only a special combination of a2a2 milk protein
genes, consulted nutritionists, EU and LT scientists. Furthermore, in an additional manufacturing process,
we have broken down lactose, resulting in a product suitable for lactose intolerant and casein allergic
consumers.
A wide range of protein-enriched products are becoming part of the food range. According to nutrition
experts, the popularity of protein products is due to people’s more responsible approach to nutrition and
healthy lifestyle. In response, the Company has launched a new product on the market: three flavours of
collagen-coated cottage cheese.
The company’s technologists regularly undertake internships in foreign countries, participate in trade fairs,
consult EU consultants on various technological and technical issues, and receive training and seminars.
They are constantly looking for sustainable technologies and innovative production methods.
Helped save 33,814 kg of corrugated cardboard;
During 2023, corrugated cardboard containers were phased out for internal production needs (transport
between production units) and replaced by recyclable containers. The amount of corrugated cardboard
saved was 10,884 kg;
Tests are being carried out with attached caps: At the end of 2023, ŽEMAITIJOS PIENAS AB was the
first dairy producer in Lithuania to introduce pure pack fresh dairy products to the market with an
attached cap;
Tests are underway with recycled PET packaging (PET bottles and shrink films).
In order to meet the requirements of export markets and their trading networks, the following is foreseen for
2024:
1. Continue certification to the current BRC and IFS food safety standards.
2. Meet the food safety and product quality requirements of individual EU and other export markets
(by hiring in-house assessors/auditors).
3. Comply with packaging and product requirements of individual EU networks.
4. Optimise in-house processes. Aim to reduce manual labour, save energy resources and increase
productivity.
Strong focus on the Company’s employees, by improving the qualifications of the Company’s employees,
by participating in international exhibitions and conferences presenting equipment innovations and
innovative technologies related to environmental protection and sustainability (recycling of waste and
circular production trends). Cooperation with academic institutions and research to find added values for
products.
ŽEMAITIJOS PIENAS, AB
Registration number 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER, 2023
12
During 2023, the Company’s main investment objective, as in previous years, was to increase the Company’s
competitiveness and to seek and develop measures to address and improve product quality and the working
conditions and safety of employees. A large number of minor operational, repair and programming works
were carried out to improve safety, the technical level of the equipment, reduce pollution and energy costs.
The main investments were:
1. Replacement of worn-out equipment in the cheese department, for technical condition and quality
assurance.
2. Phase I of the construction of the wind farms (construction of access roads, sites and foundations).
3. Upgrading of the yoghurt packing line.
4. Acquisition of equipment for the preparation and packaging of grated and dried cheese.
Šilutės Rambynas also pays great attention to the quality and safety of its products, and in 2023 operated
under the following integrated food safety and quality management systems:
BRC Global Standard for Food Safety (BRC: British Retail Consortium), since 2010;
Certified to the HALAL standard since 2015;
EkoAgros—for organic products—since 2007;
IFS Food (International Food Standard) since 2018;
FSSC 22000 food safety management system since 2018.
“Šilutės Rambynas” also pays great attention to ensuring the quality and safety of production, so in 2022 it
worked according to the following integrated food safety and quality management systems:
BRC Global Standard for Food Safety (BRC – British Retail Consortium), since 2010;
Certified according to the requirements of the HALAL standard since 2015;
EkoAgros – for the production of organic products – since 2007;
IFS Food (International Food Standard) – since 2018;
FSSC 22000 food safety management system – since 2018.
The subsidiary Šilutės Rambynas ABF will acquire and put into operation fixed assets for 108,000 EUR in
2023, with assets of EUR 1,231,000 bought in 2022. The largest purchases were EUR 66 thousand for a
cheese slicer, EUR 19 thousand for a second-hand tractor, while the remainder was for the purchase of
machinery and equipment used in cheese production, IT equipment and other equipment.
Products and trademarks
In response to the needs and expectations expressed by consumers, 27 new products were developed in 2023,
which have been accepted by consumers and have been successfully “established” on the market:
Q1:
1. Actifeel fibre yoghurt with avocado and apple 3% fat, 300 g.
2. Actifeel fibre yoghurt with carrots and oranges 2.6 % fat, 300 g.
3. Actifeel fibre yoghurt with figs and millet 2.6% fat, 300 g.
4. Magija cottage cheese bar with raisins and apples 7.2 % fat, 100 g.
5. Magija cottage cheese bar with strawberries 7.2 % fat, 100 g.
ŽEMAITIJOS PIENAS, AB
Registration number 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER, 2023
13
6. Magija cottage cheese bar with cranberries 7.1 % fat, 100 g.
7. Magija cottage cheese bar with plombyr flavour 7.9% fat, 100 g.
8. Žemaitijos kastinys with herbs, 200 g.
Q2:
1. Magija glazed cottage cheese bar with salted caramel, coated with milk chocolate 24.3% fat. 40 g.
2. Magija cottage cheese cream-apple cake 8.4% fat. 180 g.
3. Magija cottage cheese cream with pears and salted caramel 8.4% fat, 180 g.
4. Magija cottage cheese cream with strawberries 8.4 % fat, 180 g.
5. Žemaitijos milk A2 lactose-free of at least 3.5% fat. 0.9 l, the first and only milk of this type in the Baltic
States, which is suitable for everyone, even those who are allergic to milk protein and/or lactose intolerant.
6. Džiugas hard cheese Delicious 100 g.
7. Jums lactose-free yoghurt 2.9% fat. 125 g.
8. Jums yoghurt with carrots and oranges 2.5% fat 125 g.
9. Jums yoghurt with figs and millet groats 2.5% fat 125 g.
10. Tichė sparkling strawberry flavoured table water 1.5 l.
11. Tichė sparkling raspberry flavoured table water 1.5 l.
Q3:
1. Rambyno smoked processed cheese snack, BBQ flavour with chilli peppers Chipotle 45% fat 75 g.
2. Carbonated table water MONA 1.5 g.
Q4:
1. Magija glazed cottage cheese bar with rum and chocolate coating 19.6% fat. 40 g.
2. Magija glazed cottage cheese bar with creamy liqueur, covered with milk chocolate 20.3% fat. 40 g.
3. Magija glazed cottage cheese bar with balsamic and chocolate coating 19% fat. 40 g.
4. Protein M collagen-coated cottage cheese bar with vanilla flavour 14.2% fat. 40 g.
5. Protein M collagen-coated cottage cheese bar with strawberry flavour 14.2% fat. 40 g.
6. Protein M collagen-coated cottage cheese bar with chocolate flavour 14.4% fat. 40 g.
Every year brings new experiences and challenges for the Company, which encourage us to move forward
and spread the message of the unique products of ŽEMAITIJOS PIENAS AB to the world. The year 2023
was a year of astonishing results that build consumer confidence in the Company’s products.
The products of ŽEMAITIJOS PIENAS AB are appreciated and noticed not only in the Lithuanian market,
but also worldwide. The pride of 2023—cheese Džiugas—has won 4 international awards, highlighting the
ŽEMAITIJOS PIENAS, AB
Registration number 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER, 2023
14
taste and quality of this cheese. It is gratifying that the number of achievements of Džiugas is fully
approaching the 100th number, which is of great value and importance to the Company.
In 2023, Džiugas won three awards in the United Kingdom. The Great Taste 2023 award recognises two
maturities of Džiugas cheese: 12 months and 36 months in 180 grams. It also won a gold medal at the
International Cheese and Dairy Awards 2023 with a 36-month matured Džiugas cheese in a 180 grams pack.
Džiugas produced by ŽEMAITIJOS PIENAS AB has also been recognised and appreciated in Poland at the
Good Cheese Awards. Džiugas 12-month aged, packaged in cheese cubes, was awarded a silver medal for
its genuine taste and quality.
The Pik-Nik brand has also been added to the awards shelf this year. The brand was awarded two prize
positions in the United Kingdom. Winning silver and bronze medals at the International Cheese and Dairy
Awards 2023, specifically for Pik-Nik Original 80 grams cheese sticks.
International recognition was also given to the Magija milk chocolate line’s cottage cheese, which was
recognised for its quality in Poland. The biscuit-flavoured cottage cheese was awarded a gold medal at the
Good Cheese Awards, while the caramel and peanut cottage cheese won two awards. A gold medal was
awarded for winning the children’s treat position and securing a win at the Innovative Product 2023 Awards.
The importance of cheese and the traditions it creates is also inseparable from the Company’s activities: in
2023, the 21st Džiugiadienis was held in Telšiai, which virtually united Džiugas cheese lovers from
Lithuania, Germany, Hungary, the United Kingdom, Croatia, the Czech Republic, Poland, Spain and France.
The event included judging and tasting of 12-month, 18-month, 24-month and 36-month Džiugas cheeses.
One of the traditions favoured by the Pik-Nik brand is the championship of cheese sausage ripping, which
has been held in the Baltic States and Spain. This event brought people together and, in the form of a game,
made it possible to like and get to know cheese sticks. It is also important to mention the exceptional national
campaign for Pik-Nik tattoos, which was organised in the Baltic States, Hungary, Spain and Croatia. The
interest in the campaign was very successful. The children’s audience was fully engaged in the game of
colourful tattoos, while Pik-Nik attracted new consumers and broadened brand awareness.
The Magija brand organised a national campaign in Lithuania, Latvia and Estonia in 2023. The purchase of
3 Magija cheesecakes was entered into a game where the main prize was a trip to Disneyland. We can be
pleased with the excellent results and the high level of consumer engagement.
Financial information
The Company has selected the key standard financial indicators for its analysis, which many companies use
in their practice to analyse their financial data.
The main financial performance indicators reflecting the activities of the Group and the Company for the
years 2023 and 2022 are as follows:
Financial indicators
The Group The Company
2023
2022
Change
, %
2023
2022
Change,
%
Turnover, thousand euros 278,004 263,394 5.55 277,305 262,671 5.57
ŽEMAITIJOS PIENAS, AB
Registration number 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER, 2023
15
Gross profitability, % 21.93 17.38 26.2 20.67 17.41 18.7
Net profitability, % 7.72 1.50 414.6 7.09 2.08 241.2
EBITDA, thousand euros 32,251 11,241 186.9 29,748 12,223 143.4
EBITDA profitability, % 11.60 4.27 171.8 10.73 4.65 130.5
ROE profitability, % 17.33 3.87 348.1 17.05 5.72 198.2
ROA profitability, % 12.88 2.40 437.9 12.51 3.48 259.3
Current ratio 3.33 2.01 65.4 3.21 1.98 62.3
Quick ratio 1.54 0.60 157.5 1.48 0.59 150.8
Debt-to-Equity ratio 0.35 0.61 -42.6 0.36 0.64 -43.8
Debt ratio 0.26 0.38 -31.6 0.27 0.39 -30.8
Amount of investments in
fixed assets, thousand euros
13,482 6,821 -97.7 12,215 5,356 128.1
The indicators presented above are calculated using the following formula:
Gross profitability = gross profit / sales revenue. Gross profitability (or gross margin) is the ability of a
company to earn a profit from its main business, to control the level of sales revenue and cost of sales. The
higher the gross margin earned for each euro of sales revenue, the more efficient a company is.
Net profitability = net profit / sales revenue. Net profitability ratio is the financial result of a business, one
of the most important (if not the most important one) ratios for a business owner. Net profitability, as a ratio
of sales revenue and net profit, properly describes ultimate profitability of a company. The monetary value
demonstrates the net profit for one euro of sales. A higher value indicates higher profitability of a company.
EBITDA = Net profit + income tax + interest expense + depreciation and amortization expenses.
Earnings before interest, taxes, depreciation and amortization (EBITDA) are easily calculated by adding
income tax and interest expense to net profit, and the amount of depreciation and amortization. This amount
is important to separate the cost of financing an entity’s operations and the impact of amortization and
depreciation. EBITDA profit is often used together or even in place of the value of cash flows.
EBITDA profitability = EBITDA / sales revenue
ROE profitability = net profit / equity. The Return on Equity (ROE), also known as Return on Net Worth,
is a measure of the efficiency of use of the funds invested by owners. It helps to see how effective is the use
of owners’ funds. It mainly depends on a company’s capital structure. ROE shows how much the management
of a company has earned through the use of the company’s capital owned by the shareholders.
ROA profitability = net profit / assets. Return on Assets (ROA) is a measure of how well the assets are
used. Return on assets describes the ability to use all assets in a more profitable manner. It shows the share
of total assets recovered in the form of profit. ROA shows how much the management of a company has been
able to earn from the total assets used.
Current ratio = current assets / short-term liabilities. Current ratio, also known as Current Liquidity
ratio, shows the ability of a company to meet short-term liabilities with its current assets. It determines how
ŽEMAITIJOS PIENAS, AB
Registration number 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER, 2023
16
much current assets exceed short-term liabilities. It defines the ability of a company to cover its short-term
liabilities with its current assets. The value shows how much current assets cover a single euro of short-term
liabilities.
Quick ratio = (current assets - inventories) / short-term liabilities. Critical Liquidity ratio, also known as
Quick ratio, shows the ability of company to use promptly (quickly) sold current assets to meet short-term
liabilities, which is why the inventories are subtracted from the current assets as low-liquidity assets. It
determines how much the most liquid assets exceed short-term liabilities. Critical liquidity determines the
ability of a company to meet short-term liabilities using its most mobile (quickly monetizable) assets.
Debt-to-Equity ratio = amounts payable and liabilities / equity. Debt-to-Equity ratio, also known as
Leverage ratio, shows how much debt there is for each euro of equity. This indicator is also used as an
indicator of the capital structure and financial leverage group. In this case, in contrast to the gross solvency
ratio, the higher the value of the ratio, the worse a company`s solvency position.
Debt (Indebtedness) ratio = amounts payable and liabilities / assets. Indebtedness ratio, also known as
Debt ratio, shows how much debt there is for each euro of assets. The lower the value of this indicator, the
more the assets cover the debts, which is why banks and other creditors value low debt ratio. This indicator
is also used as an indicator of the capital structure and financial leverage group.
When calculating the financial indicators for the years 2023 and 2022, all changes in the statement of
financial position were assessed in accordance with the requirements of IFRS 16. What is more, the
amortization of the received support and the depreciation of the assets owned by the right of use were also
assessed.
Although sales under customer contracts in 2023 compared to 2022 grew at a moderate pace, the Company's
gross margin in 2023 compared to 2022 increased from 17.41% to 20.67%. The Group's gross profitability
in 2023 increased by 26.2%. The increase in gross profit for both the Company and the Group in 2023 is due
to the decrease in raw material purchase prices. The war between Russia and Ukraine, which broke out on
24 February 2022, led to faster-than-ever increases in the prices of electricity and other energy sources, gas,
fuel, packaging and nutrients, as well as in the price of raw milk in 2022, with the price of raw milk in 2023
recovering to the level it was at in 2021; electricity and other prices have also fallen, with a significant impact
on gross margins. The shortage of skilled labour and the demand for higher wages by existing workers has
not diminished in 2023.
The calculation of net profit includes all expenses of the Company and the Group, even those that may not
be related to direct activities or may be one-off, as well as estimated expenses such as accruals, depreciation,
etc. The net profitability of the Company and the Group in 2023 compared to 2022 has significantly increased
due to successful / profitable sales in export markets. The net sales profitability indicator reflects the actual
profitability of the sales, taking into account all revenue and expenses.
In 2023, the Company’s EBITDA increased by 143.4 %, if compared to the year 2022, and this was the effect
of an increase of net profit. ABF "Šilutės Rambynas" ended 2023 with a profit, resulting the Group's 2023
Compared to 2022, EBITDA increased by 186.9%.
In 2023, the current ratio of the Company was 3.21, compared to 1.98 in 2022. In 2023, the current ratio of
the Group was 3.33, compared to 2.01 in 2022. The current ratio shows how many times current assets of a
company exceed its short-term liabilities, i. e. the value of the indicator shows how much one euro of short-
term liabilities is covered by short-term assets. The most acceptable variation of the indicator is in the range
of 1.2-2.0. The range limits vary in different industry sectors.
The quick (solvency) ratio of the Company in 2023 was 1.48, compared to 0.59 in 2022. The quick (solvency)
ratio of the Group in 2023 was 1.54, compared to 0.60 in 2022. The quick (solvency) ratio of the Company
ŽEMAITIJOS PIENAS, AB
Registration number 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER, 2023
17
and the Group in 2023 compared to 2022 increased more than twice. The increase was caused by the
repayment of a working capital loan to SEB Bank. The quick (solvency) ratio shows whether a company
could quickly pay off its short-term liabilities from its most mobile (potentially quick to cash) assets. A
normal value reads from 0.5 to 1.5, a value lower than 0.5 is considered unsatisfactory.
The debt-to-equity ratio (indicator) of the Company and Group increased in 2023, if compared to 2022,
decreased by more than 1.5 times. The debt-to-equity ratio, which can be referred to elsewhere as the financial
dependency ratio, reveals the capital structure of a company. This is done by comparing the debts of a
company with the equity of a company. This solvency ratio is close to the equity-to-debt ratio (constant
solvency ratio), the only difference being that it is the opposite, i.e., the numerator and denominator change
their places with each other. As a rule, if the value of the indicator does not differ much from the number 1,
then a company’s condition in terms of solvency is considered normal, the value close to 0.5 is considered
as good. It should be noted that the interpretation of the meaning of this indicator is highly dependent on the
industry in which the company operates. Let’s say that in industries that require large capital investments,
even a value of 2 can be considered as good.
In 2023, the debt ratio / coefficient of the Company was 0.27, compared to 0.39 in 2022. The debt ratio /
coefficient of the Group was 0.26 in 2023, compared to 0.38 in 2022. This indicator shows what proportion
of borrowed funds is used to form the assets of a company. A lower value of this indicator is considered to
be better because then a company is considered to be less risky.
As the Company had financial liabilities in 2023, the Company calculated the interest coverage ratio. Interest
service ratio is a financial indicator that compares a company’s EBIT profit with its interest expenses. This
coefficient indicates the ability of a company to redeem its debts. The lower this indicator is, the worse is the
situation of a company. The higher this ratio is, the easier it is for a company to cope with its financial
leverage. If the interest coverage ratio was close to or below 1, it would signal a critical situation for a
company. The interest ratio is calculated as follows:
Interest ratio = EBIT / Interest expense.
The interest (coverage) ratios of the Company and the Group for the year 2023 are higher than 30.
The Company’s operating expenses in 2023 accounted for (EUR 34.120 million) 12.23% from its turnover,
whereas in 2022 it accounted for (EUR 39.895 million) 15.2 % from its turnover. In 2023, the turnover of
the Company increased by 5.57 % and operating expenses grew by 14.5 %. Operating expenses mainly
consisted of remuneration expenses and marketing expenses. The Group’s operating expenses in 2023 (EUR
35.757 million) accounted for 12.86 % from its turnover, whereas in 2022 (EUR 41.422 million) it accounted
for 15.73 % from its turnover. In 2023, the sales of the Group increased by 5.55 %, whereas operating
expenses decreased by 13.68 % due to not fully used marketing tools.
Comparison of amounts and prices of raw milk purchased by ŽEMAITIJOS PIENAS, AB in 2023 and
2022
* The milk purchased is converted into a basic fat and protein content, using a specific coefficient
Purchase of raw milk (converted to
basic content*)
2023 2022
Change when comparing
2023 to 2022, %
Amount of purchased milk, thousand
tons
426 437 -2.52 %
Milk purchase price, EUR/t 310.6 416 -25.34 %
ŽEMAITIJOS PIENAS, AB
Registration number 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER, 2023
18
Dairy farming in Lithuania is one of the most important and priority branches of the country's agriculture,
which has not only economic, but also social significance, because the money received for milk constitutes
a significant part of the income received in agriculture, therefore ŽEMAITIJOS PIENAS, AB has been
paying a competitive price to milk producers for the production of higher quality milk than that determined
by the EU standard for many years. The average amount of purchased raw milk converted to basic indicators
in 2023 amounted to 426 thousand tons, which is -2.5% less than in 2022 (437 thousand tons in 2022).
The year 2023 in the Lithuanian raw milk market was complicated and full of challenges: increased prices
of fertilizers and diesel fuel, reduced harvest and more expensive fodder due to drought and prolonged winter,
lack of fodder, increasing environmental protection requirements for dairy farms, increased cost of milk and
other factors reduced the number of dairy farms and the number of cows kept in them. Also, the decrease in
the purchase of raw milk was promoted by the liquidation of dairy farms. The largest decrease in sales came
from farms keeping 1-5 cows and farms keeping 6-14 cows. Although the level of farm entrepreneurship
remains low, the number of dairy farms that sell milk is decreasing, but dairy farms are gradually getting
larger, the amount of milk produced from a cow is increasing, as well as the number of large dairy farms and
the share of milk sold by them is also increasing.
The average price of recalculated milk purchased in 2023 is 310.5 EUR/t, which is -25.34% lower than in
2022 (in 2022, the average price of recalculated milk purchased is 415.9 EUR/t). The market for dairy
products is characterized by large price fluctuations. Such large changes in the prices of dairy products were
caused by fluctuations in the demand and supply of dairy products. ŽEMAITIJOS PIENAS, AB operates on
the open market. Since it is export-oriented (more than half of all processed milk in the form of products is
exported), all market changes also affect the selling prices of Lithuanian dairy products, as well as the level
of milk purchase prices in Lithuania. Due to seasonality, in the fourth quarter of 2023, the average price of
raw natural milk (424.0 EUR/t) was 3.89% higher compared to the first quarter of 2023 (408.1 EUR/t), this
was influenced by the increase in protein and fat content indicators, the export markets also sent signs of
recovery.
For many years, ŽEMAITIJOS PIENAS, AB has based its activities with milk producers on honest and fair
partnership and promoted dairy farm owners who achieve the best milk quality indicators. In order to promote
the production of milk of the highest possible quality, in December of 2023, ŽEMAITIJOS PIENAS, AB
paid farmers an annual partnership bonus in the amount of EUR 879,382.42 for the natural milk sold in 2023.
The subsidiary company Šilutės Rambynas, ABF does not buy raw milk directly from dairy farms as it buys
raw milk for the production of its products from ŽEMAITIJOS PIENAS, AB.
In 2023, the sales of ŽEMAITIJOS PIENAS, AB Group amounted to EUR 279 million (EUR 278,004
thousand). This is an increase of 5,55% compared to the year 2022 (in 2022, the sales amounted to EUR
263,394 thousand). In 2023, the sales of the Company amounted to EUR 277 million (EUR 277,305
thousand), which is an increase of 5.57 % compared to the year 2022 (in 2022, the sales amounted to EUR
262,671 thousand).
ŽEMAITIJOS PIENAS, AB receives the largest share of income from Lithuania, which amounts to more
than half of all income (50.5% in 2023). The export countries with the highest turnover in 2023 included
Poland, Latvia, Estonia, Germany, Holland, Italy, Kazakhstan, USA.
The sales of ŽEMAITIJOS PIENAS, AB according to geographic segments (secondary segments) in 2023
and 2022:
ŽEMAITIJOS PIENAS, AB
Registration number 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER, 2023
19
Row
No.
Geographic
breakdown of
sales, thousand
euros
2023
Per cent
from total
revenue in
2023
2022
Per cent from
total revenue
in 2022
Change
when
comparing
2023 to
2022, per
cent
1 Lithuania 140,049 50.50% 139,953 53.28% 0.07%
2 EU countries 97,068 35.00% 87,165 33.18% 11.36%
3 Other countries 40,188 14.49% 35,553 13.54% 13.03%
4 Total: 277,305 100% 262,671 100% 5.57%
The sales of the companies of the Group according to geographic segments (secondary segments) in 2023-
2022:
Row
No.
Geographic
breakdown of sales,
thousand euros
2023
Per cent
from total
revenue in
2023
2022
Per cent
from total
revenue in
2022
Change
when
comparing
2023 to
2022, per
cent
1 Lithuania 139,220 50.08% 139,058 52.79% 0.12%
2 EU countries 97,931 35.23% 88,076 33.44% 11.19%
3 Other countries 40,853 14.69% 36,260 13.77% 12.67%
4 Total: 278,004 100% 263,394 100% 5.55%
AB ŽEMAITIJOS PIENAS exported its products to 47 countries in 2023. In the competitive struggle, we
successfully carried out development in the Polish market, introduced new protein curd snacks Mprotein,
which successfully conquered the hearts of residents of Poland. We are increasing sales and brand
development in Croatia. We have introduced PIK NIK cheese strings in Hungary, which are confidently
making their way in the snack category in the country. Buyers from the Baltic countries have met and already
appreciated the unique A2 milk. In order to gain a stronger foothold in the export markets, like every year
we have signed direct contracts with large retail chains, thus trying to ensure the highest level of satisfaction
of the end user needs, the adaptation of the product in the market, the possibility of direct cooperation with
the owners of the shelves. We are getting closer to the user, our buyer and the sales channels.
As the awareness of our brands and the number of sales channels and countries keep growing, we consistently
and constantly face the need to improve the processes of service provision, implement individual country
requirements for the product and its storage, initiate and implement advertising projects, i. e. we must
ŽEMAITIJOS PIENAS, AB
Registration number 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER, 2023
20
constantly strengthen our management, marketing, technological, personnel management, financial law, and
other competencies.
The Company's goal is to develop its universal brands with minimal adaptation to export markets. With such
goals we constantly analyze markets and available resources in a global context. Thus, we are faced with
considerable challenges: to stand out in the context of competitors, to create exceptional prices for market
users, to increase the frequency of shopping in each country individually, taking into account the maturity of
the market, traditions, and the level of competition.
The distribution of products sold by ŽEMAITIJOS PIENAS, AB in 2023-2022 by groups of products was as
follows:
Row
No.
Sales by groups of
products,
thousand euros
2023
Per cent
from total
revenue in
2023
2022
Per cent
from total
revenue in
2022
Change
when
comparing
2023 to
2022, per
cent
1
Fermented and
processed cheeses
117,207 42.27% 103,613 39.45% 13.12%
2 Fresh dairy products 95,098 34.29% 88,320 33.62% 7.67%
3 Butter and spreads 27,783 10.02% 25,742 9.80% 7.93%
4 Dry dairy products 24,849 8.96% 25,419 9.68% -2.24%
5 Other 12,368 4.46% 19,577 7.45% -36.82%
6 Total: 277,305 100% 262,671 100% 5.57%
The distribution of products sold by ŽEMAITIJOS PIENAS, AB Group in 2022 and 2023 by groups of
products was as follows:
Row
No.
Sales by groups of
products,
thousand euros
2023
Per cent
from total
revenue in
2023
2022
Per cent
from total
revenue in
2022
Change when
comparing
2023 to 2022,
per cent
1
Fermented and processed
cheeses
118,465 42.61% 105,934 40.22% 11.83%
2 Fresh dairy products 95,584 34.38% 88,851 33.74% 7.58%
3 Butter and spreads 27,783 10.00% 25,742 9.77% 7.93%
4 Dry dairy products 24,849 8.94% 25,419 9.65% -2.24%
ŽEMAITIJOS PIENAS, AB
Registration number 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER, 2023
21
5 Other 11,323 4.07% 17,448 6.62% -35.10%
6 Total: 278,004 100% 263,394 100% 5.55%
Other products include sales of raw milk, raw cream, curds, water products and ice cream. Comparing 2023
with 2022, the sales of other products decreased by 36.82%. This was due to the dencrease in the price of
raw cream.
Compared to 2023 with 2022 the turnover of sales of fresh dairy products increased by 7.67%, which was
influenced by the increase in the average selling price of cottage cheese and glazed cheese (in 2023, compared
to 2022, the average selling price increased by 9.76%).
Comparing 2023 with 2022, the sales turnover of butter and spreads increased by 7.93%. This was a result
of the increase in demand of butter (compared to 2023, in 2022 the demand for butter and grease spreads
increased by 27.17%).
The sales turnover of dry dairy products decreased by 2.24%, this was as a result of the decrease in the
average sales price (compared to 2023, in 2022 the average sales price decreased by 21.12%).
Overview of Šilutės Rambynas, ABF activities
The main activity of the company is production of dairy products. Moreover, the company provides rental,
transportation, storage, maintenance of milk purchasing points and other services.
The company does not buy raw materials directly from producers - the milk required for production is
purchased from ŽEMAITIJOS PIENAS, AB. The purchase price of the raw material is determined according
to the formula: milk price plus collection costs of ŽEMAITIJOS PIENAS, AB without transportation costs.
In 2023 5,042 tons of natural milk were purchased, while in 2022 – 5,704 tonnes. The decrease is 662 tonnes
or 11.6 %. The average price of purchased milk recalculated according to the basic parameters was 319.3
EUR/t, while in 2022 – 427.7 EUR/t, so the price of raw milk increased by 108.4 EUR/t or 25.3 % during
the Period. The amount of raw material purchased is still significantly lower than the pre-pandemic level.
This is influenced by the reduced demand for the company's products.
Šilutės Rambynas specializes in the production of cheese. Production volumes in 2022 and 2023 are shown
in the diagram below:
ŽEMAITIJOS PIENAS, AB
Registration number 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER, 2023
22
During 2023, 4,543 tons of cheese were produced, or 582 tons (11.4%) more compared to 2022 period. The
decrease in production volumes was caused by the suspension of the production of fermented cheeses and
cheese products for a period of four months due to reconstruction. Also the big impact was caused in 2020
when a new half-hard fermented cheese production line was put into operation at AB ŽEMAITIJOS PIENAS
factory. For this reason, the production of fermented cheeses (Gouda and Tilsit) continued to decrease in
2023 - by 50%, from 558 to 279 tons. Fermented cheese production decreased by 415 tons or 34.4% in 2023.
The production of cheese strings increased by 3.6 percent in the comparative period. from 2,924 t in 2022 to
3,027 tons in 2023. Production of other cheeses creased by 1.4% or 6 tons. In both 2022 and 2023 all the raw
material was processed into cheeses.
Most of the products produced in Šilutės Rambynas are sold through the parent company - ŽEMAITIJOS
PIENAS, AB. During 2023, production was sold for EUR 33,338 thousand or 14.3 % less than during the
2022, when sales amounted to EUR 38,896 thousand. The decline in sales was determined by the significant
decrease in the prices and the production (due to the 2023 performed reconstruction) of fermented cheese
and cheese products. Also the decline in sales was determined by the decrease of raw cream prices. In the
comparable period, the average price of raw cream with 40 % fat content decreased from 3,061 Eur / ton to
2,204 Eur / ton.
The structure of sales by markets is graphically represented:
Whereas the main sales are carried out through ŽEMAITIJOS PIENAS, AB, the company does not invest
separately in marketing. In 2023 insignificant amounts were allocated to the development of sales in the
markets of the Middle East.
For the same reason that large sales are carried out through the parent company, the company is not directly
exposed to significant risks due to market uncertainty and customer reliability. In order to manage the risk of
direct sales, customers are subject to a prepayment system for production or a deferral of payments, but
transactions are prohibited within the insurance limit set by the trade credit insurance company.
Type of risks, their factors and uncertainties, risk management
Information on the extent of risk and risk management, current and potential types of risks, uncertainties,
risk mitigation measures and the internal control system implemented in the company is provided in the
Company’s Governance Report.
AB "ŽEMAITIJOS PIENAS"
88%
Lithuania kt.
3%
Latvia
6%
other ES
countries
1%
other countries
2%
2021 m.
ŽEMAITIJOS PIENAS, AB
Registration number 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER, 2023
23
Financial and other risks and their management have also been disclosed in Chapter 29 “Financial Risk
Management” of the Explanatory Notes to the Annual Audited Financial Statements for the year 2023.
Also should be mentioned, that the Company and the Group companies have Activity and Product and
Management Liability Insurance. All assets of the Company and Group companies, including stocks, are
insured against all risks, including damage caused by overvoltage fluctuations.
The impact of the war on the Company's activities
In 2022 February 24 the war between Russia and Ukraine disrupted plans to increase sales to Ukraine and
Belarus. AB ŽEMAITIJOS PIENAS' sales to these countries before the start of the war amounted to about
2.5% of all sales. The Company and the Group conducted sales to these countries safely, i.e. unloaded
products only in case of advance payment or having Credit insurance limits. As of 12/31/2023, the Company
and the Group have no receivables from buyers located in those countries, so there is no impairment of
receivables. The period of 2023 was very dynamic due to the ongoing war in Ukraine and the start of the war
in Israel, in any case, the Company managed not to lose its position and brand awareness in the markets
where the Company was active before the war, not only that, in Ukraine the Company managed to conclude
contracts with new retail chains and even increase sales to this country. After the start of the war in Israel,
sales temporarily decreased due to security restrictions imposed in the country, but at the end of the year the
situation began to stabilize and return to the former pre-war situation. Sales to Ukraine in 2022 accounted for
1.2% of all sales. Sales are made with an INVEGA export credit guarantee for each buyer or prepayment.
At the end of the year, the Company and the Group did not have any balances of production exclusively
intended for the above-mentioned countries.
AB "ŽEMAITIJOS PIENAS" did not have any real estate in these countries, therefore it does not assess any
decrease in the value of long-term assets.
The management of the Company and the Group closely monitors the situation in Ukraine and imposed
sanctions in order to comply with them. The current political situation does not affect the ability of the
Company and the Group to continue its activities.
Business plans and forecasts of the Companies of the Group
The upcoming year is very important and symbolic for the Company, as it will mark the anniversary of one
hundred years of experience in the production of dairy products (hereinafter referred to as the Centenary). So
already in 2023, the Centenary communication was started - the promotion of the TOP 5 brands of
ŽEMAITIJOS PIENAS in Lithuania ‘Top products to your home all year long’ was carried out, in which
such brands as Džiugas, Magija, Pik-Nik, Rambynas, and Tichė were involved. This promotion increased the
awareness of the said brands and carried the message of the important anniversary.
The past years have been full of many awards, projects, and events, thus the Company is entering the year
2024 with great impatience, new ideas, and goals, which are special and symbolic as the Centenary of
ŽEMAITIJOS PIENAS, AB approaches.
The managers of the Company, while considering the operational plans and strategy, proved that the
Centenary teaches: courage, truth, and mutual respect are ageless. The goal of the Company and companies
of the Group is to develop their universal brands with minimal adaptation to export markets. With such goals
in mind, we constantly analyse markets and available resources in a global context. Thus, we are faced with
significant challenges, i.e. stand out in the context of competitors, create exceptional prices for market
consumers, increase the frequency of shopping in each country individually, while taking into account the
maturity of the market, traditions, and the level of competition. Nevertheless, we believe in what we do. We
are growing sustainably, together with Partners, markets, Consumers, and employees of our Company, who
ŽEMAITIJOS PIENAS, AB
Registration number 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER, 2023
24
create and change our everyday life. The Company sought and will seek to optimally use the opportunities
for rapid expansion in a competitive environment.
The main goal was and is - the direct sale of the products produced by the Company and the Group to the
shelves of strategic foreign countries with their own trademarks and brands, and that the products of the
Company and the Group are of the highest quality in their segment and best meet the customer's expectations,
so that the customer has the opportunity to choose health-friendly and organic food. The products produced
and sold by the company make Lithuania and the Samogitian region famous in various countries of the world.
The purpose of the company is to protect and preserve what has been created, to look for ways, to do
something different that has not been tried yet.
The long-term goals of AB ŽEMAITIJOS PIENAS group companies are to become and stay strong,
competitive, technically modern, reliable, attractive companies for investors, so that the Company's return to
shareholders would be one of the highest among equal companies. To find and maintain the most profitable
markets for our products in the European Union, the Baltic states and other countries of the world by giving
priority to the closest markets, as well as the markets of Germany, France, England, and Hungary. To make
maximum possible use of existing production capacities. By continuaslly carrying studies of the consumer
market, consumer needs for new products, tastings, with the help of scientists and new scientific methods,
the aim is to improve and create new dairy products. In addition, the Company's goal is to get as close as
possible to consumers by directly supplying and selling goods to consumers.
The essential current objectives and plans of the Company are as follow:
to purchase milk in accordance with market conditions but not at a higher price than that paid for raw
milk by other market participants in Lithuania and purchase high-quality milk only;
encourage and assist farmers in improving milk quality;
to increase sales at the prices favourable to the Company;
to focus on the sales of higher value-added products on export markets;
whatever we do, always remain a reliable, socially oriented and responsible company.
The lack of skilled labour forces the Company to focus on human resources, so special attention is paid to
team building, development of competence and qualification, formation of special skills, revision, and
improvement of motivation systems.
Regularly changing and dynamic market of the sale of products and the purchase of raw milk, as well as
other factors, force the Group to refrain from publishing the turnover and profit forecasts for the upcoming
activity period.
In the face of volatile production prices, Šilutės Rambynas plans to pay more and more attention to the search
for new export markets and establishing a foothold in the existing ones. Šilutės Rambynas will give priority
to further modernization, reduction of energy, material and labor resources, optimization of operations,
production of profitable products.
Priority will be given to increasing the production and improving the quality of Pik-Nik cheese sausages,
searching for new markets.
In 2024, it is planned to allocate up to 2.0 million for new acquisitions. Eur. The largest investments are
planned for equipment that will allow to increase the production of Pik-Nik cheese strings and at the same
time with the aim of improving the quality of production, reducing the influence of the human factor on
production and reducing the increasingly expensive labor costs. Investments will also be made in
ŽEMAITIJOS PIENAS, AB
Registration number 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER, 2023
25
modernization of raw milk processing, improving work and conditions for employees, improving and
modernizing existing equipment, repairing premises and replacing old, worn-out equipment with new ones.
Information of research and development activities of the Company
The company continues to pay great attention to justifying the expectations of consumers by creating
products focused on certain functionality. According to research data, lactose intolerance is characteristic of
32% of the Lithuanian population. Also, some consumers are allergic to milk protein - casein.
Taking this into account, we were the first in Lithuania to present a unique product to the market – A2 MILK
WITHOUT LACTOSE, which is suitable for consumers who previously wanted to but could not consume
it.
We carried out genetic tests, selected herds of cows that have only a special combination of a2a2 milk protein
genes, consulted with nutritionists, EU and LT scientists. Next, in the technological process of production,
we additionally split the lactose and got the following result: a product suitable for lactose-intolerant, casein-
allergic consumers.
Various protein-enriched products are establishing themselves in the range of food products. According to
nutrition experts, protein products have become popular due to people’s more responsible attitude towards
nutrition and a healthy lifestyle. In response to this, the company introduced a new product to the market:
glazed cottage cheese bars with collagen available in three flavours.
The company's technologists are constantly doing internships in foreign countries, participating in
exhibitions, consulting with EU consultants on various technological and technical issues, raising their
qualifications at trainings and seminars. The specialists are constantly looking for sustainable technologies
and innovative production methods.
The company is constantly looking for ways to ensure constant growth of income and better implementation
of operational efficiency. The Company plans to allocate up to EUR 18 million for investments in 2024. The
investments are planned for the saving of energy resources, the acquisition of new equipment, the renewal
and automation of production equipment, the development of technologies for renewable energy sources,
and the creation of new processes.
The Company and its subsidiary (jointly or separately) continuously make investments and seek ways to
ensure continuous growth of income and improvement of activity effectiveness. In 2023 the Company plans
to allocate up to 14 million euros for investments. All investments are planned to reduce energy costs, for the
acquisition of new equipment, the renewal and automation of production equipment, and the development of
renewable energy source technologies and for the development of new processes.
The Company's goal is to ensure the highest quality standards, the production of products that meet and create
the greatest added value and their supply to the consumer. Therefore, the Company's product development
technologists, in cooperation with Lithuanian scientists, as well as with experts from foreign countries, create
new products that meet the needs of the modern consumer. Looking for new innovative production
technologies, taking into account the concept of sustainability and circular production, looking for more
sustainable raw materials and a more sustainable way of producing products. The further use of recycled
packaging materials and by-products (formed after the technological process) is evaluated. We continue to
search for innovative technologies to obtain the added value of products, focusing on the support of a certain
functionality of the human body. The Company's specialists are constantly doing internships in foreign
countries, participating in exhibitions, conferences, raising their qualifications in training and seminars.
Laboratory tests of products are constantly carried out at the National Institute of Food and Veterinary Risk
Assessment, Eurofins, Hamilton, KTU MI, VU, LSMU Veterinary Academy, etc. in laboratories. The
ŽEMAITIJOS PIENAS, AB
Registration number 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER, 2023
26
research is aimed at the improvement of the products of the existing product basket and the search for
functional properties.
Activities of the Companies of the Group in the field of environmental protection
ŽEMAITIJOS PIENAS, AB, a company that produces and sells dairy products, which, in accordance with
the criteria laid down in the Regulations for the issue, amendment and revocation of Integrated Pollution
Prevention and Control Permits, refers to companies that use the equipment subject to a special permit for
the performance of its activities in accordance with the above rules. Still in 2006 the Company received an
Integrated Pollution Prevention and Control Permit, which is not limited in time, but is the subject to
adjustment due to changes. The Company does not have a negative impact on the environment, which should
be mitigated by immediate measures, however, the Company constantly monitors its performance indicators,
plans and implements the latest technologies that would reduce production and operating costs and energy
costs, and improve the Company’s environmental condition in every way.
The company strives to save as much as possible and rationally use natural resources by various means. The
company is well aware that, acting irresponsibly, its activities can cause great damage to nature, and only the
complex use of economic, legal, technical and biological measures can guarantee the rational use of natural
resources now and in the future, therefore the impact on the environment is controlled according to
coordinated monitoring programs. When the company expands or renews facilities and technologies, an
environmental impact assessment is carried out to ensure that the Company's development does not exceed
the permitted environmental norms. Being socially responsible and taking care of the environment and its
preservation, the company invests in saving energy, improving business management processes, and tries to
allocate funds for other activities as much as possible.
In 2022, we used independent auditors to conduct an audit of the energy consumption of technological
processes and devices, the conclusions of which will be used to determine the need for projects in the future,
reducing the use of energy resources. The Company constantly implements investment projects, during which
it implements new modern technologies that allow more efficient use of renewable energy resources, reduce
the amount of pollutants released into the environment, and apply other environmental protection measures.
One of the priority areas of sustainability is the impact on the environment, the Company constantly monitors
its performance indicators, plans and implements the latest technologies that would reduce production and
operational costs and energy costs, conserve natural resources and improve the Company's environmental
status in every way.
In our activities, we monitor the CO₂ footprint and aim to eliminate or significantly reduce the emission of
such emissions as sulfur dioxide, solid particles or nitrogen oxides. The monitoring of pollutant emissions is
carried out in accordance with the environmental monitoring programs of business entities approved by the
responsible institutions. in 2022 Planned and unplanned inspections by inspectors of the Department of
Environmental Protection were carried out in the company, during which not a single violation was found.
In the future, AB ŽEMAITIJOS PIENAS will continue to make every effort to become an increasingly
environmentally friendly company. It is expected that it will be possible to use more energy obtained from
renewable sources in its activities and to reduce the amounts of pollutants emitted into the environment.
During the year 2022, the amount of energy and renewable resources used during the activities of the group
of companies is listed in the social responsibility and sustainability report.
ABF "Šilutės Rambynas" has been paying great attention to environmental protection for several years, and
the most important goal is to reduce production waste and conserve natural resources:
ŽEMAITIJOS PIENAS, AB
Registration number 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER, 2023
27
after concentrating the whey, the remaining whey water is purified by the membrane system to water
suitable for washing equipment, thus reducing the amount of water and wastewater used;
for the management of industrial wastewater, the company has installed wastewater accumulation
and mixing capacities, which allow to avoid instant pollution and to control the quality of wastewater
discharged to the Šilute water treatment plant;
highly concentrated wastewater is collected in a separate container and, depending on the volume of
production, it is taken to Tytuvenai 1-2 times a week and delivered to biogas producers.
Aspects on management of employees and human resources of the Companies of the Group
The main assets of the Company are its employees, the most important link in achieving goals of the
Company. In 2023, the annual turnover of employees increased to 12.08% (according to 2022 - 9.61%). The
Company's personnel policy is focused on the formation of teamwork, continuous professional development,
optimal use of work resources, recruitment and training of competent employees.
During the reporting period, a lot of attention was paid to investigating the job satisfaction of already
employed employees, attracting young specialists. To increase youth interest in the Company.
In the employee job satisfaction survey, 481 employees of the Company were interviewed, the insights,
conclusions and implementation plan of the survey were presented to the Board of the Company and
presented separately to departments and divisions according to relevance. In order to improve the results and
trace the change in the job satisfaction indicator, an identical study will be conducted in 2024, and the results
obtained will be compared and analysed.
Taking into account the prevailing average age of employees and in order to ensure their turnover, a lot of
attention is paid to youth and their attraction. In 2023, organized and participated in the German Language
Day, the youth forum "Education for a career in the direction of STEAM", the opportunity exhibition "Telšiai
- Jaunimui. Discover, know, find out". The long-term "Pušelė" project, which promotes employment and
entrepreneurship of the youth of the Telšiai district, has been implemented.
The Curators and Mentors Project, which started in 2022 and was in progress during the reporting period,
was successfully implemented. In the course of this project, employee turnover decreased, the rate of
adaptation during the trial period increased, and the number of employees who left after the first month of
work decreased.
Despite ongoing new projects, employees are also encouraged on the occasion of seniority and birth
anniversaries, benefits upon the birth of a child, marriage, recommending a person for employment, obtaining
a higher education diploma, having 3 (three) or more children and/or preparing for the start of a new academic
year. Children of the employees are congratulated on the occasion of the holidays and former, long-term
employees who worked in the Company until retirement age are not forgotten.
ŽEMAITIJOS PIENAS, AB
According to the data available by 31 December 2022, AB “ŽEMAITIJOS PIENAS” had 1288 employees.
According to the data available by 31 December 2022, AB “ŽEMAITIJOS PIENAS” had 1271 employees.
According to the data available by 31 December 2021, the Company had 1249 employees.
According to the data available by 31 December 2020, the Company had 1242 employees.
According to the data available by 31 December 2019, the Company had 1210 employees.
Comparing to the previous year the number of employees slightly increased in almost 1 %.
ŽEMAITIJOS PIENAS, AB
Registration number 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER, 2023
28
Groups of ŽEMAITIJOS PIENAS, AB employees by education (2021, 2022, 2023):
Number of employees 31-12-2021 31-12-2022 31-12-2023
With university education 175 177 181
With college degree 305 286 270
With vocational education 358 384 395
With secondary education 341 345 358
With unfinished secondary
education
70 79 84
Is viso: 1249 1271 1288
Number of ŽEMAITIJOS PIENAS, AB employees by their corresponding groups and their average wages
in EUR for corresponding employee work groups make up:
12/31/2021 12/31/2022 12/31/2023
Number of
employees
by groups
Number of
employees
Average
wage, EUR
Number of
employees
Average
wage, EUR
Number of
employees
Average
wage, EUR
Director 6 7314 6
7710
7 7870
Specialists 316 2453 309 2890 311 2832
Workers 927 1466 956 1769 970 1819
In total:
1249
1271
1288
College, 270
University, 181
Lower
secondary;
77
Primary;
7
Vocational, 395
Secondary, 358
Employee distribution according to education
(Diagram 1)
ŽEMAITIJOS PIENAS, AB
Registration number 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER, 2023
29
Number of employees by age groups 2023:
Šilutės Rambynas, ABF
At the end of the period, the company had 157 employees, their number increased by 1 employer (0.6 %)
compared to 2022. Changes of groups of employees by education are provided in the Table below:
Education of employees 31-12-2023 31-12-2022
With Master’s degree 5 5
With University Degree 19 21
With College Degree 35 35
With Vocational Education 55 61
With Secondary Education 33 25
With unfinished Secondary Education
10 9
In total:
157 156
The average salary during 2023 was 1,943 EUR/month or 14,5% lower than in 2022. Changes in wages by
employee groups are given in the Table below:
Number of employees by
groups
31-12-2023 31-12-2022
Number of
employees
Average wage,
EUR/month
Number of
employees
Average wage,
EUR/month
Director 6 4075 5 3375
Specialists 23 2675 23 2277
7
149
328
292
351
155
6
0
100
200
300
400
Iki 19
metų
20-29
metų
30-39
metų
40-49
metų
50-59
metų
60-69
metų
virš 70
metų
Number of employees according to age groups
(diagram 4)
ŽEMAITIJOS PIENAS, AB
Registration number 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER, 2023
30
Workers 128 1712 128 1524
Iš viso: 157 1943 156 1697
The Company seeks to develop and maintain long-term relationships with its employees, especially when the
labour market is not satisfying - the lack of highly qualified employees. Therefore, employees are constantly
encouraged to develop in the professional field. The Company employees could improve their knowledge
and skills in seminars and courses. There are training programs that train and certify specialists, production
workers, technicians, operators, locksmiths, brigades, masters, and masters.
Transactions with associated parties
Transactions of associated parties during the first half of the current financial year that have a material effect
on the financial position or performance of the company and / or group of companies during that period,
including the amounts of those transactions, are reported in Explanatory Note for the year 2023.
Legal disputes
The company has submitted a lawsuit to the court regarding the award of an insurance payment in
the amount of EUR 248,028.62 from the insurance company “Compensa Vienna Insurance Group”.
On 1 July 2021, when a large amount of precipitation fell, the roof of one building belonging to the
Company was completely damaged – broken: the supporting structures of the building and the roof
covering were damaged. The company suffered a loss of EUR 303,993.42 (excluding VAT) due to
the insured event. The insurance company only partially satisfied the Company’s claim to pay the
insurance benefit by paying the Company an insurance benefit of EUR 55,964.80. The insurance
company refused to cover the rest of the damage suffered by the Company. In view of this, the
Company, defending its interests, was forced to apply to the court with a claim for the award of an
insurance payment. The hearing of the case is still going on;
Other cases in which the Company would be a participant in civil, criminal or administrative
proceedings and which could in any way fundamentally affect the Company’s financial situation
have not been initiated at this time.
Regulated information published by the Company
During the reporting period, the Company submitted 13 notices via the information system of the Vilnius
Stock Exchange (AB NASDAQ OMX Vilnius) (on the website). All facts (events) are stored in the Central
Regulated Information Database, as well as this information is available on the Company’s website
www.zpienas.lt. Public notices shall be published in accordance with the procedure established by legal acts.
Notices on convocation of the General Meeting of Shareholders and other material events are published in
accordance with the procedure established by the Law on Securities in the Central Regulated Information
Database www.crib.lt and on the Company’s website www.zpienas.lt.
The most important events of the reporting period were published of 2023:
Date The most important notices of the reporting period
2023-09-29
ŽEMAITIJOS PIENAS AB Group half-year information for the I-st half of
2023
OTHER INFORMATION
ŽEMAITIJOS PIENAS, AB
Registration number 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER, 2023
31
Information related to the Corporate Governance Code of the Companies.
During the reporting period there were no significant changes related to compliance with the Corporate
Governance Code of the Companies. Other information related to compliance with the Corporate Governance
Code is provided in consolidated annual report of the Company for 2022, in the annex to this annual report -
in the report on compliance with the Governance report.
The most important post-reporting events
The Court of Appeal of Lithuania examined the civil case according to the appeal of ADT Sp. z. o. o., the
company registered in the Republic of Poland, the defendant (hereinafter - the Defendant) and on 27 February
2023, appealing the decision of 19 September 2023 of the Šiauliai Regional Court in civil case according to
the lawsuit of the Company against the Defendant for damages and decided to reject the Defendant’s appeal
and leave the decision of 19 September 2023 of the Šiauliai Regional Court unchanged.
The Company reminds that, due to the Defendant’s improper performance of contractual obligations, it filed
a lawsuit in the Šiauliai Regional Court for awarding of damages in the amount of EUR 630,521.00 from the
Defendant. Šiauliai Regional Court in its decision of 19 September 2023 satisfied the lawsuit in full and
awarded compensation of losses in the amount of EUR 630,521.00 from ADT Sp. z o. o. in favor of the
Company.
2023-09-20
Financial results of ŽEMAITIJOS PIENAS AB for the first six months of 2023
2023-09-19
New wording of the Articles of Association of ŽEMAITIJOS PIENAS, AB was
registered
2023-07-25
Decisions made by extraordinary general meeting of shareholders of
ŽEMAITIJOS PIENAS, AB
2023-07-04
Regarding the Convening of the Extraordinary General Meeting of
Shareholders of the Company
2023-06-19 Election of members of the Audit Committee of ŽEMAITIJOS PIENAS, AB
2023-06-12
ŽEMAITIJOS PIENAS, AB has agreed with bank on the loan of 12 millions
135.2 thousand euros
2023-04-21 Annual information of ŽEMAITIJOS PIENAS, AB
2023-04-21
Decisions made by Ordinary General Meeting of Shareholders of
ŽEMAITIJOS PIENAS, AB
2023-04-20
Update: Regarding alternative draft decision on agenda item 6 of the general
meeting of shareholders, to be held on 21 April 2023, related to establishment
of the reserve for the purchase of own shares and the determination of the
procedure
2023-03-30
Regarding the convening of the Ordinary General Meeting of Shareholders of
ŽEMAITIJOS PIENAS, AB
2023-03-16
Unaudited financial results of ŽEMAITIJOS PIENAS, AB group business
activity during 2022
2023-02-23
ŽEMAITIJOS PIENAS, AB concluded a transaction for the acquisition of
wind power plants
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
STATEMENTS OF FINANCIAL POSITION
FOR THE YEAR ENDED 31 DECEMBER, 2023
(All amounts in EUR thousands unless otherwise stated)
32
The Group | The Company | ||||
| As at 31 | As at 31 | As at 31 | As at 31 | ||
| Notes | December | December | December | December | |
ASSETS | 202 3 | 202 2 | 202 3 | 202 2 | |
Non - current assets | |||||
Intangible assets | 5 | 144 | 131 | ||
Property, plant and equipment | 5 | 58.868 | 52.113 | ||
Investment property | 6 | 2.468 | 2.670 | ||
Right-of-Use assets | 7 | 1.367 | 1.844 | ||
Investments in subsidiaries and associates | 1 | 3.150 | 3.150 | ||
Loans granted | 8 | 1.400 | 1.645 | ||
Other financial assets | - | 126 | |||
Deferred income tax asset | 27 | 395 | 495 | ||
| Total non-current assets | 67.792 | 62.174 | |||
Current assets | |||||
Inventories | 9 | 48.225 | 66.208 | ||
Prepayments | 388 | 259 | |||
Trade accounts receivable | 10 | 23.235 | 23.307 | ||
Other accounts receivable | 11 | 1.636 | 3.787 | ||
Cash and cash equivalents | 12 | 15.905 | 1.064 | ||
Total current assets | 89.389 | 94.625 | |||
| TOTAL ASSETS | 157.181 | 156.799 | |||
| EQUITY AND LIABILITIES | |||||
| Capital and reserves | |||||
Share capital | 13 | 12.104 | 12.104 | ||
Own shares ( - ) | 13 | ( | ( | (389) | (389) |
Legal reserve | 13 | 1.403 | 1.403 | ||
Other reserves | 13 | 10.200 | 11.600 | ||
Retained earnings | 92.020 | 70.753 | |||
| Equity attributable to equity holders | 115.338 | 95.471 | |||
| of the Company | |||||
| Non-controlling interest | 16 | - | - | ||
| Total Equity | 115.338 | 95.471 | |||
| Non-current liabilities | |||||
| Grants received | 14 | 2.175 | 2.428 | ||
| Loans received | 19 | 7.041 | 5.750 | ||
| Obligations under finance lease | 18 | 1.126 | 1.617 | ||
| Deferred Corporate income tax liability | - | - | |||
| Long term provision for defined employee benefits | 15 | 3.669 | 3.728 | ||
| Total non-current liabilities | 14.011 | 13.523 | |||
| Current liabilities | |||||
| Loans received | 19 | 2.933 | 20.735 | ||
| Obligations under finance lease | 18 | 796 | 917 | ||
| Trade accounts payable | 20 | 15.751 | 19.671 | ||
| Income tax payable | 2.225 | 511 | |||
| Accrued expenses and other current liabilities | 15, 21 | 6.127 | 5.971 | ||
| Total current liabilities | 27.832 | 47.805 | |||
| Total liabilities | 41.843 | 61.328 | |||
| TOTAL EQUITY AND LIABILITIES | 157.181 | 156.799 |
The accompanying explanatory notes are an integral part of these consolidated and Company‘s financial
statements.
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER, 2023
(All amounts in EUR thousands unless otherwise stated)
33
The Group | The Company | ||||
| Notes | 2023 | 2022 | 2023 | 2022 | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | 22 | 277.305 | 262.671 | ||
SALES | 22 | ||||
Cost of sales | ( | ( | (219.987) | (216.930) | |
GROSS PROFIT | | 57.318 | 45.741 | ||
Operating expenses | 23 | ( | ( | (34.120) | (39.895) |
Other operating income and expenses | 24 | 209 | 275 | ||
PROFIT (LOSS) FROM OPERATIONS | 23.407 | 6.121 | |||
Financial income and expenses | 25 | ( | ( | (401) | (104) |
PROFIT (LOSS) BEFORE TAX | | 23.006 | 6.017 | ||
Income tax benefit (expense) | 26 | ( | ( | (3.338) | (557) |
| NET PROFIT (LOSS) | 19.668 | 5.460 | |||
| ATTRIBUTABLE TO: | |||||
| Equity holders of the Company | | 19.668 | 5.460 | ||
Non -controlling interest | | ( | - | - | |
19.668 | 5.460 | ||||
| Basic and diluted earnings per share | 17 | 0,47 | 0,13 | ||
| (EUR) | |||||
Other comprehensive income (loss) not to be reclassified to profit or loss in subsequent periods | |||||
| Actuarial gains (losses) from long term | | ( | 199 | (446) | |
| provision for defined employee benefits, less | |||||
deferred income tax | |||||
Net other comprehensive income (loss) not to be reclassified to profit or loss in subsequent periods | | ( | 199 | (446) | |
Total comprehensive income (loss) for the year, net of tax | 19.867 | 5.014 | |||
| ATTRIBUTABLE TO: | |||||
| Equity holders of the Company | 19.867 | 5.014 | |||
Non -controlling interest | | ( | - | - | |
| | 19.867 | 5.014 |
The accompanying explanatory notes are an integral part of these consolidated and Company‘s financial
statements.
ŽEMAITIJOS PIENAS AB
Company code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
STATEMENTS OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR, in thousands, unless otherwise stated)
34
| Equity | Non- | Total | ||||||
| The Group | Share | Own shares | Legal | Other | Retained | attributable to | controlling | equity |
| capital | (-) | reserve | reserves | earnings | equity holders | interest | ||
of the Company | ||||||||
| Balance as of 31 December 2021 | ( | |||||||
| Net profit | ( | |||||||
| Other comprehensive income | ( | ( | ( | |||||
| Total comprehensive income | ( | |||||||
| Acquisition of own shares | ( | ( | ( | |||||
| Transfer to/from reserves | ( | |||||||
| Used of reserves | ( | |||||||
| Authorized capital increase-decrease | ( | ( | ||||||
| Balance as of 31 December 2022 | ( | |||||||
| Net profit | ||||||||
| Other comprehensive income | ||||||||
| Total comprehensive income | ||||||||
| Acquisition of own shares | ||||||||
| Transfer to/from reserves | ( | |||||||
| Used of reserves | ( | |||||||
| Authorized capital increase-decrease | ||||||||
| Balance as of 31 December 2023 | ( |
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
STATEMENTS OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
35
The Company
Share
capital
Own
shares
(
-
)
Legal
reserve
Other
reserves
Retained
earnings
Total equity
Balance as of 31 December
20
21
13.449
(8.151)
1.403
14.250
69.895
90.846
Net profit -
- -
-
5.460
5.460
Other comprehensive income -
- -
-
(446)
(446)
Total comprehensive income -
- -
-
5.014
5.014
Acquisition of own shares -
(389) -
-
-
(389)
Transfer to/from reserves -
- -
1.600
(1.600)
-
Used of reserves -
- -
(4.250)
4.250
-
Authorized capital increase-
decrease
(1.345)
8.151 -
-
(6.806)
-
Balance as of 31 December
202
2
12.104
(389) 1.403
11.600
70.753
95.471
Net profit -
- -
-
19.668
19.668
Other comprehensive income -
- -
-
199
199
Total comprehensive income -
- -
-
19.867
19.867
Acquisition of own shares -
- -
-
-
-
Transfer to/from reserves -
- -
200
(200)
-
Used of reserves -
- -
(1.600)
1.600
-
Authorized capital increase-
decrease
-
- -
-
-
-
Balance as of 31 December 2023 12.104
(389) 1.403
10.200
92.020
115.338
The accompanying explanatory notes are an integral part of these consolidated and Company‘s financial statements
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
CASH FLOW STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
36
The Group | The Company | ||||
Cash flow s to operating activities | Notes | 2023 | 2022 | 2023 | 2022 |
Profit (loss) for the period | 19.668 | 5.460 | |||
| Adjustments: | |||||
Depreciation and amortization | 5,6 | 5.545 | 5.388 | ||
Amortization of grants received | 14 | ( | ( | (253) | (255) |
Depreciation right-of-use assets | 7 | 705 | 723 | ||
Gain (loss) on disposal and write offs of non-current assets | ( | 4 | (62) | ||
Decrease (increase) in deferred tax asset | 27 | ( | 100 | (835) | |
Impairment (reversal) of accounts receivable | 10 | 532 | 104 | ||
Net financial expenses (income) | 427 | 396 | |||
Impairment (reversal) of inventories to net realizable value | 9 | ( | (2.441) | 3.546 | |
Elimination of non-cash items | ( | 325 | (8.596) | ||
| Net cash flows from ordinary activities before changes in working | 24.612 | 5.869 | |||
capital | |||||
| Changes in working capital: | |||||
(Increase) decrease in inventories | 9 | ( | 20.424 | (28.698) | |
(Increase) decrease in trade receivables | 10 | ( | 180 | (3.927) | |
| (Increase) decrease in prepayments | ( | (129) | 13 | ||
| (Increase) decrease in other receivables | ( | 538 | (308) | ||
| (Decrease) increase in trade payables | 20 | ( | (3.920) | 567 | |
| (Decrease) increase other accounts payable | 21,22 | 2.651 | 1.271 | ||
| Decrease) increase income tax payables | ( | (666) | 445 | ||
| Net cash flows from operating activities | ( | 43.690 | (24.768) | ||
| Cash flows from (to) investing activities | |||||
| (Acquisition) of intangible assets and property, plant and equipment. | 5 | ( | ( | (12.215) | (5.356) |
| Proceeds on sale of property, plant and equipment | 100 | 436 | |||
| Acquisition of right-of-use assets | 7 | ( | ( | (219) | (1.762) |
| Repayment of loans granted | 8 | 2.484 | 1.181 | ||
Loans granted | 8 | ( | ( | (1.267) | (2.332) |
Interest received | 26 | 210 | 107 | ||
| Net cash flows (to) investing activities | ( | ( | (10.907) | (7.726) | |
| Cash flows from (to) financing activities | |||||
| (Acquisition) of own shares | 13 | - | 7.762 | ||
| Grants received | 14 | 56 | 61 | ||
| Financial lease payments | 18 | ( | (786) | 744 | |
| Loan received | 19 | 3.724 | 24.735 | ||
| Loan (payments) | 19 | ( | ( | (20.235) | (2.750) |
| Other financial (income) and expenses | 26 | ( | 44 | (42) | |
| Interest (payments) | ( | ( | (745) | (350) | |
| Net cash flows from (to) financial activities | ( | (17.942) | 30.160 | ||
| Net increase (decrease) in cash and cash equivalents | ( | 14.841 | (2.334) | ||
| Cash and cash equivalents at the beginning of the year | 1.064 | 3.398 | |||
| Cash and cash equivalents at the end of the year | 15.905 | 1.064 |
The accompanying explanatory notes are an integral part of these consolidated and Company‘s financial statements.
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
EXPLANATORY NOTES
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
37
| 31 12 2023 | 31 12 2022 | ||||
| Shareholder | Number of | Ownership | Number of | Ownership | |
| shares | % | shares | % | ||
Pažemeckas Algirdas | 14.063.152 | 33,69% | 14.063.152 | 33,69% | |
Pažemeckienė Danutė | 14.014.581 | 33,58% | 14.014.581 | 33,58% | |
AB Klaipėdos pienas, code 240026930, Šilutės pl. 33, 91107 | Klaipėda | 2.901.844 | 6,95% | 2.901.844 | 6,95% |
| UAB Baltic Holding, code 302688114. | 4.530.380 | 10,86% | 4.530.380 | 10,86% | |
Vilhelmo Berbomo g. 9 - 4, Klaipėda | |||||
Other shareholders | 6.005.523 | 14,39% | 6.005.523 | 14,39% | |
“Žemaitijos pienas” AB | 222.020 | 0,53% | 222.020 | 0,53% | |
| Total share capital, shares units | 41.737.500 | 100,00% | 41.737.500 | 100,00% |
| Ownership | Percentage | Cost of | Cost of | Net assets | |||
| Subsidiary | Registration | of the | in | investment | investment | as of 31 | Main |
| address | Group | consolidation | 2023 | 2022 | December | activities | |
| Šilutės | Klaipėdos g. | Cheese | |||||
| Rambynas | 3, Šilutė, | 87,82% | 87,82% | 3.150 | 3.150 | 13.014 | production |
ABF | Lietuva | and selling |
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
EXPLANATORY NOTES
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
38
2. BASIS FOR DRAWING UP FINANCIAL STATEMENTS
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
EXPLANATORY NOTES
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
39
Investments (Companies in separate statements)
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
EXPLANATORY NOTES
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
40
ADOPTION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS
In the current year, the Company and the Group has adopted all of the new and revised Standards and Interpretations
that are relevant to its operations and effective for accounting periods beginning on 1 January 2023
(a) The following standards, amendments and interpretations are mandatory for accounting periods beginning
on or after 1 January 2023
Amendments to IFRS 17 and IFRS 4: The deferral of effective dates for IFRS 17 and IFRS 9 for insurers
(published 25 June 2020, effective from 1 January 2023)
The amendments to IFRS 17 are effective, retrospectively, for annual periods beginning on or after 1 January 2023,
with earlier application permitted. The amendments aim at helping companies implement the Standard. In particular,
the amendments are designed to reduce costs by simplifying some requirements in the Standard, make financial
performance easier to explain and ease transition by deferring the effective date of the Standard to 2023 and by
providing additional relief to reduce the effort required when applying IFRS 17 for the first time.
The amendments to IFRS 4 change the fixed expiry date for the temporary exemption in IFRS 4 Insurance Contracts
from applying IFRS 9 Financial Instruments, so that entities would be required to apply IFRS 9 for annual periods
beginning on or after 1 January 2023.
The management has assessed that these amendments will not have any impact on the Company’s financial
statements.
IFRS 17: Insurance Contracts (published 18 May 2017, effective from 1 January 2023)
The standard is effective for annual periods beginning on or after 1 January 2021 with earlier application permitted
if both IFRS 15 Revenue from Contracts with Customers and IFRS 9 Financial Instruments have also been applied.
In its March 2020 meeting the Board decided to defer the effective date to 2023. IFRS 17 Insurance Contracts
establishes principles for the recognition, measurement, presentation and disclosure of insurance contracts issued. It
also requires similar principles to be applied to reinsurance contracts held and investment contracts with discretionary
participation features issued. The objective is to ensure that entities provide relevant information in a way that
faithfully represents those contracts. This information gives a basis for users of financial statements to assess the
effect that contracts within the scope of IFRS 17 have on the financial position, financial performance and cash flows
of an entity. This IFRS will not have any impact on the financial position or performance of the Company as insurance
services are not provided.
Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single
Transaction (issued on 7 May 2021, effective from 1 January 2023)
The amendments require companies to recognise deferred tax on transactions that, on initial recognition, give rise to
equal amounts of taxable and deductible temporary differences. The amendments are effective for annual reporting
periods beginning on or after 1 January 2023.
Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of
Accounting policies (issued on 12 February 2021, effective from 1 January 2023)
The Amendments are effective for annual periods beginning on or after January 1, 2023 with earlier application
permitted. The amendments provide guidance on the application of materiality judgements to accounting policy
disclosures. In particular, the amendments to IAS 1 replace the requirement to disclose ‘significant’ accounting
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
EXPLANATORY NOTES
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
41
policies with a requirement to disclose ‘material’ accounting policies. Also, guidance and illustrative examples are
added in the Practice Statement to assist in the application of the materiality concept when making judgements about
accounting policy disclosures.
Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of
Accounting Estimates (issued on 12 February 2021, effective from 1 January 2023)
The amendments introduce a new definition of accounting estimates, defined as monetary amounts in financial
statements that are subject to measurement uncertainty. Also, the amendments clarify what changes in accounting
estimates are and how these differ from changes in accounting policies and corrections of errors. The amendments
become effective for annual reporting periods beginning on or after January 1, 2023 with earlier application permitted
and apply to changes in accounting policies and changes in accounting estimates that occur on or after the start of that
period.
(b) Standards and amendments that have been approved but are not yet effective and have not been applied in
advance
Amendments to IAS 1: Classification of Liabilities as Current or Non-current and Classification of Liabilities
as Current or Non-current (issued on 23 January 2020, effective from 1 January 2024)
The amendments aim to promote consistency in applying the requirements by helping companies determine whether,
in the statement of financial position debt and other liabilities with an uncertain settlement date should be classified
as current or non-current. The amendments affect the presentation of liabilities in the statement of financial position
and do not change existing requirements around measurement or timing of recognition of any asset, liability, income
or expenses, nor the information that entities disclose about those items. Also, the amendments clarify the
classification requirements for debt which may be settled by the company issuing own equity instruments.
Management has not yet assessed the impact of applying these amendments.
The amendments in Non-current Liabilities with Covenants (Amendments to IAS 1) (issued on 31 October 2022,
effective from 1 January 2024):
Modify the requirements introduced by Classification of Liabilities as Current or Non-current on how an entity clas-
sifies debt and other financial liabilities as current or non-current in particular circumstances: only covenants with
which an entity is required to comply on or before the reporting date affect the classification of a liability as current
or non-current. In addition, an entity has to disclose information in the notes that enables users of financial statements
to understand the risk that non-current liabilities with covenants could become repayable within twelve months. The
amendments are effective for reporting periods beginning on or after 1 January 2024. The amendments are applied
retrospectively in accordance with IAS 8 and earlier application is permitted.
Management has not yet assessed the impact of applying these amendments.
Amendments to IFRS 16 Lease Liability in a Sale and Leaseback with amendments that clarify how a seller-
lessee subsequently measures sale and leaseback transactions that satisfy the requirements in IFRS 15 to be
accounted for as a sale (issued on 22 September 2022, effective from 1 January 2024):
Lease Liability in a Sale and Leaseback (Amendments to IFRS 16) requires a seller-lessee to subsequently measure
lease liabilities arising from a leaseback in a way that it does not recognise any amount of the gain or loss that relates
to the right of use it retains. The new requirements do not prevent a seller-lessee from recognising in profit or loss
any gain or loss relating to the partial or full termination of a lease. The amendments are effective for annual reporting
periods beginning on or after 1 January 2024. Earlier application is permitted. A seller-lessee applies the amendments
retrospectively in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors to sale
and leaseback transactions entered into after the date of initial application.
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
EXPLANATORY NOTES
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
42
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
EXPLANATORY NOTES
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
43
20-40 | years | |
5-15 | years | |
10-15 | years | |
3-10 | years |
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
EXPLANATORY NOTES
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
44
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
EXPLANATORY NOTES
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
2023 | 2022 | ||||
USD 1 | = | EUR 0,904977 | USD 1 | = | EUR 0,939055 |
45
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
EXPLANATORY NOTES
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
46
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
EXPLANATORY NOTES
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
47
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
EXPLANATORY NOTES
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
48
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
EXPLANATORY NOTES
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
49
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
EXPLANATORY NOTES
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
50
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
EXPLANATORY NOTES
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
51
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
EXPLANATORY NOTES
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
52
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
EXPLANATORY NOTES
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
53
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
EXPLANATORY NOTES
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
54
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
EXPLANATORY NOTES
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
55
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
EXPLANATORY NOTES
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
56
| The Group | Aquired rights | Computer | Licenses | Total | |
a nd patents | software | ||||
| Acquisition cost | |||||
As of 31 December 2021 | 279 | 142 | 631 | 1.052 | |
| -acquisition | 76 | - | 3 | 79 | |
| -incorporation/mergers | - | - | - | - | |
| -sold or written-off assets | - | - | - | - | |
As of 31 December 2022 | 355 | 142 | 634 | 1.131 |
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
EXPLANATORY NOTES
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
57
| -acquisition | 74 | 31 | 6 | 111 |
| -reclassification | - | - | - | - |
| -sold or written-off assets | (0) | (8) | (300) | (308) |
As of 31 December 2023 | 429 | 165 | 340 | 934 |
Accumulated amortisation | ||||
As of 31 December 2021 | 198 | 131 | 524 | 853 |
| -amortization | 50 | 6 | 91 | 147 |
| --reclassification | - | - | - | - |
| -amortization of sold and written-off assets | - | - | - | - |
As of 31 December 2022 | 248 | 137 | 615 | 1.000 |
| -amortization | 69 | 11 | 17 | 97 |
| -reclassification | - | - | - | - |
| -amortization of sold and written-off assets | (0) | (8) | (299) | (307) |
As of 31 December 2023 | 317 | 140 | 333 | 790 |
Net Book Value | ||||
As of 31 December 2021 | 81 | 11 | 107 | 199 |
As of 31 December 2022 | 107 | 5 | 19 | 131 |
As of 31 December 2023 | 112 | 25 | 7 | 144 |
| The Company | Aquired rights | Computer | Licenses | Total | |
a nd patents | software | ||||
| Acquisition cost | |||||
| As of 31 December 2021 | 279 | 121 | 631 | 1.031 | |
-acquisition | 76 | - | 3 | 79 | |
-incorporation/mergers | - | - | - | - | |
| -sold or written-off assets | - | - | - | - | |
As of 31 December 2022 | 355 | 121 | 634 | 1.110 | |
-acquisition | 74 | 31 | 6 | 111 | |
-reclassification | - | - | - | - | |
| -sold or written-off assets | (0) | (8) | (300) | (308) | |
As of 31 December 2023 | 429 | 144 | 340 | 913 | |
Accumulated amortisation | |||||
As of 31 December 2021 | 198 | 110 | 524 | 832 | |
-amortization | 50 | 6 | 91 | 147 | |
- incorporation/mergers | - | - | - | - | |
-amortization of sold and written-off assets | - | - | - | - | |
As of 31 December 2022 | 248 | 116 | 615 | 979 | |
-amortization | 69 | 11 | 17 | 97 | |
- reclassification | - | - | - | - | |
-amortization of sold and written-off assets | (0) | (8) | (299) | (307) | |
As of 31 December 2023 | 317 | 119 | 333 | 769 | |
| Net Book Value | |||||
As of 31 December 2021 | 81 | 11 | 107 | 199 | |
As of 31 December 2022 | 107 | 5 | 19 | 131 | |
As of 31 December 2023 | 112 | 25 | 7 | 144 |
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
EXPLANATORY NOTES
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
58
| Land, | Machinery | Other | Construction | |||
| buildings and | and | Vehicles | property, | in progress | Total | |
| The Group | constructions | equipment | plant and | and | ||
| equipment | prepayments | |||||
| Acquisition cost | ||||||
As of 31 December 2021 | 27.363 | 93.740 | 12.103 | 5.261 | 1.141 | 139.608 |
| -acquisition | 128 | 1.287 | 1.081 | 247 | 3.999 | 6.742 |
| -sold or written-off assets | (117) | (455) | (399) | (71) | - | (1.042) |
| -reclassification | 672 | 966 | 36 | 1 | (1.675) | - |
| --internal operatios | - | - | 36 | - | - | 36 |
| -transfers to investment property | (385) | - | - | - | - | (385) |
| -transfers from investment property | - | - | - | - | - | - |
| As of 31 December 2022 | 27.661 | 95.538 | 12.821 | 5.438 | 3.465 | 144.923 |
| -acquisition | 129 | 1.788 | 732 | 174 | 10.548 | 13.371 |
| -sold or written-off assets | (505) | (62) | (406) | (284) | - | (1.257) |
| -reclassification | 524 | 982 | 1 | 2 | (1.509) | - |
| -incorporation/mergers | - | - | - | - | - | - |
| -internal operatios | - | - | - | - | - | - |
| -transfers to investment property | - | - | - | - | - | - |
| -transfers from investment property | - | - | - | - | - | - |
As of 31 December 2023 | 27.809 | 98.246 | 13.148 | 5.330 | 12.504 | 157.037 |
| Accumulated depreciation | ||||||
As of 31 December 2021 | 9.864 | 58.598 | 8.995 | 3.298 | - | 80.755 |
| -depreciation | 648 | 3.859 | 614 | 421 | - | 5.542 |
| -depreciation of written-off and sold | (20) | (359) | (337) | (70) | - | (786) |
assets | ||||||
| -incorporation/mergers | - | - | - | - | - | - |
| -reclassification ( subsidiary) | - | - | - | - | - | - |
| -transfers to investment property | (108) | - | - | - | - | (108) |
| -transfers from investment property | - | - | - | - | - | - |
| As of 31 December 2022 | 10.384 | 62.098 | 9.272 | 3.649 | - | 85.403 |
| -depreciation | 635 | 3.995 | 703 | 395 | - | 5.728 |
| -depreciation of written-off and sold | (9) | (56) | (320) | (268) | - | (653) |
assets | ||||||
| -incorporation/mergers | - | - | - | - | - | - |
| -reversals (subsidiary) | - | - | - | - | - | - |
| -reclassification (subsidiary) | - | - | - | - | - | - |
| -transfers to investment property | - | - | - | - | - | - |
| -transfers from investment property | - | - | - | - | - | - |
As of 31 December 2023 | 11.010 | 66.037 | 9.655 | 3.776 | - | 90.478 |
| Impairment | ||||||
As of 31 December 2021 | - | - | - | - | - | - |
| -impairment losses | - | - | - | - | - | - |
| -transfers to investment property | - | - | - | - | - | - |
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
EXPLANATORY NOTES
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
59
| -reversal of impairment | - | - | - | - | - | - |
As of 31 December 2022 | - | - | - | - | - | - |
| -impairment losses | - | - | - | - | - | - |
| -transfers to investment property | - | - | - | - | - | - |
| -reversal of impairment | - | - | - | - | - | - |
As of 31 December 2023 | - | - | - | - | - | - |
| Net book value | ||||||
As of 31 December 2021 | 17.499 | 35.142 | 3.108 | 1.963 | 1.141 | 58.853 |
As of 31 December 2022 | 17.277 | 33.440 | 3.549 | 1.789 | 3.465 | 59.520 |
As of 31 December 20 2 3 | 16.799 | 32.209 | 3.493 | 1.554 | 12.504 | 66.559 |
| Land, | Machinery | Other | Construction | |||
| buildings and | and | Vehicles | property, | in progress | Total | |
| The Company | constructions | equipment | plant and | and | ||
| equipment | prepayments | |||||
| Acquisition cost | ||||||
As of 31 Decmber 2021 | 24.543 | 84.035 | 10.605 | 4.753 | 354 | 124.290 |
| -acquisition | 128 | 1.259 | 1.092 | 151 | 2.647 | 5.277 |
| -incorporation/mergers | - | - | - | - | - | - |
| -sold or written-off assets | (117) | (453) | (303) | (65) | - | (938) |
| -adding value | - | - | - | - | - | - |
| -reclassification | - | 531 | 36 | 1 | (568) | - |
| -transfers to investment property | (385) | - | - | - | - | (385) |
| -transfers from investment property | - | - | - | - | - | - |
| As of 31 December 2022 | 24.169 | 85.372 | 11.430 | 4.840 | 2.433 | 128.244 |
| -acquisition | 128 | 1.714 | 714 | 159 | 9.389 | 12.104 |
| -incorporation/mergers | - | - | - | - | - | - |
| -sold or written-off assets | - | (61) | (406) | (224) | - | (691) |
| -adding value | - | - | - | - | - | - |
| -reclassification | - | 982 | - | 2 | (984) | - |
| -transfers to investment property | - | - | - | - | - | - |
| -transfers from investment property | - | - | - | - | - | - |
As of 31 December 2023 | 24.297 | 88.007 | 11.738 | 4.777 | 10.838 | 139.657 |
| Accumulated depreciation | ||||||
As of 31 December 2021 | 8.652 | 52.824 | 7.505 | 2.936 | - | 71.917 |
| -depreciation | 600 | 3.420 | 620 | 388 | - | 5.028 |
| -incorporation/mergers | - | - | - | - | - | - |
| -depreciation of written-off and sold assets | (19) | (358) | (266) | (63) | - | (706) |
| - transfers to investment property | (108) | - | - | - | - | (108) |
| -transfers from investment property | - | - | - | - | - | - |
As of 31 December 2022 | 9.125 | 55.886 | 7.859 | 3.261 | - | 76.131 |
| -depreciation | 585 | 3.578 | 728 | 355 | - | 5.246 |
| -incorporation/mergers | 1 | - | - | - | - | 1 |
| -depreciation of written-off and sold assets | - | (55) | (320) | (214) | - | (589) |
| -transfers to investment property | - | - | - | - | - | - |
| -transfers from investment property | - | - | - | - | - | - |
As of 31 December 2023 | 9.711 | 59.409 | 8.267 | 3.402 | - | 80.789 |
| Impairment | ||||||
As of 31 December 2021 | - | - | - | - | - | - |
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
EXPLANATORY NOTES
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
60
- impairment losses | - | - | - | - | - | - |
-reversal of impairment | - | - | - | - | - | - |
As of 31 December 2022 | - | - | - | - | - | - |
| - impairment losses | - | - | - | - | - | - |
| - reversal of impairment | - | - | - | - | - | - |
| As of 31 December 2023 | - | - | - | - | - | - |
| Net book value | ||||||
As of 31 December 2021 | 15.891 | 31.211 | 3.100 | 1.817 | 354 | 52.373 |
As of 31 December 2022 | 15.044 | 29.486 | 3.571 | 1.579 | 2.433 | 52.113 |
As of 31 December 2023 | 14.586 | 28.598 | 3.471 | 1.375 | 10.838 | 58.868 |
The Group | The Company | |
| Acquisition cost | ||
| As of 31 December 2021 | 4.449 | 3.712 |
| - acquisition | - | - |
| - transfers from property, plant and equipment | 385 | 385 |
| -reversals (subsidiary) | - | - |
| -sold or written-off investment property | (198) | (198) |
| -transfers to property, plant and equipment | - | - |
| As of 31 December 2022 | 4.636 | 3.899 |
| -acquisition | - | - |
| -transfers from property, plant and equipment | - | - |
| -reversals (subsidiary) | - | - |
| -sold or written-off investment property | - | - |
| -transfers to property, plant and equipment | - | - |
| As of 31 December 2023 | 4.636 | 3.899 |
| Accumulated depreciation | ||
| As of 31 December 2021 | 1.617 | 966 |
| - depreciation | 214 | 213 |
| -transfers to property, plant and equipment | (57) | (57) |
| -reversals (subsidiary) | - | (1) |
| -sold or written-off investment property | - | - |
| - transfers from property, plant and equipment | 108 | 108 |
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
EXPLANATORY NOTES
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
61
| As of 31 December 2022 | 1.882 | 1.229 |
| -depreciation | 203 | 202 |
| -transfers to property, plant and equipment | - | - |
| -reversals (subsidiary) | - | - |
| -sold or written-off investment property | - | - |
| -transfers from property, plant and equipment | - | - |
| As of 31 December 2023 | 2.085 | 1.431 |
| Impairment | ||
| As of 31 December 2021 | - | - |
| -impairment losses | - | - |
| -reversal of impairment | - | - |
| -transfers from property, plant and equipment | - | - |
| As of 31 December 2022 | - | - |
| -impairment losses | - | - |
| -reversal of impairment | - | - |
| -transfers from property, plant and equipment | - | - |
| As of 31 December 2023 | - | - |
| Net book value, Eur thousand: | ||
| As of 31 December 2021 | 2.832 | 2.746 |
| As of 31 December 2022 | 2.754 | 2.670 |
| As of 31 December 2023 | 2.551 | 2.468 |
| The Group | Land, buildings | Movable | Vehicles | Total |
Acquisition cost | and constructions | property | ||
As of 31 December 2021 | 2.412 | 507 | 103 | 3.022 |
- acquisition | 1.719 | 92 | - | 1.811 |
- reclassification | - | 1 | - | 1 |
- the end of the contract | (1.637) | - | (103) | (1.740) |
Acquisition cost | ||||
| As of 31 December 2022 | 2.494 | 600 | - | 3.094 |
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
EXPLANATORY NOTES
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
62
- | ||||
| The Company | Land, buildings and | Movable | Vehicles | Total | |
Acquisition cost | constructions | property | |||
| As of 31 December 2021 | 2.412 | 507 | 103 | 3.022 | |
- acquisition | 1.719 | 92 | - | 1.811 | |
- reclassification | - | 1 | - | 1 | |
- the end of the contract | (1.637) | - | (103) | (1.740) | |
Acquisition cost | |||||
| As of 31 December 2022 | 2.494 | 600 | - | 3.094 | |
- acquisition | 52 | 236 | - | 288 | |
- reclassification | - | - | - | - | |
- the end of the contract | - | (600) | - | (600) | |
Acquisition cost | |||||
| - | As of 31 December 2023 | 2.546 | 236 | - | 2.782 |
Accumulated depreciation | |||||
| As of 31 December 2021 | 1.549 | 414 | 83 | 2.046 | |
- depreciation | 618 | 92 | 13 | 723 | |
- reclassification | - | 2 | 2 | 4 | |
- the end of contract | (1.629) | - | (98) | (1.727) | |
Accumulated depreciation | |||||
| As of 31 December 2022 | 538 | 508 | - | 1.046 | |
- depreciation | |||||
- reclassification | |||||
- the end of the contract | |||||
Accumulated depreciation | |||||
| As of 31 December 2023 | |||||
| Impairment | (31) | - | - | (31) | |
As of 31 December 202 1 | |||||
Impairment loses | (173) | - | - | (173) | |
| Impairment | (204) | - | - | (204) | |
As of 31 December 202 2 | |||||
Impairment loses | 23 | (14) | - | 9 | |
| Impairment | (181) | (14) | - | (195) | |
As of 31 December 202 3 |
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
EXPLANATORY NOTES
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
63
| Net book value, | Eur thousand: | |||
As of 31 December 2021 | 832 | 93 | 20 | 945 |
As of 31 December 2022 | 1.752 | 92 | - | 1.844 |
As of 31 December 2023 | 1.204 | 163 | - | 1.367 |
The Group | The Company | |||
31 st Dec 2023 | 31 st Dec 2022 | 31 st Dec 2023 | 31 st Dec 2022 | |
Loans granted: | 2.421 | 3.638 | 2.421 | 3.638 |
Loans granted to related parties | 300 | 1.473 | 300 | 1.473 |
Loans granted to milk suppliers | 1.849 | 1.967 | 1.849 | 1.967 |
Loans granted to the staff | 272 | 198 | 272 | 198 |
Loans granted to not related parties | - | - | - | - |
Current portion of loans granted (Note 11) | (1.021) | (1.993) | (1.021) | (1.993) |
| In the number loans granted to milk suppliers | - | - | - | |
impairment | ||||
Non- current loans granted | 1.400 | 1.645 | 1.400 | 1.645 |
The Group | The Company | |||
31 st Dec 2023 | 31 st Dec 2022 | 31 st Dec 2023 | 31 st Dec 2022 | |
| Raw materials | 6.743 | 7.278 | 5.957 | 6.286 |
| Finished goods and work in progress | 45.225 | 65.454 | 43.130 | 63.203 |
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
EXPLANATORY NOTES
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
64
| Goods for resale | 489 | 511 | 489 | 511 |
52.457 | 73.243 | 49.576 | 70.000 | |
Less: Allowance for inventories | (1.877) | (4.198) | (1.351) | (3.792) |
| Total | 50.580 | 69.045 | 48.225 | 66.208 |
The Group | The Company | |||
31 st Dec 2023 | 31 st Dec 2022 | 31 st Dec 2023 | 31 st Dec 2022 | |
Balance at beginning of year | 4.198 | 555 | 3.792 | 246 |
| Additional allowance made | - | 3.643 | - | 3.546 |
| Reversals of allowance made | (2.321) | - | (2.441) | - |
| Write-off | - | - | - | - |
| Balance at end of year | 1.877 | 4.198 | 1.351 | 3.792 |
The Group | The Company | |||
31 st Dec 2023 | 31 st Dec 2022 | 31 st Dec 2023 | 31 st Dec 2022 | |
Trade accounts receivable | 22.087 | 21.715 | 22.068 | 21.684 |
Accounts receivable from related parties | 1.270 | 1.848 | 1.251 | 1.816 |
Total accounts receivable: | 23.357 | 23.563 | 23.319 | 23.500 |
Allowance for bad debts | (84) | (193) | (84) | (193) |
Allowance for bad debts of related parties | - | - | - | - |
Net trade receivables: | 23.273 | 23.370 | 23.235 | 23.307 |
The Group | The Company | ||||
2023 | 2022 | 2023 | 2022 | ||
| Balance at beginning of year | 193 | 89 | 193 | 89 | |
| Additional allowance made | - | - | - | - | |
| Reversals of allowance made | (21) | 104 | (21) | 104 | |
| Write-off | - | - | - | - | |
Balance at end of year | 172 | 193 | 172 | 193 |
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
EXPLANATORY NOTES
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
65
| Trade accounts receivables past due | |||||
| The Group | Trade accounts | More than 120 | |||
| receivables, not | Less than 60 days | 60-120 days | Total | ||
| (EUR thousand) | past due | days | |||
Trade account receivables | 18.703 | 3.265 | 36 | 83 | 22.087 |
Allowance formed | - | - | (1) | (83) | (84) |
| Trade accounts receivables | 1.060 | 209 | 1 | - | 1.270 |
from related parties | |||||
Allowance formed | - | - | - | - | - |
| Trade accounts receivables passed due | |||||
| The Company | Trade accounts | More than 120 | |||
| receivables, not | Less than 60 days | 60-120 days | Total | ||
| (EUR thousand) | past due | days | |||
Trade account receivables | 18.685 | 3.264 | 36 | 83 | 22.068 |
Allowance formed | - | - | (1) | (83) | (84) |
| Trade accounts receivables | 1.046 | 204 | 1 | - | 1.251 |
from related parties | |||||
Allowance formed | - | - | - | - | - |
| Trade accounts | Trade accounts receivables which due term has passed | ||||
| The Group | receivables, | More than 120 | |||
Less than 60 days | 60-120 days | Total | |||
| (EUR thousand) | which period | days | |||
has not passed | |||||
Trade account receivables | 17.420 | 3.433 | 41 | 821 | 21.715 |
Allowance formed | - | - | (2) | (191) | (193) |
| Trade accounts receivables | 1.409 | 430 | 9 | - | 1.848 |
| from related parties | |||||
Allowance formed | - | - | - | - | - |
| Trade accounts | Trade accounts receivables which due term has passed | ||||
| The Company | receivables, | More than 120 | |||
Less than 60 days | 60-120 days | Total | |||
| (EUR thousand) | which period | days | |||
has not passed | |||||
Trade account receivables | 17.390 | 3.432 | 41 | 821 | 21.684 |
Allowance formed | - | - | (2) | (191) | (193) |
| Trade accounts receivables | 1.377 | 430 | 9 | - | 1.816 |
| from related parties | |||||
Allowance formed | - | - | - | - | - |
The Group | The Company | |||
31 st Dec 2023 | 31 st Dec 2022 | 31 st Dec 2023 | 31 st Dec 2022 | |
Prepaid income tax | - | - | - | - |
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
EXPLANATORY NOTES
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
66
Current portion of long-term loans granted (Note 8) | 1.021 | 1.993 | 1.021 | 1.993 |
VAT receivable | 520 | 1.668 | 520 | 1.624 |
Other receivables | 747 | 182 | 747 | 182 |
2.288 | 3.843 | 2.288 | 3.799 | |
| Other receivables allowance formed* | (652) | (12) | (652) | (12) |
| Total: | 1.636 | 3.831 | 1.636 | 3.787 |
| The Group | The Company | |||
31 st Dec 2023 | 31 st Dec 2022 | 31 st Dec 2023 | 31 st Dec 2022 | |
Cash at bank | 18.092 | 1.721 | 15.751 | 1.060 |
Cash on hand | 26 | 2 | 26 | 2 |
Provided guarantees* | 128 | 2 | 128 | 2 |
| Total: | 18.246 | 1.725 | 15.905 | 1.064 |
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
EXPLANATORY NOTES
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
67
The Group | The Company | |
| Grants received | ||
As of 31 December 2021 (balance) | 11.101 | 8.651 |
| - received | - | - |
| As of 31 December 2022 (balance) | 11.101 | 8.651 |
| - received | - | - |
| As of 31 December 2023 (balance) | 11.101 | 8.651 |
| Accumulated amortisation | ||
As of 31 December 2021 (balance) | 8.068 | 5.968 |
| - amortization | 297 | 255 |
| As of 31 December 2022 (balance) | 8.365 | 6.223 |
| - amortization | 291 | 253 |
| As of 31 December 2023 (balance) | 8.656 | 6.476 |
| Net book value (EUR thousand) | ||
As of 31 December 2021 | 3.033 | 2.683 |
| As of 31 December 2022 | 2.736 | 2.428 |
| As of 31 December 2023 | 2.445 | 2.175 |
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
EXPLANATORY NOTES
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
68
| The Company | ||
31 st Dec 2023 | 31 st Dec 2022 | |
Long term liability of post retirement employee benefits | 691 | 773 |
| Short term liability of post retirement employee benefits | 214 | 205 |
(Note 2 1 ) | ||
Long term liability under additional rewards policy | 2.978 | 2.955 |
| Short term liability under additional rewards policy | 440 | 502 |
(Note 2 1 ) | ||
Total: | 4.323 | 4.435 |
| The Group | ||
31 st Dec 2023 | 31 st Dec 2022 | |
Long term liability of post retirement employee benefits | 727 | 812 |
| Short term liability of post retirement employee benefits | 277 | 231 |
(Note 2 1 ) | ||
Long term liability under additional rewards policy | 3.135 | 3.101 |
| Short term liability under additional rewards policy | 485 | 582 |
(Note 2 1 ) | ||
Total: | 4.624 | 4.726 |
| The Group | The Company | |
| Post retirement employee benefits and | Post retirement employee benefits and | |
| long terms employee benefits (Premium | long terms employee benefits (Premium | |
based on additional rewards policy) | based on additional rewards policy) | |
Balance as at 31 December 2021 | 4.254 | 3.924 |
Change accounted in the statements of comprehensive income | 27 | 65 |
Actuarial (gain) loss | 445 | 446 |
Balance as at 31 December 2022 | 4.726 | 4.435 |
Change accounted in the statements of comprehensive income | 97 | 87 |
Actuarial (gain) loss | (199) | (199) |
Balance as at 31 December 2023 | 4.624 | 4.323 |
31 st Dec 2023 | 31 st Dec 2022 | |
Discount rate | 3,78-5,55% | 1,75-3,78% |
Inflation rate | 4,16% | 6,00% |
Turnover rate | 20%-24% | 20%-24% |
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
EXPLANATORY NOTES
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
69
| Silutes Rambynas ABF | ||
31 st Dec 2023 | 31 st Dec 2022 | |
| Current assets | 6.433 | 4.871 |
| Non-current assets | 9.233 | 9.225 |
| Current liabilities | 2.087 | 2.199 |
| Non-current liabilities | 295 | 186 |
| Revenue | 33.339 | 38.896 |
| Profit | 1.611 | (1.651) |
| Total comprehensive income | 1.611 | (1.651) |
| The Group | The Company | |||
31 st Dec 2023 | 31 st Dec 2022 | 31 st Dec 2023 | 31 st Dec 2022 | |
Net profit (loss) attributable to the equity shareholders in EUR thousand | 21.253 | 4.150 | 19.668 | 5.460 |
Weighted average number of circulation shares (units) | 41.515.480 | 41.515.480 | 41.515.480 | 41.515.480 |
Basic earnings (loss) per share in EUR | 0,51 | 0,10 | 0,47 | 0,13 |
| The Group | The Company | |||||
31 st Dec 2023 | 31 st Dec 2022 | 31 st Dec 2023 | 31 st Dec 2022 | |||
Dividends declared | - | - | - | - | ||
Weighted average number of circulation shares (units) | 41.515.480 | 41.515.480 | 41.515.480 | 41.515.480 | ||
Dividends declared per share in EUR | - | - | - |
18. FINANCIAL LEASE
As at 31 December 2023, finance lease liabilities of the Group and the Company included liabilities from lease
contracts concluded with the leasing companies and liabilities for the right-of-use assets.
Future financial lease payments according to the signed financial lease contracts and liabilities for the right-of-use
assets are as follows (EUR thousand):
2023 12 31 | 2022 12 31 | |||
| Minimal financial | Present value of | Minimal | Present value of | |
| The Group | lease payments | financial lease | financial lease | financial lease |
minimal payments | payments | minimal payments | ||
| Less than 1 year | 821 | 796 | 926 | 917 |
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
EXPLANATORY NOTES
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
70
| 2 – 5 years | 1.158 | 1.126 | 1.631 | 1.617 |
| Minimal financial lease payments, EUR | 1.979 | 1.922 | 2.557 | 2.534 |
thousand | ||||
Less: future interest | (57) | - | (23) | - |
| Present value of minimal financial lease | 1.922 | 1.922 | 2.534 | 2.534 |
| payments, EUR thousand |
2023 12 31 | 2022 12 31 | |||
| Minimal financial | Present value of | Minimal | Present value of | |
| The Company | lease payments | financial lease | financial lease | financial lease |
minimal payments | payments | minimal payments | ||
| Less than 1 year | 821 | 796 | 926 | 917 |
| 2 – 5 years | 1.158 | 1.126 | 1.631 | 1.617 |
Minimal financial lease payments, EUR thousand | 1.979 | 1.922 | 2.557 | 2.534 |
| Less: future interest | (57) | - | (23) | - |
| Present value of minimal financial | 1.922 | 1.922 | 2.534 | 2.534 |
lease payments, EUR thousand |
As at 31st December 2023, 2022 the financial lease contracts of the Company and the Group are signed in EUR.
The terms and conditions of the contract with all later additions do not provide any restrictions on the Company’s and
Group’s activities, associated with dividends, additional borrowings or additional long-term rent.
| Creditor | Date of | Loan maturity | Currency | 2023.12.31 | 2022.12.31 |
agreement | date | ||||
| AB SEB bank | 2018-06-11/ | 2024-03-30 | EUR | 1.000 | 2.500 |
2019 - 07 - 16 | |||||
| AB SEB bank | 2018-06-11/2022- | 2027-05-23 | EUR | 5.250 | 6.750 |
| AB SEB bank | 2018-06-11/2023 | 2028-06-07 | EUR | 3.724 | - |
AB SEB bank | Overdraft limit | 2024-06-30 | EUR | - | 17.235 |
| Total: thousand EUR | 9.974 | 26.485 |
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
EXPLANATORY NOTES
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
71
| The Group | The Company | |||
31 st Dec 2023 | 31 st Dec 2022 | 31 st Dec 2023 | 31 st Dec 2022 | |
Payables to suppliers | 14.471 | 17.675 | 13.273 | 16.647 |
Annual bonuses to the suppliers of raw material* | - | - | - | - |
Payables to related parties | 184 | 1.549 | 1.816 | 2.163 |
Advances received | 734 | 861 | 662 | 861 |
Total: | 15.389 | 20.085 | 15.751 | 19.671 |
| The Group | The Company | |||
31 st Dec 2023 | 31 st Dec 2022 | 31 st Dec 2023 | 31 st Dec 2022 | |
Vacation reserve | 1.464 | 1.599 | 1.269 | 1.415 |
Bonuses for employees | - | - | - | - |
Wages and salaries payable | 1.607 | 1.405 | 1.447 | 1.263 |
Social security payable | 1.113 | 914 | 1.004 | 853 |
Dividends payable | 772 | 796 | 772 | 796 |
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
EXPLANATORY NOTES
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
72
| Payables based on defined obligations to employees (Note | 762 | 814 | 654 | 707 |
15) | ||||
Management Bonus | - | - | - | - |
Accrued expenses | 288 | 404 | 288 | 404 |
| Taxes payable, other than income tax | 753 | 571 | 662 | 528 |
Other short-term liabilities | 85 | 12 | 31 | 5 |
Total: | 6.844 | 6.515 | 6.127 | 5.971 |
| The Group | Sales, EUR thousand | Variation in % | ||
2023 | 2022 | As comparing 2023 with 2022 | ||
Fermented cheese | 118.465 | 105.934 | 11,83% | |
Fresh dairy products | 95.584 | 88.851 | 7.58% | |
Butter and spreadable fat mixes | 27.783 | 25.742 | 7,93% | |
Dry dairy products | 24.849 | 25.419 | (2,24)% | |
Other | 11.323 | 17.448 | (35,10)% | |
Total: | 278.004 | 263.394 | 5,55% |
| The Company | Sales, EUR thousand | Variation in % | ||
2023 | 2022 | As comparing 2023 with 2022 | ||
Fermented cheese | 117.207 | 103.613 | 13,12% | |
Fresh dairy products | 95.098 | 88.320 | 7,67% | |
Butter and spreadable fat mixes | 27.783 | 25.742 | 7,93% | |
Dry dairy products | 24.849 | 25.419 | (2,24)% | |
Other | 12.368 | 19.577 | (36,82)% | |
Total: | 277.305 | 262.671 | 5,57% |
The Group | The Company | |||
2023 | 2022 | 2023 | 2022 | |
| Sales, EUR thousand: | ||||
Lithuania | 139.220 | 139.058 | 140.049 | 139.953 |
EU countries | 97.931 | 88.076 | 97.068 | 87.165 |
Other countries | 40.853 | 36.260 | 40.188 | 35.553 |
Total, EUR thousand: | 278.004 | 263.394 | 277.305 | 262.671 |
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
EXPLANATORY NOTES
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
73
The Group | The Company | |||
2023 | 2022 | 2023 | 2022 | |
| Wages, salaries and social security** | 18.553 | 16.857 | 18.144 | 16.514 |
| Marketing expenses | 7.652 | 8.112 | 7.650 | 8.086 |
| Rent and insurance | 827 | 818 | 802 | 805 |
| Logistic services | 1.564 | 2.001 | 1.375 | 1.833 |
| Repairs | 280 | 915 | 275 | 911 |
| Materials | 1.225 | 1.183 | 1.176 | 1.131 |
| IT consulting | 424 | 357 | 413 | 346 |
| Taxes, other than income tax | 867 | 950 | 756 | 855 |
| Consulting | 283 | 264 | 243 | 158 |
| Depreciation or amortisation | 1.159 | 1.161 | 1.123 | 1.126 |
| Business trips | 213 | 169 | 213 | 160 |
| Trade accounts receivable impairment (reversal) | 532 | 104 | 532 | 104 |
| Utilities | 403 | 532 | 293 | 361 |
| Production for advertising purposes | 114 | 164 | 113 | 160 |
| Telecommunication | 55 | 50 | 51 | 45 |
| Pension reserve and other employee related accruals | 50 | (6) | 41 | 30 |
| Employee bonuses | 2.011 | 1.553 | 2.011 | 1.553 |
| Other expenses | 1.459 | 2.285 | 1.350 | 2.171 |
| Inventory allowance (reversal)* | (1.914) | 3.953 | (2.441) | 3.546 |
Total: | 35.757 | 41.422 | 34.120 | 39.895 |
The Group | The Company | ||||
2023 | 2022 | 2023 | 2022 | ||
| Other operating income | |||||
Goods for resale sales income | 277 | 284 | 263 | 307 | |
| Gain on disposal of property, plant and equipment | 22 | 131 | 19 | 114 | |
| Rental income | 610 | 480 | 573 | 434 | |
| Other | 6 | 109 | 7 | 127 | |
915 | 1.004 | 862 | 982 | ||
| Other operating expenses | |||||
| Cost of goods for resale sold | (205) | (239) | (210) | (228) | |
Rental expenses | (320) | (317) | (318) | (315) | |
| Other | (137) | (140) | (125) | (164) | |
(662) | (696) | (653) | (707) | ||
| Net income and expenses of other activities: | 253 | 308 | 209 | 275 |
| Rent Income | The Group | The Company | ||
31 st Dec 2023 | 31 st Dec 2022 | 31 st Dec 2023 | 31 st Dec 2022 | |
| Less than 1 year | 657 | 449 | 658 | 449 |
| 2 – 5 years | 1.109 | 1.330 | 1.109 | 1.330 |
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
EXPLANATORY NOTES
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
| Over 5 years | - | - | - | - |
| Total: | 1.766 | 1.779 | 1.767 | 1.779 |
| The Group | The Company | |||||
| 2023 | 2022 | 2023 | 2022 | |||
| Income from financial and investment activities | ||||||
| Interest income | 210 | 107 | 210 | 107 | ||
| Foreign currency exchange gain | - | 42 | - | 42 | ||
| Other financial income | 190 | 93 | 190 | 93 | ||
| Goodwill/merger result | - | - | - | - | ||
400 | 242 | 400 | 242 | |||
| Expenses from financial and investment activities | ||||||
| Foreign currency exchange (loss) | (53) | - | (53) | - | ||
| Interest expense | (745) | (352) | (745) | (350) | ||
| Other financial expenses | (3) | 3 | (3) | 4 | ||
(801) | (349) | (801) | (346) | |||
| Total: | (401) | (107) | (401) | (104) |
The Group | The Company | ||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||
Current income tax expenses | 3.307 | 1.393 | 3.238 | 1.393 | |||||||||
| Change in deferred income tax asset | 307 | (781) | 100 | (836) | |||||||||
| Change in deferred income tax accounted through OCI | - | - | - | - | |||||||||
| The correction of prior year income tax | - | - | - | - | |||||||||
Income | tax | expenses | (income) | recognised | in | the | 3.614 | 612 | 3.338 | 557 | |||
| statement of comprehensive income | The Group | The Company | |||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||
Profit before tax | 25.063 | 4.561 | 23.006 | 6.017 | |||||||||
Income tax, applying valid tax rate (15%) | 3.521 | 903 | 3.451 | 903 | |||||||||
Permanent differences | 375 | (176) | 169 | (231) | |||||||||
Investment incentive utilization | (282) | (115) | (282) | (115) | |||||||||
Change in deferred tax allowance | - | - | - | - | |||||||||
Deffered tax recognition from investment incentive that was not previously recognised | - | - | - | - | |||||||||
Income | tax | expenses | (income) | reported | in | the | 3.614 | 612 | 3.338 | 557 | |||
statement of comprehensive income | |||||||||||||
The correction of prior year income tax | - | - | - | - | |||||||||
Income | tax | expenses | (income) | reported | in | the | 3.614 | 612 | 3.338 | 557 | |||
statement of comprehensive income | |||||||||||||
| Deferred income tax asset | ||||
Accounts receivable | 110 | 31 | 110 | 31 |
74
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
EXPLANATORY NOTES
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
75
Inventory allowance | 282 | 630 | 203 | 569 |
Accrued vacation reserve | 191 | 213 | 190 | 212 |
Other accrued expenses | 698 | 708 | 654 | 665 |
Tax loss | 93 | 273 | - | - |
Investment incentive | - | - | - | - |
Total deferred income tax asset | 1.374 | 1.855 | 1.157 | 1.477 |
Deferred income tax asset realization allowance* | (-) | (-) | (-) | (-) |
Deferred income tax asset (after realization allowance) | 1.374 | 1.855 | 1.157 | 1.477 |
Deferred income tax liability | ||||
Change in depreciation rates of tangible assets | (1.081) | (1.255) | (762) | (982) |
Total deferred income tax liability, in total | (1.081) | (1.255) | (762) | (982) |
| Deferred income tax asset, net | 293 | 600 | 395 | 495 |
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
EXPLANATORY NOTES
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
| The Group | The Company | |||
31 12 2023 | 31 12 2022 | 31 12 2023 | 31 12 2022 | |
| Cash and cash equivalents | 18.246 | 1.725 | 15.905 | 1.064 |
| Loans granted | 1.400 | 1.645 | 1.400 | 1.645 |
| Trade accounts receivable | 23.273 | 23.370 | 23.235 | 23.307 |
| Other accounts receivable | 1.636 | 3.831 | 1.636 | 3.787 |
| Other | - | 126 | - | 126 |
| Total financial assets | 44.555 | 30.697 | 42.176 | 29.929 |
The Group | The Company | |||
2023 12 31 | 2022 12 31 | 2023 12 31 | 2022 12 31 | |
Customer No. 1 | 17% | 19% | 17% | 19% |
Customer No. 2 | 11% | 10% | 11% | 10% |
| Customer No. 3 (related | 3% | 5% | 3% | 5% |
party) |
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
EXPLANATORY NOTES
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
77
| On | Up to 3 | From 3 | From 1 | More | |||
| The Group | demand | months | months to | to 5 | than | Total | |
| 1 year | years | 5 years | |||||
Trade payables | - | 18.535 | - | - | - | 18.535 | |
Trade payables to related parties | - | 1.550 | - | - | - | 1.550 | |
Loans received | - | 875 | 19.860 | 5.750 | - | 26.485 | |
Financial lease | - | 271 | 646 | 1.617 | - | 2.534 | |
Other financial debts | - | - | - | - | - | - | |
Balance as of 31 December 20 2 2 | - | 21.231 | 20.506 | 7.367 | - | 49.104 | |
Trade payables | - | 15.204 | - | - | - | 15.204 | |
Trade payables to related parties | - | 185 | - | - | - | 185 | |
Loans received | - | 1.375 | 1.558 | 7.041 | - | 9.974 | |
Financial lease | - | 228 | 568 | 1.126 | - | 1.922 | |
Other financial debts | - | - | - | - | - | - | |
Balance as of 31 December 202 3 | - | 16.992 | 2.126 | 8.167 | - | 27.285 | |
| On | Up to 3 | From 3 | From 1 | More | |||
| The Company | demand | months | months to | to 5 | than | Total | |
1 year | years | 5 years | |||||
Trade payables | - | 17.508 | - | - | - | 17.508 | |
Trade payables to related parties | - | 2.163 | - | - | - | 2.163 | |
Loans received | - | 875 | 19.860 | 5.750 | - | 26.485 | |
Financial lease | - | 271 | 646 | 1.617 | - | 2.534 | |
Other financial debts | - | - | - | - | - | - | |
Balance as of 31 December 20 2 2 | - | 20.817 | 20.506 | 7.367 | - | 48.690 | |
Trade payables | - | 13.935 | - | - | - | 13.935 | |
Trade payables to related parties | - | 1.816 | - | - | - | 1.816 | |
Loans received | - | 1.375 | 1.558 | 7.041 | - | 9.974 | |
Financial lease | - | 228 | 568 | 1.126 | - | 1.922 |
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
EXPLANATORY NOTES
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
78
Other financial debts | - | - | - | - | - | - |
Balance as of 31 December 202 3 | - | 17.354 | 2.126 | 8.167 | - | 27.647 |
The Group | The Company | |||
31 12 2023 | 31 12 2023 | |||
Assets | Liabilities | Assets | Liabilities | |
| EUR | 39.450 | 40.223 | 37.033 | 39.605 |
| USD | 4.419 | 28 | 4.419 | 28 |
| PLN | 730 | 21 | 730 | 21 |
| GBP | 29 | 1 | 29 | 1 |
| HUF | 351 | 13 | 351 | 13 |
| Other | 2 | - | 2 | - |
| Total: | 44.981 | 40.286 | 42.564 | 39.668 |
The Group | The Company | |||
31 12 2022 | 31 12 2022 | |||
Assets | Liabilities | Assets | Liabilities | |
- | - | |||
| EUR | 30.415 | 59.993 | 29.622 | 58.850 |
| USD | 249 | 29 | 249 | 29 |
| PLN | 115 | 12 | 115 | 12 |
| GBP | 40 | 0 | 40 | 0 |
| HUF | 160 | 9 | 160 | 9 |
| Other | 2 | 0 | 2 | 0 |
| Total: | 30.981 | 60.043 | 30.188 | 58.900 |
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
EXPLANATORY NOTES
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
79
| Item | Company Name | Company Details | Nature of Main Activities | |||||||||||||||
| No. | ||||||||||||||||||
| 1. | Šilutės Rambynas, ABF | Company code: 277141670; address: Klaipėdos g. 3, | Dairy activities and cheese making | |||||||||||||||
| Šilutė, LT-99115 | ||||||||||||||||||
| 2. | Žemaitijos pieno investicija, AB | Company code: 300041701; address: Sedos g. 35, Telšiai | Renting | and | operating | own | and | rented | real | |||||||||
| , LT-87101 | estate | |||||||||||||||||
| 3. | Klaipėdos pienas, AB | Company | code: | 240026930; | address: | Šilutės | pl. | 33, | Ice-cream production | |||||||||
| Klaipėda, LT-91107 | ||||||||||||||||||
| 4. | Čia Market, UAB | Company | code: | 141354683, | address: | Sedos g. | 35A, | Retail trade in non-specialized stores. | ||||||||||
| Telšiai LT-87101 | ||||||||||||||||||
| 5. | Muižas piens, SIA | Company | code: 4 | 0003786632, | address: | Bauskas | iela | Wholesale trade in food products, marketing | ||||||||||
| 58a-8, 5stavs room 507, Riga, LV-1004, Latvia | ||||||||||||||||||
| 6. | Samogitija, UAB | Company code: 302501454, address: Narutavičių g. 4, | Production, transportation, storage, distribution, | |||||||||||||||
| Telšiai, LT-87101 | etc. of dairy and other food products. | |||||||||||||||||
| 7. | S.A.R. Dziugas France | Company | code: | 75186 | 0669, | address: | Rue | 10 | de | Production and sale of dairy products | ||||||||
| Penthievre 75008, Paris | ||||||||||||||||||
| 8. | Dziugas USA L.L.C. | Company code: 0400754292, address: Five greentree | Wholesale import, marketing of dairy products | |||||||||||||||
| centre, ste. 104, 525 Route 73 North Marlon, NJ08053, | ||||||||||||||||||
| 9. | Dziugas Eesti OU | Company code: 14324189, address: Punane 56, Tallinn, | Wholesale import, sales and marketing of dairy | |||||||||||||||
| Estonia | products | |||||||||||||||||
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
EXPLANATORY NOTES
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
80
| 10. | Dziugas Poland | Company code: 368496450, address: ul. Luki Wielke 5, | Activities | of | agents | trading | in | food | and | |||||||
| Warsaw, Poland | beverages | |||||||||||||||
| 11. | Baltic Holding, UAB | Company code: 302688114, address: Įgulos g. 18B -4, | IT services | |||||||||||||
| Klaipėda | ||||||||||||||||
| 12. | Nepriklausoma tyrimų laboratorija, | Company code: 110824551, address: Narutavičių g. 4, | Laboratory | and | other | tests | of | materials | and | |||||||
| UAB | Telšiai | analysis services | ||||||||||||||
| 13. | Dziugas Deutschland GmbH | Company code: HRB 154342, address: Neuer Wall 41, | Marketing and product sales | |||||||||||||
20354 | Hamburg , Germany | |||||||||||||||
| 14. | Dziugas Hungary Kft | Company code: 01-09-325932, address: 1064 Budapest, | Wholesale import, sales and marketing of dairy | |||||||||||||
| Podmaniczky u. 57.2 emelet 14, Vengrija | products | |||||||||||||||
| 15. | Dziugas UK Ltd | Company | code: | 11405400; | address: | 10 | Bloomsbury | Activities | of | agents | trading | in | food | and | ||
| Way, London WC1A 2SL, United Kingdom | beverages | |||||||||||||||
| 16. | Danutė Pažemeckienė | Virvytės 36, Telšiai | Rent of premises | |||||||||||||
Sales to and purchases from related parties (EUR thousand):
The Group | The Company | |||
| 31 12 2023 | 31 12 2022 | 31 12 2023 | 31 12 2022 | |
| 1)Sales | ||||
| Sales of goods | ||||
| To the subsidiary | ||||
| Šilutės Rambynas ABF | - | - | 1.132 | 2,695 |
- | - | 1.132 | 2.695 | |
| To other related parties | ||||
| Klaipėdos pienas AB | 1.454 | 1.835 | 1.403 | 1.292 |
| Žemaitijos pieno investicija AB | 496 | 0 | - | 0 |
| Čia Market UAB | 5.490 | 5.733 | 5.491 | 5.733 |
| Dziugas USA LLC | - | - | - | - |
| Dziugas UK Ltd | 898 | 210 | 898 | 210 |
| S.A.R.Dziugas France | - | - | - | - |
| Dziugas Deutschland GmbH | 0 | 10 | 0 | 10 |
| Dziuugas Hungary Kft | 430 | 205 | 430 | 205 |
| Dziugas Eesti OU | 0 | 4 | 0 | 4 |
| Dziugas Poland | 1.553 | 1.004 | 1.553 | 1.004 |
| Nepriklausoma tyrimų laboratorija UAB | 21 | 17 | 19 | 14 |
| Muizas piens SIA | 756 | 977 | 756 | 977 |
11.098 | 9.995 | 10.550 | 9.449 | |
| Sales of inventory and services | ||||
| To the subsidiary | ||||
| Šilutės Rambynas ABF | - | - | 30 | 114 |
| - | - | 30 | 114 | |
| To other related parties | ||||
| Klaipėdos pienas AB | 651 | 530 | 649 | 525 |
| Žemaitijos pieno investicija AB | 67 | 332 | 67 | 332 |
| Samogitija UAB | 0 | 0 | 0 | 0 |
| Čia Market UAB | 395 | 387 | 386 | 379 |
| Muizas piens SIA | 4 | 3 | 4 | 3 |
| Nepriklausoma tyrimų laboratorija UAB | 101 | 92 | 62 | 54 |
| S.A.R.Dziugas France | 1 | 2 | 1 | 2 |
| Dziugas UK Ltd | 2 | 1 | 2 | 1 |
| Dziugas Deutschland GmbH | 1 | 10 | 1 | 10 |
| Dziugas Hungary Kft | 10 | 12 | 10 | 12 |
| Dziugas Eesti OU | 8 | 6 | 8 | 6 |
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
EXPLANATORY NOTES
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
81
| Dziugas USA LLC | - | - | - | - |
| Dziugas Poland | 35 | 33 | 35 | 33 |
1.275 | 1.408 | 1.225 | 1.357 | |
Total Sales: | 12.373 | 11.403 | 12.937 | 13.615 |
The Group | The Company | |||
| 31 12 2023 | 31 12 2022 | 31 12 2023 | 31 12 2022 | |
| 2) Purchases | ||||
| From the subsidiary | - | - | - | - |
Šilutės Rambynas ABF | - | - | 12.717 | 8.105 |
| - | - | 12.717 | 8.105 | |
| From other related parties | ||||
Samogitija UAB | 19 | 12 | 19 | 12 |
Čia Market UAB | 1.535 | 2.237 | 1.533 | 2.236 |
Klaipėdos pienas AB | 86 | 98 | 86 | 98 |
Žemaitijos pieno investicija AB | 914 | 910 | 913 | 910 |
Muizas piens SIA | 449 | 460 | 449 | 460 |
Nepriklausoma tyrimų laboratorija UAB | 1.521 | 1.451 | 1.195 | 1.127 |
Dziugas Poland | 819 | 645 | 819 | 645 |
Dziugas UK Ltd | 280 | 190 | 280 | 190 |
Dziugas Hungary Kft | 393 | 338 | 393 | 338 |
Dziugas Deutschland GmbH | 101 | 362 | 101 | 362 |
S.A.R.Dziugas France | 85 | 256 | 85 | 255 |
Dziugas USA LLC | - | - | - | - |
Dziugas Eesti OU | 346 | 288 | 346 | 288 |
Danutė Pažemeckienė | 114 | 112 | 114 | 112 |
| 6.662 | 7.359 | 6.333 | 7.033 | |
Total Purchases: | 6.662 | 7.359 | 19.050 | 15.138 |
Balances outstanding with related parties | The Group | The Company | ||
31 12 2023 | 31 12 2022 | 31 12 2023 | 31 12 2022 | |
| 3) Accounts receivable and financial debts | ||||
| Subsidiary | ||||
Šilutės Rambynas ABF | - | - | - | - |
| - | - | - | - | |
| Other related parties | ||||
Samogitija UAB | - | 0 | - | 0 |
Čia Market UAB | 709 | 1.155 | 707 | 1.154 |
Klaipėdos pienas AB (including loan) | 477 | 1.781 | 461 | 1.750 |
Žemaitijos pieno investicija UAB | - | - | - | - |
Muizas piens SIA | 128 | 119 | 128 | 119 |
Dziugas Hungary Kft | 30 | 33 | 30 | 33 |
Dziugas Deutschland GmbH | 1 | 0 | 0 | 0 |
S.A.R.Dziugas France | 8 | 0 | 8 | 0 |
Dziugas Eesti Ou | - | 1 | - | 1 |
Dziugas Poland | 81 | 180 | 81 | 180 |
Dziugas UK Ltd | 136 | 52 | 136 | 52 |
Dziugas USA LLC | - | - | - | - |
| 1.570 | 3.321 | 1.551 | 3.289 | |
Total balances of receivables: | 1.570 | 3.321 | 1.551 | 3.289 |
ŽEMAITIJOS PIENAS AB
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
EXPLANATORY NOTES
FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts in EUR thousands unless otherwise stated)
82
The Group | The Company | |||
31 12 2023 | 31 12 2022 | 31 12 2023 | 31 12 2022 | |
4) B alances of payables | ||||
| Subsidiary | ||||
| Šilutės Rambynas ABF | - | - | 1.661 | 1.242 |
| - | - | 1.661 | 1.242 | |
Other related parties | ||||
Žemaitijos pieno investicija UAB | 16 | 1.346 | 16 | 746 |
Klaipėdos pienas AB | - | - | - | - |
Čia Market UAB | - | - | - | - |
Muizas piens SIA | - | - | - | - |
Samogitija UAB | 11 | 40 | 11 | 40 |
Nepriklausoma tyrimų laboratorija UAB | 126 | 125 | 96 | 96 |
Dziugas Poland | - | - | - | - |
Dziugas UK Ltd | - | - | - | - |
S.A.R.Dziugas France | - | 10 | - | 10 |
Dziugas USA LLC | - | - | - | - |
Dziugas Deutschland GmbH | - | - | - | - |
Dziugas Hungary Kft | - | - | - | - |
Dziugas Eesti OU | 32 | 29 | 32 | 29 |
| 185 | 1.550 | 155 | 921 | |
Total balances of payables: | 185 | 1.550 | 1.816 | 2.163 |
In 2023-2022, the Company did not account for the impairment of debts related to amounts that belong to related
parties. The assessment of these doubtful debts is reviewed each financial year by examining the related party's
financial position, the market in which the related party operates and future factors as described in Note 3 (Impairment
of Financial Assets). The main assumptions used by the Company's management in assessing the value of doubtful
debts were as follows: (a) the period during which it is expected to recover the existing debt balance. As at 31
December 2023, the debts were due for repayment (as at 31 December 2022, it was one year).
As at 31 December 2023 and 31 December 2022, there were no indications of applying related party impairment to
receivables.
The Company and the Group have concluded a number of transactions with related parties (AB “Žemaitijos pieno
investicija” group companies) and the Group's profit and sales are significantly affected by transactions with AB
“Žemaitijos pieno investicija” group. Transactions include the leasing of fixed assets, the sale of raw materials and
the purchase of manufactured products (cheese) from ABF “Šilutės Rambynas”, the sale of the finished products to
UAB “Čia Market”, and the sale of raw materials, production and services to AB "Klaipėdos Pienas".
30. EVENTS AFTER THE REPORTING PERIOD
There were no significant events after the balance sheet date that could significantly affect the financial reporting of
the Company and the Group as at 31 December 2023.
83
2023
AB „ŽEMAITIJOS PIENAS“
CONSOLIDATED GOVERNANCE REPORT
AB ŽEMAITIJOS PIENAS GOVERNANCE REPORT
For the financial year ending on 31 December 2023
1
CONTENT
General information on corporate governance report ...................................... 2
Main risk factors and risk management .......................................................... 2
Management of companies (group) ................................................................ 7
Other governance information ...................................................................... 14
Compliance with the corporate governance code ......................................... 15
AB ŽEMAITIJOS PIENAS GOVERNANCE REPORT
For the financial year ending on 31 December 2023
2
Governance report of AB ŽEMAITIJOS PIENAS
(hereinafter – Report) provides main information and
principles regarding management and related processes.
During development of the Consolidated governance
report one followed the Law on Financial Statements of
Companies of the Republic of Lithuania and Law on
Consolidated Financial Statements of Groups of
Companies of the Republic of Lithuania, Law on
Companies of the Republic of Lithuania, legal acts
regulating issuer legal form and activities, documents on
incorporation of issuer and affiliated Company and other
legal acts.
AB ŽEMAITIJOS PIENAS (hereinafter - the Company) is
a large public interest entity whose securities are traded
on the regulated market of the Republic of Lithuania. The
Company has a subsidiary (subsidiary) - ABF Šilutės
Rambynas, which is a medium-sized company
(hereinafter - the Companies or the Group). As both
Companies are related, therefore the consolidated Report
is provided.
The Report indicates key risks faced during pursuant in
economic activities, their mitigation measures and
processes, provides information on the structural bodies
of both Companies, data on shareholders and their
(directly or indirectly) shareholdings, shareholders' rights,
transactions concluded by the Group in accordance with
the procedure established in Article 37
2
of the Law on
Companies of the Republic of Lithuania as well as data on
the Group management and other bodies, systems
policies on election of their members, powers and
functions of bodies, information on following to the
Corporate Governance Code for the Companies, review
of other information related to the Group management.
other information required by law.
The governance report for 2023 is an integral part of the
consolidated annual report and is published on the
Company's website http://www.zpienas.lt/lt and
www.nasdaqomxbaltic.com in accordance with the
procedure established by legal acts.
INTERNAL CONTROL SYSTEM, RISK MANAGEMENT
OBJECTIVES
The risk management of the Group's companies is based
on the principles of COSO ERM (The Committee of
Sponsoring Organizations’ Enterprise Risk Management
(ERM) Framework), which defines ERM as: „Enterprise
risk management is not a function or a division, but the
culture, capabilities, and practices, integrated with
strategy-setting and performance, that organizations rely
on to manage risk in creating, preserving, and realizing
value “.
Organizational structure, roles and responsibilities of risk
management
Risks in our operations are inherent and may be related to
strategic objectives, performance, compliance with laws
and regulations, and key environmental, social and
governance priorities. Risk management starts with the
individual and collective abilities of the organization’s
employees; knowledge of risks, their significance and
impact on the organization; approach to strong risk
management as an important contribution to effective
organizational governance. All employees of the Group
are encouraged to be open, honest and guided by the
facts when discussing risks and their management, thus
enabling the Group to consider all possible opportunities
and risks and to make informed decisions.
GENERAL INFORMATION ON CORPORATE GOVERNANCE REPORT
RISK SCOPE, FACTORS AND RISK MANAGEMENT
AB ŽEMAITIJOS PIENAS GOVERNANCE REPORT
For the financial year ending on 31 December 2023
3
The main objectives of risk management are:
• Expeditious management of internally identified risks
related to compliance with laws and other legal acts by
ensuring the production and supply of quality products,
consumer safety, satisfaction and proper customer
relations;
• Supporting strategies to ensure resource efficiency;
enabling an optimized, proactive approach to audit and
compliance identification/recovery processes; promoting
monitoring and reporting of functional compliance;
• Continuous improvement of decision-making,
planning and prioritization in the assessment of
opportunities and threats;
• Promoting value creation by enabling the
management to respond quickly, effectively, and
efficiently to future events that create uncertainty and
indicate a significant threat or opportunity.
Risk management enables the successful business
development of the Group of companies in line with
our business principles and organizational values.
MAIN RISKS, THEIR FACTORS AND RISK
MANAGEMENT
Risk - the influence of surprise, uncertainty on goals
(deviation from what we expected).
The approach of the Group of companies is twofold:
RISK = THREATS + OPPORTUNITIES.
Risks are rarely isolated, so management identifies the
interactions between risks when identifying them. The
risk is assessed according to its consequences and
probability of occurrence.
Risk management requires a broad understanding of the
business environment (internal and external factors)
that may affect the achievement of strategic and business
objectives. As the business environment changes, so do
the risks, their impact, and management priorities.
In the Group of companies, risks are divided into
categories. Reviewing and categorizing risks is an
ongoing, uninterrupted process, the frequency and extent
of which depend on changes in the business environment.
The following are selected examples of risks specific to
our industry. A definitive and static definition of all possible
types of risks is not possible due to the ever-changing
business environment.
Risk categories, description, examples
Risk categories
Description, examples
Strategic
◦ Reduction in business vitality due to competition and increasing pricing pressures
◦ Loss of intellectual property and trade secrets
◦ Increasing geopolitical barriers to trade in the form of protectionism and nationalism
◦ Production quality control, including changes in food safety standards
◦ Negative impact to reputation/loss of public trust
Operational
◦ Supply chain breakdown and / or- insufficient / inappropriate information flow within the organization and
/ or with suppliers and buyers
◦ Loss of business continuity or resilience
◦ Third party risk - the quality of relations with external business partners and their relations with their
partners, including human rights issues
◦ Availability of key materials, labour and other critical resources
◦ Inefficient use of resources/increased product cost
Cybersecurity
◦ Hacking, data loss, breach, fraud
◦ Impact to availability of critical information systems
◦ Security incident at critical third-party affecting business operations
Environmental
◦ Environmental, social and governance perceptions - opportunities to identify strategies to address long-
term sustainability
◦ Restriction of labour resources and trade due to the effects of diseases and viruses
◦ Increased severe weather events such as storms, flooding, drought
Social
◦ Human capital development risks, including leadership sustainability, management succession and
capability, employee engagement and accountability
◦ Unfair labour practices, including collective bargaining, freedom of association and grievance processes
Compliance
◦ Increasing regulatory changes and enforcement in areas such as:
- Animal welfare and protection
- Protection and handling of personal information in accordance with data protection requirements
- Employee health and safety
- Selling and promotion of products, including health compliance, healthy eating promotion, climate
change programs, anti-corruption trade requirements, other governmental, international programs
◦ Product quality, safety and effectiveness concerns
◦ Significant legal proceedings, including product liability
Financial
◦ Credit risk related with the fulfilment of obligations of customers or other parties to the Group of companies
◦ Liquidity risk related with the fulfilment of the Group's obligations to suppliers and other bound parties
◦ Achievement of the set / planned financial results, economic exponents
◦ Changes in tax laws or exposures to additional tax liabilities
◦ Fluctuating currency exchange rates; inflation and currency devaluation
◦ Impact of interest rates changes
AB ŽEMAITIJOS PIENAS GOVERNANCE REPORT
For the financial year ending on 31 December 2023
4
Risk categories
Description, examples
◦ Risk of errors / non-compliances in financial statements
◦ Risk of changes in the value of assets and liabilities
◦ Risk of capital adequacy ratio and maintenance
Depending on the complexity of the risks, their
interactions, probabilities, impacts and ability to manage
the situation, the behavior of the risks (response) is
different. In the general case, the access to risk response
of the Group companies is as follows:
• Accept – no action is taken to affect likelihood or
impact. This is how risks are treated within tolerance limits
(risk appetite). In this case decision to self-insure can be
taken against loss because insurance costs and
deductibles exceed the cost of replacement.
• Avoidance - steps are taken to stop risky activities.
Risk aversion is perceived as, for example, a decision not
to undertake or terminate a project due to the excessive
probability of unstable cash flows.
• Aiming - action is taken to take greater risks to
achieve better results (seizing opportunities).
Management understands the nature and extent of the
changes required for improvements, such as the
development of new products, services, and the
expansion of operations through more aggressive growth
strategies.
• Mitigation - actions are taken to reduce the likelihood
and/or impact of the risk. This can include many day-to-
day business solutions, such as diversifying product
offerings, maintaining significant cash reserves, investing
in technology upgrades that reduce the likelihood of
system failures, and so on.
• Sharing/Transfer - actions are taken to reduce the
likelihood or impact of a risk by transferring or otherwise
sharing a portion of the risk. Examples include risk sharing
with customers or suppliers through contract terms;
purchase of insurance to protect against large unexpected
losses; business partnerships, etc.
The following is a more detailed description of the
risks that the Group companies identify as the most
important (priority) for the period 2023 and the
directions of management of these risks:
Strategic/operational risk category
Business resilience risk is highly related to the
environment in which the Company and the Group
operate and which affect the Company's and the Group's
performance. This is the competitiveness of the Company
and the Group; economic viability of the Company's and
the Group's largest customers; the political and economic
environment in the European Union and Russia; legal
regulations for the purchase of the main raw materials.
The major risk faced by AB ŽEMAITIJOS PIENAS is raw
milk seasonality: in summer one purchases twice as much
milk than in winter, therefore such situation at the raw milk
market has negative impact on both Companies.
Therefore, production capacities of the Company are used
irregularly: in summer the Company operates with full
capacity, and in winter – could be with only 60 per cent
capacity. So, wishing to ensure raw milk supply, the
Company pays to raw milk suppliers (farmers) higher price
than it is paid at the market. The main reasons for the
Company's lack of milk as a milk processor are the high
standards of milk quality and dairy farms in the EU,
including regulations related to the Climate change policy;
A large part of the milk purchased by cooperatives in
Lithuania is exported from the country, because milk
processors can no longer pay higher raw material prices
due to cheaper milk products imported into the country
more freely by foreign competitors (e. g. Poland).
The rise in energy prices is affecting the Company and
the Group due to rising production costs. As the price of
fuel becomes more expensive, the transportation costs of
importing raw materials and distributing products
increase. In order to reduce these risks, the Company and
the Group streamline production by digitizing and
standardizing workplaces, investing in energy cost
optimization solutions, optimizing logistics routes.
In order to move in the direction of sustainable business,
in 2023 the Company has concluded a transaction with
the wind power plant manufacturer ENERCON GmbH for
the purchase and installation of 2 (two) wind power plants
at Telšiai district. The total value of the transaction
reaches over 10 million Euros (excl. VAT). The installation
completion of power plants is scheduled for the end of
2024. The total power of power plants will reach 8.4 MW.
By investing in green energy, the Company aims to
continue going in the direction of sustainable business,
thereby contributing to the fight against climate change. It
is expected that the amount of green electricity produced
by these wind power plants will meet the most part of
Company's electricity consumption needs.
Competitive risk. The Company and the Group face
competitive risk at the local market, so the main objective
of the Company and Group is to increase export sales
directly to “shelves” of marketing networks. In order to
avoid lack of sales specialists, the Company has
associated companies in strategic countries that employ
sales specialists in those countries, thus reducing the risk
of shortage of specialists. Ambitious goals are also being
set for the increasing export to EU countries, development
of e-commerce and export distribution channels.
AB ŽEMAITIJOS PIENAS GOVERNANCE REPORT
For the financial year ending on 31 December 2023
5
Reputation risk is related to the decisions made by the
Company and the behavior of employees. Reputation and
honor in the Company and the Group are valued as the
foundation of business and business relationships. The
Company has the Code of Ethics. The Code of Ethics sets
standards of conduct for all employees, regardless of their
position, scope of employment and other conditions. With
regard to reduce the risk of corruption and bribery, the
Company and the Group have implemented appropriate
internal processes, also has approved Anti-corruption
policy. Also Company's and the Group's has equal
opportunities policy was approved as well. In order to
achieve high standards of compliance with competition
law and ethical treatment of its competitors the Company
has approved Competition Compliance Policy. According
to the management assessment, the implemented
measures are effective.
Purchase and supply risk. Purchases of goods (basic,
auxiliary materials, parts, equipment, etc.) and services in
the Company are carried out by public and closed tenders
or by sending inquiries/inquiries to suppliers of services or
goods. The supplier of goods or services is usually
selected from three commercial offers. The Company and
the Group have procedures for identifying and analyzing
purchase and supplier risk factors. When selecting key
suppliers, internal audits of suppliers are performed.
Contracts with suppliers are prepared and signed in
accordance with the procedures provided for in the
approved procedure for concluding, coordinating and
approving contracts between the Company and the
Group. The Company has a legal department that
oversees all signed contracts between the Company (or
Group companies) and the suppliers and buyers.
Environmental / cyber risk category
The Company and the Group companies, as well as all
Lithuanian and World business organizations, live in the
conditions of increased threat and impact of these risks.
The most important risks in this category today are the
impact of the Russia’s war in Ukraine, impact of climate
change and the increased threat of cyber-attacks and
hacking. Due to their uniqueness and importance in
today's context, these risks and their management
approaches have been discussed in the Annual Report
and the impact on the financial statements in the
Explanatory Note. Therefore, the information in the
Management Report is no longer duplicated.
The influence of the war in Ukraine is managed by the
Company's management closely monitoring the situation
in Ukraine and sanctions in order to comply with them. The
Company has an approved Sanctions Policy, which helps
to ensure that no transactions are made with sanctioned
persons.
The impact of climate change and compliance with legal
requirements are managed on the basis of the company's
established procedures, procedures and through targeted
project activities.
The threat of cyber-attacks and possibilities of break-ins
are managed according to the company's current
procedures. The company has implemented
modernization work for critical communications, server,
software and also security systems.
Financial risk category
The Company and the Group are exposed to major
financial risks, most of which are market risks. Financial
risk management is an integral part of the Group's
Financial Management Policy, which in turn is an integral
part of the Group's Risk Management System. The main
risks of the financial category faced by the Company and
the Group to date are interest rate, exchange rate risk,
liquidity and credit risks.
The Company and the Group operate internationally,
therefore they are exposed to the risk of foreign
exchange rate fluctuations. International business
involves settlements in foreign currencies, which exposes
it to the risk of foreign exchange fluctuations, which are
related to fluctuations in the exchange rates of the Polish
zloty, the US dollar and other currencies. Foreign
exchange risk arises from future commercial transactions,
recognized assets and liabilities and net investments in
foreign operations when the recognized assets and
liabilities are denominated in a currency that is not the
functional currency of the Company and of the Group. The
primary currency in which the Company and the Group
makes settlements is the Euro.
The Company's and the Group's operating income and
expenses are largely independent of changes in market
interest rates. However, the Company is exposed to
interest rate change risk due to long-term loans. In order
to determine the impact of interest rates on the Company's
performance, positions are identified that give rise to the
interest rate risk. Assets and liabilities that are sensitive to
changes in interest rates include the Company's actual
transactions, such as: deposits, investments, loans
granted, securities held by the Company and any other
on-balance sheet and off-balance sheet transactions
whose value depends on fixed or variable interest rates
and positively correlates with interest rate fluctuations.
The Company does not use any financial instruments to
hedge against the risk of interest rate fluctuations, but the
situation is constantly monitored to ensure that such
decisions are made in a timely manner if necessary.
Credit risk. In order to ensure the timely settlement of
receivables, before signing purchase and sale
agreements with the client/buyer, the buyer's financial and
economic situation is checked through available sources
(data provided by the client, various databases, registers,
etc.). The concentration of customers in the dairy industry
determines the overall credit risk of the Company and the
Group, as these customers may be similarly exposed to
changes in environmental and economic conditions. The
Company has procedures in place, including a Credit Risk
Management Policy, to ensure that sales do not exceed
AB ŽEMAITIJOS PIENAS GOVERNANCE REPORT
For the financial year ending on 31 December 2023
6
the accepted credit risk limit, i. e. the Company evaluates
the reliability of each business partner both when selling
and buying goods or services, i.e. - performs reliability
analysis. Sale of products (dispatch of goods) in the
Company begins if there is a 90-100% payment
guarantee. Various payment guarantees apply, such as:
100% prepayment; mortgage of liquid real estate (value is
determined by property valuers); a bank guarantor (this is
a settlement security, but not a settlement instrument, it is
used when payment is not made); documentary letter of
credit (L/C); the most commonly used trade credit limit
insurance; document collection (payment procedure when
the bank undertakes to mediate for the seller of the goods
in order to obtain payment for the goods from the buyer).
The Company is among those Lithuanian companies that
pays for purchased goods and services on time, and
evaluates, rates and determines the reliability of their
customers. In each case, it is decided what kind of
hedging can and must be required from customers, what
kind of credit limit and payment deferral in days may be
granted. Customers’ settlements are constantly monitored
and analysed. Because this type of risk is well managed,
the Company does not have new large “bad” debts, which
makes it easier to plan its cash flows
Liquidity risk. The Company's policy is to maintain a
sufficient amount of cash and cash equivalents and, if
necessary, to attract additional external financing in order
to fulfil its strategic plans and commitments and maintain
an optimal capital structure. As liquidity is determined by
the asset-liability ratio, the aim is to have a liquidity ratio
close to or higher than 1.
Liquidity risk is managed by planning and forecasting cash
flows, which helps to pro-proactively identify potential
cash shortages and facilitate the choice of financing
method. Cash flow forecasts are prepared for one month,
year and long-term - up to 3-5 years. The cash flow
forecast anticipates cash receipts and payments and
enables to plan short-term borrowing and investing
money. Until the end of the current year, the forecast
shows the main trends in working capital and cash flow:
the need for external financing of activities or the
possibility of investing funds is identified, the impact of
possible interest rates and currency exchange risk is
assessed. At the end of the current year, the monetary
budget for the following year is drawn up. Long-term
forecasting (over a year) is part of strategic business
planning. These cash flow projections provide with
information on the extent of the cash surplus or extra
need: when the cash surplus or extra need will arise, the
extension of the period of the surplus or extra need, how
the cash surplus will be used or the need will be financed.
For the cash flow projections until the end of the month or
the current year the cash payments and receipts method
is exploited, and the sources and uses of funds method is
embraced for the next year's budget plan or for the next 3-
5 years. Cash flow forecasting is necessary due to the
uneven distribution of income and expense flows.
Payments for goods sold are deferred from 14 to 30 days,
in rare cases - up to 60-90 days. Suppliers are paid for
services and goods on average within thirty days, and raw
milk providers / farmers – within 15-20 days from the end
of the decade. Based on these facts, the forecasts for the
month, week are quite accurate. There is the aim to agree
on a deferral of payments with suppliers of goods and
services for up to 60 days.
The company has a loan committee that assesses the risk
of loans granted to employees and milk providers /
farmers. The Company has approved lending regulations,
based on which the members of the loan committee
evaluate the applications of borrowers. Loans are not
granted if the borrower does not have to offer liquid real
estate / movable property as collateral.
A conservative approach to liquidity risk management
allows the Company to maintain the required amount of
cash while maintaining funding flexibility.
Compliance risk category
The Company seeks to minimize the risk of legal non-
compliance and ensure that the Company's activities
comply with applicable legal requirements and standards.
For this purpose, the Company's lawyers participate in
decision-making, preparation of various procedures and
agreements, coordination processes.
Representatives of potential clients, who visited the
Company several times with the independent audit
engagements, positively assessed the conditions of the
existing infrastructure, the organization of the main
operational and safety processes, cooperation with
related third parties and the designed control system.
The Company's Audit Committee supervises the
preparation of consolidated financial statements; internal
control and financial reporting risk management system;
compliance with the legislation governing the preparation
of consolidated financial statements. The Company is
responsible for the quality and timely preparation of the
consolidated financial statements.
The Company's and the Group's risk management is
implemented through a Risk Management System
with integrated internal policies, procedures and
regulations in line with the organization's operating
principles, values and business philosophy. The
proper functioning of internal control is implemented
through the development and maintenance of an
appropriate control environment; continuous monitoring
and evaluation; horizontal and vertical communication,
including information systems supporting business
processes. The Company has separated business
decision-making and operational functions from
controlling functions; the limits of decision-making power
are set and their control is provided for; defined collegial
decision-making in business processes, etc. The overall
logic of the functioning of internal control is presented in
the Map of the Risk Management System
AB ŽEMAITIJOS PIENAS GOVERNANCE REPORT
For the financial year ending on 31 December 2023
7
Map of the risk management system
BENDROVIŲ (GRUPĖS) VALDY
MANAGEMENT STRUCTURE
Management bodies of AB „ŽEMAITIJOS PIENAS“ are: (i)
The General Meeting of Shareholders; (ii) The
Supervisory council; (iii) The Board; ir (iv) Chief Executive
Officer (CEO, General Manager). Administration of the
Company, consisting of structural divisions –
departments, is subordinate to General Manager.
The Company has the following departments: (i)
Financial; (ii) Legal and personnel; (iii) Logistics; (iv)
Production and Raw material purchase; (v) Sales and
Marketing; and (vi) Central purchasing. Also the Company
has operating Audit Committee.
ORGANIZATIONAL AND MANAGEMENT STRUCTURE OF THE COMPANY:
GENERAL MEETING OF
SHAREHOLDERS
PRODUCTION AND RAW
MATERIAL PURCHASE
DEPARTMENT
SALES AND
MARKETING
DEPARTMENT
FINANCIAL
DEPARTMENT
LEGAL AND
PERSONNEL
DEPARTMENT
LOGISTICS
DEPARTMENT
CENTRAL PURCHASING
DEPARTMENT OF
GROUP COMPANIES
BOARD
CHIEF EXECUTIVE OFFICER
(CEO)
INTERNAL AUDITOR
SUPERVISORY COUNCIL
MANAGEMENT OF THE COMPANIES
AUDIT COMMITTEE
SECRETARIAT
AB ŽEMAITIJOS PIENAS GOVERNANCE REPORT
For the financial year ending on 31 December 2023
8
The General Meeting of Shareholders is the supreme
body of the Company responsible for taking of decisions.
Competence of the General Meeting of Shareholders, its
convocation procedure, rights and obligations do not differ
from competence of the General Meeting of Shareholders,
its convocation procedure and rights and obligations
provided for in the Law on Companies of the Republic of
Lithuania, other legal acts and Articles of Association of
the Company.
It should be noted that due to the fact that the shares of
ŽEMAITIJOS PIENAS, AB are traded on the stock
exchange, the number of shareholders and their structure
are constantly changing.
Assessing the data obtained from the intermediary of
public trading in securities, on 31 of December 2023, there
were 3182 shareholders (natural and legal persons).
While at the beginning of the year 2023 there were 3152
shareholders. Thus, the number of shareholders
increased during the reporting period.
On 2023 the structure of the Company’s major
shareholders holding more than 5 % of the capital had no
changes.
It should also be noted, that during 2023 the Company still
owns 222,020 of its own shares or 0,53% of its authorized
capital.
MAIN SHAREHOLDERS 2023-12-31
(≥ 5% CAPITAL):
Shareholder
Number of shares
owned, pcs.
Proportion of the
authorized capital
owned, %
Share of votes
owned, %
Proportion of votes
held together with
related, %
Pažemeckas Algirdas*
14 063 152
33,69
33,69
67,27
Pažemeckienė Danutė*
14 014 581
67,27
67,27
UAB “Baltic Holding”
į. k.: 302688114,
adresas: Vilhelmo Berbomo g. 9-4,
Klaipėda
4 530 380
10,85
10,85
10,85
AB “KLAIPĖDOS PIENAS”
į. k.: 240026930,
Šilutės pl. 33, 91107, Klaipėda
2 901 844
6,95
6,95
6,95
* - Algirdas Pažemeckas and Danutė Pažemeckienė hold 14 063 152 pcs. of shares (votes) under the right of joint
ownership;
** - Danutė Pažemeckienė holds 14 014 581 pcs. of shares by the right of personal ownership and it is considered that
Danutė Pažemeckienė owns together with her spouse 28 077 733 pcs. of shares or 67,27 percent (in aggregate) of the
shares (votes)
The largest shareholder of Šilutės Rambynas, ABF is
ŽEMAITIJOS PIENAS, AB. This Company directly owns
87.82 % of shares. The remaining shares are held by
minor shareholders, the majority of which are raw milk
producers. The total number of shareholders is 601.
Šilutės Rambynas, ABF is not subject to share
management and usage restrictions. Šilutės Rambynas,
ABF does not own shares of any other significant entities
either directly or indirectly.
INFORMATION ON RIGHTS OF SHAREHOLDERS,
THEIR REALISATION, RESTRICTIONS OF VOTING
RIGHTS OR SPECIFIC VOTING RIGHT USE SYSTEMS
Neither AB ŽEMAITIJOS PIENAS, nor ABF Šilutės
Rambynas have been restricted in terms of the transfer
(disposal of) securities, or subject to any other constraints,
including those imposed on voting rights. The
shareholders of both Companies exercise their property
and non-property rights, and are obliged to perform the
duties specified in the Republic of Lithuania Law on
Companies, and the Articles of Association of the
Company. All of the issued shares grant their holders
equal rights laid out in the Republic of Lithuania Law on
Companies, other legislation, and the Company’s Articles
of Association.
Restrictions imposed on voting rights or other rights.
All registered ordinary shares of the companies carry
equal voting rights and are of equal nominal value. Each
share grants its holder one vote during general
shareholder meetings. The companies do not know of any
restrictions, bans and/or other special conditions which
have been applicable to their securities or shareholdings
AB ŽEMAITIJOS PIENAS GOVERNANCE REPORT
For the financial year ending on 31 December 2023
9
during the reporting period, and are not aware of (have no
data on) any systems in accordance with which the
property rights attached to securities have been separated
from the holders thereof. The companies do not know of
any special control rights held by any individual
shareholders (shareholder), which leads them to believe
that no such shareholders exist, and are not aware of any
special agreements drawn up between shareholders or
Groups thereof which could fundamentally alter, give rise
to, or terminate their rights and duties with regards to
controlling the Company, including affecting the interests
of the Group or the shareholders.
Shareholders of the Companies shall have the
following property rights:
(i) to receive a part of the Company profit; (ii) to receive a
part of the assets of liquidated companies; (iii) to receive
shares free of charge, provided that authorized capital has
been increased using Company funds, except in cases
specified by the law; (iv) in cases where the shareholder
is a natural person – to bequeath all shares, or a part
thereof, to one or more persons; (v) having regard to the
procedure and conditions laid out by the law, to sell or
otherwise transfer all shares, or part thereof, to other
persons; (vi) other rights conferred by legislation;
Shareholders of the Companies shall have the
following non-property rights:
(i) to attend meetings; (ii) according to the rights granted
by the shares to vote at the meetings; (iii) to receive non-
confidential information about the economic activity of the
company under the conditions and on the grounds
established by legal acts; (iv) to elect and be elected to
the management and control bodies of the company, to
hold any position in the company, unless otherwise
provided by the Law on Companies of the Republic of
Lithuania; (v) to submit specific proposals for the
improvement of the company's financial, economic,
organizational, etc. activities, to appeal to the court
against the decisions or actions of the shareholders'
meetings, the Supervisory Board, the Board and the
manager of the company that violate the laws of the
Republic of Lithuania, the Company's Articles of
Association, shareholders' property and non-property
rights. One or more shareholders have the right to claim
compensation for damage caused to shareholders without
a separate authorization; (vii) other non-property rights
established by law.
A person acquires all the rights and obligations granted to
him by the part of the authorized capital and / or voting
rights acquired in the company: in case of increase of
authorized capital - from the date of registration of
amendments to the Company's Articles of Association
related to increase of the authorized capital and/or voting
rights, in other cases - from the acquisition of ownership
rights to the part of the authorized capital of the Company
and/or voting rights.
INFORMATION ON THE MUTUAL AGREEMENTS,
THEIR SPECIAL CONTROL RIGHTS, RESTRICTIONS
IMPOSED ON VOTING RIGHTS, AND OTHER
FEATURES RELATED TO THE HOLDING OF SHARES
The companies do not know of any significant agreements
drawn up between shareholders or by any shareholders
who have been conferred any special control rights.
Furthermore, based on the available data, shares held by
the shareholders are not subject to any restrictions,
constraints, or special rights. As far as the Company is
aware, all shareholders are free to exercise their property
and non-property rights attached to the shares.
There have been no arrangements wherein AB
ŽEMAITIJOS PIENAS is a party and which would enter
into force, change, or be terminated in the event of a
change in control of the issuer, or the effects thereof,
except in cases where due to the nature of the
arrangements the disclosure thereof would cause
significant damage to the issuer. The same situation is
with ABF Šilutės Rambynas.
The companies have not entered into any unusual
agreements with members of the bodies or employees
that would would provide for compensation in the event of
their resignation or dismissal without just cause or if their
employment is terminated due to a change in control of
the issuer.
During the reporting period, there have been no harmful
transactions which: fail to comply with the aims of the
Company or the Group, or with regular market conditions;
violate the interests of the shareholders or other groups of
persons; and have had any negative impact on the
operations of the Company or the performance thereof, or
might have such an impact in the future. There were also
no transactions concluded due to conflicts of interest
between the Company's managers, controlling
shareholders or other parties' obligations to the Company
and their private interests and (or) obligations.
The Supervisory Board of the Company is a collegial
supervisory body, responsible for the Company activity
supervision, managed by the Chairman. Supervisory
Board of the Company consists of 3 members elected by
the General Meeting of Shareholders for the period of four
years. Articles of Association of the Company provide that
number of cadencies of the Board members is unlimited.
By 31 December 2023 the Supervisory Board was
independent, because all members of the Supervisory
Board do not have any relationships with the Company.
More detailed aspects related to the Supervisory Board
and its activities are reviewed in the Report on Following
to the Corporate Governance Code. It should be noted
AB ŽEMAITIJOS PIENAS GOVERNANCE REPORT
For the financial year ending on 31 December 2023
10
that no special rules regulating election, replacement of
members of the Supervisory Board are applied. These
actions are taken in accordance with provisions of the Law
on Companies and Articles of Association of the
Company. No special policies related to age, gender,
education, professional experience applied to election of
members. We appreciate personal properties which would
be the best for interests of the Group and shareholders.
Functioning of the Supervisory Board is regulated in the
Work Procedure of the Supervisory Board.
Linas
Siraštanovas
(independent member)
Chairman of the Company’s
Supervisory Council. Elected to the
Supervisory Council on the 2 August,
2021, by the ordinary General
Meeting of Shareholders for a four-
year term. Education: Vilnius
university, Master of commerce.
Participation in activities of other
companies and (or) organizations:
Compensa Vienna Insurance Group,
Head of Klaipėda region. Supervising
Company’s field of sales of products
and finances.
Gražina
Norkevičienė
(independent member)
Member of the Company’s
Supervisory Council. Elected to the
Supervisory Council on the 2 August,
2021, by the ordinary General
Meeting of Shareholders for a four-
year term. Education: Kaunas
Polytechnic Institute, mild and dairy
products technologist-engineer. Does
not participate in any activities of other
companies, institutions and (or)
organizations. Supervising
Company’s field of quality parameters
in production processes, performs
quality control of raw milk and also
controls companies that provide raw
milk test services, also performs
tasting supervision.
Virginija
Vaitkuvienė
(independent member)
Member of the Company’s
Supervisory Council. Elected to the
Supervisory Council on the 2 August,
2021, by the ordinary General
Meeting of Shareholders for a four-
year term. Education: Kaunas
Polytechnic Institute, milk and dairy
products technologist-engineer. Does
not participate in any activities of other
companies, institutions and (or)
organizations. Supervising
Company’s manufacturing processes
and development of new products.
During 2023, the following amounts were accrued to the
members of the Supervisory Board for their work on the
Supervisory Board:
• Gražina Norkevičienė – 11 741 Eur;
• Virginija Vaitkuvienė – 12 918 Eur;
• Linas Siraštanovas – 11 741 Eur.
No loans were granted to the members of the Supervisory
Board, no guarantees were issued, no assets were
disposed of.
The Board of the Company – a collegial management
body representing the shareholders of the Company
within the period between their meetings and making
decisions on the most important issues of the Company’s
economic activities. The Board of the Company does not
perform supervisory functions since these functions are
delegated to the Supervisory Board of the Company. All
members of the Board have the powers provided for by
law, the Articles of Association of the Company and the
Rules of Procedure of the Board adopted by it. All
members of the Board are responsible for the specific
economic activity spheres of the Company. Currently, the
Board consists of 5 (five) members.
The members of the Board are elected by the Supervisory
Council for a maximum four-year period. The number of
their cadencies is unlimited. It should be noted that no
special rules regulating election, replacement of members
of the Board are applied. These actions are taken in
accordance with provisions of the Law on Companies and
Articles of Association of the Company. The election of
members is not subject to special policies related to age,
gender, education, professional experience, and the
qualities that would best suit the interests of the Group and
shareholders are assessed. The activities of the Board are
managed by the chairman who is elected by the members
of the Board. Specific aspects related to the Board and its
activity is provided in the Report on Following to the
Company Management Code. Below are the data about
the members of the Board of ŽEMAITIJOS PIENAS, AB.
In addition to the general and statutory functions, the
members of the Board of the Company also carry out
delegated special and individual functions directly related
to the activities of the Companies, including some
functions oriented to prevention in order to avoid various
negative external impacts.
Robertas
Pažemeckas
Member of the Board of the
Company since 24-08-2021, until the
term of office of the acting Board of
Company. Chairman of the Board.
Education: Vilnius University, Master
of laws. Workplace: General
Manager of the Company. Does not
participate in the management of
BENDROVĖS STEBĖTOJŲ TARYBOS NARIAI 2021 M. GRUODŽIO 31 D.
BENDROVĖS VALDYBA IR JOS NARIAI 2021 M. GRUODŽIO 31 D.
MEMBERS OF THE BOARD AS AT 31-12-2023
MEMBERS OF THE SUPERVISORY COUNCIL AS AT 31-12-2023
AB ŽEMAITIJOS PIENAS GOVERNANCE REPORT
For the financial year ending on 31 December 2023
11
other companies. Holds 2540 pcs. of
Company’s shares. The
shareholding of the Company is less
than 0.05%.
Marius
Dromantas
Member of the Board of the
Company since 24-08-2021, until the
term of office of the acting Board of
Company. Education: Kaunas
University of Technology, bachelor
of transport engineering; Vilnius
Gediminas Technical University,
master of transport engineering.
Workplace: ŽEMAITIJOS PIENAS,
AB Logistics director. Participation in
the management of other companies
- Member of the Board of Čia Market,
UAB (code 141354683, Sedos 35a,
Telšiai, LT-87101). Do not hold
Company shares.
Dalia Gecienė
Member of the Board of the
Company since 24-08-2021, until the
term of office of the acting Board of
Company. Education: Kaunas
Polytechnic Institute (KTU), engineer
- economist. Workplace:
ŽEMAITIJOS PIENAS, AB Chief
Accountant. Does not participate in
the management of other
companies. Holds 475 160 pcs of
Company shares. The Company's
shareholding is 1.14%.
Algirdas
Pažemeckas
Member of the Board of the
Company since 27-07-2022, until
the term of office of the acting
Board of Company. Education:
University degree - Kaunas
Polytechnic Institute - mechanical
engineer. Workplace:
ŽEMAITIJOS PIENAS, AB Sales
manager. Does not participate in
the management of other
companies. Together with the
spouse under the right of joint
ownership holds 33.69% of the
Company’s shares
Monika
Jasiulionienė
Member of the Board of the
Company since 24-08-2021, until
the term of office of the acting
Board of Company. Education:
Kaunas University of Technology,
Bachelor of food chemistry and
engineering; Kaunas University of
Technology, Master of
manufacturing/engineering.
Workplace: ŽEMAITIJOS PIENAS,
AB Chief production manager.
Does not participate in the
management of other companies.
Do not hold Company shares.
During 2023, no remuneration or other monetary amounts
were accrued to the members of the Board of Company.
Board member Monika Jasiulionienė had a balance of
unpaid loans of 135,948 euros on 31/12/2023. Loans were
granted with interest and mortgage of real estate. Loans
were granted with interest and mortgage of real estate. No
loans were granted to other members of the Board, no
guarantees were issued, no assets were disposed of. All
members of the Board are employees of the Company,
therefore they were paid according to their duties.
The Manager of Company is the CEO, who is acting on
the basis of the Company’s Articles of Association, the
decisions of the General Meeting of Shareholders, Board
decisions and other Company’s local acts. The manager
of the Company is elected by the Board of the Company.
The Manager shall organise Company’s daily activities
and implement the actions required to perform the
functions, to implement the decisions of Company’s
management bodies and to ensure Company’s business.
The CEO of the Company is a responsible one and reports
to the Board on a regular basis. It should be noted that no
special rules, regulating selection or replacement of the
Manager of the Company, are applied; when taking these
actions the Company shall follow the Law on Companies
and the provisions of Articles of Association of the
Company.
The members of management, control and supervisory
bodies of the Company are elected in accordance with the
requirements of the legislation, considering the skills,
qualifications and professional experience of these
persons; moreover, before being elected to the relevant
body each candidate shall fill in a declaration of conflict of
interests. The Company believes that such a system of
election of candidates for a position fully meets the
interests of the Company and the majority of
shareholders.
The administration of the Company consists of the
CEO, Chief production officer, Logistics director, Sales
and marketing department director, Procurement
manager, Legal and personnel department director, Chief
financial officer, Chief Accountant and other staff
performing administrative functions. Administration of the
Company is managed by the CEO. The departments of
the Company are the structural subdivisions of the
Company that execute and implement the decisions,
orders and other instructions of the Board and the CEO of
the Company.
INFORMATION ABOUT ADMINISTRATION AS AT 31-12-2023
AB ŽEMAITIJOS PIENAS GOVERNANCE REPORT
For the financial year ending on 31 December 2023
12
Robertas
Pažemeckas
General Manager. Employed in the
company since August 26, 2002.
Holds 2540 pcs. Company shares.
The shareholding of the Company is
less than 0.05%.
The position of CFO is currently
vacant.
Dalia Gecienė
Chief Accountant. Has been working
for the company since July 29, 1986.
Holds 475,160 pcs. Company
shares. The Company's
shareholding is 1.14%.
Monika
Jasiulionienė
Chief Production Officer. Has been
working for the company since
August 10, 2020. Has no shares of
the Company.
Marius
Dromantas
Director of Logistics. Employed in
the Company since 01/12/2003. Has
no shares of the Company.
The position of Director of the
Personnel and Legal Department is
currently vacant.
Asta Gaubienė
Director of Sales and Marketing.
Employed in the Company since
October 1, 1998. Has no shares of
the Company.
Severina Butkė
Marketing Manager. Has been
working since November 28, 2018.
Education: Vilnius Gediminas
Technical University, Bachelor of
Communication. Has no shares of
the Company.
Nijolė
Penkovskienė
Head of Purchasing Department.
Has been working in the company
since 2017-07-03. Education:
higher. Has no shares of the
Company.
Audit Committee of the Company – the Company has
an Audit Committee consisting of three members. On 19
June, 2023 the Supervisory Board of the Company has
elected the following members of the Company's Audit
Committee, two of whom are independent: Nijolė
Zibalienė (chairwoman), Regina Domarkienė and Sigita
Leonavičienė.
The main functions of the audit committee are to perform
unexpected financial inspections, inventories of material
values, to submit proposals on the optimization of
processes, to perform other duties assigned by legal acts.
This committee also performs the advisory function of the
Company's Supervisory Board, and its main task is to
increase the efficiency of the work of the Supervisory
Board in the field of the Company's financial supervision,
to help ensure that impartial and well-considered
decisions are made. It should be noted that there are no
other committees or bodies established in the Company.
No loans were granted to the members of the Audit
Committee, no guarantees were issued, no assets were
transferred, no premiums, extra fees, bonuses, bonuses
and any other benefits were paid, except for the amount
paid to the chairwoman of the Audit Committee under the
service agreement.
Angelė
Taraškevičienė
An independent member of the Audit
Committee since 2017. Former
chairwoman of the Audit Committee.
During 2023 the calculated
remuneration with taxes is EUR
5,000. Term ended on 06/19/2023.
Zina
Sakalauskienė
Has been serving as an independent
member of the Audit Committee until
19/06/2023.
Sigita
Leonavičienė
Member of the Audit Committee
since 2017. On 06/19/2023, she was
elected for a new term until the
Company body that elected the
member revokes her position.
Regina
Domarkienė
An independent member of the Audit
Committee, elected on 06/19/2023,
until the Company body that elected
the member removes her from her
position.
Nijolė Zibalienė
A chairwoman of the of the Audit
Committee (independent member),
elected on 06/19/2023, until the
Company body that elected the
member removes her from her
position.
MEMBERS OF THE AUDIT COMMITTEE
MANAGEMENT OF SUBSIDIARY ABF „ŠILUTĖS RAMBYNAS“
AB ŽEMAITIJOS PIENAS GOVERNANCE REPORT
For the financial year ending on 31 December 2023
13
The bodies of ABF Šilutės Rambynas (hereinafter - Šilutės
Rambynas) are: (i) the General Meeting of Shareholders;
(ii) the Management Board; and (iii) the sole managing
body is the head of the company (CEO). There are also
administrative staff working under the authority of the
manager. The company does not have a supervisory board
and an audit committee.
The competence of the General Meeting of Shareholders,
the rights and duties of the shareholders are provided by
the Law on Companies of the Republic of Lithuania, as well
as other legal acts and the Articles of Association of the
Company.
The Articles of Association of Šilutė Rambynas are being
amended or separate new provisions are being adopted in
accordance with the usual procedure established by legal
acts.
The activities of the Board of Šilutė Rambynas, the election
and replacement of its members are subject to the same
rules as those established by AB ŽEMAITIJOS PIENAS,
as well as the requirements of the Law on Companies and
the Articles of Association of the Company. The members
of the Board are not granted any other or special powers
than provided by law and the Articles of Association of the
Company. The members of the Board of Šilutės Rambynas
do not have special functions or authorizations, e.g. certain
activities of the company are not assigned, except those
that perform the duties arising from the employment
contract, if they are employees of the company.
Algirdas
Bladžinauskas
Member of the Board of the
Company re-elected for a new term
from 20/04/2023 until the end of the
current term of the Company's Board
(20/04/2027). Chairman of the
Board. Education: Lithuanian
Academy of Agriculture, Master of
Agronomy. Workplace: Šilutė
Rambynas Director General. Does
not participate in the management of
other companies. Šilutė Rambynas
has no shares.
Irena
Baltrušaitienė
Member of the Board re-elected for a
new term from 20/04/2023 until the
end of the current term of the
Company's Board (20/04/2027).
Education: Kaunas Polytechnic
Institute, Master of Milk and Milk
Products Technology. Workplace:
not working. Does not participate in
the management of other
companies. He has no shares in the
company.
Linas Puskunigis
Member of the Board of the
Company re-elected for a new term
from 20/04/2023 until the end of the
current term of the Company's Board
(20/04/2027). Education: Lithuanian
Academy of Agriculture, Master of
Economics and Organization.
Workplace: Šilutė Rambynas
accountant. Does not participate in
the management of other
companies. Holds 2076 pcs. Šilutė
Rambybas shares. The
shareholding is 0.24%.
Robertas
Pavelskis
Member of the Board re-elected for a
new term from 20/04/2023 until the
end of the current term of the
Company's Board (20/04/2027).
Education: VMU Agricultural
Academy. Workplace: AB
“ŽEMAITIJOS PIENAS” technical
manager. Does not participate in the
DIRECTOR GENERAL
MANAGEMENT BOARD
PRODUCTION
DEPARTMENT
GENERAL MEETING OF
SHAREHOLDERS
QUALITY
MANAGER
TECHNICAL
DEPARTMENT
LOGISTICS
DEPARTMENT
ADMINISTRACIJOS
PADALINYS
MEMBERS OF ŠILUTĖ RAMBYNAS BOARD,, 2023-12-31
AB ŽEMAITIJOS PIENAS GOVERNANCE REPORT
For the financial year ending on 31 December 2023
14
management of other companies.
He has no shares in the company.
Renata Rupšienė
Member of the Board of the
Company re-elected for a new term
from 20/04/2023 until the end of the
current term of the Company's Board
(20/04/2027). Education: Kaunas
University of Technology - Bachelor
of Food Chemistry and Engineering;
Kaunas University of Technology,
Master of Manufacturing
Engineering. Workplace: Production
Director of AB ŽEMAITIJOS
PIENAS. Does not participate in the
management of other companies.
He has no shares in the company.
The administration of Šilutė Rambynas consists of the l
Director General, Chief Production Officer, Technical
Director, Transport Manager, Sales Manager, Production
Manager, Chief Accountant and other employees. The
administration of the company is headed by the CEO. The
directors / managers implement the goals and tasks set
by the management bodies of the Company, perform the
functions according to the competencies assigned to them
and manage the subordinate employees.
During the reporting period (2023), no amounts were
accrued to the members of the Board of Šilutė Rambynas
for their work in the Board. The directors / managers of the
administration were paid EUR 224 thousand under their
employment contracts. The average amount per
administration manager was € 56,936.
During the reporting period, no guarantees or sureties
were given to the members of the Board, the General
Manager and the Chief Accountant, no property or other
property rights were transferred.
Board members, company director, chief accountant has
no material obligations to the company, just as the
company has no obligations to those persons.
There were no guarantees and sureties and / or other
means of securing obligations to ensure the fulfillment of
obligations of other entities (manager, chief accountant)
on behalf of the issuer during 2023, the issuer did not
grant loans to these entities either.
During 2023 ŽEMAITIJOS PIENAS, AB and Šilutės
Rambynas, ABF transactions with related parties as
provided for in Article 37(2) of the Law on Companies of
the Republic of Lithuania, were not concluded. Other
transactions between the parties referred to the
company's financial statements
ŽEMAITIJOS PIENAS AB, acting in compliance with
Paragraph 3 of Article 12 of the Law of the Republic of
Lithuania on Securities and Paragraph 24.4 of the Listing
Rules of NASDAQ Vilnius AB, hereby discloses how the
Company complies with the Corporate Governance Code
of NASDAQ Vilnius, as well as its specific provisions and
recommendations. In the event of non-compliance with
this Code or any of its provisions or recommendations, the
specific provisions or recommendations which are not
complied with and the reasons for such non-compliance
must be stated. In addition, other explanatory information
provided in this form must be provided.
The Company’s management structure consists of four
levels – general meeting of shareholders, supervisory
board, management board and manager. In 2023, the
supervisory board consisted of three members, whereas
the management board consisted of five members;
members of the management board are elected and
dismissed from office by the supervisory board; the
management board has a competence to elect and
dismiss from office the manager of the company.
The Company generally complies with the
recommendations of the Corporate Governance Code of
the companies listed on the NASDAQ VILNIUS, except for
the recommended conditions related to the establishment
of nomination and remuneration committees and the
assignment of certain functions to the competence of
these committees (clauses 5.2 and 5.3). The Company
has the opinion that the emergence of these bodies would
INFORMATION ABOUT COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE
ŠILUTĖ RAMBYNAS MANAGER AND ADMINISTRATION
OTHER GOVERNANCE INFORMATION
AB ŽEMAITIJOS PIENAS GOVERNANCE REPORT
For the financial year ending on 31 December 2023
15
be excessive, disproportionate to the Company's
management objectives, increase the Company's
administrative costs, and the Company's Board and
Supervisory Board are responsible for performing these
functions (according to their competence).
PRINCIPLES / RECOMMENDATIONS
YES /NO /
IRELEVANT
COMMENT
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
The Company publishes the most significant information
in public, provides it at general meetings of shareholders,
as well as provides other ways of access to it and
participation in the company’s governance in the manner
and under the procedure laid down in legal acts.
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 Company’s shares currently grant equal rights to all
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 recommendations are complied according to the
procedure laid down in legal acts.
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
According to the procedure laid down in legal acts.
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
According to the procedure laid down in legal acts.
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
Yes
The recommendation is complied with, rights of
shareholders living abroad to access the information
and/or familiarise with it are ensured.
AB ŽEMAITIJOS PIENAS GOVERNANCE REPORT
For the financial year ending on 31 December 2023
16
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.
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 are furnished with the opportunity to vote
both, in advance and in person in general meetings of
shareholders.
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 .
Yes
The company, after assessing justified, real and
reasonable proposals on the application of electronic
means of communication in general meetings of
shareholders, also after assessing other conditions,
including interests of all shareholders, economic costs,
technological feasibility and other aspects, would consider
this recommendation.
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
It is complied with in so far as it is reasonable and
practicable.
1.10. Members of the company’s collegial
management body, heads of the
administration1 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
It is complied with in so far as it is reasonable and
practicable.
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.
AB ŽEMAITIJOS PIENAS GOVERNANCE REPORT
For the financial year ending on 31 December 2023
17
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
The majority of the supervisory board is independent. This
enables to ensure their responsible actions with respect
to all interest holders.
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 majority of the supervisory board is independent. This
enables to ensure their responsible actions with respect
to all interest holders.
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 majority of the supervisory board is independent. This
enables to ensure their responsible actions with respect
to all interest holders.
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.
Independent2 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
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
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
Conditions are established for proper discharge of duties.
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
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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
2.2.3.Chair of the supervisory board should
be a person whose current or past positions
constituted no obstacle to carry out impartial
activities. A former manager or management
board member of the company should not be
immediately appointed as chair of the
supervisory board either. Where the
company decides to depart from these
recommendations, it should provide
information on the measures taken to ensure
impartiality of the supervision.
Yes
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
2 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
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 annual budget of remuneration to members of the
supervisory board is approved by the general meeting of
shareholders.
2.2.7. Every year the supervisory board
should carry out an assessment of its
activities. It should include evaluation of the
structure of the supervisory board, its work
organisation 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
Partly carried out.
Principle 3: Management board
3.1. Functions and liability of the management board The management board should ensure the
implementation of the company’s strategy and good corporate governance with due regard to the interests of
its shareholders, employees and other interest groups.
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3.1.1.The management board should ensure
the implementation of the company’s strategy
approved by the supervisory board if the
latter has been formed at the company. In
such cases where the supervisory board is
not formed, the management board is also
responsible for the approval of the company’s
strategy.
Yes
The management board carries out and implements
strategic plans and goals.
3.1.2.As a collegial management body of the
company, the management board performs
the functions assigned to it by the Law and in
the articles of association of the company,
and in such cases where the supervisory
board is not formed in the company, it
performs inter alia the supervisory functions
established in the Law. By performing the
functions assigned to it, the management
board should take into account the needs of
the company’s shareholders, employees and
other interest groups by respectively striving
to achieve sustainable business
development.
Yes
The management board, while performing the functions
assigned to it, takes into account the needs of the
company, shareholders, employees and other interest
groups by striving to achieve sustainable business
development.
3.1.3.The management board should ensure
compliance with the laws and the internal
policy of the company applicable to the
company or a group of companies to which
this company belongs. It should also
establish the respective risk management
and control measures aimed at ensuring
regular and direct liability of managers.
Yes
3.1.4.Moreover, the management board
should ensure that the measures included
into the OECD Good Practice Guidance3 on
Internal Controls, Ethics and Compliance are
applied at the company in order to ensure
adherence to the applicable laws, rules and
standards.
Yes
As far as practicable.
3.1.5.When appointing the manager of the
company, the management board should
take into account the appropriate balance
between the candidate’s qualifications,
experience and competence.
Yes
3.2. Formation of the management board
3 3.2.1.The members of the management
board elected by the supervisory board or, if
the supervisory board is not formed, by the
general meeting of shareholders should
collectively ensure the required diversity of
qualifications, professional experience and
competences and seek for gender equality.
With a view to maintain a proper balance in
terms of the current qualifications possessed
by the members of the management board, it
should be ensured that the members of the
management board would have, as a whole,
diverse knowledge, opinions and experience
to duly perform their tasks.
Yes
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3.2.2.Names and surnames of the candidates
to become members of the management
board, information on their educational
background, qualifications, professional
experience, current positions, other important
professional obligations and potential
conflicts of interest should be disclosed
without violating the requirements of the legal
acts regulating the handling of personal data
at the meeting of the supervisory board in
which the management board or individual
members of the management board are
elected. In the event that the supervisory
board is not formed, the information specified
in this paragraph should be submitted to the
general meeting of shareholders. The
management board should, on yearly basis,
collect data provided in this paragraph on its
members and disclose it in the company’s
annual report.
Yes
3.2.3.All new members of the management
board should be familiarised with their duties
and the structure and operations of the
company
Yes
All members of the management board are familiarised
with and explained their rights and duties.
3.2.4. Members of the management board
should be appointed for a specific term,
subject to individual re-election for a new term
in office in order to ensure necessary
development of professional experience and
sufficiently frequent reconfirmation of their
status.
Yes
3.2.5. Chair of the management board should
be a person whose current or past positions
constitute no obstacle to carry out impartial
activity. Where the supervisory board is not
formed, the former manager of the company
should not be immediately appointed as chair
of the management board. When a company
decides to depart from these
recommendations, it should furnish
information on the measures it has taken to
ensure the impartiality of supervision.
Yes/No
Chair of the management board holds office of the CEO,
however he does not vote when voting on decisions that
may cause a conflict of interest.
3.2.6. Each member should devote sufficient
time and attention to perform his duties as a
member of the management board. Should a
member of the management board attend
less than a half of the meetings of the
management board throughout the financial
year of the company, the supervisory board
of the company or, if the supervisory board is
not formed at the company, the general
meeting of shareholders should be notified
thereof.
Yes
3.2.7. In the event that the management
board is elected in the cases established by
the Law where the supervisory board is not
formed at the company, and some of its
members will be independent4, it should be
announced which members of the
management board are deemed as
independent. The management board may
decide that, despite the fact that a particular
member meets all the criteria of
independence established by the Law,
he/she cannot be considered independent
Irrelevant
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due to special personal or company-related
circumstances.
3.2.8. The general meeting of shareholders of
the company should approve the amount of
remuneration to the members of the
management board for their activity and
participation in the meetings of the
management board.
Yes
The budget of remuneration to independent members is
approved by the company’s general meeting of
shareholders.
No additional remuneration is paid to members of the
management board who work at the company on the
basis of employment agreements.
3.2.9. The members of the management
board should act in good faith, with care and
responsibility for the benefit and the interests
of the company and its shareholders with due
regard to other stakeholders. When adopting
decisions, they should not act in their
personal interest; they should be subject to
no-compete agreements and they should not
use the business information or opportunities
related to the company’s operations in
violation of the company’s interests.
Yes
3.2.10. Every year the management board
should carry out an assessment of its
activities. It should include evaluation of the
structure of the management board, its work
organisation and ability to act as a group,
evaluation of the competence and work
efficiency of each member of the
management board, and evaluation whether
the management board has achieved its
objectives. The management board should,
at least once a year, make public respective
information about its internal structure and
working procedures in observance of the
legal acts regulating the processing of
personal data.
Yes
Partly carried out.
Principle 4:
Rules of procedure of the supervisory board and the management board of the company
The rules of procedure of the supervisory board, if it is formed at the company, and of the management board
should ensure efficient operation and decision-making of these bodies and promote active cooperation
between the company’s management bodies.
4.1. The management board and the
supervisory board, if the latter is formed at the
company, should act in close cooperation in
order to attain benefit for the company and its
shareholders. Good corporate governance
requires an open discussion between the
management board and the supervisory
board. The management board should
regularly and, where necessary, immediately
inform the supervisory board about any
matters significant for the company that are
related to planning, business development,
risk management and control, and
compliance with the obligations at the
company. The management board should
inform he supervisory board about any
derogations in its business development from
the previously formulated plans and
objectives by specifying the reasons for this.
Yes
4.2. It is recommended that meetings of the
company’s collegial bodies should be held at
Yes
A preliminary schedule is approved in which the time, date
and agenda of the meeting are set out.
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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.
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
Are informed beforehand by e-mail and/or other means of
communication.
4.4. In order to coordinate the activities of the
company’s collegial bodies and ensure
effective decision-making process, the chairs
of the company’s collegial supervision and
management bodies should mutually agree
on the dates and agendas of the meetings
and close cooperate in resolving other
matters related to corporate governance.
Meetings of the company’s supervisory board
should be open to members of the
management board, particularly in such
cases where issues concerning the removal
of the management board members, their
responsibility or remuneration are discussed.
Yes
Principle 5: Nomination, remuneration and audit committees
5.1.Purpose and formation of committees
The committees formed at the company should increase the work efficiency of the supervisory board or,
where the supervisory board is not formed, of the management board which performs the supervisory
functions by ensuring that decisions are based on due consideration and help organise its work in such a way
that the decisions it takes would be free of material conflicts of interest. Committees should exercise
independent judgment and integrity when performing their functions and provide the collegial body with
recommendations concerning the decisions of the collegial body. However, the final decision should be
adopted by the collegial body.
5.1.1.Taking due account of the company-
related circumstances and the chosen
corporate governance structure, the
supervisory board of the company or, in
cases where the supervisory board is not
formed, the management board which
performs the supervisory functions,
establishes committees. It is recommended
that the collegial body should form the
nomination, remuneration and audit
committees.
Yes/Ne
An audit committee has been formed.
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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.
Functions of committees are currently performed by the
collegial bodies themselves.
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.
Yes/No
This principle is partly complied with.
5.1.4. Committees established by the
collegial body should normally be composed
of at least three members. Subject to the
requirements of the legal acts, committees
could be comprised only of two members as
well. Members of each committee should be
selected on the basis of their competences by
giving priority to independent members of the
collegial body. The chair of the management
board should not serve as the chair of
committees.
Yes
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/No
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
5.2. Nomination committee
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5.2.1. The key functions of the nomination
committee should be the following: 1) to
select candidates to fill vacancies in the
membership of supervisory and management
bodies and the administration and
recommend the collegial body to approve
them. The nomination committee should
evaluate the balance of skills, knowledge and
experience in the management body, prepare
a description of the functions and capabilities
required to assume a particular position and
assess the time commitment expected; 2)
assess, on a regular basis, the structure, size
and composition of the supervisory and
management bodies as well as the skills,
knowledge and activity of its members, and
provide the collegial body with
recommendations on how the required
changes should be sought; 4) devote the
attention necessary to ensure succession
planning.
No
Has not been formed. The functions are carried out by the
collegial bodies.
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.
No
5.3. Remuneration committee
The main functions of the remuneration
committee should be as follows: 1) submit to
the collegial body proposals on the
remuneration policy applied to members of
the supervisory and management bodies and
the heads of the administration for approval.
Such policy should include all forms of
remuneration, including the fixed-rate
remuneration, performance-based
remuneration, financial incentive schemes,
pension arrangements and termination
payments as well as conditions which would
allow the company to recover the amounts or
suspend the payments by specifying the
circumstances under which it would be
expedient to do so; 2) submit to the collegial
body proposals regarding individual
remuneration for members of the collegial
bodies and the heads of the administration in
order to ensure that they would be consistent
with the company’s remuneration policy and
the evaluation of the performance of the
persons concerned; 3) review, on a regular
basis, the remuneration policy and its
implementation.
No
Has not been formed. The functions are carried out by the
collegial bodies.
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
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5.4.2. All members of the committee should
be provided with detailed information on
specific issues of the company’s accounting
system, finances and operations. The heads
of the company’s administration should
inform the audit committee about the
methods of accounting for significant and
unusual transactions where the accounting
may be subject to different approaches.
Yes
All members of the audit committee are familiarised with
peculiarities of activities of the company, excluding
information that is treated as confidential.
5.4.3. The audit committee should decide
whether the participation of the chair of the
management board, the manager of the
company, the chief finance officer (or senior
employees responsible for finance and
accounting), the internal and external
auditors in its meetings is required (and, if
required, when). The committee should be
entitled, when needed, to meet the relevant
persons without members of the
management bodies present.
Yes
Conditions for realising the principle are established.
5.4.4. The audit committee should be
informed about the internal auditor’s work
programme and should be furnished with
internal audit reports or periodic summaries.
The audit committee should also be informed
about the work programme 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
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
5.4.6. The audit committee should submit to
the supervisory board or, where the
supervisory board is not formed, to the
management board its activity report at least
once in every six months, at the time that
annual and half-yearly reports are approved.
Yes
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.
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
The principle is complied with, each member of the
supervisory and management body declares in writing
and confirms his interests, as well as undertakes to avoid
a conflict of interest.
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Principle 7: Remuneration policy of the company
The remuneration policy and the procedure for review and disclosure of such policy established at the
company should prevent potential conflicts of interest and abuse in determining remuneration of members of
the collegial bodies and heads of the administration, in addition it should ensure the publicity and
transparency of the company’s remuneration policy and its long-term strategy.
7.1. The company should approve and post
the remuneration policy on the website of the
company; such policy should be reviewed on
a regular basis and be consistent with the
company’s long-term strategy.
Yes
The company has a remuneration policy for the members
of the management, the board and the supervisory board,
which is made public.
7.2. The remuneration policy should include
all forms of remuneration, including the fixed-
rate remuneration, performance-based
remuneration, financial incentive schemes,
pension arrangements and termination
payments as well as the conditions specifying
the cases where the company can recover
the disbursed amounts or suspend the
payments.
Yes
7.3. With a view to avoid potential conflicts of
interest, the remuneration policy should
provide that members of the collegial bodies
which perform the supervisory functions
should not receive remuneration based on
the company’s performance.
Yes
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.
Irrelevant
Severance pay is not specified in the Company's
Remuneration Policy.
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.
Irrelevant
The Company does not have a system of remuneration
for financial instruments.
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
Information on the implementation of the Company's
remuneration policy and the average amounts of
remuneration of individual groups of employees are
published in the Company's annual report, which is
published on the Company's website.
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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
The company does not apply the mentioned schemes.
Principle 8: Role of stakeholders in corporate governance
The corporate governance framework should recognise 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
The implementation of the recommendation of Principle
8 is ensured by the precise supervision and control of the
state institutions that regulate and control the activities of
the Company.
The Company conducts consultations with employee
representatives on the business processes carried out in
the Company.
Stakeholders may participate in the management of the
Company to the extent provided by law.
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
authorised capital, involvement of creditors in
corporate governance in the cases of the
company’s insolvency, etc.
Yes
8.3. Where stakeholders participate in the
corporate governance process, they should
have access to relevant information.
Yes
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
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: 9.1.1.operating and financial
results of the company; 9.1.2.objectives and
non-financial information of the company;
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; 9.1.4.members of the company’s
supervisory and management bodies who
are deemed independent, the manager of the
Yes
Information is published according to the procedure laid
down by legal acts; shareholders are provided with an
opportunity to become familiar with it also in other ways,
excluding the information and data that are treated as
confidential.
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company, the shares or votes held by them at
the company, participation in corporate
governance of other companies, their
competence and remuneration; 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; 9.1.6.potential key risk factors,
the company’s risk management and
supervision policy; 9.1.7.the company’s
transactions with related parties; 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.);
9.1.9.structure and strategy of corporate
governance; 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
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
See comment on point 9.1 above
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
See comment on point 9.1 above
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
See comment on point 9.1 above
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.
AB ŽEMAITIJOS PIENAS GOVERNANCE REPORT
For the financial year ending on 31 December 2023
29
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
Audit is carried out by an independent company.
10.2. It is recommended that the audit firm
would be proposed to the general meeting of
shareholders by the supervisory board or, if
the supervisory board is not formed at the
company, by the management board of the
company.
Yes
An audit company is selected by way of public competition
out of several (at least) three proposals.
10.3. In the event that the audit firm has
received remuneration from the company for
the non-audit services provided, the company
should disclose this publicly. This information
should also be available to the supervisory
board or, if the supervisory board is not
formed at the company, by the management
board of the company when considering
which audit firm should be proposed to the
general meeting of shareholders.
Yes
AB ŽEMAITIJOS PIENAS
REMUNERATION REPORT FOR 2023
The Remuneration Report of ŽEMAITIJOS PIENAS, AB (hereinafter – the Company) has been prepared for
reporting financial year 2023, which coincides with the calendar year. The Remuneration Report (hereinafter
– Report) has been prepared in accordance with the Law on Financial Statements of Entities of the Republic
of Lithuania, the Remuneration Policy of the Chairman and other members of the Board and the Supervisory
Council of the Company ŽEMATIJOS PIENAS, AB (hereinafter – Remuneration Policy) and other legal acts.
On 9 April 2020 the General Meeting of Shareholders approved the Remuneration Policy of the Chairman and
other members of the Board and also members of the Supervisory Council of ŽEMAITIJOS PIENAS, AB. This
Remuneration Policy applies to the General manager and members of the management bodies of the
Company insofar as it relates to the payment of monetary remuneration for activities in the management and
/ or supervisory bodies of the Company. The Remuneration Report shall include information on remuneration
of each member of the management and supervisory bodies, information on other (un)received benefits, other
data.
The remuneration accrued to the General manager (or CEO) of the Company during 2023, which was
determined by the Board, ant the additional salary not exceeded the amount provided/confirmed for in the
Remuneration Policy (Paragraph 4.1 and 4.2. of the Remuneration Policy). General manager did not receive
any remuneration from the companies referred to the group of companies, as defined in the Law on
Consolidated Financial Statements of Companies of the Republic of Lithuania. Incentive benefits were paid to
the General manager of the company, as it is provided for in paragraph 4.6 of the Remuneration Policy. The
salary for the General manager was paid in accordance with the procedure, scope and terms provided for in
the Employment Contract. The General manager did not receive any other property benefits during 2023,
including the award of shares or other transactions in his favor of and in his interests.
According to the Remuneration Policy approved by the General Meeting of Shareholders of the Company, the
permanent and additional remuneration is paid only to independent members of the management bodies and
the Supervisory Council, bonuses approved by the General Meeting of Shareholders, - to all members of the
management bodies. According to the Remuneration Policy, the members of the management bodies who do
not have an employment or other relationship with the Company and / or its subsidiaries are considered
independent members of the management bodies.
The Company has 3 (three) independent members of the Supervisory Council. During the reporting period
(2023), the Company (Issuer) accrued EUR 36,400 to independent members of the Supervisory Council under
activity agreements, on average EUR 12,133 per year for one independent member of the Supervisory Council.
Members of Supervisor Council did not receive any payments from subsidiary or other companies that are
related to ŽEMAITIJOS PIENAS, AB.
All members of the Board of the Company are employees of the Company and during 2023 they were not paid
any fixed or additional remunerations for their work in the Board of the Company. Their remuneration was
received only that was based on the employment. The average monthly salaries by employee groups are
presented on page Annual Report.
Remuneration paid to the members of the management bodies and Supervisory Board would be recovered
(refunded) in accordance with the procedure established by legal acts, upon certain grounds and conditions.
If the General manager of the Company or any member of the Board or Supervisory Council resigns, expires
his membership or is removed from office, no benefits are paid, but remuneration is paid in proportion to the
time spent in the office (time of his membership).
No bonuses were paid to the member of the Board and / or Supervisory Council of the Company.
During the reporting period (2023), no guarantees or sureties were given to the members of the Board,
Supervisory Board and the General manager of the Company. No assets or other property rights were
transferred, no other benefits were received from the Company.
GENERAL INFORMATION ON THE REMUNERATION REPORT
INFORMATION ON THE REMUNERATION RECEIVED BY MEMBERS OF THE MANAGEMENT AND
SUPERVISORY BODIES
Members of the Board and Supervisory Council, General manager and members of the Audit Committee have
no significant material obligations to the Company (Issuer), except that one Member of the Board as of 31-12-
2023 has EUR 135,948 of obligations to the Company according to 2 (two) loan agreements, the Company
(Issuer) has no obligations to these persons.
Guarantees and sureties and / or other measures to secure the fulfilment of the obligations of the General
manager, members of the Board and Supervisory Council were not granted on behalf of the Issuer during
2023. The Issuer did not grant loans except for one board member and Company shares to any of these
persons.
The remuneration paid to the General manager of the Company, members of the Board and the Supervisory
Council in 2023 complied with the principles, grounds and conditions approved in the Remuneration Policy.
The Report approved by the Board of the Company is submitted to the ordinary General Meeting of
Shareholders, which decides whether to approve the Remuneration Report or not. Such (non) approval does
not release the Board from the responsibility for the decision taken.
The consolidated remuneration report together with the set of financial statements for 2023 was approved at
general meeting of shareholders held on 21 April 2023.
The Remuneration Report for 2023 is an integral part of the Consolidated Annual Report and is published on
the website of the Company www.zpienas.lt/en and www.nasdaqomxbaltic.com in accordance with the
procedure established by legal acts.
FINAL PROVISIONS OF THE REMUNERATION REPORT
2023
ŽEMAITIJOS PIENAS AB
Group
SOCIAL
RESPONSIBILITY
(SUSTAINABILITY)
REPORT
CONTENT
LETTER FROM OUR CEO
ABOUT THE SUSTAINABILITY REPORT
ACTIVITIES AND STRUCTURE
Sustainability principles and commitments
Sustainability management
Our achievements
Stakeholder engagement
Material topics
ENVIRONMENTAL AREA
SOCIAL AREA
ECONOMIC AREA
3
4
5
7
9
10
11
12
14
26
37
50
SUSTAINABILITY AT THE GROUP
6
2
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45
EU TAXONOMY
GRI INDEX
EU TAXONOMY
LETTER FROM OUR CEO
2023 was a dynamic year with a complex geopolitical situation. Fragile
global food supply chains had a further direct impact on global food
security and affordability. The uncertainty and heightened risk
environment did not go away, but we managed to stay focused and
navigated significant damage, striking a balance in line with our
strategic commitments and the principles of the United Nations Global
Compact, taking into account and engaging with the expectations of
all our stakeholders when making key decisions about our business.
One of our main objectives continues to be to ensure the production
and supply of products that meet the highest quality standards and
add value to the consumer. As we did last year, this year we have
continued our cooperation with researchers from Lithuanian
universities and experts from abroad. This cooperation has enabled us
to bring 27 dairy products to the market.
Our commitment to environmental, social and governance
sustainability objectives enables our employees to work safely, reliably
and responsibly. We enter 2024 focused, responsive, and listening to
our employees, customers and partners, always welcoming feedback
from so that we can continue to succeed.
3
AB ''ŽEMAITIJOS PIENAS''
Managing Director
Robertas Pažemeckas
ŽEMAITIJOS PIENAS AB | SOCIAL RESPONSIBILITY (SUSTAINABILITY) REPORT | 2023
CONTENT LETTER FROM A CEO ACTIVITIES AND STRUCTURE ENVIRONMENTAL AREA SOCIAL AREA ECONOMIC AREASUSTAINABILITY AT THE GROUPABOUT THE SUSTAINABILITY REPORT EU TAXONOMY
GRI 2-2
ABOUT THE SUSTAINABILITY REPORT
4
Corporate Social Responsibility (Sustainability) Report (hereinafter
referred to as "Sustainability Report") for group of companies
(hereinafter referred to as "Group’’), AB ŽEMAITIJOS PIENAS, operating
in Lithuania at Sedos g. 35, LT-87101 Telšiai (hereinafter referred to as
"ŽEMAITIJOS PIENAS", the "Company"), and ABF Šilutės Rambynas
(hereinafter referred to as the "Group company" or the "subsidiary
company"), is presented for the period from 1 January 2023 to 31
December 2023.
The Group submits this report in accordance with the Global Reporting
Initiative (GRI) Standard, 2021 updated version. The content of the report
includes the latest information available at the time of publication. This
report is a stand-alone document but should be read in conjunction
with the Group's Consolidated Annual Report, which is available on the
Group’s website. This Sustainability Report was published on 15 March
2024.
The Sustainability Report for 2022 also referred to the GRI standard but
did not fully comply with it. A materiality assessment was carried out in
2023 and a materiality matrix was established. This step was omitted in
the preparation of the 2022 report.
The Sustainability Report complies with the requirements of the Social
Responsibility Report of the Republic of Lithuania and the European
Commission's Guidelines for Non-Financial Reporting, and is issued
annually. Activities and achievements described cover environmental,
social and governance (ESG) areas.
The Sustainability Report is classified as a non-financial corporate report
and is therefore reviewed and audited by an independent auditor
together with the consolidated set of financial statements and the
annual report. All information related to the audit of the accounts is
available on the website.
If you have any questions about the content of this Sustainability Report
or the Group's activities, please contact info@zpienas.lt.
GRI 2-1 | GRI 2-2 | GRI 2-3 | GRI 2-4 | GRI 2-5
ŽEMAITIJOS PIENAS AB | SOCIAL RESPONSIBILITY (SUSTAINABILITY) REPORT | 2023
CONTENT LETTER FROM A CEO ACTIVITIES AND STRUCTURE ENVIRONMENTAL AREA SOCIAL AREA ECONOMIC AREASUSTAINABILITY AT THE GROUPABOUT THE SUSTAINABILITY REPORT EU TAXONOMY
AB ŽEMAITIJOS PIENAS, together with its subsidiary, is engaged in the
production and marketing of milk products. Its products include cheese
and cheese products, pre-packaged cheese, processed cheese and
processed spreadable cheese, cream, buttermilk mixtures, milk fat,
pasteurized cream, dried milk products, and fresh milk products. The
company sells its products under the brand names 'Džiugas',
'Germantas', 'Žemaitijos', 'Magija', 'Pik-Nik', 'Rambyno', 'Dobilas', 'Gaja' and
'TICHĖ'.
ACTIVITIES AND STRUCTURE
5
GRI 2-1 | GRI 2-2 | GRI 2-6 | GRI 2-9
AB ŽEMAITIJOS
PIENAS
ABF Šilutės
Rambynas
AB ŽEMAITIJOS
PIENAS
Vilnius branch
AB ŽEMAITIJOS
PIENAS
Kaunas branch
AB ŽEMAITIJOS
PIENAS
Telšiai branch
AB ŽEMAITIJOS
PIENAS
Panevėžys branch
The Group of companies consists of AB ŽEMAITIJOS PIENAS (code: 180240752, address: Sedos g. 35, Telšiai)
and its subsidiary ABF Šilutės Rambynas (code: 277141670, address: Klaipėdos g. 3, Šilutė), and branches:
Vilnius branch (code: 123809154, address: Algirdo g. 40/13, Vilnius, Kaunas branch (code: 134853981, address:
Europos pr. 36, Kaunas), Telšiai branch (code: 110893017, address: Sedos g. 35, Telšiai), Panevėžys branch
(code: 148133399, address: J. Janonio g. 9, Panevežys). The Company's branches shall perform the functions
of selling goods (dairy products) within the defined territory of the branch's activity and shall perform other
actions or carry out the Company's orders. The Company has not established any representative offices.
AB ŽEMAITIJOS PIENAS is a Lithuanian company with a long tradition of
milk processing, cherishing classical recipes and technologies of dairy
production, promoting the revival and consumption of heritage and
cultural products reflecting centuries of history.
The Company is a private legal entity with economic, financial,
organizational and legal autonomy, and is guided in its activities by the
laws of the Republic of Lithuania, Government Decrees and other
applicable normative acts of the Republic of Lithuania.
The main activities of ABF Šilutės Rambynas are the production and sale
of fermented cheeses and cheese products, the production and sale of
unripened cheeses, and the production and sale of pasteurized cream
and pasteurized whey. It also provides rental, transport, warehousing,
milk collection point services and other services.
Main objectives and nature of the economic activity
The companies in the Group engage in economic and commercial
activities for their own benefit and for the benefit of their shareholders.
The objectives of the business are to organize and carry out the activities
set out in the articles of association with a view to generating income
and profits, and to satisfy the shareholders' proprietary interests and the
interests of the employees.
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SUSTAINABILITY AT
THE GROUP
SUSTAINABILITY PRINCIPLES AND COMMITMENTS
7
GRI 2-22 | GRI 2-23 | GRI 2-24
The Group’s sustainability principles and commitments are defined
based on its activities and interaction with nature, people and the
economy. The Group understands its corporate responsibility in a
broader context, and aims to contribute to the United Nations
Sustainable Development Goals (SDGs), adhere to the European Green
Deal and the Paris Agreement on climate change, and support and act
in accordance with the principles of the United Nations Global Compact
on human rights, workers' rights, environmental protection and the
prevention of corruption.
Identifying and managing the Group's impacts and associated risks is
critical to the long-term success of the business. Thus, the Group is
committed to sustainable and responsible business principles in its day-
to-day operations. In 2024, the Group plans to prepare and adopt a
Sustainability Policy to further enhance relevant practices within its
group companies.
The Group’s management reviewed the Group’s sustainability strategy
and reconfirmed that in 2024 the Group will continue to actively pursue
sustainability efforts.
The Group's objective is to sell its products directly to the strategic
foreign markets under its own brands and to provide the customer with
a choice of healthy and organic food products.
Long-term objectives of the Group companies:
To become and remain strong, competitive, modern, reliable and
attractive to investors, with the aim of generating one of the highest
returns to shareholders among peer companies.
To find and maintain the most profitable markets for its products in
the European Union and other countries around the world. Priority
should be given to markets as close as possible to the Company's
production, including Germany, France, England, and Hungary.
Maximize the use of existing production capacity.
To improve and develop new dairy products through continuous
research of the consumer market and their needs for new products,
tastings, scientific research, and new scientific methods.
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CONTENT LETTER FROM A CEO ACTIVITIES AND STRUCTURE ENVIRONMENTAL AREA SOCIAL AREA ECONOMIC AREASUSTAINABILITY AT THE GROUPABOUT THE SUSTAINABILITY REPORT EU TAXONOMY
8
GRI 2-22 | GRI 2-23 | GRI 2-24
VISION
MISSION*
VALUES
Creating unique and tasty
products, anticipating the
future needs of
consumers today.
Representing a culture of
Žemaitija to the world. To
be considerate to the
environment and
appealing to employees
and society.
Effective time and
workflow management,
delivering on promises
and commitments, direct
communication,
integrity, willingness to
learn and develop, and a
desire to do more and
better every day.
To continuously add value
to the Customer and the
Company by retaining
existing Customers and
attracting new ones,
ensuring the highest level
of product quality from
field to shelf.
LINK TO
SUSTAINABILITY
Supporting and ensuring
sustainable development
when it comes to
environment, people, and
society. Responsibility to
achieve a better quality of
life for all.
Resilience, cost savings,
talent attraction and
retention, Customer
attraction and satisfaction,
brand and reputation,
innovation, and
productivity.
Promote sustainability
across the food industry
through a common voice,
working with stakeholders
and relevant sectors to
deliver sustainable
practices.
SUSTAINABILITY AS A LONG-TERM STRATEGY
*see AB ŽEMAITIJOS PIENAS website section "About us"
ŽEMAITIJOS PIENAS AB | SOCIAL RESPONSIBILITY (SUSTAINABILITY) REPORT | 2023
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SUSTAINABILITY MANAGEMENT
9
The Group strives to implement sustainability by applying the
recommendations of international sustainability standards and best
practices. Our activities encompass social, environmental, and economic
responsibility along the sustainable value chain, from raw milk suppliers
to waste managers and beyond.
Board members closely monitor sustainability matters and are involved
in strategic sustainability management. They receive information on the
execution of the strategy, the development of sustainability issues, the
projects planned and underway, and the progress made by the
initiatives.
The Boards of Žemaitijos pienas AB and Šilutės rambynas ABF are
collegial management bodies representing the Board's shareholders in
the period of time between their meetings and taking decisions on the
most important issues related to the Company's business activities.
The Board of Directors of the Group shall consider and approve:
The Company's and its subsidiary company’s operational structure.
Determine and approve, on a monthly basis, the range and quantity
of products to be made available free of charge to customers for
tasting, for the purpose of market research and/or development.
The management structure of the Group companies (including
sustainability) and the roles of the staff.
The regulations of the Group's branches and representative offices.
The positions to be filled by competitive recruitment.
Members of the Management Board shall be elected by the Supervisory
Board for a period not exceeding four years. They shall serve for an
unlimited number of terms. There are no special rules governing the
election or replacement of the members of the Group company's
Management Board. It is governed by the provisions of the Companies
Act and the Articles of Association of the Company.
The election of members is based on the best interests of the Group and
its shareholders. The activities of the Board shall be managed by a
Chairman who shall be elected by the Board from among its members.
The Chairman of the Board shall be the Chief Executive Officer. The
Group also has a Supervisory Board to prevent conflicts of interest.
The Groups' sustainability matters and the preparation of the
Sustainability Report are handled by a Sustainability Working Group,
delegated and approved by the Chief Executive Officer. The
Sustainability Group consists of specialists from different related
business areas. They deepen their knowledge in the specific fields of
sustainability through various seminars and training courses related to
their areas of work. The Sustainability Working Group coordinates and
monitors the progress towards the sustainability goals. Such monitoring
reports are then presented to the highest governance body during each
quarterly meeting. In critical situations, urgent matters are reported
immediately to those responsible.
In order to further enhance its commitment to sustainability efforts, the
Group plans to develop a Sustainability Policy that will define clear
principles for the management of environmental, social, and
governance (ESG) parts and sets guidelines to be followed by top
management and all other responsible persons.
For more information on the Group's organizational structure and
governance, please refer to the Annual Report.
GRI 2-9 | GRI 2-10 | GRI 2-11 | GRI 2-12 | GRI 2-13 | GRI 2-14 | GRI 2-15 | GRI 2-16 | GRI 2-17 | GRI 2-18
ŽEMAITIJOS PIENAS AB | SOCIAL RESPONSIBILITY (SUSTAINABILITY) REPORT | 2023
CONTENT LETTER FROM A CEO ACTIVITIES AND STRUCTURE ENVIRONMENTAL AREA SOCIAL AREA ECONOMIC AREASUSTAINABILITY AT THE GROUPABOUT THE SUSTAINABILITY REPORT EU TAXONOMY
At the end of 2023, the Company became the first dairy producer in Lithuania
to bring fresh dairy products to the market in "pure pack" packaging with an
integrated stopper. This innovation has significantly improved the efficiency
and sustainability of product packaging.
Opportunities to reduce the amount of plastic in the packaging of products
without compromising the safety and quality of the product itself have been
assessed and implemented. Actions launched in mid-2023 led to a reduction
in 2,500 kilograms of plastic.
During 2023, the Company moved away from using corrugated containers for
internal production needs (e.g. transport between production departments)
and switched to returnable containers. This move resulted in an additional
saving of 10,884 kg of corrugated cardboard.
Investments were made in EURO 6 trucks and hybrid vehicles, contributing to
the reduction of GHG emissions.
The Company's hard cheese "DŽIUGAS" has participated in competitions and
international projects. It has been awarded and recognised with top marks for
taste and quality, approaching its 100th award.
The longest cheese string in the history of ABF Šilutės Rambynas was
produced. The cheese string was an incredible 699.56 metres long, weighed
91.2 kg and required more than 970 litres of milk.
OUR ACHIEVEMENTS
10
Redesign of corrugated cardboard boxes has facilitated the packaging of
products and allowed the use of adhesive tape to be eliminated. These
changes have saved 33,814 kg of corrugated cardboard since mid-2023. It also
made it easier for employees, helping to optimize packaging materials and
meet the requirements of supermarket shelves.
New products introduced
27
Reduction in waste generated
3%
ŽEMAITIJOS PIENAS AB | SOCIAL RESPONSIBILITY (SUSTAINABILITY) REPORT | 2023
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STAKEHOLDER ENGAGEMENT
11
GRI 2-25 | GRI 2-26 | GRI 2-29
Successful dialogue with relevant stakeholders inside and outside our
sector is crucial for inclusive and sustainable business growth.
The Group considers its stakeholders to be those that are relevant and/or
significantly impacted by the Group’s activities, as well as individuals or
organizations that have a significant influence on the Group’s
businesses. Without stakeholder feedback, some valuable insights and
opportunities might be missed. Thus, the Group engages with
stakeholders as often as possible: through customer and partner
meetings, employee and customer satisfaction surveys, as well as
Group’s events, career fairs, audits and social media.
CLIENTS
KEY STAKEHOLDERS
WITHIN THE GROUP
EMPLOYEES BOARD
SUPPLIERS
REGULATORY
BODIES
FUTURE
GENERATION
ACADEMIA
Complaints & Reporting Channels
For any potentially negative impacts to be effectively remediated, a
survey form is in place for both internal and external stakeholders. This
channel is used to submit and receive information regarding concerns
and / or to report potential violations. Reports received are dealt with by
the responsible persons in accordance with internal procedures,
ensuring confidentiality.
For each report or complaint received, measures are taken to remedy
the negative impact as soon as possible. The effectiveness of the
measures taken are also assessed by the Group at a later stage.
ŽEMAITIJOS PIENAS AB | SOCIAL RESPONSIBILITY (SUSTAINABILITY) REPORT | 2023
CONTENT LETTER FROM A CEO ACTIVITIES AND STRUCTURE ENVIRONMENTAL AREA SOCIAL AREA ECONOMIC AREASUSTAINABILITY AT THE GROUPABOUT THE SUSTAINABILITY REPORT EU TAXONOMY
MATERIALITY ASSESSMENT
12
In 2023, the Group carried out its first materiality assessment of
sustainability topics according to GRI guidelines. The purpose of this
assessment was to review matters that are material for the Group in
environmental, social, and economic areas. The material topics
identified are disclosed in detail in this Sustainability Report.
In 2024, the Group plans to carry out a double materiality assessment in
accordance with the European Sustainability Reporting Standards and
will update the list of material topics accordingly.
Main steps for 2023 materiality assessment:
1. Identification of relevant topics amongst sector participants. The
Group has reviewed the sustainability topics relevant to the participants
in the dairy sector and identified a list of potential sustainability topics.
Topics recommended by other widely used international standards and
guidelines for the sector were also included at this stage.
2. Stakeholder engagement. The Group conducted an anonymous
survey to find out the most important sustainability topics for its
stakeholders. The survey was carried out from 13 December 2023 to 5
January 2024 by sending a questionnaire to relevant contacts from each
stakeholder group. A total of 369 responses were received.
3. Development of the materiality matrix. After obtaining the
stakeholders' view, the Group assessed each sustainability topic in terms
of its potential environmental and social impacts, as well as its influence
on the business strategy (including risks and opportunities). In
developing the matrix, the Group followed the process of GRI and the
European Commission's Guidelines for Non-Financial Reporting. The
topics falling under the high-impact areas on the horizontal axis were
assessed from two perspectives: the extent of the impact of the
activities on society and the environment, and the financial materiality
of the Group's results.
GRI 3-1
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CONTENT LETTER FROM A CEO ACTIVITIES AND STRUCTURE ENVIRONMENTAL AREA SOCIAL AREA ECONOMIC AREASUSTAINABILITY AT THE GROUPABOUT THE SUSTAINABILITY REPORT EU TAXONOMY
– environmental area – social area – governance area
MATERIALITY MATRIX
13
GRI 3-2 | GRI 3-3
The materiality matrix presents and prioritizes the Group's key sustainability topics. All topics in the matrix are material to the Group’s sustainability and
are described in this report, however the most important topics are those that are of high relevance to stakeholders (vertical axis) and/or reflect a very
significant impact on the environment, society, and our performance (horizontal axis). Due to their high relevance to the implementation of the strategy,
the nine high-impact, stakeholder-relevant themes at the centre of the matrix are also included in the matrix.
Diversity, equality and inclusion
Moderate importance
Very important
Moderate Very high
IMPORTANCE TO STAKEHOLDERS
IMPACT ON SOCIETY, ENVIRONMENT AND BUSINESS RESULTS
Important
High
Energy and GHG management
Product safety and quality
Waste management (incl. packaging)
Water and effluent management
Occupational Health and Safety (incl.
Human rights)
Risk management
Employee training
Anti-corruption
Biodiversity
Management of sustainability topics
The principles for the management of all material sustainability topics are described in accordance with GRI 3-3 in the relevant chapters of this report,
arranged by each of the specific topics themselves.
ŽEMAITIJOS PIENAS AB | SOCIAL RESPONSIBILITY (SUSTAINABILITY) REPORT | 2023
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ENVIRONMENTAL
AREA
ENERGY & GHG EMISSIONS
15
Environmental impact is one of the sustainability priority areas for the
Group, therefore AB Žemaitijos Pienas Group continuously monitors its
performance indicators, plans and implements the latest technologies
to reduce production and operating costs, conserve energy and natural
resources, and improve the Group's environmental performance in
every way.
The Group is well aware that its activities can cause significant damage
to the environment if not handled responsibly, and that only an
integrated use of economic, legal, technical, and biological measures
can guarantee the rational use of natural resources, both now and in the
future. Environmental impact is therefore controlled in accordance with
agreed monitoring programs. As the Group expands or upgrades its
facilities and technological processes, an environmental impact
assessment is carried out to ensure that the expansion does not exceed
permissible environmental standards. As a socially responsible company
concerned about the environment and its preservation, the Group
invests in energy saving, improvement of its business management
processes, and makes every effort to allocate resources to other related
activities.
The Group's environmental matters are considered and reviewed each
year during a strategy review. During this review, opportunities in each
of the relevant topics are assessed and investments are planned or
adjusted.
GRI 302-1
ENERGY & ENERGY EFFICIENCY
In 2022, the Group engaged independent auditors to conduct an energy
audit of its processes and facilities. The findings of this audit were used
by the Group to identify the need for new projects and to reduce the use
of energy resources. Large companies are required to undergo energy
audits every four years, and the Group anticipates conducting another
audit of this nature in 2026.
By 2025, the Group intends to invest more than
€10 million in renewable electricity generation facilities
that will enable it to reduce the use of grid electricity, thus contributing
to the creation of a sustainable energy infrastructure and reducing
greenhouse gas emissions.
The Group’s objective is to source more than 70% of its electricity needs
from renewable energy generation facilities. During 2023, the Group
obtained all necessary permits (including a construction permit) from
the relevant authorities for the construction of wind power plants.
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Energy consumption
TJ
2022
2023
Energy use from non-renewable sources:
Petrol
0,154
0,404
Diesel
121,742
114,557
LPG
49,579
57,758
Natural gas
53,725
42,188
Energy use from renewable sources:
Wood
213,581
201,412
Energy, heating, cooling and steam consumption:
Electricity
107,544
107,053
Central heating
0,318
0,319
Cooling
0
0
Steam
0
0
Total:
546,643
523,691
ENERGY & GHG EMISSIONS
16
GRI 302-1
Notes: Energy consumption data are provided by internal metering tools.
Total energy consumption is calculated according to the GRI 302-1 indicator formula.
Biofuels
38,46%
Diesel
21,87%
Electricity
20,44%
Natural
gas
8,06%
Liquefied
petroleum
gas
11,03%
Distribution of the Group's energy consumption in 2023, %.
Petrol - 0,08%
District heating - 0,06%
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ENERGY & GHG EMISSIONS
17
GRI 302-3
REDUCING EMISSIONS OF GREENHOUSE GAS & AIR
POLLUTANTS
The Group welcomes the European Union's Green Deal policy initiative,
which aims to support the EU's green transformation, with the ultimate
goal of achieving climate neutrality by 2050. Additionally, due to the use
of industry specific dairy processing equipment, the Group’s falls under
the Integrated Pollution Prevention and Control Permit (IPPCP)
mechanism, which means that air emissions are strictly regulated.
GHG emission reductions are addressed at Board level in meetings.
Matters addressed include planned investments, budget, environmental
impact assessment and the review of project progress. In order to better
assess the Group's current situation and its prospects for competitive
success, the Group has started to develop an environmental plan
(Environmental Policy) which will set out the objectives and targets for
managing benefits and impacts.
We monitor emissions of our operations and aim to eliminate or
significantly reduce not only GHG emissions, but also others such as
sulfur dioxide, particulate matter, and nitrogen oxides. Emissions
monitoring is carried out in accordance with the environmental
monitoring programs of operators approved by the responsible
authorities. In 2023, the Group was subject to scheduled and
unscheduled inspections by inspectors of the Department of
Environmental Protection, during which one violation was detected at
one of the Group's milk collection points (related to management of
wastewater). The Group has taken appropriate action to remedy this
violation.
Energy intensity
Energy intensity is calculated on the basis of the Group's data for the
financial year 2023. During 2023, the Group's activities consumed 523,691
TJ (terajoules) of energy. Consumption in 2022 was 546,643 TJ.
Energy intensity metrics
2022
2023
TJ / ‘000 Eur revenue
0,00202
0,001884
TJ / 1 employee
0,37263
0,375138
TJ / tonne FPCM milk
0,001252
0,001228
TJ / tonne of cheese
0,04139
0,046402
Revenue, ‘000 Eur
263 394
278 004
No. of employees
1 427
1 396
FPCM milk, ‘000. tonnes
437
426
Cheese, tonnes
12 847,8
11 286,0
Note: The energy intensity index is calculated according to the GRI 302 Energy methodology.
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Intensity metric
Emissions intenstity, tonnes CO2e
2022
2023*
2023**
Per 1 employee
17,10
20,73
411,13
Per 1M Eur of revenue
92,91
104,11
2 064,5
Per tonne of FPCM milk
0,056
0,068
1,35
ENERGY & GHG EMISSIONS
18
GRI 305-1 | GRI 305-2 | GRI 305-3 | GRI 305-4
Emissions
Notes:
*Selected main method for reporting is market-based. Using location-based method total emissions in 2023
are 567 142 t CO2e
The increase in indirect emissions is due to the elimination of certificates proving the origin of green
electricity, as a result of the energy crisis caused by the Russian war in Ukraine, which has led to higher
energy prices.
2023m. For the first time, Scope 3 emissions were systematically assessed and included the following
categories in 2023: purchased goods and services, fixed assets, other energy and fuel related emissions,
business travel, waste generated, upstream transport.
Calculations were made in accordance with the Greenhouse Gas Protocol (GHG) and IPCC guidelines. The
calculation of emissions (Scope 1 and Scope 2) includes not only CO₂ but also other greenhouse gases (CH4,
N2O, HFCs) generated in the activity by converting them to CO₂ equivalent according to the standard
coefficients (IPCC, EEA Inventory guidebook, AIB for electricity), and denoting the final total number CO₂eq.
Emission intensity of the Group
Notes:
*Direct (Scope 1) and indirect energy emissions (Scope 2) are included in the calculation of the intensity
ratio. The increase in emission intensity is due to the proportionally lower amount of green electricity
purchased in 2023.
** Scope 3 emissions have been assessed from 2023 onwards, so the total intensity of all three assessment
areas has been highlighted in a separate column to maintain the comparability of Scope 1 and Scope 2 with
2022.
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Emissions category
Emissions, tonnes CO2e
2022
2023
Direct (Scope 1) GHG emissions
15 382
15 062
Indirect (Scope 2) emissions (market-
based)
9 022
13 880
Other indirect (Scope 3) emissions
-
544 997
Total*:
-
573 939
Other emissions (outside of Scopes)
Biogenic CO2
40 501
38 612
Indirect (Scope 2) emissions (location-
based)
7 116
7 084
WATER & EFFLUENT MANAGEMENT
19
GRI 303-1 | GRI 303-2 | GRI 303-5
By saving water and limiting wastewater, the Group can reduce its
operating costs. This includes lower water supply and thus lower
wastewater management costs which translates to overall better use of
resources. The Group conducts its water extraction operations in full
compliance with statutory regulations. All existing water points are
registered, water resources have been examined, approved and
documented in the Land Registry. In order to manage the extracted
resources efficiently, the Group conducts appropriate accounting and
control procedures, reports, and pays taxes accordingly.
Although there is no shortage of water in Lithuania, the Group strives to
minimize any significant negative impact on the environment in its
operations.
The Group uses fresh water in Telšiai for its operations, and the water
required for its production needs is extracted from its own boreholes at
the water point. Additionally, some water is supplied by the centralized
district water system (grid water), which accounts for less than 1% of the
total annual water consumption.
TICHĖ mineral water from own borehole is bottled using advanced
production technology and equipment compliant with EU standards
and national Food Quality and Safety Management System both of
which ensures the highest quality of mineral water.
Šilutės Rambynas consumes a relatively large amount of water. In order
to conserve water resources as much as possible, modern technologies
are being introduced to conserve water in production. During whey
processing, after concentrating the whey, the remaining whey water is
purified by a membrane system to ensure the water is then suitable for
washing the equipment. A project to modernize the dewatering baths is
planned: the equipment acquired will allow the production process to
reduce the need for manual labor, improving working conditions, and
ensure a consistently high product quality.
The Group complies with the requirements of the Law on Drinking
Water of the Republic of Lithuania, the Lithuanian Hygienic Standard
HN 24:2023 "Safety and Quality Requirements for Drinking Water"
approved by the Order of the Minister of Health of the Republic of
Lithuania No. V-455 of 23 July 2003 (wording of the Order No. V-141 of 31
January 2023), their amendments, and other legal acts.
The Group ensures the quality of drinking water supply and wastewater
management services in compliance with the Quality Requirements for
Public Drinking Water Supply and Wastewater Management Services
approved by Order No D1-639 of the Minister of the Environment of the
Republic of Lithuania of 29 December 2006 (Order No D1-15 of 13 January
2023, as amended from time to time); procedure “PR-32 Drinking Water
Supply and Maintenance. Wastewater disposal”. Also, conducts
programmatic supervision of drinking water in accordance with Control
Scheme CH, M30.
In accordance to a contractual agreement with a local wastewater
treatment provider, at the facility at Sedos str. 35, Telšiai, the Group is
allowed to discharge wastewater with the following pollution
concentrations: BOD7 - daily average concentration of pollutants 1100
mgO2/l; suspended solids - daily average concentration of pollutants 350
mg/l; total nitrogen - daily average concentration of pollutants 100 mg/l;
total phosphorus - daily average concentration of pollutants 20 mg/l.
Type
Quantity in megaliters (ML)
2021
2022
2023
Underground water
1037,530
1109, 26
1065,010
Grid supplied water
99,400
90,897
82,094
Total:
1136,93
1200,045
1147,104
Water consumption
Note: Water consumption accounting is carried out according to internal procedures. The Company does
not consume water in areas of water scarcity.
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WATER & EFFLUENT MANAGEMENT
20
The amount of water drawn from the city water supply in 2023 was
0.036 % for AB Žemaitijos pienas and 44.3 % for AB Šilutės Rambynas.
The total amount of water abstracted by the group from the district grid
was 7.16%.
WATER SOURCES
ŽEMAITIJOS PIENAS
The Company uses the following water boreholes in its food production
process:
3 fresh water boreholes
1 mineral water borehole "Tiche" for the production of mineral water
(Mažeikių g.4, Telšiai);
3 fresh water inlets from the city water supply of UAB "Telšių
vandenys" - backup in case of need in the food production process;
1 fresh water inlet (Mažeikių g.4, Telšiai) from the city water supply to
UAB "Telšių vandenys" - backup in case of need in the process of
mineral water production.
2 fresh water inlets from the city water supply of UAB "Telšių
vandenys" - fire-fighting inlets;
Improving water boreholes involves the following processes:
removal of hydrogen sulphide by aeration,
removal of iron, manganese, ammonium and mechanical impurities
in filters,
flushing of filters,
final disinfection of the treated water with chlorine dioxide.
The treated water is supplied/used for steam production, hot water
production, process equipment needs, domestic use, replenishment of
the refrigeration circulating water system).
The Group’s current wastewater management partner is UAB "Telšių
vandenys". Wastewater from milk processing must be properly
managed to prevent water pollution. The wastewater treatment shall
separate and dispose of particularly polluting wastewater for biogas
production.
Monitoring of borehole water is carried out by Vilniaus Hidrogeologija; In
accordance with the IPPCP, “Nepriklausoma tyrimų laboratorija”
monitors production and rainwater effluents; regular communication is
maintained with Telšių vandenys UAB regarding water and wastewater
quality matters. Contaminated wastewater is transported for biogas
production.
Every year the Group draws up investment and operational plans, as well
as an energy conservation action plan; sets wastewater pollution targets
(lower than contractual targets with the wastewater manager or the
IPPCP); sets targets to reduce water/wastewater use per unit of product
produced; cooperates with public authorities in adapting to prevailing
political and legal frameworks.
Šilutės Rambynas
AB-F "Šilutės Rambynas" uses two sources of drinking water. Water is
drawn from the district water grid for the main cheese-making
processes and for washing the surfaces of the equipment in contact
with foodstuffs. Drinking water extracted from its own operational
borehole is used for technological processes, tanker washing, and the
domestic needs of employees.
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Effluents
Unit
2022
2023
Change, %
Wastewater transferred for wastewater treatment
Domestic and industrial
wastewater
m³
1 288 440
1 258 012
-2,36
Animal by-products - ABP
Transferred for biogas
production
t
12 390
13 217
+6,67
Transferred to economic
operators
t
15 005
13 207
-11,98%
21
WASTEWATER (EFFLUENT) MANAGEMENT
A substantial quantity of by-products are generated during the dairy
processing process, such as milk and whey residues in tanks and
pipelines, as well as residues in mixing plants.
As part of the circular economy principles for reducing waste and
pollution and restoring & renewing natural systems, the Group sends the
by-products to a biogas plant, where by-products are mainly converted
into organic fertilizers and biogas, and then into electricity and heat.
Some of the animal by-products are handed over to local farmers to be
used as a feed for livestock. Today, the Group considers this use of
animal by-products to be the most cost-effective and environmentally
friendly, which is why a continuous cooperation with biogas plants and
local farmers is envisaged for the future.
In order to ensure the quality and reliability of the domestic and
industrial wastewater treatment, the wastewater is transferred to a
licensed wastewater management company. Surface wastewater is
discharged separately to a surface water treatment-filtration outfall. At
Šilutės Rambynas, the company carries out an in-house treatment of
contaminated industrial wastewater that is later discharged into the
district sewerage network. Wastewater storage and mixing tanks are
installed, which prevent instant contamination and allow for quality
control of the wastewater discharged into the treatment plant owned
by UAB Šilutės vandenys.
Notes: Accounting of wastewater generation is carried out in accordance with approved internal
procedures, in units of m³ (cubic metres) and t (tonnes).
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WATER & EFFLUENT MANAGEMENT
CONTENT LETTER FROM A CEO ACTIVITIES AND STRUCTURE ENVIRONMENTAL AREA SOCIAL AREA ECONOMIC AREASUSTAINABILITY AT THE GROUPABOUT THE SUSTAINABILITY REPORT EU TAXONOMY
WASTE MANAGEMENT (INCL. PACKAGING)
22
ŽEMAITIJOS PIENAS AB | SOCIAL RESPONSIBILITY (SUSTAINABILITY) REPORT | 2023
Waste and packaging management is an integral part of the Group’s
environmental sustainability management. The Group's operations
generate a significant amount of waste and, in line with other EU
Member States, the Group is committed to the Green Deal principles to
reduce the use of natural resources.
The use of recyclable containers is being increased, and
recyclable containers have been developed separately
for internal use and have been successfully adapted
and integrated into the recovery process. Products are
supplied to customers in returnable containers where
possible.
The aim is to replace the multi-component plastics
labelled "7 Other" with single-component plastics that
are easier to recycle, while maintaining the same shelf-
life.
Tests are being carried out with the aim of reducing the
amount of packing/packaging material for internal use.
Packaging made from recycled rPET is being tested,
both in bottles and in heat shrink.
For the correct identification and segregation of packaging waste in the
individual units, the Group has developed a procedure "Waste
Management PR-31”, which has been approved by the CEO.
As a dairy producer, the Group faces a constant challenge to select the
right packaging to balance maintaining the integrity of the product with
minimizing the environmental impact.
Or plastic and paper
packaging, where the
plastic is free from ink
contamination and can
be easily separated from
the cardboard
Replacing non-
recyclable packaging
with single-component
plastic packaging
Possibility of
generating less
waste
Searching for ways to
reduce cost associated
with waste
management
Regular
packaging review
Design, materiality,
weight
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WASTE MANAGEMENT (INCL. PACKAGING)
23
In order to develop efficient waste management of packaging, the
Group fulfills tasks set out by the Ministry of the Environment of the
Republic of Lithuania for the management of packaging and packaging
waste. All collected and sorted waste is transferred to a licensed
packaging waste management facility. The waste generated by product
packaging (including packaging for transporting products) is sorted into
recyclable (PET, HDPE, LDPE, PP) and non-recyclable (OTHER, C/PAP,
etc.) materials. In line with sustainable waste management procedures,
the Group's internal sorting and separating procedures are being
reviewed and adjusted in order to maximize the proportion of recyclable
plastics, cardboard, and other types of waste to be recycled.
The management of negative impacts depends on both the Group and
third-party waste management facilities in the waste management
chain. Waste and product packaging matters are generally reviewed
annually, unless a need for new EU legislation arises.
The Group’s waste management processes are subject to inspections
and assessments by regulatory authorities and audits by the Group’s
team of approved auditors, which assess the state of practices in place
and their compliance with the regulatory procedures. The Groups’ own
procedure "Waste Management PR-31” is fully audited once a year and
periodic limited-scale audits are carried out at individual processing
units.
The Group is committed to applying circular economy principles in all
areas of its operations to the extent that’s possible. The Group shall,
wherever possible, select only the waste handlers who are registered in
the State Registry of Waste Handlers, ensuring that waste management
is carried out to the highest standards. The cooperation contracts with
these waste managers are reviewed annually, assessing the quality of
the services provided and evaluating the waste managers using a 100-
point scoring system.
The Group also places great emphasis on waste sorting and control. The
waste generated is carefully managed, including sorting and weighing,
both at the point of generation and at the point of storage. These
measures enable the Group to manage waste efficiently, reducing its
environmental impact and ensuring sustainable waste management.
Waste by composition
Weight, t
2022
2023
Recyclable waste
Paper
267,0
247,0
Plastic packaging
48,9
71,0
Wood packaging
67,0
42,5
PET packaging
1,0
3,4
Glass packaging
1,8
3,0
Metals
97,2
0
Dairy industry waste
0
5587,0
Non-recyclable waste
Other waste
307,3
186,4
Multi-component packaging
107,2
109,8
Total
897,5
6250,2
Note: Data based on product logistic tables and data from GPAIS.
GRI 306-2 | GRI 306-3
Waste generated in operations
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Waste by composition
Weight, t
2022
2023
PET and other plastic packaging
57,4
49,7
Glass and glass packaging
2,4
3,8
Paper and cardboard packaging
239,1
242,9
Paper products
17,6
20,3
Wood packaging
70,1
31,8
Dairy processing waste
0
5587,0
Other waste
501,3
270,5
Total
888,0
6205,8
Dangerous waste diverted from
disposal
78,6
113,5
of which is directed to recycling (offsite)
4,6
4,0
Non-dangerous waste diverted from
disposal
809,4
6092,3
of which is directed to recycling (offsite)
386,7
5935,3
Total directed to recycling (offsite):
391,2
5939,3
WASTE & PRODUCT PACKAGING MANAGEMENT
24
GRI 306-4
Waste diverted from disposal
Notes: data is collected in accordance with legal requirements in the Unified Product, Packaging and Waste
Accounting Information System (GPAIS).
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WASTE MANAGEMENT (INCL. PACKAGING)
25
2023 ACHIEVEMENTS
PLANS FOR 2024
Started optimization for the amount of packaging and packaging
materials used.
Trials are underway to replace multi-component plastics labelled
"7Other" with single-component (more recyclable) plastics.
Conducted tests with recycled PET packaging (PET bottles and shrink
films).
Implemented a change in corrugated cardboard box design which
made packing process easier as well as eliminating the use of
adhesive tape. The changes were made in order to reduce the amount
of corrugated cardboard, to improve labor efficiency, optimize the use
of available packaging materials and to meet the shelf requirements
of the supermarkets. The change in the design of the two boxes from
mid-2023 onwards resulted in a saving of 33 814 kg of corrugated
board.
Conducted tests with attached caps: At the end of 2023, we were the
first dairy producer in Lithuania to introduce fresh dairy products in
pure-pack packaging with an attached cap.
Eliminated the use of corrugated cardboard containers for internal
production needs (transportation between production departments)
in favor of reusable containers. The amount of corrugated cardboard
saved is 10 884 kg.
Initiated assessment of the potential to reduce the amount of plastic
used for product packaging without affecting the safety and quality of
the product itself. The process started in mid-2023 and has led to a
reduction of 2500 kg of plastic that would have otherwise been
released to the market.
Began using corrugated cardboard boxes made of part or fully recycled
cardboard.
Complying with the packaging and product requirements of
individual EU networks.
Optimizing the Group’s internal processes in order to reduce manual
labor, save energy resources, and increase productivity.
Optimizing the amount of packaging and packaging materials used.
Increasing the use of reusable containers for the local market. This will
be achieved by actively collaborating with local chains to ensure that
short shelf-life fresh dairy products are placed on the shelves in
reusable containers only.
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SOCIAL
AREA
Shortening transport distances for raw materials and products
by using electric hydraulic trolleys.
Installing robotic packaging and palletizing equipment for
packaging the final product.
Increasing digitalization for the display of information, thus
reducing "paper logs".
EMPLOYEE WELLBEING
27
Employee wellbeing is the key to business success. To create and
maintain a sustainable workplace and ensure employee wellbeing, we
focus our efforts on the following key areas:
We use a variety of tools to monitor employee well-being:
Microclimate surveys - confidential personal interviews in which
employees express their views on working conditions, supervisors,
colleagues and other relevant issues.
Employee Opinion Analysis - this is used to make decisions on
measures to improve the microclimate and working conditions.
Investing in reducing heavy work - reducing manual labor in
technological processes through mechanization or automation:
Creating opportunities for all to prosper.
With more than 1,300 employees, we have a strong responsibility
towards our employees and the people who work for us in our
value chain. Our people are vital to our success, so we strive to
create a workplace for everyone who wants one.
Safe workplaces.
The aim is to ensure that all employees are trained and instructed in
occupational health and safety. All new employees are trained in
occupational health and safety, as well as fire safety before starting
work. All new recruits receive first aid training also.
Talent attraction & development.
The Group is constantly looking after the career opportunities of
young people, and is committed to ensuring that long-standing
employees with long and meaningful experience pass on the
knowledge they have gained to young potential talents.
Diversity & inclusion.
The Group pursues an active and responsible human resources
policy, does not discriminate on any grounds, and integrates
employees of all ages into the workplace.
In 2023, the Group carried out employee job satisfaction surveys in its
production units and branches in Vilnius, Kaunas, Telšiai, and Panevėžys.
The survey covered 401 out of 449 production employees and 35 out of
48 professionals working in the branches. Following the surveys,
improvement action plans were drawn up in each department, and the
surveys were repeated 6 months later in 2 of the 4 branches, to assess
the implementation of the action plan and the effectiveness of the
measures. A re-survey of the production units is planned for 2024.
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MATERIAL WELLBEING PACKAGE
28
We are committed to the material well-being of our employees, which is
why we not only pay a competitive salary that is in line with legal
requirements and labor market conditions, but also ensures that
employees who achieve their goals receive an adequate material welfare
package.
To ensure that employees consistently perform at their best, the Group
encourages all employees to ensure that their pay is linked to their
performance as much as possible. Employees are given opportunities to
earn additional income:
By completing additional tasks.
By doing extra work.
By applying for vacancies.
Additional benefits that may be granted to employees:
On the occasion of a first marriage.
On the death of a family member.
In case of financial hardship, a loan is granted.
Funding for studies.
Children of employees (16+ years old) could be employed during
summer time for fixed remuneration.
Incentive payments for the award of a bachelor's or master's degree.
For staff work anniversaries and jubilees.
Other benefits are also provided, such as leisure activities (health hikes
with the participation of employees' family members), the possibility for
employees to come to work by bicycle or scooter, for which the CGroup
has a dedicated storage area where loading of these vehicles can also
be arranged, and two days of paid leave to go to a medical institution.
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DIVERSITY, EQUALITY & INCLUSION (INCL. HUMAN RIGHTS)
29
GRI 406-1 | GRI 2-23 | GRI 2-30
The Group does not discriminate and does not differentiate on the basis
of gender, age, race, creed, or any other aspect in the context of
promotion opportunities or remuneration. We strive to ensure diversity
in the workplace based on mutual respect and trust, promoting equal
opportunities and allowing colleagues to reach their full potential. These
aspirations are enshrined in relevant procedures and policies:
The Equal Opportunities Policy and its implementing procedures
The Policy on Prevention of Violence and Harassment
Human Rights Policy
Code of Ethics
Standard of Procedures - Personnel Procedure (ISO) PR-03
During 2023, all these documents were reviewed and updated.
The Group shall at all times strive to respect and protect human rights
as defined in the Universal Declaration of Human Rights adopted by the
General Assembly of the United Nations and shall do so in accordance
with the conventions relating to human rights.
In accordance with the Labor Code of the Republic of Lithuania, the
Group has an elected Labor Council which performs clearly defined
social partnership functions. The Works Council represents the rights
and interests of employees by participating in information, consultation,
and other procedures which involve employees and their
representatives in the employer's decision-making. Žemaitijos pienas
has a Labor Council with 11 members. It also has an elected Chairperson
of the Labor Council and a Secretary of the Labor Council.
A new Labor Council was elected on 14 April 2022 for a three-year term.
During the year 2023, 3 meetings of the Labor Council were held.
The Group does not have any collective agreements with its employees,
but the possibility of concluding them in the future is not excluded.
During 2023, there were no cases of discrimination and human rights
violations in the Group.
Šilutės Rambynas is temporarily recruiting young, inexperienced
employees who are able to integrate well into the day-to-day operations
and adapt to the processes at hand. They are eager to get to know the
specifics of the work and to learn from the experienced ones. During
2023, 3 young staff members (17-18 years old) were recruited on a
temporary summer basis. Šilutės Rambynas also recruits trainees.
During the reporting period, 19 students had internships with the
Company.
ŽEMAITIJOS PIENAS AB | SOCIAL RESPONSIBILITY (SUSTAINABILITY) REPORT | 2023
CONTENT LETTER FROM A CEO ACTIVITIES AND STRUCTURE ENVIRONMENTAL AREA SOCIAL AREA ECONOMIC AREASUSTAINABILITY AT THE GROUPABOUT THE SUSTAINABILITY REPORT EU TAXONOMY
30
GRI 2-7 | GRI 2-8 | GRI 401-1
Employees
Category
Total number
Permanent
employees
Temporary
employees
Full-time
employees
Part-time
employees
Non-guaranteed
hours employees
2023
Total number, of which:
1288
1215
73
1199
89
0
By gender:
Women
584
550
34
519
65
0
Men
704
665
39
680
24
0
By company:
Žemaitijos pienas
1288
1215
73
1199
89
0
Šilutės rambynas
157
157
0
157
0
0
Notes: The number of staff actually employed on 31 December 2023 is given. The number of employees (total) is given for the end of the reporting period; the number of redundancies and hires is given for the whole reporting
period. The figures presented are headcount figures. The number of staff has varied only slightly between reporting periods and during the reporting period. There are no staff members who are not employees of the organization
during the reporting period and none during the reporting period.
New employees
Employee turnover
Total number per
category
Number of new
employees
Rate, %
Number of employees
who left the Group
Rate, %
2023
By gender:
Women
584
99
16.95 %
62
10.62 %
Men
704
180
25.57 %
124
17.61 %
By age group:
under 30 years old
156
110
70.51 %
66
42.31 %
30-50 years old
654
135
20.64 %
101
15.44 %
more than 50 years old
478
34
7.11 %
19
3.97 %
By company:
Žemaitijos pienas
1288
279
21.66%
186
14.44 %
Šilutės rambynas
157
43
27,39 %
32
20,38 %
Notes: *The rate is calculated as follows: the number of new staff in a given category divided by the total number of staff in that category. For example, the number of female recruits among all female employees.
ŽEMAITIJOS PIENAS AB | SOCIAL RESPONSIBILITY (SUSTAINABILITY) REPORT | 2023
DIVERSITY, EQUALITY & INCLUSION (INCL. HUMAN RIGHTS)
CONTENT LETTER FROM A CEO ACTIVITIES AND STRUCTURE ENVIRONMENTAL AREA SOCIAL AREA ECONOMIC AREASUSTAINABILITY AT THE GROUPABOUT THE SUSTAINABILITY REPORT EU TAXONOMY
All employees
Board
Top management
ŽEMAITIJOS
PIENAS
Šilutės
Rambynas
ŽEMAITIJOS
PIENAS
Šilutės
Rambynas
ŽEMAITIJOS
PIENAS
Šilutės
Rambynas
2023
Total
number, of
which:
1288
157
5
5
7
(5 of which
are board
members)
3
By gender:
Women
584
77
2
2
4
(2 of which
are board
members)
1
Men
704
80
3
3
3 (board
members)
2
By age group:
under 30
years old
156
14
0
0
0
0
30-50 years
old
654
59
3
0
4
(3 of which
are board
members)
0
more than
50 years old
478
84
2
5
3
(2 of which
are board
members)
3
Annual total compensation ratio
2023
Annual total compensation for the organization’s highest-
paid individual to the median annual total compensation
for all employees (excluding the highest-paid individual)
3:1
Percentage increase in annual total compensation for the
organization’s highest-paid individual to the median
percentage increase in annual total compensation for all
employees (excluding the highest-paid individual)
2.03
Percentage increase in median annual remuneration for
all employees
2.39
31
GRI 2-19 | GRI 2-10 | GRI 2-21 | GRI 405-1
Diversity of governance bodies and employees
Notes: the data for gender and age distribution does not include the data for Šilutė Rambynas. Šilutė
Rambynas plans to start measuring and reporting data for next year's report.
ŽEMAITIJOS PIENAS AB | SOCIAL RESPONSIBILITY (SUSTAINABILITY) REPORT | 2023
DIVERSITY, EQUALITY & INCLUSION (INCL. HUMAN RIGHTS)
CONTENT LETTER FROM A CEO ACTIVITIES AND STRUCTURE ENVIRONMENTAL AREA SOCIAL AREA ECONOMIC AREASUSTAINABILITY AT THE GROUPABOUT THE SUSTAINABILITY REPORT EU TAXONOMY
Average number of training hours
Employees
2023, hrs
By gender:
Women
2,83
Men
2,69
By employee category:
Management
9,60
Specialists
6,59
Workers
1,69
STAFF TRAINING & DEVELOPMENT
32
The Group's priority remains and will continue to be skills development.
All employees of the Group have the opportunity to improve their
knowledge and skills in person or remotely through internal and
external training, courses, seminars, conferences or exhibitions.
The Group invests in staff development and competence development
in various areas to increase staff motivation and to enable them to do
their job even better. The management of this topic is defined in the
Procedure "Personnel Management" PR-03.
In 2023, 1,476 employees participated in internal and 605 in external
training at Group level. In 2022, 1,712 staff participated in internal training
and 849 in external training.
In 2023, the ŽEMAITIJOS PIENAS participated in:
Youth Forum "Challenge. Youth Challenge "Active Summer".
Presentations of the project "Career Education in STEAM".
Opportunities exhibition "Telšiai - For Youth. Discover, Explore,
Learn".
VGTU Career Days.
ŽEMAITIJOS PIENAS also runs adaptation programs for new employees
and employees changing positions. To be implemented in 2023:
EU "Apprenticeship Project" - on-the-job training.
Mentor and Mentee Project - Mentors train new recruits and those
wishing to change roles, e.g. a production worker is trained for an
operator position; a technician who has moved to another
department is trained by a Mentor to work in a new position etc.
A total of 3885.26 hours of training will be provided in 2023.
The contract for the EU Structural Funds co-funded project 09.4.3-ESFA-
K-827-04-0028 "Improving the skills of employees in the workplace" was
signed at the end of 2020, with the aim of ensuring that employees are
continuously upskilled, are professionally mobile and able to move
quickly to other activities. The project aimed to provide on-the-job
training for employees.
The project will run from 2020 to 16 June 2023. 160 employees were
trained in the production and transport departments.
In the near future, the Group plans to carry out a digitization project of
its internal training in order to further encourage and involve employees
in the learning process.
GRI 404-1 | 404-2
Executive Reserve Programme - a multi-module training
programme for managerial candidates.
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CONTENT LETTER FROM A CEO ACTIVITIES AND STRUCTURE ENVIRONMENTAL AREA SOCIAL AREA ECONOMIC AREASUSTAINABILITY AT THE GROUPABOUT THE SUSTAINABILITY REPORT EU TAXONOMY
OCCUPATIONAL SAFETY & HEALTH
33
The Group has established an Occupational Safety and Health Service,
consisting of occupational safety and health specialists, to implement
occupational safety and health measures. Each year, these specialists
participate in various training courses, seminars and conferences to
improve their qualifications. The Group also has an Occupational Health
and Safety Policy.
All the Group's structural units and departments have designated
employees trained in occupational health and safety or departmental
employees who are responsible for the safety, health, and fire safety of
the employees in the department. They carry out:
Continuous risk assessments,
Control of breaches,
Employee briefings,
And other functions to ensure the health and safety of employees.
The Group provides the following health and safety training:
Induction and fire safety training for all employees.
Occupational safety training for specialist professions (locksmiths,
production workers, etc.).
Occupational safety training for higher risk jobs (forklift work, telfer
work, well work, etc.)
All new employees are trained in occupational health and safety, fire
safety, first aid and preventive measures before starting work. Before
being employed, workers must undergo a health check-up and hygiene
training for working with foodstuffs at the health facility.
Hazard identification, risk assessment, and incident investigation
Designated staff are responsible for occupational health and safety
within the units. All incidents shall be investigated and recorded in
accordance with the Regulations on the Investigation and Recording of
Accidents at Work approved by the Government of the Republic of
Lithuania.
Work-related hazards are identified by the Group's Occupational Safety
and Health Service during regular and periodic inspections of the units,
as well as by means of video surveillance cameras installed in the
workplaces to monitor occupational safety violations.
Hazards identified shall be recorded in the Group's network and sent to
the head of the unit with the measures to eliminate the hazard and the
time limit for implementation of the measure specified.
The Group hires an external company authorized to carry out the work
to assess occupational risks in all workplaces, and to carry out the
assessment and propose measures to prevent or reduce the risks. The
results of the occupational risk assessment are used to improve
workplaces, select personal protective equipment and develop safety
legislation.
The Group's rules of procedure state that every worker must
immediately report work-related hazards and dangerous situations to
the head of the unit or to the occupational safety and health service. The
Group's workplace rules state that an employee has the right to refuse
to work when there is a risk of injury or danger to his health. Anonymous
messages are provided in the form of message boxes into which
workers can drop anonymous written messages.
The Group ant its companies has adopted a procedure for recording and
investigating incidents. All employees are made aware of the obligation
to report incidents to the Head of Unit during briefings and training. All
incidents occuring are investigated, the causes are recorded and
measures are planned to prevent similar incidents.
GRI 403-1 | GRI 403-2 | GRI 403-5
ŽEMAITIJOS PIENAS AB | SOCIAL RESPONSIBILITY (SUSTAINABILITY) REPORT | 2023
CONTENT LETTER FROM A CEO ACTIVITIES AND STRUCTURE ENVIRONMENTAL AREA SOCIAL AREA ECONOMIC AREASUSTAINABILITY AT THE GROUPABOUT THE SUSTAINABILITY REPORT EU TAXONOMY
2022
2023
Žemaitijos
pienas
Šilutės
rambynas
Žemaitijos
pienas
Šilutės
rambynas
Number of fatalities as a
result of work-related injury
1 (traffic
accident)
0
0
0
Rate of fatalities as a result
of work-related injury
0,4
0
0
0
Number of high-
consequence work-related
injuries (excluding fatalities)
0
0
1
0
Rate of high-consequence
work-related injuries
(excluding fatalities)
0
0
0,8
0
Number of recordable work-
related injuries
2
0
8
0
Rate of recordable work-
related injuries
0,8
0
3,1
0
The main types of work-
related injury
Traffic
accident
(fatal) and
minor
injuries
Fracture,
contusion
of limb
Mild
accidents
N/A
Total number of hours
worked per year by all
employees together
2522520
332309
2562560
332309
OCCUPATIONAL SAFETY & HEALTH
34
GRI 403-9
Work related injuries
Notes: Rates are based on 1 000 000 hours worked. The company does not employ non-employees.
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COMMUNITY SUPPORT
35
ŽEMAITIJOS PIENAS projects and awards in 2023
Every year brings new experiences and challenges that encourage us to
move forward and spread the message of ŽEMAITIJOS PIENAS products
to the world. Last year was a year for projects and awards, of results
achieved, and appreciation received from consumers of the products
we supply.
ŽEMAITIJOS PIENAS products have been appreciated and noticed not
only in the Lithuanian market, but also worldwide. In 2023, the
Company's pride and joy, cheese "Džiugas", won 4 international awards,
highlighting the impeccable taste and quality of this cheese.
ŽEMAITIJOS PIENAS is delighted that Džiugas' many achievements are
moving full steam ahead towards the 100th milestone of value and
importance to the Company.
"Džiugas has been awarded three medals in the UK. "The Great Taste
2023 award, which recognizes two maturities of Džiugas cheese - 12
months and 36 months in 180 grams. Also a 36-month matured Džiugas
cheese in a 180 gram pack was awarded a gold medal at the
International Cheese and Dairy Awards 2023. "Džiugas has also been
recognized in Poland, where ŽEMAITIJOS PIENAS products were
recognized and appreciated at the Good Cheese Awards. Džiugas 12-
month aged cheese, packaged in cheese pieces, was awarded a silver
medal for its genuine taste and quality.
Pik-Nik CHAMPIONSHIP "PASIPLĖŠOM"
One of Pik-Nik's favourite traditions is the cheese sausage ripping
championship held in the Baltic States, Hungary, and Spain. In 2023, this
event brought people together and, in the form of a game, allowed
them to get to know and love cheese sticks. It is also important to
mention the exceptional Pik-Nik National Tattoo Campaign organized in
the Baltic States, Hungary, Spain, and Croatia. The interest and
involvement in the campaign was felt in all these countries. The
children's audience was the most engaged in the color tattoo game,
while Pik-Nik attracted new consumers and broadened brand
awareness.
France, the Czech Republic, Hungary, Germany, Poland and other
countries participating remotely. The event included judging and
tasting of 12-month, 18-month, 24-month, 36-month and 36-month old
products. "Maturity of Džiugas cheeses. Not only guests, but also the
Company's employees were able to enjoy the range of flavors of these
cheeses.
This year, the Pik-Nik brand was also added to the Company's award
shelf. In the United Kingdom, this product line was awarded two prize
positions, winning silver and bronze medals at the International Cheese
and Dairy Awards 2023 for the Pik-Nik Original 80 gram pack of cheese
sticks.
It is important for ŽEMAITIJOS
PIENAS to share the history,
tradition and exceptional
taste of Džiugas cheese in the
planning of the annual
Džiugiadienė. In 2023, on the
first Friday in May, the 21st
Džiugiadienis took place in
Telšiai, with guests from
mmm
ŽEMAITIJOS PIENAS AB | SOCIAL RESPONSIBILITY (SUSTAINABILITY) REPORT | 2023
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COMMUNITY SUPPORT
36
MAGIC - for MAGICAL moments
The milk chocolate line Magija's cottage cheese has also been
internationally recognized for its quality in Poland. The biscuit-flavored
curd cheese was awarded a gold medal at the Good Cheese Awards,
while the caramel and peanut curd cheese received two awards. The
gold medal was awarded for the winning position of the children's treat
and secured a win at the Innovative Product 2023 Awards.
It is important to note that the Magija brand has organized an exclusive
national campaign in Lithuania, Latvia, and Estonia in 2023. The
purchase of 3 Magija cheesecakes was entered into a game where the
main prize was an unforgettable trip to Disneyland theme park. The
company is delighted with the excellent results and the high level of
consumer engagement.
2024 will be a very important and symbolic year for the Company, as it
will mark the centenary of its rooted, centenary experience in dairy
production. Therefore, the 100th anniversary communication - "Tops to
Home all year round" - was already launched in 2023.
The following brands participated in the ZEMAITIJOS PIENO TOP Brands
campaign in Lithuania: "Magija", "TICHĖ", "Pik-Nik", "Džiugas" and
"Rambynas". The campaign broadened the awareness of these brands
and spread the message of the important anniversary.
Support for Ukraine
The unprecedented war launched by Russia in Ukraine, which has led to
the death of innocent civilians, the destruction of critical engineering
and public infrastructure, broken supply chains, and disrupted logistics,
and has led to a shortage of clean water and drinking water.
In 2023, the Company was not indifferent and contributed to the relief
effort in Ukraine with a donation of EUR 14 000.
ŽEMAITIJOS PIENAS AB | SOCIAL RESPONSIBILITY (SUSTAINABILITY) REPORT | 2023
CONTENT LETTER FROM A CEO ACTIVITIES AND STRUCTURE ENVIRONMENTAL AREA SOCIAL AREA ECONOMIC AREASUSTAINABILITY AT THE GROUPABOUT THE SUSTAINABILITY REPORT EU TAXONOMY
GOVERNANCE /
ECONOMIC AREA
PRODUCT SAFETY & QUALITY
38
The quality of our products is of the utmost importance to us, so we
control every step of the production chain, from the supply of raw
materials to the delivery of the product to the consumer.
The Group is guided by a Quality and Food Safety Policy approved by
the Board of Directors. Aims and objectives of the Food and Safety
Policy include:
To meet the requirements of the legislation and other regulatory
documents applicable to the Group and the requirements of the
interested parties by ensuring the quality and safety of the products.
To protect the environment by reducing material and energy
consumption in all stages of production.
Ensuring food safety in the supply chain, from the receipt of raw
materials to the final product the consumer receives.
To continuously improve production technology and products.
To provide consumers and customers with wholesome, authentic,
quality, and safe food products in a timely manner.
To carefully and competently study the needs of our consumers and
to react promptly to changes.
To continuously improve the performance of our integrated food
safety and quality management system in line with the
requirements of our customers, our retailers, and the international
standards, ISO 22000, FSSC 22000, BRC, and others.
To systematically improve the skills and awareness of all levels of
staff, ensuring their responsibility for product safety and quality, their
duties and their competences.
Žemaitijos pienas continues to be assessed against international
standards for food safety and quality management. During 2023, 8
assessments were carried out at ŽEMAITIJOS PIENAS and 4 at Šilutės
rambynas. The conclusions of which confirm that both companies
comply with the requirements of international food safety standards.
Šilutės Rambynas pays great attention to ensuring the quality and
safety of its products. Šilutė Rambynas operates under the following
integrated food safety and quality management systems:
BRCGS (BRC Global Standard) - since 2010
FSSC 2200 (includes ISO 22000:2005) - since 2019
HALAL Standard - since 2015
EcoAgros certification - since 2007
GRI 416-1 | 416-2
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CONTENT LETTER FROM A CEO ACTIVITIES AND STRUCTURE ENVIRONMENTAL AREA SOCIAL AREA ECONOMIC AREASUSTAINABILITY AT THE GROUPABOUT THE SUSTAINABILITY REPORT EU TAXONOMY
PRODUCT SAFETY & QUALITY
39
The Group has set the following food safety and quality targets for 2024-
2025:
Improving the quality of dairy products
Ensure food safety in the supply chain, from the receipt of raw
materials, to materials used in the final product
Remain at the level of the most advanced dairy producers in
Eastern Europe
Implement the proven New Product Development Plan
Ensure on-time delivery of products without transport
irregularities
Meet the requirements of international food safety standards
To improve the IMSMS system of AB "žemaitijos pienas" in
accordance with LEAN methods and to standardize workplaces,
ensuring that the production of products is carried out identically
in different shifts and by different employees
During the reporting period, 100% of the company's product and service
categories were tested for health and safety impacts. There were no
non-conformities related to the health and safety impacts of products
and services during 2023.
ŽEMAITIJOS PIENAS AB | SOCIAL RESPONSIBILITY (SUSTAINABILITY) REPORT | 2023
CONTENT LETTER FROM A CEO ACTIVITIES AND STRUCTURE ENVIRONMENTAL AREA SOCIAL AREA ECONOMIC AREASUSTAINABILITY AT THE GROUPABOUT THE SUSTAINABILITY REPORT EU TAXONOMY
RISK MANAGEMENT
40
The Group's risk management strategy is implemented through the
organization's operating principles, values and business philosophy,
consistent with a Risk Management Framework, including integrated
internal policies, procedures, and practices.
The general logic of the functioning of internal control is presented in
the Risk Management Framework Map.
The proper functioning of internal control is achieved through:
Establishing and maintaining an appropriate control environment.
Continuous monitoring and evaluation.
Horizontal and vertical communication, including information
systems supporting business processes.
It separates business decision-making and operational functions from
controlling functions; sets limits and controls on decision-making
powers; and defines collegial decision-making in business processes.
ŽEMAITIJOS PIENAS | Risk management map
Increasing level of detail in risk management system
Org.
strategy
Risk
management
strategy
Risk management
policies
Limits on material risks
General guidelines by area of
activity
Detailed guidelines (approval procedures,
procedures, orders, action plans)
Risks
Goals
Internal
control
systems
ŽEMAITIJOS PIENAS AB | SOCIAL RESPONSIBILITY (SUSTAINABILITY) REPORT | 2023
CONTENT LETTER FROM A CEO ACTIVITIES AND STRUCTURE ENVIRONMENTAL AREA SOCIAL AREA ECONOMIC AREASUSTAINABILITY AT THE GROUPABOUT THE SUSTAINABILITY REPORT EU TAXONOMY
RISK MANAGEMENT
41
SUSTAINABILITY RISK ASSESSMENT
In order to ensure the sustainability of the business due to the
increasing commitment of companies to and understanding of the
benefits of stricter regulation, the Group needs to take into account the
environmental, social, and economic (ESG) factors that affect the entire
value chain, both in the short and long term.
Anything that challenges the smooth functioning of supply and
demand for goods and services can pose a risk to value and supply
chain management. In order to manage potential risks, the Group
commits and obliges its suppliers and partners to actively pursue a
social responsibility policy in terms of environment, transparency, and
employees before signing contracts with suppliers. This clause is
included in all (100%) contracts signed with suppliers.
Risk assessment and management refers to the process of identifying,
assessing, and controlling any threats to the Group's capital and
earnings. Some degree of risk is always present in any operating system
and is important in determining sustainability risk management for all
businesses, organizations, and governments. By proactively identifying
and managing the risks that affect our supply chains, production,
operations, and other functions, we can build effective systems to
ensure business sustainability. Below is a model for assessing
sustainability and disclosing risks.
Employees
Culture, talent,
leadership, wellbeing
and development
Resources
Energy, water, raw
materials, waste, air
quality, GHG emissions
Finance
Profitability, return on
investment, risk
management
Services
Buildings, landscape,
public services,
infrastructure
management
Value chain
Supply chain, customers,
business model, product
innovation
Profitability
modelling
Setting financial
targets and
priorities
Sustainability
assessment
Identify areas of
risk and
opportunity
GRI 414-1 | GRI 308-1
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CONTENT LETTER FROM A CEO ACTIVITIES AND STRUCTURE ENVIRONMENTAL AREA SOCIAL AREA ECONOMIC AREASUSTAINABILITY AT THE GROUPABOUT THE SUSTAINABILITY REPORT EU TAXONOMY
RISK MANAGEMENT
42
Early identification of risks is essential for effective risk management.
Industries with longer supply chains tend to face higher risks, which
may arise from occupational health and safety incidents, shortages of
natural resources, or technical failures leading to shortages of raw
material supply. Risks can manifest themselves in a variety of ways,
ranging from those that are market-related to those that affect the
operations of our Group companies. Effective risk management is
becoming increasingly important, and we therefore present a number
of risk sub-systems that we need to take into account in our day-to-day
operations.
SUPPLY CHAIN SUSTAINABILITY RISKS
As a dairy farmer, an uninterrupted supply of raw milk is crucial for us.
When identifying supply chain risks, we need to look not only at the
suppliers of raw milk, but also at the suppliers of other raw materials
that supply the materials needed to produce and market our products.
ENVIRONMENTAL RISKS
Physical. Extreme weather and loss of biodiversity. From the business
development side to the supply chains, inadequately managed physical
risks to the Group's environment can have serious consequences.
Political. New legislation is being adopted and existing legislation is
being strengthened for all EU Member States. Aggressive climate
mitigation actions are proposed, with sustainable products becoming
the norm.
HEALTH & SAFETY RISKS
To prioritize active and engaged employees, we need to identify and
manage occupational health and safety risks that can threaten the
sustainability of the business, including workplace environment, air
quality, or other workplace hazards.
EMPLOYEE RISKS
Employee risk refers to the consequences of the actions of our
Company's employees when they deviate from the approved internal
regulatory documents and may damage the business reputation
through fraud or other illegal activities.
QUALITY RISK
When the quality of products or services does not meet the Company's
stated quality objectives and customer expectations, we are exposed to
quality risk. From production equipment to transportation, products can
be exposed to a range of quality risks at all stages of their life cycle.
TECHNOLOGICAL RISKS
Risks related to technology include hardware or software failures, data
risks, hardware attacks and non-compliance with data management or
others. Technological risks are affecting equipment and processes
associated with many business systems.
SECURITY RISKS
Security risks include physical risks, such as theft of documents or
intrusion into private domains, and cyber-security threats related to
data. A cyber-attack can lead to loss of information and economic costs,
with the risk of reputational damage or loss of sales and customers.
ENERGY RISKS
Energy risks expose us to risks including increases in the price of energy
resources, energy supply triggers, regulatory changes affecting energy
consumption, and customer demands to reduce our carbon footprint.
ECONOMIC RISKS
Economic risk refers to the risk that macroeconomic conditions, such as
inflation, changes in interest rates, exchange rate fluctuations or
economic sanctions pose to the Group.
LIABILITY PROTECTION RISK
We may be liable if our activities cause damage or injury to third parties,
whether to people, property, or business.
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COMPLIANCE & PREVENTION OF CORRUPTION
43
Code of Ethics
The Group operates in accordance with a Code of Ethics approved in
2018. This Code sets out standards of conduct for all employees,
regardless of position, scope of employment, etc. The Group has
appropriate internal processes in place to mitigate the risk of corruption
and bribery.
An Equal Opportunities Policy for the Group was approved in 2018. The
Company's Competition Compliance Policy was approved in 2021 in
order to achieve high standards of competition law compliance and
ethical behaviour towards its competitors. In our management's
assessment, the measures put in place are effective.
Oversight & responsibilities
The Group seeks to minimize the risk of legal non-compliance and to
ensure that the Group's operations comply with legal requirements and
standards. To this end, the Group's lawyers are involved in the decision-
making process and in the drafting and coordination of various policies,
procedures, and contracts.
Tax transparency
The Group's commitment is to calculate, declare, and pay taxes correctly
and in good faith, in accordance with the applicable laws of the
Republic of Lithuania. The Department of Finance is the overseeing
body for fair payment of taxes. The Group’s Management team is tasked
with preparation and fair presentation of the Group's consolidated
financial statements in accordance with EU Adopted International
Financial Reporting Standards. This includes overseeing and
implementing the necessary and adequate internal control measures
which ensure that the Group's consolidated financial statements are
prepared in a manner that is free from material misstatement, whether
due to fraud or error.
In preparing the Group and consolidated financial statements,
management is required to make an assessment of the Company's and
the Group's ability to continue as an ongoing concern and to disclose, as
necessary, matters relating to ongoing concern, and the application of
the relevant basis of accounting, unless management intends to
liquidate the Company and the Group or to cease operations, or unless
management has no realistic alternative but to do so.
During the reporting period, the Group did not impose any fines or non-
monetary sanctions for material non-compliance with laws and
regulations.
The Company is a member of
the Lithuanian Dairy Farms
Association and the Lithuanian
Food Exporters Association.
Prevention of corruption
The Group has a zero-tolerance approach to corruption and makes
significant efforts to prevent it in all its activities.
The Code of Conduct obliges employees to avoid situations that could
lead to conflicts of interest. The Group's policy in this respect strictly
prohibits the acceptance of gifts, invitations to meetings, cultural or
other events, that could lead to a mutual obligation of the parties. Efforts
are continuously made to ensure the widest or largest possible range of
suppliers.
In addition to price, quality and reliability of the supplier are important
criteria in the Group's evaluation methodology when purchasing goods
and selecting a supplier. Suppliers are audited before the purchase of
goods and only afterwards a decision is taken on the purchase of goods
or services. The Group purchases goods and services in accordance with
the principles of equality, non-discrimination, mutual recognition,
proportionality, and transparency.
GRI 2-25 | GRI 2-27 | GRI 2-28 | GRI 205-3
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One of the Group's guiding principles is to develop fair and transparent
cooperative relationships with suppliers, customers, and other entities.
However, the Group's policy prohibits its employees from offering gifts
to customers, suppliers, partners, or other persons that would help to
maintain cooperation. This rule does not apply to gifts of extremely low
value, such as holiday cards or greeting cards.
There were no confirmed incidents of corruption during the reporting
period.
Competition
The Group has a strong competition law culture. In order to ensure
effective compliance with competition rules, it has adopted a
Competition Law Compliance Policy.
The main objective of this policy is to provide guidance to all employees
from all Group companies on the basic principles of competition law
and to enable them to comply with them. The policy aims to enhance
the integration of competition rules across the Group, to set out rules of
conduct in dealing with competitors, customers, and suppliers, and to
provide guidelines for assessing such conduct.
Privacy Policy
The Group takes the protection of personal data seriously and therefore
strives to ensure the protection of personal data rights processing by all
means. Data subjects are the users of the products, partners, and other
persons who entrust us with their personal information, with the Group
being responsible for justifying this trust.
GRI 2-25
In this Privacy Policy, the Group:
Defines the commitment and responsibility to protect and respect
individual privacy.
Explains how it collects, uses, and protects (processes) personal data.
Informs data subjects about how their personal data is processed
and what rights each data subject has.
When processing the personal data of data subjects, the Group
complies with the Law on Legal Protection of Personal Data of the
Republic of Lithuania, the Law on Electronic Communications of the
Republic of Lithuania, and other directly applicable legal acts regulating
the protection of personal data, as well as with the instructions of the
competent authorities.
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The European Union (EU) taxonomy (Taxonomy Regulation, 2020/852,
and related delegated acts) is a system for classifying economic
activities in order to guide private investment towards environmentally
sustainable activities that contribute to the environmental objectives of
the European Green Deal.
The taxonomy defines the following environmental objectives:
Climate change mitigation.
Adaptation to climate change.
Sustainable use and protection of water and marine resources.
Transition to a circular economy.
Prevention and control of pollution.
Protecting and restoring biodiversity and ecosystems.
The taxonomy sets out criteria based on scientific evidence to assess the
sustainability of activities. Business activities that are included in the
taxonomy and meet its criteria can be classified as sustainable and
attract green investments.
Taxonomy-eligible economic activity is defined as an activity described
in the relevant delegated acts of the Taxonomy Regulation, i.e. it is
included in the Taxonomy. Companies that have identified that their
economic activity's revenue (Turnover), capital expenditure (CapEx)
and/or operating expenses (OpEx) are related to the activities described
in the delegated acts are required to carry out an analysis and disclose
the extent to which their activities meet the criteria of the taxonomy in
relation to these indicators. Taxonomy-aligned activity is one that meets
the criteria of the technical screening of the taxonomy, i.e. contributes
significantly to at least one of the six environmental objectives, causes
no significant harm to the other five, and complies with the minimum
safeguards.
In this report, in accordance with the provisions of the Taxonomy
Regulation and the related delegated acts, we provide the main
performance indicators of the group of companies (AB ŽEMAITIJOS
PIENAS together with its subsidiary) and information on the compliance
of taxonomy-eligible activities with the criteria.
Identifying taxonomy-eligible activities and calculating indicators
The Group carries out taxonomy-eligible activities and/or invests in
taxonomy-eligible measures that can contribute to the objectives of
climate change mitigation, adaptation and the transition to a circular
economy. The Group does not carry out activities that may contribute to
other environmental objectives of the taxonomy. The assessment of the
compliance of the Group's activities with the criteria of the taxonomy
has revealed that the Group has not prepared the climate change risk
and vulnerability assessment, i.e. it does not meet one of the criteria for
not causing significant harm. It is therefore concluded that the group's
companies do not currently carry out activities that are sustainable in
terms of the taxonomy (meeting the criteria).
It is important to underline that the Group fulfils the minimum
safeguards condition: it has implemented the recommended measures
for socially responsible and ethical business as set out in the OECD
Guidelines for Multinational Enterprises, and complies with the UN
Guiding Principles on Business and Human Rights.
Revenue
The main activities of the group - production and marketing of dairy
products - are currently not included in the taxonomy and are therefore
not subject to the taxonomy criteria. The fact that an activity is not
included in the taxonomy does not mean that it cannot be carried out in
an environmentally sustainable manner.
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Group companies derive income from other additional activities that are
included in the taxonomy. Some of the revenues generated by the
Company and its subsidiary in 2023 are consistent with these activities
defined in the taxonomy:
Renting of premises in own buildings - Acquisition and ownership of
buildings.
Transport services - Freight transport services by road.
Collection and transport of deposit containers - Collection and
transport of non-hazardous and hazardous waste.
The share of revenue from taxonomy-eligible activities is calculated by
dividing the revenue from products and services related to taxonomy-
eligible activities by the total revenue of the group. Only 1.89% of the
group's revenue is attributable to taxonomy-eligible activities (see Table
1).
CapEx
Some of the group’s additions to long-term assets through 2023
correspond to the following activities as defined in the taxonomy:
Buildings and building construction - Acquisition and ownership of
buildings.
Acquisition of light (passenger) vehicles - Transport by motorbikes,
passenger cars and light commercial vehicles.
Acquisition of a wind power plant - Installation, maintenance and
repair of renewable energy technologies.
Acquisition of freight vehicles - Freight transport services by road.
Road construction - Infrastructure enabling road transport and
public transport.
Capital expenditure for taxonomy-eligible activities is calculated as the
investment related to the activities defined in the taxonomy divided by
the total capital expenditure. In total, 59.18% of the Group's capital
expenditure is attributable to taxonomy-eligible activities (see Table 2).
OpEx
Part of the Group's operating costs according to the taxonomy through
2023 correspond to the following activities defined in the taxonomy:
Repair and maintenance of buildings - Acquisition and ownership of
buildings.
Maintenance and repair of light (passenger) vehicles - Transport by
motorbikes, passenger cars and light commercial vehicles.
Maintenance and repair of own freight vehicles - Freight transport
services by road.
Periodical repair and rental of equipment - Production of heat/cool
from bioenergy.
The taxonomy's definition of OpEx differs from the definition normally
used in financial accounting and covers a much smaller proportion of
expenses. Applying the taxonomy definition, we have included the costs
of renting and maintaining assets in the denominator of OpEx. In total,
56.37% of the Group's operating expenses are classified as taxonomy-
eligible activities (see Table 3).
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Table 1. Revenue according to taxonomy in 2023
Substantial
contribution criteria
Do no significant harm criteria
Economic
activity
NACE
code(s)
Absolute
revenue
2023
Proportion of
revenue,
2023
Climate
change
mitigation
Climate
change
adaptation
Climate
change
mitigation
Climate
change
adaptation
Water and
marine
resources
Circular
economy
Pollution
Biodiversity
and
ecosystems
Minimum
safeguards
Taxonomy-
aligned
proportion of
revenue,
2023
Taxonomy-
aligned
proportion of
revenue,
2022
Category
(enabling)
Category
(transitional)
thousand
Eur
%
%
%
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
%
E
T
A. Taxonomy-eligible activity:
A.1. Environmentally sustainable activities (Taxonomy-aligned)
Revenue of
environmentally
sustainable
activities
(Taxonomy-
aligned) (A.1)
0
0%
-
-
-
-
-
-
-
-
Y
0%
0%
-
-
A.2. Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
Acquisition and
ownership of
buildings
L68
372
0.14%
Freight
transport
services by road
H49.41,
H53.10,
H53.20,
N77.12
3 572
1.28%
Collection and
transport of
non-hazardous
and hazardous
waste
E38.11,
E38.12,
F42.9
1 315
0.47%
Total: A.1 + A.2
5 259
1.89%
B. Taxonomy-non-eligible activities
Revenue of
taxonomy-non-
eligible
activities (B)
272 745
98.11%
TOTAL: A + B
278 004
100%
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Table 2. Capital expenditure (CapEx) according to taxonomy in 2023
Substantial
contribution criteria
Do no significant harm criteria
Economic activity
NACE
code(s)
Absolute
Taxonomy
CapEx in
2023
Proportion of
CapEx,
2023
Climate
change
mitigation
Climate
change
adaptation
Climate
change
mitigation
Climate
change
adaptation
Water and
marine
resources
Circular
economy
Pollution
Biodiversity
and
ecosystems
Minimum
safeguards
Taxonomy-
aligned
proportion of
CapEx,
2023
Taxonomy-
aligned
proportion of
CapEx,
2022
Category
(enabling)
Category
(transitional)
thousand
Eur
%
%
%
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
%
E
T
A. Taxonomy-eligible activity:
A.1. Environmentally sustainable activities (Taxonomy-aligned)
CapEx of
environmentally
sustainable activities
(Taxonomy-aligned) (A.1)
0
0%
-
-
-
-
-
-
-
-
Y
0%
0%
-
-
A.2. Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
Acquisition and
ownership of buildings
L68
120
0.89%
Transport by
motorbikes, passenger
cars and light
commercial vehicles
H49.32,
H49.39,
N77.11
101
0.75%
Freight transport
services by road
H49.41,
H53.10,
H53.20,
N77.12
522
3.87%
Installation,
maintenance and repair
of renewable energy
technologies
F42, F43,
M71, C16,
C17, C22,
C23, C25,
C27, C28
5 922
43.93%
Infrastructure enabling
road transport and
public transport
F42.11,
F42.13,
M71.12,
M71.20
1 313
9.74%
Total: A.1 + A.2
7 978
59.18%
B. Taxonomy-non-eligible activities
CapEx of taxonomy-
non-eligible activities (B)
5 504
40.83%
TOTAL: A + B
13 482
100%
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Table 3. Operating expenditure (OpEx) according to taxonomy in 2023
Substantial
contribution criteria
Do no significant harm criteria
Economic activity
NACE
code(s)
Absolute
operating
expenditure
in 2023
Percentage of
operating
expenditure,
2023
Climate
change
mitigation
Climate
change
adaptation
Climate
change
mitigation
Climate
change
adaptation
Water and
marine
resources
Circular
economy
Pollution
Biodiversity
and
ecosystems
Minimum
safeguards
Taxonomy-
aligned
percentage
of operating
expenditure,
2023
Taxonomy-
aligned
percentage
of operating
expenditure,
2022
Category
(enabling)
Category
(transitional)
thousand
Eur
%
%
%
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
%
E
T
A. Taxonomy-eligible activity:
A.1. Environmentally sustainable activities (Taxonomy-aligned)
OpEx of environmentally
sustainable activities
(Taxonomy-aligned) (A.1)
0
0%
-
-
-
-
-
-
-
-
Y
0%
0%
-
-
A.2. Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
Acquisition and
ownership of buildings
L68
154
5.55%
Transport by
motorbikes, passenger
cars and light
commercial vehicles
H49.32,
H49.39,
N77.11
38
1.36%
Freight transport
services by road
H49.41,
H53.10,
H53.20,
N77.12
1 314
47.25%
Production of heat/cool
from bioenergy
D35.30
59
2.11%
Total: A.1 + A.2
1 565
56.37%
B. Taxonomy-non-eligible activities
OpEx of taxonomy-non-
eligible activities (B)
1 216
43.63%
TOTAL: A + B
2 782
100%
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GRI INDEX
50
Statement of use
AB „ŽEMAITIJOS PIENAS“
group of companies have
reported in accordance
with the GRI Standards for
the period from 1 January
to 31 December 2023
GRI 1 used
GRI 1: Foundation 2021
Applicable GRI Sector Standards
Not applicable
GRI 2: General Disclosures 2021
Disclosure
Location
1. The organisation and its reporting practices
2-1
Organizational details
4, 5 p.
2-2
Entities included in the organization’s
sustainability reporting
3, 4, 5 p.
2-3
Reporting period, frequency and contact
point
4 p.
2-4
Restatements of information
4 p.
2-5
External assurance
4 p.
2. Activities and workers
2-6
Activities, value chain and other
business relationships
5 p.
2-7
Employees
30 p.
2-8
Workers who are not employees
30 p.
3. Governance
2-9
Governance structure and composition
9 p.
2-10
Nomination and selection of the highest
governance body
9 p.
2-11
Chair of the highest governance body
9 p.
2-12
Role of the highest governance body in
overseeing the management of impacts
9 p.
2-13
Delegation of responsibility for managing
impacts
9 p.
Disclosure
Location
2-14
Role of the highest governance body in
sustainability reporting
9 p.
2-15
Conflicts of interest
9 p.
2-16
Communication of critical concerns
9 p.
2-17
Collective knowledge of the highest
governance body
9 p.
2-18
Evaluation of the performance of the
highest governance body
9 p.
2-19
Remuneration policies
31 p.
2-20
Process to determine remuneration
31 p.
2-21
Annual total compensation ratio
31 p.
4. Strategy, policies and practices
2-22
Statement on sustainable development
strategy
3, 7, 8 p.
2-23
Policy commitments
7, 8, 29 p.
2-24
Embedding policy commitments
7, 8 p.
2-25
Processes to remediate negative impacts
11, 43, 44 p.
2-26
Mechanisms for seeking advice and
raising concerns
11 p.
2-27
Compliance with laws and regulations
43 p.
2-28
Membership associations
43 p.
5. Stakeholder engagement
2-29
Approach to stakeholder engagement
11 p.
2-30
Collective bargaining agreements
29 p.
Risk management
40 p.
1GRI 3: Key Sustainability Themes 2021
3-1
Process to determine material topics
12 p.
3-2
List of material topics
13 p.
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Disclosure
Location
3-3
Management of material topics
13 p.
Economic topics
GRI 414: Supplier Social Assessment 2016
414-1
New suppliers that were screened
using social criteria
41 p.
GRI 205: Anti-corruption 2016
205-3
Confirmed incidents of corruption and
actions taken
43 p.
Environmental topics
GRI 302: Energy 2016
302-1
Energy consumption within the
organisation
15, 16 p.
302-3
Energy intensity
17 p.
GRI 303: Water and Effluents 2018
303-1
Interactions with water as a shared
resource
19 p.
303-2
Management of water discharge related
impacts
19 p.
303-5
Water consumption
19 p.
GRI 305: Emissions 2016
305-1
Direct (Scope 1) GHG emissions
18 p.
305-2
Energy indirect (Scope 2) GHG emissions
18 p.
305-3
Other indirect (Scope 3) GHG emissions
305-4
GHG emissions intensity
18 p.
GRI 306: Waste 2020
306-2
Management of significant waste-related
impacts
23 p.
306-3
Waste generated
23 p.
306-4
Waste diverted from disposal
24 p.
Disclosure
Location
GRI 308: Supplier Environmental Assessment 2016
308-1
New suppliers that were screened
using environmental criteria
41 p.
Social topics
GRI 401: Employment 2016
401-1
New employee hires and employee
turnover
30 p.
GRI 403: Occupational health and safety 2018
403-1
Occupational health and safety management
system
33 p.
403-2
Hazard identification, risk
assessment, and incident investigation
33 p.
403-5
Worker training on occupational
health and safety
33 p.
403-9
Work-related injuries
34 p.
GRI 404: Training and Education 2016
404-1
Average hours of training per year per
employee
32 p.
404-2
Programs for upgrading employee skills and
transition assistance programs
32 p.
GRI 405: Diversity and Equal Opportunity 2016
405-1
Diversity of governance bodies and
employees
31 p.
GRI 406: Non-discrimination 2016
406-1
Incidents of discrimination and corrective
actions taken
29 p.
GRI 416: Customer Health and Safety 2016
416-1
Assessment of the health and safety impacts
of product and service categories
38 p.
416-2
Incidents of non-compliance concerning the
health and safety impacts of products and
services
38 p.
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