2024
ŽEMAITIJOS PIENAS, AB
CONSOLIDATED MANAGEMENT REPORT
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended December 31, 2024
1
TABLE OF CONTENT
General information ...................................................................................................... 2
Information on the issuer's stock trading on the regulated market ................................ 4
Review of the group's business activities, risks, and prospects ..................................... 7
Other information ......................................................................................................... 28
Information on remuneration for 2024..........................................................................30
Corporate governance information................................................................................32
Information on compliance with the AB Nasdaq Vilnius listed companies code.........46
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended December 31, 2024
2
Reporting period covered by the management report
This consolidated management report is prepared for the 2024 period and includes significant events and data
occurring after the end of the reporting period. The document refers to ŽEMAITIJOS PIENAS, AB (hereinafter - the
Company or Issuer), Šilutės Rambynas, ABF (hereinafter - the Group company or Subsidiary). When facts and/or
data about both companies are described, they are collectively referred to as Group companies.
Brief history of the Company
The origins of ŽEMAITIJOS PIENAS, AB date back to 1924 when the Telšiai dairy was established, which at the
time was considered a major facility. In late 1984, Telšiai dairy began operations in new premises and operated until
the opening and privatization of one of the largest cheese factories in the Baltic region. ŽEMAITIJOS PIENAS, AB
was registered in the Register of Legal Entities on June 23, 1993, and re-registered on October 16, 1998. On May 1,
2004, by a decision of the general meeting of shareholders, it was reorganized by separation, establishing Žemaitijos
pieno investicija, AB. On December 18, 2019, the Company was reorganized by merging Baltijos mineralinių
vandenų kompanija, UAB which was deregistered from the Register of Legal Entities on January 10, 2020.
Company information and contact details
Registry data stored at the State Enterprise Centre of Registers of the Republic of Lithuania.
Company name: Akcinė bendrovė ŽEMAITIJOS PIENAS
Legal form: Public Limited Liability Company
Company code: 180240752
VAT payer code : LT802407515
Share capital: EUR 12,103,875
Registered office: Sedos g. 35, Telšiai, Lietuva
Phone: + 370 444 22201
Fax: + 370 444 74897
Email: info@zpienas.lt
Website: www.zpienas.lt
Stock trading code: ZMP1L
ISIN code: LT0000121865
LEI code: 5299005U9E85Y55OHK45
GENERAL INFORMATION
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended December 31, 2024
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GROUP STRUCTURE
ŽEMAITIJOS PIENAS, AB branches:
Branch name Data
Vilnius branch code: 123809154, address: Algirdo g. 40, 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, Panevėžys
The company's branches handle sales functions for dairy products within their designated territories and perform
other tasks assigned by the Company.
The Company has no representative offices.
Company name: Akcinė bendrovė (firma) “Šilutės Rambynas”
Legal form: Public Limited Liability Company (firm)
Company code: 277141670
VAT payer code: LT714167015
Share capital: EUR 2 493 028,50
Registered office: Klaipėdos g. 3, Šilutė, Lietuva
Phone: + 370 441 77442
Fax: + 370 441 77443
Email: info@rambynas.lt
ŽEMAITIJOS PIENAS,
AB
ŽEMAITIJOS PIENAS, AB Vilnius branch
ŽEMAITIJOS PIENAS, AB Kaunas branch
ŽEMAITIJOS PIENAS, AB Telšiai branch
ŽEMAITIJOS PIENAS, AB Panevėžys branch
Šilutės Rambynas, ABF
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended December 31, 2024
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Subsidiary – Šilutės Rambynas, ABF
Šilutės Rambynas, ABF specializes in the production and sale of fermented cheeses, pasteurized cream, and
pasteurized and concentrated whey (NACE 10.5 Group "Manufacture of Dairy Products," 10.51 Class "Operation of
Dairies and Cheese Making"). Additionally, the company provides leasing, transportation, warehousing, and milk
collection point maintenance services.
Šilutės Rambynas, ABF has no branches or representative offices.
Key economic activity objectives
The Group companies engage in economic and commercial activities (manufacturing, trade, service provision, etc.)
to generate benefits and profits for themselves and their shareholders. The objectives of these activities are to organize
and conduct operations in accordance with the company's statutes, aiming to generate revenue and profit while
satisfying the financial interests of shareholders and the interests of employees.
AB "ŽEMAITIJOS PIENAS" is primarily engaged in the development, production, and sale of dairy products,
including (Fermented cheeses and cheese products, packaged cheeses and cheese products, processed cheeses and
cheese products, creams and curd creams, butter and dairy spreads, mixed spreads and milk fats, pasteurized cream,
buttermilk, whey, and dried dairy products, fresh dairy products (milk, cream, curd, curd products, yogurts, desserts,
curd snacks, glazed curd snacks, and fermented dairy products). The Company operates in both Lithuanian and
international markets under the NACE 10.5 Group "Manufacture of Dairy Products" and 10.51 Class "Operation of
Dairies and Cheese Making."
According to the Industry Classification Benchmark (ICB), a widely used international business classification
standard, ŽEMAITIJOS PIENAS, AB falls under the category of Consumer Staples – Food, Beverages, and Tobacco.
On July 16, 2004, ŽEMAITIJOS PIENAS, AB entered into an agreement with Šiaulių Bankas, AB under which the
management of the accounts of the securities issued by the company was transferred to the competence of Šiaulių
Bankas, AB from July 23, 2004. The securities register (accounting) of Šilutės Rambynas, ABF is managed by Šiaulių
Bankas, AB based on the agreement concluded on July 16, 2004.
AB "ŽEMAITIJOS PIENAS" shares are listed on the NASDAQ OMX Vilnius Stock Exchange supplementary list
(symbol – ZMP1L). The company's securities have been listed since October 13, 1997. The ISIN code of the shares
is LT0000121865.
Below is a chart of the public trading of the company's securities on the stock exchange, showing that from January
2, 2024, to December 30, 2024, the stock price increased overall during the year. The change at the end of the
reporting period amounted to +0.56 euros or +32.94%. During the 2024 trading period, a total of 235,715 shares of
the company were transferred through executed transactions.
As of December 30, 2024, AB "ŽEMAITIJOS PIENAS" had a market capitalization of 94.33 million euros.
Compared to 2023, the company's capital value increased by 23.79 million euros.
INFORMATION ABOUT THE ISSUER'S TRADING IN SECURITIES MARKET
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended December 31, 2024
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During the reporting period, the volume of stock sales and price dynamics are presented in the chart below.
Historical stock data is presented in the table below.
Stock information of ŽEMAITIJOS PIENAS, AB
ISIN code: LT0000121865
Ticker / Symbol: ZMP1L
List / segment: Baltic secondary list
Nominal value: 0.29 EUR
Type of Security : Ordinary registered shares
Total issued shares: 41,737,500
Listed shares: 41,737,500
Voting right shares: 41,737,500
Listing start date: October 13, 1997
Listed on the secondary trading list since October 13, 1997
Share capital : 12,103,875 EUR
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended December 31, 2024
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The issuer’s securities have not been traded on other exchanges or organized regulated markets.
Šilutės Rambynas, ABF Securities (Shares)
Šilutės Rambynas, ABF shares are not traded on the Vilnius Stock Exchange or any other organized regulated
markets.
ŽEMAITIJOS PIENAS, AB holds 87.82% of Šilutės Rambynas, ABF ordinary registered shares, with full property
and non-property rights without any restrictions. Šilutės Rambynas, ABF does not own any shares of ŽEMAITIJOS
PIENAS, AB. Both companies do not hold each other's shares through orders or any other contractual basis.
Dividends
On April 26, 2024, the Annual general meeting of shareholders of ŽEMAITIJOS PIENAS, AB decided:
€200,000 to be allocated for employee bonuses.
€2,075,774 to be distributed as dividends, equivalent to €0.05 per share.
Šilutės Rambynas, ABF shareholders did not allocate dividends.
Stock information of Šilutės Rambynas, ABF
ISIN code: LT LT0000109217
LT 0000118945
LT 0000125668
Nominal value: 2.90 EUR
Type of security: Ordinary registered shares
Total issued shares: 859,665
Listed shares: Not listed
Voting rights shares: 859,665
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended December 31, 2024
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Share capital
As of December 31, 2024, the share capital of ŽEMAITIJOS PIENAS, AB consisted of:
Share class, type Number of shares
(units)
Nominal value
(EUR)
Total nominal
value (EUR)
Share of authorized
capital (%)
Ordinary registered
shares
41,737,500 0.29 12,103,875 100
All Company shares are fully paid, and no restrictions on the transfer of securities were applied to them during the
reporting period. The Issuer is not aware of any separate mutual shareholder agreements that may restrict the transfer
of securities and/or voting rights. According to the Company's data, there are no shareholders who have special
control rights.
As of December 31, 2024, the share capital of Šilutės Rambynas, ABF consisted of:
Share class, type Number of shares
(units)
Nominal value
(EUR)
Total nominal
value (EUR)
Share of authorized
capital (%)
Ordinary registered
shares
859,665 2.90 2,493,028.50 100
All shares of Šilutės Rambynas, AB are fully paid, and no restrictions on the transfer of securities are applied to them.
The Issuer is also not aware of any separate mutual shareholder agreements that may restrict the transfer of securities
and/or voting rights. According to the Company's knowledge, there are no shareholders who have special control
rights.
Acquisition and transfer of own shares
On April 26, 2024, the General Meeting of Shareholders decided to allocate a reserve for the acquisition of own
shares and set the conditions for the share buyback. The purpose of acquiring shares is their cancellation to increase
each investor’s ownership share in the Company's capital.
However, during the reporting period, the Company did not implement this decision and did not repurchase its own
shares. Additionally, during the reporting period, the Company did not transfer its own shares or enter into any other
transactions, such as pledging or imposing any other restrictions or limitations on them. There are no disputes or
claims regarding these shares.
At the end of the reporting period, the Company owned 222,020 of its own shares, representing 0.53% of all
ŽEMAITIJOS PIENAS, AB shares listed on the NASDAQ OMX Vilnius Stock Exchange.
Šilutės Rambynas, AB has not repurchased any of its own shares and does not hold any own shares on any other
grounds. Šilutės Rambynas, AB does not have any subsidiaries and does not engage in own share repurchases.
Product Safety and International Recognition
In 2024, ŽEMAITIJOS PIENAS, AB actively invested in the renewal and modernization of production unit
equipment to optimize manufacturing processes and enhance the efficiency of compliance with food safety and
quality standards. Taking into account international food safety and quality management standards, the following
audits and evaluations were conducted:
REVIEW OF THE GROUP'S BUSINESS ACTIVITIES, RISKS, AND PROSPECTS
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended December 31, 2024
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1. March 4–6, 2024 – Bureau Veritas conducted a process evaluation based on FSSC requirements.
2. April 18, 2024 – US Force audit assessed the compliance of the Mineral water production department with
NATO requirements.
3. June 10, 2024 – CB Certification conducted an evaluation for compliance with Rainforest Alliance requirements
and potential brand usage.
4. June 12, 2024 – Polish retail chain Żabka audited processes for compliance with its standards.
5. February 14, 2024 – The Azerbaijan State Food and Veterinary service conducted a remote process evaluation
and document verification. Result: ŽEMAITIJOS PIENAS, AB received approval to export products to
Azerbaijan.
6. June 27, 2024 – A quarterly audit was successfully conducted according to Kosher requirements.
7. July 15–19, 2024 – Global Quality certification agency performed an unannounced assessment, confirming
compliance with BRC and IFS standards.
8. July 22, 2024 – Lidl retail chain conducted an unannounced audit.
9. September 2–3, 2024 – Bureau Veritas Lit conducted a BRC audit in the Mineral water production department.
10. September 24, 2024 – Halal Correct conducted a remote evaluation, issuing an updated Halal certificate.
11. October 30, 2024 – Ekoagros performed the annual inspection of organic dairy product production.
12. October 31, 2024 – Firefield retail chain conducted a process audit.
13. December 19, 2024 – A quarterly audit was successfully conducted according to Kosher requirements.
ŽEMAITIJOS PIENAS, AB meets all international food safety standards and the requirements set by retail chains.
Sustainability and Environmental Protection
In 2024, ŽEMAITIJOS PIENAS, AB continued its sustainability initiatives:
Optimized the use of packaging materials.
Reduced plastic usage in dairy product packaging, resulting in 41,000 kg less plastic entering the market.
Additionally, secondary packaging was replaced with reusable returnable packaging, preventing the release of
5,300 kg of plastic into the market.
Conducted trials to replace multi-component plastic (marked as "7Other") with single-component plastic, which
is easier to recycle. Several suitable structures were identified and tested with the product throughout 2024.
Ensuring logistical efficiency, corrugated cardboard boxes made from 100% recycled cardboard were used, or
part of the corrugated cardboard was replaced with recycled material.
After modifying the design of corrugated cardboard boxes, the packaging process was facilitated, and adhesive
tape was eliminated. The changes were made to reduce the amount of corrugated cardboard, ease employees'
work, optimize the available packaging materials, and meet retail shelf requirements. In 2024, by changing the
design of one type of box, 43,700 kg less corrugated cardboard was introduced into the market. As a result of
this optimization, the weight of the corrugated cardboard box was reduced by 28%, and logistics (pallet loading
capacity) increased by 15%.
In 2024, the project continued, where corrugated cardboard packaging was eliminated for internal company needs
(transportation between production departments) and replaced with returnable packaging.
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended December 31, 2024
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We were the first in Lithuania to introduce Pure-Pak packaging with an attached cap for dairy products.
Tests are being conducted with recycled PET packaging (PET bottles and shrink films).
Where possible, tertiary packaging made from 100% recycled plastic was used, which additionally reduced the
amount of plastic introduced into the market by 800 kg per year.
Šilutės Rambynas, AB has been dedicated to environmental protection for many years, with the primary goal of
reducing production waste and conserving natural resources:
By concentrating whey, the remaining whey water is purified using a membrane system to a level suitable for
equipment cleaning, reducing water consumption and wastewater output.
To manage industrial wastewater, the company has installed wastewater collection and mixing tanks, preventing
sudden pollution and ensuring that wastewater discharged into Šilutė’s water treatment facilities meets quality
standards.
High-concentration wastewater is collected in a separate tank and, depending on production volume, is
transported 2–3 times per week to Tytuvėnai, where it is delivered to biogas producers.
At the end of the year, the company transitioned to cleaner fuel for steam production—liquefied natural gas
(LNG).
To meet the requirements of export markets and their retail chains, the following actions are planned for 2025:
1. Continue certifications according to BRC and IFS standards.
2. Comply with food safety and product quality requirements set by various EU and other export market
regulations by accommodating on-site evaluations and audits.
3. Meet packaging and product requirements imposed by different EU retail chains.
4. Optimize internal processes to reduce manual labor and save energy resources
5. Enhance employee qualifications and participate in international exhibitions and conferences.
6. Expand collaboration with scientific institutions and conduct research related to new product development.
A strong focus is placed on company employees by improving their qualifications through participation in
international exhibitions and conferences showcasing equipment innovations and advanced technologies related to
environmental sustainability, including waste recycling and circular production trends. The company collaborates
with scientific institutions to conduct research aimed at increasing product value-added benefits.
Investments of ŽEMAITIJOS PIENAS, AB in 2024
In 2024, the primary investment goal of the Company, as in previous years, was to enhance competitiveness, seek
and develop solutions to improve product quality, employee working conditions, and safety. Numerous small-scale
operational, repair, and programming works were carried out, which improved workplace safety, enhanced technical
equipment levels, reduced pollution, and lowered energy costs.
Key investments focused on the modernization of production units:
1. Completed investments in the cheese production unit, replacing older cheese-making equipment with more
efficient ones.
2. Implemented modern separation and microfiltration technology to enhance processing efficiency.
3. Automated the temperature and humidity control system in aging chambers.
4. Expanded the processed cheese production facilities to integrate new equipment and improve working
conditions for employees.
5. Installed an innovative cheese drying and cheese powder packaging line.
6. Completed the acidic whey demineralization project to improve resource utilization.
7. Finished the construction of wind turbines, obtaining permits for final adjustments and commissioning
procedures.
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended December 31, 2024
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8. Launched a feasibility study for the reconstruction and expansion of the fresh dairy product production unit,
including facility, equipment, and warehouse upgrades, to accommodate increased capacity.
9. Began developing a system for collecting, concentrating, and reusing milk residues from various production
process steps.
10. Carried out minor operational and maintenance works, which were integral to ongoing investments and aimed
at improving workplace safety, upgrading technical equipment, reducing physically demanding jobs,
minimizing wastewater pollution, and optimizing energy resources.
The goal is to ensure that equipment conditions, automation, and technological processes operate smoothly,
guaranteeing that the final product delivered to consumers is safe and of high quality.
Audits of Šilutės Rambynas, ABF in 2024
In 2024, the company's activities were evaluated according to various international standards, retail chain
requirements, and ethnic standards:
January 25, 2024 – Ekoagros conducted an annual inspection of organic dairy product production, labeling, and
sales processes.
February 12–15, 2024 – Bureau Veritas Lit assessed the company’s compliance with FSSC 22000 (ISO
22000:2018 + FSSC 22000) V5.1 standards.
April 11, 2024 – Bureau Veritas Lit conducted an evaluation and certification according to the BRC GS Food
Standard Version 9.
September 6, 2024 – Halal Correct Certification audited production processes for Halal compliance and issued
an updated Halal certificate.
October 2, 2024 – The Klaipėda County State Food and Veterinary Service (VMVT) conducted an audit of the
Hazard Analysis and Critical Control Points (HACCP) system, assessing the company's production and
packaging process compliance.
October 30, 2024 – Fayrefield Foods, an independent sales and marketing company from the UK, audited the
production, packaging, and labeling of string cheese sausages for food safety compliance.
December 11, 2024 – the retail chain LIDL conducted an unannounced audit, evaluating the production,
packaging, and labeling of string cheese sausages for compliance with international food safety standards.
Investments
In 2024, Šilutės Rambynas, AB-F invested in upgrading and modernizing equipment in various production units to
optimize manufacturing processes and ensure effective management of food safety risk factors. The company
acquired and put into operation long-term assets worth €1.5 million, a significant increase compared to €108,000 in
2023.
The largest investments included:
Two curd drying vats – €1,118,000
Internal roadway construction – €234,000
Natural gas equipment site – €71,000
Various cheese production support equipment, inventory, computer technology, and other assets – €75,000
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended December 31, 2024
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Products and Brands
Taking into account consumer expectations and needs, 27 new products were developed in 2024 and successfully
established themselves in the market:
1. Curd cheese, 22% fat
2. Baked curd cheese with garlic and turmeric, 22% fat
3. Smoked curd cheese with garlic and bacon, 22% fat
4. Kefir smoothie with mango, 0.5% fat
5. Still cactus and lemon-flavored soft drink "Gaja", 1L
6. Still cactus and lemon-flavored soft drink "Gaja", 1.5L
7. Processed cheese "Rambyno" cheddar flavor, 45% fat d.m., 150g
8. Carbonated berry-flavored soft drink "GAJA Tonic", 1.5L
9. Carbonated bitter lemon-flavored soft drink "GAJA Tonic", 1.5L
10. Crunchy dried hard cheese balls "Džiugas", 40% fat d.m., packed, 140g
11. Crunchy dried cheese balls with caramelized onion flavor, 45% fat d.m., 140g
12. Crunchy dried cheese balls with tomato flavor, 45% fat d.m., 140g
13. Crunchy dried cheese balls with cream and onion flavor, 45% fat d.m., 140g
14. Crunchy dried hard cheese balls "Džiugas", 40% fat d.m., packed, 50g
15. Crunchy dried cheese balls with caramelized onion flavor, 45% fat d.m., 50g
16. Crunchy dried cheese balls with tomato flavor, 45% fat d.m., 50g
17. Crunchy dried cheese balls with cream and onion flavor, 45% fat d.m., 50g
18. Glazed dessert "Jums" with cocoa, 24.5% fat, 38g
19. Glazed dessert "Jums" with vanilla, 24.4% fat, 38g
20. Kefir smoothie with dates, 0.4% fat, 450g
21. Processed spreadable cheese with black truffles, 160g
22. Processed spreadable cheese product with caramelized condensed milk, 175g
23. Hard cheese "Džiugas", 40% fat d.m., 160g
24. Crunchy dried cheese balls with truffles, 45% fat d.m., 50g
25. Salted butter "Džiugas", 81% fat, 170g
26. Lactose-free butter "Džiugas", 82% fat, 170g
27. Salted butter with truffles "Džiugas", 80% fat, 80g
The year 2024 was significant for ŽEMAITIJOS PIENAS, AB, as the company celebrated its 100th anniversary. The
company traces its origins back to 1924, when a dairy began operating in Telšiai, later growing into one of the largest
and most modern dairy processing companies in Lithuania. The centennial anniversary provided an important
opportunity to reflect on past achievements, completed projects, newly developed products, and recognitions received
both in Lithuania and internationally.
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended December 31, 2024
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ŽEMAITIJOS PIENAS, AB products are valued not only in Lithuania but also abroad. In 2024, the
company's products received various awards:
"Smakuje Dzieciom" Awards in Poland:
- Gold Medal – Chocolate-coated glazed curd snack with vanilla "Magija";
- Silver Medals – String cheese "Pik Nik Kids Twiller", Crunchy dried cheese balls "Džiugas", and
Natural mineral water "Tichė Kids".
International "Good Cheese" Awards:
- Gold and Bronze Medals – Hard cheese "Džiugas" aged 12 and 18 months;
- Bronze Medal in the Debut Category – Crunchy dried cheese balls "Džiugas" with cream and onion
flavor.
Innovation Category Recognition – Assortment of dried cheese balls "Džiugas"
"Lithuanian Product of the Year" Awards:
- Gold Medals – Crunchy dried cheese balls "Džiugas" and Innovative first-in-the-Baltics "A2
lactose-free milk";
- Silver Medal – Glazed curd snack "Protein M" with vanilla.
As in previous years, 2024 saw the traditional celebration marking the start of the "Džiugas" cheese production season
– "Džiugiadienis". This year was the 22nd edition of the event, which attracted significant attention both in Lithuania
and abroad. In honor of the company’s centennial, the event format was expanded—besides the annual virtual event,
physical celebrations were organized in Poland, Estonia, and the United Kingdom. During these events, participants
tasted "Džiugas" cheese, evaluated its flavor, aroma, color, and texture, and learned about pairing possibilities and
culinary applications.
In 2024, the "Pik-Nik Pasiplėšom!" championships were once again held in Lithuania, Latvia, and Estonia. These
events brought together both children and adults, encouraging consumers to actively engage with the products. In the
autumn, consumers across various European countries participated in the "Pik-Nik" tattoo campaign, highlighting
string cheese snacks as a perfect option for home, school, or outdoor activities.
In 2024, ŽEMAITIJOS PIENAS, AB placed a strong emphasis on social responsibility. The company carried out
social initiatives in Lithuania, Latvia, Estonia, Poland, Croatia, and Hungary. During these campaigns, consumers
had the opportunity to contribute to various social projects by purchasing the company’s products. The funds raised
were allocated to:
In Lithuania, for children with oncological diseases.
In Latvia, for the support of children with autism.
In Estonia, for the purchase of equipment for pregnant women and newborns.
In Poland and Croatia, for the education and development of children living in orphanages.
In Hungary, for the support of the "Heim Pál" foundation, which collaborates with local hospitals.
To mark the centennial, the company launched the campaign "ŽEMAITIJOS PIENAS – from generation to
generation for 100 years," aiming to emphasize the continuity of dairy farming traditions. The culmination of the
jubilee year was the national lottery "Šimtas metų – šimtas dovanų," conducted in Lithuania, Latvia, and Estonia.
The main prize of the lottery was a new Toyota Yaris Cross.
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended December 31, 2024
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The year 2024 became an important part of the company's history. The achieved results and implemented projects
contribute to the further growth of ŽEMAITIJOS PIENAS, AB and its international recognition, strengthening the
company's position in both local and foreign markets.
Financial Information
The company has selected key standard financial indicators for analysis, which are commonly used by businesses to
evaluate financial data. The main financial performance indicators reflecting the activities of the Group and the
Company for the years 2024 and 2023 are as follows:
Financial Indicators
Group Company
2024 2023
Change,
%
2024 2023
Change,
%
Revenue, thousand EUR 307 643 278 004 10,66 306 653 277 305 10,58
Gross Profit Margin, % 23,62 21,93 7,7 22,12 20,67 7,0
Net Profit Margin, % 8,87 7,72 15,0 7,94 7,09 12,0
EBITDA, thousand EUR 37 830 32 251 17,3 34 092 29 748 14,6
EBITDA Margin, % 12,30 11,60 6,0 11,12 10,73 3,6
ROE Profitability, % 18,71 17,33 7,9 18,10 17,05 6,2
ROA Profitability, % 13,60 12,88 5,5 12,95 12,51 3,5
Current Liquidity Ratio 3,25 3,33 -2,5 3,11 3,21 -3,2
Quick Ratio 1,79 1,54 16,2 1,67 1,48 12,8
Debt-to-Equity Ratio 0,38 0,35 8,6 0,40 0,36 11,1
Debt Ratio 0,27 0,26 3,8 0,28 0,27 3,7
Investment in Fixed Assets,
thousand EUR
19 805 13 482 46,9 18 952 12 215 55,2
The financial indicators mentioned above were calculated using the following formulas:
Gross Profit Margin = Gross Profit / Sales Revenue. The gross profit margin (or gross profit percentage) shows
the company's ability to generate profit from its core business activities, control sales revenue, and manage the level
of cost of sales. The higher the gross profit earned per each euro of sales revenue, the more efficient the company is.
Net Profit Margin = Net Profit / Sales Revenue. The net profit margin coefficient is the financial result of the
company’s operations and one of the most important (if not the most important) figures for the company's owners.
The net profit margin, as the ratio of sales revenue to net profit, provides a good description of the final profitability
of the company’s operations. In monetary terms, it shows how much net profit corresponds to one euro of sales
revenue. A higher coefficient value indicates higher profitability.
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
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EBITDA = Net Profit + Income Tax + Interest Expenses + Depreciation and Amortization Expenses. Earnings
before interest, taxes, depreciation, and amortization (EBITDA) is easily calculated by adding income tax and interest
expenses, as well as depreciation and amortization amounts, to net profit. This figure is important for isolating the
impact of financing costs and amortization or depreciation on the company’s operations. EBITDA profit is often used
alongside or even instead of cash flow figures.
EBITDA Margin = EBITDA / Sales Revenue.
ROE (Return on Equity) = Net Profit / Equity. The return on equity (ROE) indicator, also known as the equity
profitability ratio, is a measure of the efficiency of utilizing funds invested by owners. It helps determine how
effectively the owners' funds are being used. It heavily depends on the company’s capital structure. ROE shows how
much the company’s management has earned using the company’s capital that belongs to shareholders.
ROA (Return on Assets) = Net Profit / Total Assets. The return on assets (ROA) indicator is a measure of asset
utilization efficiency. The return on assets describes the ability to use total assets profitably. It shows what portion
of the total assets is recovered in the form of profit. ROA indicates how much the company’s management has been
able to earn from all utilized assets.
Current Liquidity Ratio = Current Assets / Current Liabilities. The current liquidity ratio, also known as the
current ratio, shows the company's ability to cover short-term liabilities with its short-term assets. It indicates how
many times current assets exceed liabilities. It describes the company’s ability to meet short-term obligations using
short-term assets. The value indicates how much one euro of short-term liabilities is covered by short-term assets.
Quick Ratio = (Current Assets – Inventory) / Current Liabilities. The quick ratio, also known as the acid-test
ratio, measures the company's ability to quickly (urgently) cover short-term liabilities with readily liquid short-term
assets, excluding inventory as a low-liquidity asset. It indicates how many times the most liquid assets exceed short-
term liabilities. The quick ratio describes the company's ability to meet short-term obligations using the most mobile
(easily convertible to cash) assets.
Debt-to-Equity Ratio = Total Liabilities / Equity. The debt-to-equity ratio, also known as the financial dependence
ratio, shows how much debt corresponds to one euro of equity. This indicator is also used as a measure of capital
structure and financial leverage within the group. Unlike the overall solvency ratio, in this case, the higher the value
of this indicator, the worse the company’s solvency position.
Debt Ratio = Total Liabilities / Total Assets. The debt ratio, also known as the indebtedness ratio, shows how much
debt corresponds to one euro of total assets. The lower the value of this indicator, the more debt is covered by assets;
thus, banks and other creditors prefer a low value of this ratio. This indicator is also used as a measure of capital
structure and financial leverage within the group.
When calculating the financial indicators for 2024 and 2023, all changes in the Statement of Financial Position were
assessed in accordance with the IFRS 16 requirements. Additionally, in calculations where depreciation and
amortization amounts were used, the amortization of received grants and the depreciation of right-of-use assets were
taken into account.
Sales under contracts with customers in 2024 increased by more than 10% compared to 2023, but the Company's
gross profit margin in 2024 increased from 20.67% to 22% compared to 2023. The Group's gross profit margin in
2024 increased by 7.7%. Both the Company's and the Group's gross profit increased in 2024 due to the rise in dairy
product prices. The shortage of qualified labor and the existing employees' demand for higher wages did not decrease
in 2024. The increase in wages raised the production cost of products and operating expenses.
When calculating net profit, all expenses of the Company and the Group were taken into account, including those
that may not be directly related to core operations or may be one-time expenses, as well as costs such as provisions,
impairments, etc. The net profitability of the Company and the Group in 2024, compared to 2023, significantly
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended December 31, 2024
15
increased due to successful/profitable sales in export markets. The net sales profitability ratio reflects the true
profitability of sales, considering all revenues and expenses.
The Company's EBITDA in 2024, compared to 2023, increased by 14.6%. The biggest impact was the increase in
net profit. Šilutės Rambynas, ABF ended 2024 with a profit, as a result, the Group's EBITDA in 2024, compared to
2023, increased by 17.3%.
The Company's current liquidity ratio in 2024 was 3.11, while in 2023, it was 3.21. The Group's current liquidity
ratio in 2024 was 3.25, compared to 3.33 in 2023. The current liquidity ratio shows how many times a company’s
current assets exceed its short-term liabilities, meaning the value of the indicator indicates how much one euro of
short-term liabilities is covered by current assets. The optimal range for this ratio is considered to be between 1.2 and
2.0, though the acceptable range varies across different industries.
The Company’s quick ratio (solvency ratio) in 2024 was 1.67, compared to 1.48 in 2023. The Group’s quick ratio in
2024 was 1.79, compared to 1.54 in 2023. The quick ratio for both the Company and the Group in 2024 increased by
more than 10% compared to 2023. The quick ratio indicates whether a company could quickly pay off its short-term
liabilities using its most liquid assets (assets that can be quickly converted into cash). A normal value is considered
to be between 0.5 and 1.5, while a value below 0.5 is considered unsatisfactory.
The debt-to-equity ratio for both the Company and the Group increased by approximately 10% in 2024 compared to
2023. The debt-to-equity ratio, sometimes referred to as the financial dependency ratio, reveals the company’s capital
structure by comparing its debt to its equity. This solvency ratio is closely related to the overall solvency ratio, with
the only difference being that its numerator and denominator are reversed. As a general rule, if the ratio is close to 1,
the company’s solvency position is considered normal, while a ratio of 0.5 is considered good. However, it is
important to note that the interpretation of this ratio depends heavily on the industry in which the company operates.
In industries requiring high capital investments, even a debt-to-equity ratio of 2 may be considered acceptable.
In 2024, the Company’s debt ratio was 0.28, compared to 0.27 in 2023. The Group’s debt ratio in 2024 was 0.27,
compared to 0.26 in 2023. This ratio indicates what portion of a company’s assets is financed by debt, meaning it
shows how much debt corresponds to each euro of assets. A lower debt ratio is considered better, as it indicates a
lower financial risk for the company.
Since the Company had financial obligations in 2024, it calculated the Interest Coverage Ratio. The interest coverage
ratio is a financial indicator that compares the company’s EBIT (earnings before interest and taxes) to its interest
expenses. This ratio reflects the company’s ability to meet its debt obligations.
The lower the ratio, the worse the company’s financial position.
The higher the ratio, the easier it is for the company to handle its financial leverage.
If the interest coverage ratio is close to or below 1, it signals a critical financial situation for the company.
The interest coverage ratio is calculated as follows:
Interest Coverage Ratio = EBIT / Interest Expenses.
The Company's and the Group's interest coverage ratios for 2024 are greater than 40.
The Company's operating expenses in 2024 amounted to €41.943 million, which accounted for 13.7% of revenue,
whereas in 2023, operating expenses were €34.120 million, making up 12.3% of revenue. The largest share of
operating expenses consisted of wages and marketing expenses. The Group's operating expenses in 2024 totaled
€43.541 million, accounting for 14.15% of revenue, while in 2023, they amounted to €35.757 million, or 12.86% of
revenue. The Group’s sales in 2024 increased by 10.66%, while operating expenses rose by 21.8% due to higher
marketing costs and sales expenses.
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended December 31, 2024
16
Situation of the dairy sector in Lithuania and the activities of ŽEMAITIJOS PIENAS, AB in 2024
Comparison of raw milk procurement quantity and prices of ŽEMAITIJOS PIENAS, AB in 2024 and 2023:
* The procured milk is recalculated to the standard level using a specific coefficient, which is calculated based on the fat and
protein content.
The dairy sector in Lithuania is an important part of the agricultural industry, facing various challenges and
achievements while having a significant economic and social impact. ŽEMAITIJOS PIENAS, AB collaborates with
dairy producers who focus on three key aspects:
1. Dairy farms of various sizes;
2. Aiming to improve farming efficiency;
3. Investing in modern technologies and innovations to enhance productivity.
For many years, the company has paid a competitive price to dairy producers for higher-quality milk that exceeds
EU standards. Every farm, regardless of its size, has the opportunity for successful development if it focuses on
productive and high-quality milk production.
The average quantity of raw milk procured and recalculated to standardized indicators by ŽEMAITIJOS PIENAS,
AB in 2024 amounted to 459 thousand tons, which is 7.71% more than in 2023 (426 thousand tons).
Challenges in the Lithuanian raw milk market in 2024
In 2024, the Lithuanian raw milk market faced climate change challenges, which led some farmers to change their
business activities or cease dairy farming. Rising temperatures and the presence of non-native pests negatively
affected fodder quality, contributing to increased milk production costs. Additionally, dairy farms encountered
difficulties due to the energy crisis, rising energy and fertilizer prices, and geopolitical tensions.
A notable trend is that small farms with 1 to 14 cows were the most affected and ceased operations. However, despite
the decline in the number of dairy farms, there is a trend toward farm consolidation—milk yield per cow is increasing,
and large dairy farms are occupying an increasing share of the market.
The average purchase price of raw milk procured and recalculated to standardized indicators in 2024 was 357.9
EUR/t, which is 15.25% more than in 2023 (310.5 EUR/t). The dairy product market is characterized by significant
price fluctuations, which are influenced by the dynamics of supply and demand for dairy products.
ŽEMAITIJOS PIENAS, AB operates in an open market, where a large portion of production is exported – more than
half of the processed milk is sold to foreign markets. As a result, international market changes directly affect both
the prices of Lithuanian dairy products and the level of raw milk procurement prices in Lithuania.
In Q4 2024, the procurement price of natural raw milk at ŽEMAITIJOS PIENAS, AB reached 564.9 EUR/t, which
is 32.8% more than in Q4 2023 (425.3 EUR/t). This price increase was partially driven by the recovering export
market and the growing demand in foreign markets.
The subsidiary company ŠILUTĖS RAMBYNAS, ABF does not directly purchase raw milk from dairy farms. The
raw milk used for its product manufacturing is procured from ŽEMAITIJOS PIENAS, AB.
Raw Milk Procurement
(Recalculated to Standardized
Indicators*)
2024 2023
Change Compared to 2024
vs. 2023, %
Procured Milk Quantity (thousand tons) 459 426 7,7 %
Procurement Milk Price (EUR/t) 357,9 310,5 15,3 %
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended December 31, 2024
17
In 2024, the total sales revenue of ŽEMAITIJOS PIENAS, AB GROUP reached 307.6 million EUR (307,643
thousand EUR), representing an increase of 10.66% compared to 2023, when sales amounted to 278,004 thousand
EUR.
The sales revenue of ŽEMAITIJOS PIENAS, AB in 2024 amounted to 306 million EUR (306,653 thousand EUR),
which is 10.58% more than in 2023 (277,305 thousand EUR).
The largest share of the company's revenue is generated in the Lithuanian market, accounting for 48% of total revenue
(2023 – 51%). The European Union markets accounted for 36% of total revenue in 2024 (2023 – 35%), while other
international markets contributed 16% (2023 – 14%).
The top export markets with the highest turnover in 2024 were Poland, Latvia, Estonia, Germany, the Netherlands,
Italy, Kazakhstan, and the USA.
ŽEMAITIJOS PIENAS, AB products are widely exported and well-known in international markets.
Company sales by geographical segments (secondary segments) in 2024 and 2023:
No.
Sales by
geographical
segments (thousand
EUR)
2024
% of Total
Revenue
2024
2023
% of Total
Revenue 2023
Change 2024
vs. 2023 (%)
1 Lithuania
147,852 48.21 % 140,049 50.50 % 5.57 %
2 EU Countries
109,357 35.66 % 97,068 35.00 % 12.66 %
3 Other Countries
49,444 16.12 % 40,188 14.50 % 23.03 %
4 Total
306,653 100% 277,305 100% 10.58 %
Group companies' sales by geographical segments (secondary segments) in 2024 and 2023:
No.
Sales by
geographical
segments (thousand
EUR)
2024
% of Total
Revenue
2024
2023
% of Total
Revenue
2023
Change 2024 vs.
2023 (%)
1 Lietuva 147,317 47.9 % 139,220 50.08 % 5.82 %
2 ES šalys 110,238 35.8 % 97,931 35.23 % 12.57 %
3 Kitos šalys 50,088 16.3 % 40,853 14.69 % 22.61 %
4 Viso 307,643 100% 278,004 100% 10.66 %
Export Expansion and Achievements in 2024
Export remains the company's main strategy.
In 2024, ŽEMAITIJOS PIENAS, AB exported its products to 48 countries, and export market turnover increased by
28% compared to 2023.
A significant breakthrough was recorded in the export sales of "Pik Nik" and "Cheerafa" string cheese snacks. In the
United Kingdom and Ireland, these products have already established themselves in the market, with customers
appreciating their taste and quality. In the Netherlands, "Cheerafa" became available in major retail chains, and sales
are steadily increasing. In the German market, "Džiugas" cheeses and the "Magija" glazed curd snack line gained
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended December 31, 2024
18
consumer interest through "in & out" sales, signaling growing product recognition. It is expected that these products
will become a permanent part of retail assortments.
Despite the challenges caused by the war, Ukraine remains one of the key export markets. Here, the product
assortment is actively expanding, and new supply contracts are being signed. The Croatian market is also showing
steady growth, with new agreements signed with retail chains and an expansion of the existing clients' product range.
Croatia was one of the first export countries to introduce "Džiugas Cheese Balls", which has received highly positive
feedback in all export markets and is now positioned in the healthy snacks category.
The popularity of "Magija" glazed curd snacks is also growing in Georgia, where one of the largest retail chains
successfully sells not only these snacks but also other ŽEMAITIJOS PIENAS, AB brands: "Džiugas," "Germantas,"
and "Pik Nik."
Social Initiatives in Export Markets
Expansion in export markets involves not only increasing sales but also strengthening collaboration with local
communities through social initiatives.
In Hungary and Croatia, social campaigns encouraged consumers to not only become more familiar with the
company's products but also to contribute to supporting socially disadvantaged groups in their countries.
Marketing and Sales Promotion Initiatives
As part of export expansion, various marketing initiatives are consistently implemented to increase product awareness
and strengthen the connection with consumers:
“Džiugiadieniai” – "Džiugas" cheese tasting events organized in export markets to introduce the product to
buyers and clients. Event participants have the opportunity to directly learn about the product’s characteristics
and pairing possibilities.
“Lithuanian Days” in foreign retail chains – special events where products are showcased in stores, tastings
are held, and direct interaction between producers and consumers takes place. In 2024, such events were held
in Germany, Ireland, and Croatia.
Export Strategy and Future Goals
As brand awareness grows and sales channels expand, the number of export markets is also increasing. This
encourages continuous improvement of service processes, adapting products to meet individual market requirements,
investing in advertising projects, and enhancing the company’s expertise in various fields, including marketing,
management, finance, law, and technology.
The company’s strategic goal is to develop brands with minimal adaptation to export markets while maintaining their
authenticity. To achieve this, market trends are continuously analyzed, and global resources are assessed to ensure a
competitive advantage. The biggest challenges are standing out among competitors, offering unique value to
consumers, and encouraging more frequent product consumption while considering each country’s market maturity,
traditions, and competitive environment.
The ŽEMAITIJOS PIENAS, AB export team serves as brand ambassadors, leveraging their knowledge, experience,
and persistence to establish a presence in new markets and introduce the world to high-quality Lithuanian dairy
products.
Distribution of Sold Products by Product Groups in 2023 and 2024 for ŽEMAITIJOS PIENAS, AB:
No
Sales by Product
Groups (thousand
EUR)
2024
% of Total
Revenue 2024
2023
% of Total
Revenue 2023
Change 2024
vs. 2023 (%)
1
Fermented and
Processed Cheeses
135,767 44.27% 117,207 42.27% 15.84%
2
Fresh Dairy Products
97,299 31.73% 95,098 34.29% 2.32%
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended December 31, 2024
19
3
Butter and Spreadable
Mixtures
34,936 11.39% 27,783 10.02% 25.75%
4
Dried Dairy Products
22,381 7.30% 24,849 8.96% -9.93%
5
Other
16,270 5.31% 12,368 4.46% 31.55%
6 Total
306,653 100%
277,305
100% 10.58%
Distribution of sold products by product groups in 2023 and 2024 for the group:
No
Sales by Product
Groups (thousand EUR)
2024
% of Total
Revenue 2024
2023
% of Total
Revenue
2023
Change 2024 vs.
2023 (%)
1
Fermented and Processed
Cheeses
137,958 44.84 % 118,465 42.61 % 16.45 %
2 Fresh Dairy Products 97,842 31.80 % 95,584 34.38 % 2.36 %
3
Butter and Spreadable
Mixtures
34,936 11.36 % 27,783 10.00 % 25.75 %
4 Dried Dairy Products 22,381 7.28 % 24,849 8.94 % -9.93 %
5 Other 14,526 4.72 % 11,323 4.07 % 28.29 %
6 Total 307,643 100% 278,004 100% 10.66 %
Sales classified under Other Products include raw milk, raw cream, kastinys, water products, and ice cream sales.
Comparing 2024 to 2023, the largest turnover change was in the Other Product Group, which increased by 31.55%.
This was influenced by the increase in the average selling price of raw cream (in 2024 compared to 2023, the average
selling price of raw cream increased by 44%).
The turnover of butter and spreadable fat mixtures increased by 25.75% due to the increase in the average butter
price. The turnover of fermented and processed cheeses increased by 15.84% due to increased demand. The turnover
of dried dairy products decreased by 9.93% due to a decrease in demand for skimmed milk powder and whey powder.
Šilutės Rambynas, ABF Operational Overview
The main activity of Šilutės Rambynas, ABF is the production and sale of fermented cheeses and cheese products,
as well as the production and trade of pasteurized cream, pasteurized, and concentrated whey (NACE 10.5 group –
"Manufacture of dairy products," 10.51 class – "Operation of dairies and cheese making"). In addition to its main
activities, the company also provides rental, transportation, warehousing, milk collection point servicing, and other
related services.
Šilutės Rambynas, ABF has not established any branches or representative offices.
Šilutės Rambynas, ABF does not purchase raw materials directly from producers – all milk needed for production is
purchased from ŽEMAITIJOS PIENAS, AB. The raw material purchase price is determined by the formula: milk
price + ŽEMAITIJOS PIENAS, AB collection costs (excluding transportation expenses).
In 2024, the company purchased 6,175 tons of natural milk, compared to 5,042 tons in 2023, which represents an
increase of 1,133 tons (or 22.5%).
The average price of milk purchased in 2024, recalculated based on standardized parameters, was 372.7 EUR/t,
whereas in 2023, the price was 319.3 EUR/t. Over the year, the average raw milk price increased by 53.4 EUR/t or
16.7%.
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended December 31, 2024
20
Despite the increase in milk procurement volume, the company's purchased raw material volumes remain lower than
pre-pandemic levels. This is influenced by reduced demand for the company's produced goods.
ABF "Šilutės Rambynas" specializes in cheese production. The production volumes for 2023 and 2024 are shown in
the graph below:
Production and Sales Results in 2024
In 2024, ABF "Šilutės Rambynas" produced 5,595 tons of cheese, which is 1,052 tons (or 23.2%) more than in 2023.
The increase in production volume was driven by growing demand for string cheese snacks.
A significant impact was also made by the new semi-hard fermented cheese production line, which was put into
operation at the ŽEMAITIJOS PIENAS, AB factory in 2020. As a result, the production of fermented cheeses such
as Gouda and Tilsit remains at a low level.
Production changes by category:
Production of fermented cheese products increased by 79 tons (or 10%) in 2024.
Production of string cheese snacks grew by 27.7%, from 3,027 tons in 2023 to 3,866 tons in 2024.
Production of other cheeses increased by 25.8%, or 115 tons.
In both 2023 and 2024, all procured raw materials were processed into cheese.
The majority of the company's produced goods are sold through the parent company, ŽEMAITIJOS PIENAS, AB.
Sales Volumes in 2024:
The total value of sold products reached 44,583 thousand EUR, which is 33.7% more than in 2023, when
sales amounted to 33,338 thousand EUR..
Sales growth was driven by a significant increase in "Pik-Nik" string cheese production and the rise in raw
product prices.
Raw cream price changes:
The average price of 40% fat cream increased from 2,204 EUR/t (2023) to 3,188 EUR/t (2024), representing
a 44.6% growth.
298
279
870
791
3866
3027
561
446
0
1000
2000
3000
4000
5000
6000
2024 m. 2023 m.
Fermented cheeses Fermented cheese product Pik-Nik Kiti
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended December 31, 2024
21
The sales structure by market is presented graphically:
Marketing strategy and sales risk management
Since the main sales of Šilutės Rambynas, ABF are conducted through the parent company, ŽEMAITIJOS PIENAS,
AB, the company does not invest separately in marketing and advertising..
For the same reason, the company does not directly face significant market uncertainty or client reliability risks.
To ensure smooth payments and minimize financial losses, the following measures are applied to direct sales clients:
Advance payment system for products;
Deferred payment system – however, all transactions are insured by the trade credit insurance company
"Coface", in compliance with the established insurance limit.
Finiancial Information
The company, when analyzing its operational efficiency, applies key standard financial indicators that are widely
used for corporate financial data analysis.
The main financial performance indicators for 2024 and 2023, reflecting the company’s results, are as follows:
Financial Indicators 2024 2023
Change
(%)
Revenue (EUR) 44,582,566 33,338,601 33.7
Gross Profit Margin (%) 10.30 10.32 -0.2
Net Profit Margin (%) 6.20 4.83 28.4
EBITDA (EUR) 3,771,376 2,541,162 48.4
EBITDA Margin (%) 8.46 7.62 11.0
ROE (%) 17.52 12.38 41.5
ROA (%) 15.02 10.29 46.0
Current Liquidity Ratio 4.75 3.24 46.6
Quick Ratio 3.58 2.04 75.5
Debt-to-Equity Ratio 0.12 0.15 -20.0
Debt Ratio 0.10 0.13 -23.1
Investment in Fixed Assets (EUR) 852,766 1,267,098 -32.7
Current and potential risks, their factors, uncertainties, and management in the group's activities
Detailed information on the extent of risk, risk management measures, potential risk types, uncertainties, and the
internal control system is provided in the Company's Management Report..
AB "Žemaitijos
pienas"
94%
Lietuva
kt.
3%
Latvija
2%
Kitos
šalys
1%
2024 m.
AB "Žemaitijos
pienas"
94%
Lietuva
kt.
1%
Latvija
3%
Kitos
šalys
2%
2023 m.
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended December 31, 2024
22
Financial and other risks, as well as their management aspects, are also thoroughly disclosed in Section 28, "Financial
Risk Management," of the 2024 audited annual financial statements.
The Company and Group companies are insured under the following policies:
Operational and product liability insurance;
Directors' and officers' (D&O) liability insurance;
All-risk insurance, covering all assets of the Company and Group companies, including inventory. This
insurance also provides protection against damage caused by power surges and fluctuations.
Impact of war on the Company's operations
Before the war, ŽEMAITIJOS PIENAS, AB sales to Ukraine and Belarus accounted for approximately 2.5% of total
sales. The Company and the Group ensured secure transactions by applying advance payment terms or credit
insurance limits..
In 2024, ŽEMAITIJOS PIENAS, AB and the Group had no overdue receivables from buyers in Ukraine or Belarus,
so there was no need to assess impairment of receivables.
Despite the challenging geopolitical situation, the company maintained its market positions and brand recognition in
the markets where it operated before the war. Furthermore, sales in Ukraine increased, and new agreements were
signed with retail chains.
Following the outbreak of war in Israel, sales to this market temporarily declined due to imposed security restrictions.
However, as the year progressed, the situation stabilized, and sales began returning to pre-war levels.
Risk Management Measures:
Sales to Ukraine are conducted with INVEGA export credit guarantees for each buyer or advance payment.
The Company and the Group had no remaining inventory at the end of the year that was exclusively
designated for these markets.
ŽEMAITIJOS PIENAS, AB had no real estate in Ukraine or Belarus, so there was no need to assess
impairment of long-term assets.
Management's Perspective
The Company and Group management closely monitors the situation in Ukraine and Israel, as well as the sanctions
being imposed, ensuring full compliance. The current geopolitical situation does not affect the Company's or Group's
ability to continue operations
Group Companies’ Operational Plans and Forecasts
100-Year Anniversary and Further Expansion
In 2024, ŽEMAITIJOS PIENAS, AB celebrated its 100th anniversary, symbolizing a balance between tradition and
innovation. Despite global challenges, the company remained strong, ensured stable growth, and continues to pursue
ambitious goals both in Lithuania and international markets—the Baltic States, Poland, Germany, Hungary, Spain,
the United Kingdom, and beyond..
In 2025, ŽEMAITIJOS PIENAS GROUP companies will continue expanding their activities, developing new
products to meet market demands, increasing brand and company recognition, and expanding into export markets.
These objectives are based on a clear strategy, focused on top-quality standards, innovation, and responsible business
practices.
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended December 31, 2024
23
Strategic Directions for 2025
To remain a leader in the dairy industry, ŽEMAITIJOS PIENAS, AB continuously monitors market changes,
analyzes consumer behavior, and seeks sustainable and competitive growth opportunities. In 2025, the Company will
prioritize the following areas:
Ensuring the highest quality – investments in raw milk quality, encouraging farmers to meet the highest
standards, and ensuring competitive purchasing prices for milk.
Enhancing consumer loyalty – expansion of international marketing campaigns, innovative advertising
solutions, and loyalty programs tailored to different audiences.
Expansion into export markets – the main focus will be on higher value-added products and increasing
export revenue.
Sustainability strategy – integration of environmental solutions, use of more sustainable packaging, and
reducing the environmental impact of production.
Social responsibility – active participation in social projects, promoting responsible consumption, and
supporting communities both in Lithuania and export markets.
Strengthening employer image – investments in employee training, skill development, and motivation to
attract qualified professionals.
Responsible approach to employees – balancing workloads, adhering to youth employment integration
principles, and improving employee well-being through additional benefits.
Šilutės Rambynas, ABF Strategic Focus for 2025
Given the fluctuating product prices, ABF "Šilutės Rambynas" will place greater emphasis on exploring new export
markets and strengthening its presence in existing ones. The company will prioritize further modernization, reducing
energy, material, and labor resource consumption, optimizing operations, and focusing on the production of profitable
products.
A key focus will be on increasing the production and improving the quality of "Pik-Nik" string cheese snacks, as
well as expanding into new markets.
Planned Investments for 2025
The company plans to allocate up to 3.0 million EUR for new acquisitions.
The largest investments will be in equipment that will increase "Pik-Nik" cheese snack production, enhance
product quality, and reduce human error in production, thereby lowering rising labor costs.
Additional investments will be directed toward modernizing raw milk processing, improving working
conditions for employees, upgrading and modernizing existing equipment, renovating facilities, and
replacing old, worn-out equipment with new machinery.
Sustainability and Environmental Initiatives
In 2025, ŽEMAITIJOS PIENAS, AB will strategically focus on implementing sustainable and environmentally
friendly solutions:
Sustainable packaging solutions – Introducing eco-friendly packaging, seeking renewable and less
environmentally harmful resources.
Responsible production – Integrating renewable energy sources into production processes.
Promoting electric vehicle usage – Installing charging stations at company branches.
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended December 31, 2024
24
Encouraging sustainable dairy farming – Supporting farmers who adhere to sustainability principles and
ensure animal welfare.
The energy consumption and use of renewable resources across the Group's operations in 2024 are detailed in the
Corporate Social Responsibility and Sustainability Report.
Future Prospects
The dairy products market remains dynamic and full of challenges, therefore ŽEMAITIJOS PIENAS, AB dedicates
special attention to market analysis and strategic planning. The company is convinced that sustainable growth and
responsible business decisions are the key to long-term success.
Although market conditions are constantly changing, the company remains faithful to its values and to the centenary
slogan:
"Courage, truth, and mutual respect – never old."
This is not only a historical reference but also a clear commitment to the future – to create the highest quality products,
promote innovation, and be a reliable partner to consumers and the business community.
Taking into account the dynamism of the dairy industry, the company does not announce specific turnover and profit
forecasts this year. However, a clearly defined strategy, focused work, and commitment to the highest standards
allow expectations of successful results both in Lithuania and export markets.
Information on the Company’s Research and Development Activities
The technologists at ŽEMAITIJOS PIENAS, AB are constantly seeking innovative technologies that not only
enhance production efficiency but also contribute to sustainability goals. In 2024, scientific research, analysis of
results, and their application in production became a key element in creating added value for products.
One of the most significant achievements in 2024 was the further processing of certain by-products. Raw materials
that were previously considered “problematic” due to their physical properties have now become valuable products
with added value through the implementation of innovative technologies.
The company has also implemented an advanced vacuum cheese drying method in product manufacturing. This
technology allows moisture to evaporate at low temperatures, preserving the nutritional value of the product. Crunchy
dried cheese balls, produced using this method, have already found their market and loyal consumers.
Another strategic research and development focus is the processing of liquid (milk-derived) waste, which helps
reduce the environmental impact of the dairy industry. Innovative solutions that transform by-products into new raw
materials are an essential part of the circular economy. These cutting-edge processes not only reduce waste but also
create high-value-added products from previously unused resources.
In 2024, the company consulted and continued collaboration with scientists from an Italian university to explore the
potential of transforming liquid (milk-derived) waste into biopolymers—materials that could potentially be used for
sustainable product packaging. Various feasibility studies are being conducted in this field.
Investments in research and development ensure the company's competitiveness and sustainable growth, making their
importance ever-increasing. Close cooperation between business and science enables the development of future
solutions that meet both market demands and environmental sustainability challenges.
ABF "Šilutės Rambynas" does not engage in research and development activities.
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended December 31, 2024
25
HUMAN RESOURCE MANAGEMENT AND WORKFORCE ASPECTS IN THE GROUP COMPANIES
Human resources are the main engine of our organization. In 2023, the annual employee turnover rate was 12.08%,
while in 2024, it decreased to 10.32%. Throughout the reporting period, the number of employees increased, and the
adaptation success rate during the probation period remained stable at around 80%
Community Engagement and Events
During the reporting period, various events were organized to strengthen the sense of community among employees.
Key events included:
The Wellness Hike;
"Žemaitijos Pieno Garbė 2024" – Employee Recognition Awards;
Employees actively participated in artistic events at the Žemaitė Drama Theater.
One of the most significant events was the jubilee dairy industry celebration, "Žemaitijos Pienas. Blooming
Centennial Meadows," marking the company’s 100th anniversary.
Employees received company-branded gifts;
The celebration included special activities for all generations, from children to long-serving employees;
A 100th-anniversary museum was opened and remained active during the summer season.
Career Development and Educational Projects
During the reporting period, 18 students completed internships at the company.
Additionally, the company hosted the final event of the "Career Development in STEAM" project (Phase II) on April
23, 2024, where six youth teams participated.
Other educational initiatives:
Participation in the Ministry of Education and Sports Conference, presenting the collaboration between
business and the STEAM center
Launch of the "Try on Your Dream Career" project
Future Goals and Objectives
Looking ahead, we recognize both challenges and opportunities. Our key goals include:
Enhancing employee engagement and motivation
Promoting leadership, mentorship, and talent development
Attracting young professionals to Telšiai and ŽEMAITIJOS PIENAS, AB
Strengthening internal communication
Managing potential risks effectively
The company remains committed to fostering a supportive and dynamic work environment, ensuring sustainable
growth and long-term success.
Employee count dynamics of ŽEMAITIJOS PIENAS, AB
Year Number of employees
2020 1242
2021 1249
2022 1271
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended December 31, 2024
26
2023 1288
2024 1316
Compared to the reporting year, the number of employees at ŽEMAITIJOS PIENAS, AB increased by approximately
2% in 2023.
Employee groups by education level at ŽEMAITIJOS PIENAS, AB (2022, 2023, 2024):
Education level 2022 2023
2024
Higher education (university) 177 181 179
Higher education (college) 286 270 261
Vocational education 384 395 411
Secondary education 345 358 368
Incomplete secondary education 79 84 97
Total 1271 1288 1316
Number of employees by position and average salary (EUR)
Position 2022 2023 2024
Managers 6 7 6
Average salary 7710 7870 7516
Specialists 309 311 307
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended December 31, 2024
27
Average salary 2890 2832 3054
Workers 956 970 1003
Average salary 1769 1819 2051
Total employees 1271 1288 1316
Number of employees by age group in 2024:
ŠILUTĖS RAMBYNAS, ABF
In 2024, the company employed 165 people (growth of +5.1%). The average monthly salary was EUR 2,112
(+8.7%).
Education level
2024-12-31
2023-12-31
With a master's degree 4 5
With a higher (university) degree 21 19
With a college (non-university) degree 35 35
With vocational education 60 55
With secondary education 34 33
With incomplete secondary education 11 10
Total: 165 157
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended December 31, 2024
28
Number of employees by position and average salary (EUR)
Position 2023 2024
Managers 6 6
Average salary 4075 4067
Specialists 23 24
Average salary 2675 2807
Workers 128 135
Average salary 1712 1902
Total employees 157 165
Šilutės Rambynas aims to build and maintain long-term relationships with its employees, especially in the context of
an unsatisfactory labor market situation – there is a shortage of highly qualified workers. Therefore, employees are
continuously encouraged to improve their professional skills. The company's employees have opportunities to
enhance their knowledge and abilities through seminars and training courses. Training programs have been
developed, under which specialists, production workers, equipment operators, machine operators, mechanics, team
leaders, and foremen are trained and certified.
Transactions with related parties
Related party transactions carried out during 2024 that had a significant impact on the Company’s and/or the Group’s
financial position or operations for that period, including the amounts of such transactions, are disclosed in the 2024
explanatory notes.
Legal disputes
The Company has filed a lawsuit seeking compensation in the amount of EUR 248,028.62 from the insurance
company Compensa Vienna Insurance Group. On July 1, 2021, due to heavy rainfall, the roof of one of the
Company’s buildings was completely damaged and collapsed—its load-bearing structures and roof covering
were destroyed. As a result of this insured event, the Company suffered damage amounting to EUR
303,993.42 (excluding VAT). The insurance company only partially satisfied the Company’s claim, paying
EUR 55,964.80 as an insurance indemnity. The insurance company refused to cover the remaining part of
the loss. Consequently, in order to protect its interests, the Company was forced to file a lawsuit for the
recovery of the insurance compensation. In the case against Compensa Vienna Insurance Group, the court of
first instance fully satisfied the Company’s claim. The decision is currently under appeal by the insurance
company.
No other legal proceedings—civil, criminal, or administrative—involving the Company that could materially
affect its financial position have been initiated at this time.
OTHER INFORMATION
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended December 31, 2024
29
Publicly disclosed regulated information of the Company
During the reporting period, the Company published 9 announcements via the information system of the Vilnius
Stock Exchange (AB NASDAQ OMX Vilnius) (on its website). All facts (events) are stored in the Central Regulated
Information Database, and this information is also available on the Company's website at www.zpienas.lt. Public
announcements are disclosed in accordance with the procedure established by legal acts. Notices regarding the
convening of the Company’s General Meeting of Shareholders and other significant events are published in
accordance with the procedure set out in the Law on Securities in the Central Regulated Information Database at
www.crib.lt and on the Company's website at www.zpienas.lt.
Key events disclosed in 2024 during the reporting period include:
Data Svarbiausi ataskaitinio laikotarpio pranešimai
30-09-2024
ŽEMAITIJOS PIENAS AB Group half-year information for the I-st half of 2024
11-09-2024
Preliminary results of ŽEMAITIJOS PIENAS AB group for the first half of 2024
29-04-2024
Procedure for the payout of dividends for the year 2023
26-04-2024
Annual information of ŽEMAITIJOS PIENAS, AB
26-04-2024
Decisions made by Ordinary General Meeting of Shareholders of ŽEMAITIJOS
PIENAS, AB
25-04-2024
Regarding the draft alternative resolution submitted to the Ordinary General
Meeting of Shareholders of ŽEMAITIJOS PIENAS, AB
04-042024
Regarding the convening of the Ordinary General Meeting of Shareholders of
ŽEMAITIJOS PIENAS, AB
26-03-2024
The results of business activity of ŽEMAITIJOS PIENAS, AB group in 2023,
excluding audit
28-02-2024
Regarding the ruling of the Court of Appeal of Lithuania in a civil case with a Polish
company
Information related to the corporate governance code
During the reporting period, there were no significant changes related to compliance with the Corporate Governance
Code.Additional information regarding compliance with the Governance Code is provided in the annex to the 2024
Management Report – the Corporate Governance Report.
Subsequent Events
No significant events occurred after the preparation of the financial statements.
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended December 31, 2024
30
INFORMATION ON REMUNERATION FOR 2024
ŽEMAITIJOS PIENAS, AB (hereinafter referred to as the Company) has prepared this remuneration information for
the financial reporting period of 2024, which coincides with the calendar year. The preparation of the remuneration
information (hereinafter referred to as the Report) was based on the Law on the Reporting of Companies and
Company Groups of the Republic of Lithuania, the Remuneration Policy of the Chief Executive Officer, Members
of the Board, and Members of the Supervisory Board of ŽEMAITIJOS PIENAS, AB (hereinafter referred to as the
Remuneration Policy), and other legal acts.
On April 9, 2020, the General Meeting of Shareholders approved the Remuneration Policy of the Chief Executive
Officer, Members of the Board, and Members of the Supervisory Board of ŽEMAITIJOS PIENAS, AB. This
Remuneration Policy applies to the Company’s Chief Executive Officer and members of the governing bodies to the
extent that it concerns the payment of monetary remuneration for their activities in the Company’s management
and/or supervisory bodies. The Remuneration Report includes information about the remuneration of each member
of the management and supervisory bodies, information about other (non-)received benefits, and other relevant data.
In 2024, the remuneration calculated for the Company’s Chief Executive Officer, which was determined by the
Board, as well as additional remuneration, did not exceed the total amount set/approved in the Remuneration Policy
(clauses 4.1 and 4.2). The Chief Executive Officer – General Director – did not receive any remuneration from
companies belonging to the group of companies as defined by the Law on Consolidated Financial Statements of
Companies of the Republic of Lithuania. In addition to basic and additional salary, the CEO was paid performance
bonuses (clause 4.6). The CEO's salary was paid in accordance with the procedures, scope, and timelines established
in the employment contract. The General Director did not receive any other material benefits in 2024, including no
shares or other transactions in favor of or in the interests of the CEO were granted.
According to the Remuneration Policy approved by the Company’s General Meeting of Shareholders, fixed and
additional remuneration is paid only to independent members of the management and supervisory boards, while
bonuses (tantjemas), approved by the General Meeting, are paid to all members of management bodies. For the
purposes of the Remuneration Policy, independent members of the management bodies are those who have no
employment or other relationship with the Company and/or its subsidiaries.
The Company has 3 (three) independent members of the Supervisory Board. During the reporting period (2024), the
Company (the issuer) calculated EUR 35,223 in remuneration for the independent members of the Supervisory Board
under activity agreements, averaging EUR 11,741 per year per independent member. The members of the Supervisory
Board did not receive any amounts from the subsidiary or other companies related to ŽEMAITIJOS PIENAS, AB.
All members of the Company's Board are employed under employment contracts and, in 2024, received no fixed or
additional remuneration for their work on the Board. Their remuneration was solely based on employment. Average
monthly salaries by employee group are presented in the annual report.
Remuneration paid to members of the management and supervisory boards would be subject to recovery (repayment)
under the procedure established by legal acts, should certain conditions arise. In the event of resignation, term
GENERAL INFORMATION ON REMUNERATION
INFORMATION ON REMUNERATION RECEIVED BY MEMBERS OF MANAGEMENT AND SUPERVISORY
BODIES
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended December 31, 2024
31
expiration, or removal of the CEO, board, or supervisory board members from their positions, no severance payments
are made; however, remuneration proportional to the time served under the employment contract is paid.
No bonuses (tantjemas) were paid to members of the Supervisory Board or the Board.
During the reporting period (2024), no guarantees or sureties were provided to the members of the Supervisory Board,
the Board, or the CEO. No assets or other property rights were transferred, nor were any other types of benefits
granted by the Company.
Members of the Supervisory Board, the Board, the CEO, and members of the Audit Committee have no significant
material obligations to the Company (issuer), except for one Board member who, as of December 31, 2024, had
obligations amounting to EUR 117,822.86 to the Company under two (2) loan agreements. The Company (issuer)
has no obligations to the aforementioned individuals.
No guarantees, sureties, or other security measures for the fulfillment of obligations of the CEO, members of the
management or supervisory boards were granted in 2024 in the name of the issuer. The issuer did not grant any loans
or shares of the Company to these individuals.
The remuneration paid in 2024 to the CEO, members of the Board, and the Supervisory Board of ŽEMAITIJOS
PIENAS, AB was in accordance with the principles, grounds, and conditions approved in the Remuneration Policy.
The Report, approved by the Company’s Board, is submitted to the Annual General Meeting of Shareholders, which
makes a decision on whether to approve the remuneration report. This (non-)approval does not relieve the Board of
responsibility for the adopted decision.
The 2023 consolidated remuneration report was approved at the General Meeting of Shareholders held on April 26,
2024, together with the 2023 financial statement set.
This information about remuneration for 2024 is an integral part of the Consolidated Management Report and is
published in accordance with the procedure established by law on the Company’s website www.zpienas.lt/lt and
www.nasdaqomxbaltic.com.
FINAL PROVISIONS
32
CONSOLIDATED CORPORATE GOVERNANCE INFORMATION
2024
In the consolidated corporate governance statement of
ŽEMAITIJOS PIENAS, AB (hereinafter – the Report), key
information is provided regarding governance principles and
related processes. The Report has been prepared in accordance
with the Law on the Reporting of Companies and Company
Groups of the Republic of Lithuania and the Law on Companies
of the Republic of Lithuania, as well as legal acts regulating the
issuer’s legal form and activities, the incorporation documents
of the issuer and its subsidiary, and other applicable legislation.
ŽEMAITIJOS PIENAS, AB (hereinafter – the Company) is a
large public interest entity whose securities are traded on a
regulated market of the Republic of Lithuania. The Company
has a subsidiary – Šilutės Rambynas, ABF, which is classified
as a medium-sized enterprise (hereinafter – the Company or the
Group). As both of these companies are related, a consolidated
governance report is provided accordingly.
The Report outlines the main risks encountered in business
operations, the measures and processes in place to mitigate
them, and provides information on the structural bodies of both
Companies, data on shareholders and their directly or indirectly
held shareholdings, shareholders’ rights, as well as transactions
(if any) concluded by the Group in accordance with Article 37
2
of the Law on Companies of the Republic of Lithuania. It also
includes information on the Group’s management and other
governing bodies, the procedures and policies for the election of
their members, their powers and functions, compliance with the
corporate governance code, an overview of other information
related to the governance of the Group, and any other
information required by legal acts.
The 2024 Corporate Governance Report is an integral part of
the Consolidated Management Report and is published in
accordance with the procedure established by legal acts on the
Company’s website www.zpienas.lt/en and
www.nasdaqomxbaltic.com.
INTERNAL CONTROL SYSTEM AND RISK
MANAGEMENT OBJECTIVES
Grupės įmonių rizikų valdymas remiasi COSO ERM principais
(įmonių rizikų valdymo metodologija, angl. – The Committee
of Sponsoring Organizations’ Enterprise Risk Management
Framework), kurie įmonių rizikų valdymą apibrėžia: „Įmonės
rizikos valdymas nėra funkcija ar padalinys. Tai yra kultūra,
gebėjimai ir praktika, kurią organizacijos integruoja į strategijos
nustatymą ir įgyvendinimą, siekdamos suvaldyti rizikas kuriant,
išsaugant ir realizuojant vertę“.
Risks in our operations are inherent and may be related to
strategic objectives, operational performance, compliance with
laws and other legal acts, as well as key environmental, social,
and governance (ESG) priorities.
Risk management begins with the individual and collective
capabilities of the organization’s employees; knowledge of
risks, their significance, and impact on the organization; and an
attitude that strong risk management is a vital contribution to
effective organizational governance.
All employees within the Group are encouraged to be open,
honest, and fact-based when discussing risks and their
management, thereby enabling the Group to consider all
possible opportunities and threats and to make well-informed
decisions.
GENERAL INFORMATION
EXTENT OF RISK, RISK FACTORS, AND RISK MANAGEMENT
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended 31 December 2024
33
Rizikų valdymo organizacinė struktūra, vaidmenys ir atsakomybės
Main Objectives of Risk Management:
• Timely management of internally identified risks related
to compliance with laws and other legal acts, ensuring the
production and supply of high-quality products, consumer
safety, satisfaction, and proper relationships with clients;
• Maintaining strategies that ensure efficient use of
resources; enabling an optimized, proactive approach to audit
and compliance identification/remediation processes;
encouraging the monitoring and accountability of functional
compliance;
• Continuous improvement of decision-making, planning,
and prioritization by assessing opportunities and threats;
• Promoting value creation by enabling management to
respond quickly, effectively, and efficiently to future events that
create uncertainty and indicate significant threats or
opportunities.
Risk management supports the successful business
development of the Group of companies, aligned with our
business principles and organizational values.
KEY RISKS, CONTRIBUTING FACTORS, AND RISK
MANAGEMENT
Risk is the effect of uncertainty on objectives (a deviation from
what was expected).
The Group’s approach to risk is twofold:
RISK = THREATS + OPPORTUNITIES
Risks rarely occur in isolation; therefore, when identifying risks,
management assesses the interrelationship between different
risks. Risk is evaluated based on its impact and the likelihood
of occurrence.
Effective risk management requires a broad understanding of
the business environment (both internal and external
factors) that may influence the achievement of strategic and
business objectives. As the business environment evolves, so do
risks, their impact, and the priorities in managing them.
Within the Group of companies, risks are categorized. The
review and categorization of risks is a continuous, ongoing
process, the frequency and scope of which depend on changes
in the business environment. Below are examples of selected
risks typical for our industry. A final and static definition of all
possible types of risks is not feasible due to the constantly
changing business environment.
Risk Categories, Description, Examples
Risk Categories Description, Examples
Strategic
◦ Business viability due to competition and changing sales prices
◦ Loss of intellectual property and trade secrets
◦ Geopolitical trade barriers due to protectionism and nationalism
◦ Product quality control, including changes in food safety standards
◦
Reputational impact / public trust
Operational
◦ Supply chain and/or information flow within the organization and/or with suppliers and buyers
◦ Business continuity or resilience – the ability to adapt and recover quickly
◦ Third-party risk – quality of relationships with external business partners and their own relationships, including
those related to human rights
◦ Availability of key materials/raw materials, labor force, and other critical resources
◦
Resource use efficiency / cost of production
Cybersecurity
◦ Hacking, data loss, breach, fraud
◦ Impact on availability of critical/essential IT systems
◦
Security incidents, critical third
-
party impact on business operations
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended 31 December 2024
34
Depending on the complexity of risks, their interrelation,
probability, impact, and the ability to manage the situation, the
behavior towards risks (response) varies. In general, the Group
companies’ approaches to risk response are as follows:
• Acceptance – no actions are taken to influence the
probability or impact. This approach is applied to risks that fall
within tolerance limits (risk appetite). In such cases, decisions
may be made to insure against losses, as insurance costs and
deductibles exceed the cost of change.
• Avoidance – actions are taken to eliminate the risk by
discontinuing the risky activity. Risk avoidance is understood,
for example, as a decision not to undertake a project or to
terminate it due to a high probability of unstable cash flows.
• Pursuit – actions are taken by accepting greater risk to
achieve better results (exploiting opportunities). Management
understands the nature and scale of changes required for
improvement, such as the development of new products or
services, or expansion of operations through more aggressive
growth strategies.
• Reduction – actions are taken to reduce the probability
and/or impact of the risk. This can involve numerous everyday
business decisions, such as diversifying product offerings,
maintaining significant cash reserves, or investing in
technological upgrades that reduce the likelihood of system
failures, etc.
• Sharing / Transfer – Actions are taken to reduce the
probability or impact of the risk by transferring or otherwise
sharing part of the risk. Examples include sharing risks with
customers or suppliers through contract terms; purchasing
insurance to protect against large unexpected losses; forming
business partnerships, and so on.
Below is a more detailed description of the risks identified
by the Group companies as the most significant (priority)
during the 2024 period, along with the directions for
managing these risks:
Strategic / Operational Risk Category
Business resilience risk is closely linked to the environment in
which the Company and the Group operate and which affects
the performance results of the Company and the Group. This
includes the competitiveness of the Company and the Group;
the economic viability of the Company’s and the Group’s major
clients; the political and economic environment within the
European Union; and legal regulations related to the
procurement of the main raw material.
The greatest risk faced by ŽEMAITIJOS PIENAS, AB is the
seasonality of raw milk: in summer, the amount of milk is twice
as high as in winter. As a result, the production capacities of
ŽEMAITIJOS PIENAS, AB are used unevenly: in summer the
plant operates at full capacity, while in winter capacity
utilization may drop to just 60%. Therefore, in order to ensure a
stable supply of raw milk, the Company typically pays its raw
milk suppliers (farms) slightly higher prices than the market
average and seeks additional suppliers in neighboring countries.
The main reasons why the Company, as a milk processor, may
face a shortage of milk include:
– EU-imposed milk quality and dairy farm requirements,
including regulations related to climate change policies;
– A large portion of the milk purchased by cooperatives in
Lithuania is exported, as domestic milk processors can no
longer afford to pay higher prices for raw milk due to the
Risk Categories Description, Examples
Environmental
◦ Environmental, social and governance (ESG) awareness – opportunities to develop strategies for addressing
long-term sustainability issues
◦ Labor and trade restrictions due to disease or virus outbreaks
◦
Increased occurrence of severe weather events
–
floods, droughts, storms
Social
◦ Human capital development, including leadership sustainability, succession, employee engagement and
accountability
◦
Unfair labor practices, including collective bargaining, freedom of
association, and grievance procedures
Compliance
◦ Regulatory changes in areas such as:
- Animal welfare protection
- Protection and processing of personal data in line with data protection reguliations
- Employee health and safety
- Product sales and advertising, including compliance with public health requirements, healthy nutrition
promotion, climate change programs, anti-corruption trade requirements, and other government or international
programs
◦ Product quality and safety requirements
◦
Significant legal proceedings, including product liability
Financial
◦ Credit risk due to customer or other party obligations to the Group
◦ Liquidity risk related to the Group’s ability to fulfill obligations to suppliers and related parties
◦ Achievement of targeted/planned financial results and economic indicators
◦ Changes in tax legislation, risk of additional tax liabilities
◦ Currency fluctuations, inflation, currency depreciation
◦ Impact of interest rate changes
◦ Risk of errors or non-compliance in financial reporting
◦ Risk of changes in asset and liability values
◦
Risk of maintaining capital adequacy and levels
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended 31 December 2024
35
increased entry of foreign competitors (e.g., from Poland)
offering cheaper dairy products in larger volumes.
The rising cost of energy affects the Company and the Group
due to increasing production expenses. As fuel prices rise, so do
the costs of transporting raw materials and distributing finished
products. In order to mitigate these risks, the Company and the
Group are improving production efficiency by digitizing and
standardizing workstations, investing in energy consumption
optimization solutions, and optimizing logistics routes.
By investing in green energy, the Company aims to follow a
sustainable business direction, thereby contributing to the fight
against climate change. It is expected that the amount of green
electricity generated by these wind turbines will cover the
majority of the Company’s electricity consumption needs.
Competitive Risk. The Company and the Group face
competitive risk in the domestic market; therefore, the main
objective of the Company and the Group is to increase export
sales directly to retail shelves. To mitigate the risk of a shortage
of sales specialists, the Company has affiliated enterprises in
strategic countries, where local sales professionals are
employed—this helps to reduce the risk related to the lack of
qualified personnel. Ambitious goals are also being set to
expand export volumes to EU countries and to broaden export
distribution channels.
Reputational Risk The reputational risk is related to the
decisions made by the Company and the behavior of its
employees. In the Company and the Group, reputation and a
good name are considered the foundation of operations and
business relationships. In 2018, the Code of Ethics was
approved and later supplemented and modified in 2021. The
Code of Ethics establishes behavioral standards applicable to all
employees, regardless of their position, employment scope, etc.
The positions within the Group that carry the highest risk of
corruption and bribery are: Procurement Manager, Chief
Financial Officer, and Sales and Marketing Director. To
mitigate the risks of corruption and bribery, the Company and
the Group have implemented appropriate internal processes and
have also adopted an Anti-Corruption Policy. Additionally, they
have an Equal Opportunity Policy. To ensure high standards of
competition law compliance and ethical behavior towards
competitors, the Company has adopted a Competition
Compliance Policy. According to management's assessment,
the implemented measures are effective. In 2024, the Group was
not found guilty of violating anti-corruption and bribery laws. It
was also not found guilty of bribing foreign officials in
international business transactions. As a result, the Company
was not fined for these violations.
In 2023–2024, work regulations, the human rights policy,
remote work procedures, and other policies were reviewed and
updated. In 2024, the Responsible Business Code was approved.
Procurement and Supplier Risks. The procurement of goods
(core and auxiliary materials, components, equipment, etc.) and
services in the Company is carried out through public or closed
tenders, or by sending requests for proposals to suppliers.
Supplier selection is generally based on at least three submitted
offers. Within the Company and the Group, procedures are in
place for the identification and analysis of procurement and
supplier risk factors. When selecting key suppliers, internal
supplier audits are conducted. Contracts with suppliers are
prepared and signed in accordance with the procedures outlined
in the Company’s and the Group’s approved rules for contract
drafting, coordination, and approval. The Company has a legal
department that oversees all contracts concluded by the
Company (or Group companies) with suppliers and buyers.
Category of Environmental / Cyber Risks
The Company and Group companies, like all business
organizations in Lithuania and worldwide, operate under
increased threats and impacts of these risks. The most
significant risks in this category today include Russia’s ongoing
war in Ukraine, the effects of climate change, and the
heightened threat of cyberattacks and breaches.
Due to their uniqueness and importance in the current context,
these risks and their management approaches have been
discussed in the Annual Report, while their impact on financial
statements has been addressed in the Explanatory Notes.
Therefore, the Management Report does not duplicate this
information but briefly outlines the key directions for managing
these risks:
The impact of the war in Ukraine is managed by the
Company's management through close monitoring of the
situation in Ukraine and the implementation of sanctions to
ensure compliance. The Company has adopted a Sanctions
Policy, which helps ensure that no transactions are conducted
with sanctioned individuals.
The threat of cyberattacks and breaches is managed in
accordance with the company's existing procedures. In 2024, the
company aimed to fully comply with the EU NIS2 Directive
requirements, investing in information system security solutions
and conducting IT security training for employees.
Category of Financial Risks
The Company and the Group face key financial risks, primarily
market risk. Financial risk management is an integrated part of
the Group’s Financial Management Policy, which, in turn, is a
component of the Group’s Risk Management System. The main
financial risks that the Company and the Group currently
encounter include interest rate risk, foreign exchange risk,
liquidity risk, and credit risk.
As the Company and the Group operate internationally, they are
exposed to foreign exchange rate fluctuation risk. Conducting
business internationally involves transactions in foreign
currencies, leading to foreign exchange risk associated with
fluctuations in the Polish zloty, the US dollar, and other
currencies. This risk arises from future commercial transactions,
recognized assets and liabilities, and net investments in foreign
subsidiaries when assets and liabilities are denominated in a
currency other than the Company’s and the Group’s functional
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended 31 December 2024
36
currency. The primary currency used for transactions by the
Company and the Group is the Euro.
The Company's and the Group's revenues and expenses from
core operations are largely independent of market interest rate
fluctuations. However, the Company faces interest rate risk due
to long-term loans. To assess the impact of interest rates on the
Company’s financial performance, positions that generate
interest rate risk are identified. Assets and liabilities sensitive to
interest rate changes include the Company’s actual transactions
such as deposits, investments, granted loans, securities held by
the Company, and 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 interest rate risk. However, the situation is continuously
monitored to ensure timely decision-making if such measures
become necessary.
Credit risk. To ensure the timely coverage of accounts
receivable, the financial and economic condition of a
customer/buyer is assessed through available sources
(customer-provided data, various databases, registers, etc.)
before signing a sales contract. The concentration of buyers in
the dairy industry influences the overall credit risk of the
Company and the Group, as these buyers may be similarly
affected by environmental and economic changes.
The Company has procedures in place, including a Credit Risk
Management Policy, to ensure that sales do not exceed the
accepted credit risk limits. When selling or purchasing goods
and services, the Company evaluates the reliability of each
business partner through a credibility analysis. Product sales
(shipment of goods) are initiated only when there is a 90-100%
payment guarantee. Various payment guarantees are applied,
such as:
100% advance payment;
Pledge of liquid real estate (valued by asset
appraisers);
Bank guarantee (ensuring payment but not serving as
a payment instrument, activated when payment is not
made);
Documentary letter of credit (L/C);
Trade credit limit insurance (most commonly used);
Documentary collection (a payment process where the
bank intermediates to secure payment for the seller).
The Company is among the Lithuanian businesses that settle
payments for purchased goods and services on time. It assesses,
rates, and determines the reliability of its clients, making case-
by-case decisions on the necessary level of security from
customers, the credit limit to be granted, and the number of days
for deferred payment. Client payments are continuously
monitored and analyzed.
As this type of risk is well managed, the Company does not have
significant new "bad" debts, allowing for easier cash flow
planning.
-----------------------------------------------------
Liquidity risk is managed through cash flow planning and
forecasting, which helps proactively identify potential cash
shortages and select appropriate financing methods. Cash flow
forecasts are prepared for one month, one year, and long-term
periods of up to 3–5 years. These forecasts estimate cash inflows
and outflows, allowing for short-term borrowing and investment
planning. By the end of the current year, the forecast highlights
key trends in working capital and cash movements, identifying
the need for external financing or investment opportunities
while assessing the impact of interest rate and foreign exchange
risks. At the end of the fiscal year, a budget for the following
year is prepared. Long-term forecasts (over one year) are part of
strategic business planning. These forecasts provide insights
into the extent of cash surpluses or additional funding needs,
including when surpluses or shortages will occur, their duration,
and how excess cash will be utilized or additional financing
secured.
For short-term forecasts (up to one month or the end of the
current year), the cash payments and receipts method is used,
while for budgeting the next year or planning for the upcoming
3–5 years, the sources and uses of funds method is applied. Cash
flow forecasting is essential, as cash inflows and outflows do
not distribute evenly over time.
Payment terms for sold goods range from 14 to 30 days, and in
rare cases, up to 60–90 days. Payments to service and goods
suppliers are typically settled within 30 days, while raw milk
suppliers and farmers receive payments 15–20 days after the end
of each 10-day period. Considering these factors, monthly and
weekly forecasts are relatively accurate. The Company aims to
negotiate payment deferrals of up to 60 days with suppliers.
A Loan Committee operates within the Company to assess the
risk of loans granted to employees and milk suppliers/farmers.
The Company has approved loan provision regulations, based
on which the Loan Committee evaluates loan applications.
Loans are not granted unless the borrower offers liquid real
estate or movable assets as collateral.
A conservative approach to liquidity risk management enables
the Company to maintain the necessary level of cash while
ensuring financial flexibility.
In 2023, AB “ŽEMAITIJOS PIENAS” was awarded a Stable
Company Certificate. The assessment confirmed that the
Company’s solvency structure is strong and has met the
CrefoCert STABILUS (Creditreform Solvency Certificate)
requirements for over ten years, maintaining a CR risk class of
1–4, with no significant threats identified to the Company's
stability.
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended 31 December 2024
37
Category of Compliance Risks
The Company strives to minimize legal non-compliance risks
and ensure that its operations align with applicable legal
requirements and standards. To achieve this, the Company's
legal team is actively involved in decision-making processes,
the preparation and coordination of various policies,
procedures, and contracts.
Representatives of potential clients have visited the Company
multiple times to conduct independent audits, which have
positively evaluated the existing infrastructure, the organization
of core operational and safety processes, collaboration with
relevant third parties, and the established control system.
The Audit Committee oversees the preparation of the
Company's consolidated financial statements, internal control,
and financial reporting risk management systems, ensuring
compliance with regulations governing consolidated financial
statements. The Company is responsible for the accurate and
timely preparation of these reports.
Risk management within the Company and the Group is
implemented through a Risk Management System that aligns
with the organization’s operational principles, values, and
business philosophy. This system integrates internal policies,
procedures, and regulations to ensure effective governance.
Proper internal control is maintained by:
Establishing and sustaining a well-functioning control
environment,
Continuous monitoring and evaluation,
Facilitating both horizontal and vertical communication,
including information systems that support business
processes.
In the Company, business decision-making and operational
functions are clearly separated from control functions.
Decision-making authorization limits are established and
monitored, while collective decision-making is integrated into
business processes.
The overall internal control framework is structured within
the Risk Management System Map, which outlines the
functioning and interaction of these controls within the
organization.
The Risk Management System Map
BENDROVIŲ (GRUPĖS) VALDYMA
COMPANY BODIES AND MANAGEMENT SYSTEM
The governing bodies of AB "ŽEMAITIJOS PIENAS" are:
(i) the General Meeting of Shareholders;
(ii) the Supervisory Board;
(iii) the Board of Directors; and
(iv) the General Director. The Company’s Administration,
which consists of structural units—departments, is subordinate
to the General Director.
The following departments operate within the Company: (i)
Finance, (ii) Human Resources and Legal, (iii) Logistics, (iv)
Production and Raw Material Procurement, (v) Sales and
Marketing, and (vi) Centralized Procurement.
The Company has an established and functioning Audit
Committee.
C
OMPANY MANAGEMENT
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended 31 December 2024
38
SUPERVISORY BOARD
COMPANY MANAGEMENT AND ORGANIZATIONAL STRUCTURE:
GENERAL MEETING OF
SHAREHOLDERS
PRODUCTION AND
RAW MATERIAL
PROCUREMENT
SALES AND
MARKETING
DEPARTMENT
FINANCE
DEPARTMENT
HUMAN RESOURCES
AND LEGAL
DEPARTMENT
LOGISTICS
DEPARTMENT
CENTRALIZED
PROCUREMENT
DEPARTMENT
BOARD OF DIRECTORS
CHIEF EXECUTIVE OFFICER
(CEO)
INTERNAL AUDITOR
AUDIT COMMITTEE
SECRETARIAT
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended 31 December 2024
39
General Meeting of Shareholders – the General Meeting of
Shareholders is the governing body responsible for making the
most significant decisions within the Company. The
competencies, convening procedures, rights, and obligations of
the General Meeting of Shareholders essentially do not differ
from those outlined in the Law on Companies of the Republic
of Lithuania, other legal acts, and the Company’s Articles of
Association.
It is important to note that AB "ŽEMAITIJOS PIENAS" shares
are traded on the stock exchange, meaning the number and
structure of shareholders are constantly changing.
MAIN SHAREHOLDRES 31-12-2024
(≥ 5% CAPITAL):
It should be noted that AB "ŽEMAITIJOS PIENAS" shares are
traded on the stock exchange, and therefore, the number and
structure of shareholders are constantly changing.
According to data obtained from the securities market
intermediary, as of 31 December 2024, the Company had 3,162
shareholders (both individuals and legal entities), compared to
3,182 shareholders at the beginning of 2024. Therefore, the
number of shareholders decreased during the reporting period.
In 2024, the structure of the Company’s major shareholders
(holding more than 5% of the capital) remained unchanged.
Additionally, as of 2024, the Company continued to hold 222,020
units of its own shares, representing 0.53% of its share capital.
Shareholder
Number of Shares
Owned, pcs.
Percentage of
Statutory Capital
Owned, %
Percentage of
Voting Rights
Owned, %
Percentage of Voting
Rights Owned
Together with Related
Parties, %
Pažemeckas Algirdas* 14,070,152 33.71 33.71
67.29
Pažemeckienė Danutė** 14,014,581 33.58 33.58
UAB “Baltic Holding”
į. k.: 302688114,
address: 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 jointly own 14,070,152 shares (votes) under common joint ownership rights.;
** - Danutė Pažemeckienė personally owns 14,014,581 shares, and therefore, it is considered that together with her spouse, Algirdas
Pažemeckas, they jointly own 28,084,733 shares or 67.29% of the total shares (votes).
The largest shareholder of ŽEMAITIJOS PIENAS, AB is
Šilutės Rambynas, ABF, which directly owns 87.82% of the
shares. The remaining shares are held by minority shareholders,
the majority of whom are raw milk producers. The total number
of shareholders is 601.
There are no restrictions on the management and use of shares
in Šilutės Rambynas, ABF. The company does not directly or
indirectly hold any significant share packages in other entities.
INFORMATION ON SHAREHOLDERS' RIGHTS,
THEIR IMPLEMENTATION, VOTING RIGHTS
RESTRICTIONS, OR SPECIFIC VOTING RIGHTS
UTILIZATION SYSTEMS
Both ŽEMAITIJOS PIENAS, AB and Šilutės Rambynas, ABF
have no restrictions or limitations on the transfer (disposal) of
securities, including restrictions on voting rights. The
shareholders of both companies exercise their property and non-
property rights and fulfill obligations as stipulated in the Law
on Companies of the Republic of Lithuania and the Company’s
Articles of Association. All issued shares grant shareholders
equal rights as provided by the Law on Companies of the
Republic of Lithuania, other legal acts, and the Company’s
Articles of Association.
Restrictions on Voting or Other Rights. All company shares
are ordinary registered shares, granting equal voting rights and
having the same nominal value. Each share entitles its holder to
one vote at the General Meeting of Shareholders.
The Companies have no information regarding any restrictions,
prohibitions, or special conditions applied to their securities or
shareholdings during the reporting period. Additionally, they
are not aware of (do not have data on) any systems where the
property rights granted by securities are separated from the
security holders.
The Companies do not have data on any special control rights
held by individual shareholders (or a shareholder) and therefore
assume that such shareholders do not exist. Furthermore, the
Companies are not aware of any special agreements between
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended 31 December 2024
40
shareholders or groups of shareholders that could fundamentally
alter, create, or terminate their rights and obligations in
managing the Company, including those that could affect the
Group's or shareholders' interests.
The shareholders of the Companies have the following
property rights:
((i) to receive a share of the company's profit (dividend);
(ii) to receive a share of the assets of the liquidated company;
(iii) to receive shares free of charge if the authorized capital is
increased from the company's funds, except in cases provided
by law; (iv) when the shareholder is a natural person – to
bequeath all or part of the shares to one or more persons;
(v) to sell or otherwise transfer all or part of the shares to the
ownership of other persons in accordance with the procedure
and conditions established by law; (vi) other rights granted by
legal acts.
The shareholders of the Companies have the following non-
property rights:
(i) to participate in meetings; (ii) to vote in meetings according
to the rights granted by shares; (iii) to receive non-confidential
information about the company’s economic activities under the
conditions and grounds established by legal acts; (iv) to elect
and be elected to the company’s management and supervisory
bodies, 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 improving the
company’s financial, economic, organizational, and other
activities, to appeal to the court against decisions or actions of
the shareholders' meeting, the supervisory board, the board, and
the company’s management that violate the laws of the Republic
of Lithuania, the company’s Articles of Association, or the
property and non-property rights of shareholders; (vi) one or
several shareholders, without a separate authorization, have the
right to demand compensation for damages caused to
shareholders; (vii) other non-property rights established by
law.Asmuo įgyja visas teises bei pareigas, kurias jam suteikia jo
įsigyta bendrovės įstatinio kapitalo ir (arba) balsavimo teisių
dalis: įstatinio kapitalo didinimo atveju – nuo bendrovės įstatų
pakeitimų, susijusių su įstatinio kapitalo ir (arba) balsavimo
teisių padidėjimu, įregistravimo dienos, kitais atvejais – nuo
nuosavybės teisių į bendrove įstatinio kapitalo ir (arba)
balsavimo teisių dalį atsiradimo.
INFORMATION ON SHAREHOLDERS' MUTUAL
AGREEMENTS, THEIR SPECIAL CONTROL RIGHTS,
VOTING RIGHTS RESTRICTIONS, OR OTHER SHARE
MANAGEMENT FEATURES
The Companies are not aware of any significant shareholder
agreements, shareholders with special control rights, or any
restrictions or limitations applied to shares held by shareholders.
According to the available information, no special rights have
been established. To the Companies' knowledge, shareholders
are free to exercise both property and non-property rights
granted by their shares.
There are no agreements to which ŽEMAITIJOS PIENAS, AB
is a party that would take effect, change, or terminate in the
event of a change in the issuer's control, nor any impact of such
agreements, except in cases where disclosure of their nature
would cause significant harm to the issuer. The same situation
applies to Šilutės Rambynas, ABF.
The Companies have not entered into any unusual agreements
with their management body members or employees that would
provide for compensation in the event of their resignation,
dismissal without just cause, or termination of employment due
to a change in the issuer's control.
During the reporting period, no harmful transactions were
concluded that would contradict the objectives of the Company
or the Group, deviate from usual market conditions, violate the
interests of shareholders or other groups, or have had or could
potentially have a negative impact on the Company's operations
or financial results. Additionally, no transactions were made
that involved conflicts of interest between the Company's
management, controlling shareholders, or other parties' duties to
the Company and their private interests and/or obligations.
The Supervisory Board is a collegial supervisory body of the
Company, consisting of three (3) members and led by its
chairman. The General Meeting of Shareholders elects the
Supervisory Board for a term of four (4) years. The Company's
Articles of Association stipulate that there is no limit on the
number of terms a board member may serve. As of December
31, 2024, the Supervisory Board was independent, as all three
members were not affiliated with the Company.
More detailed aspects regarding the status and activities of the
Supervisory Board and its members are outlined in the
Corporate Governance Code Compliance Report. It is important
to note that no special rules apply to the election or replacement
of the Company's Supervisory Board members. These actions
are carried out in accordance with the provisions of the Law on
Companies and the Company’s Articles of Association.
There are no specific policies governing the election of
members related to age, gender, education, or professional
experience. Instead, qualities that best align with the Group’s
and shareholders’ interests are assessed. The working
procedures of the Supervisory Board are regulated by the
Supervisory Board Work Regulations.
Linas
Siraštanovas
(Independent Member)
Chairman of the Company’s Supervisory
Board
Elected as a member of the Supervisory
Board on August 2, 2021, during the
Annual General Meeting of Shareholders,
for a four-year term.
Education: Master’s degree in Commerce,
Vilnius University.
SUPERVISORY BOARD MEMBERS AS OF 2024-12-31
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended 31 December 2024
41
Participation in other companies,
institutions, and organizations: Compensa
Vienna Insurance Group, Regional
Manager for Klaipėda Region. Areas of
supervision within the Company:
Oversees sales and finance.
Gražina
Norkevičienė
(Independent Member)
Member of the Company’s Supervisory
Board
Elected as a member of the Supervisory
Board on August 2, 2021, during the
Annual General Meeting of Shareholders,
for a four-year term.
Education: Kaunas Polytechnic Institute,
Specialization in Dairy Product
Technology and Engineering.
Participation in other companies,
institutions, and organizations: Does not
participate in the activities of other
companies, institutions, or organizations.
Areas of supervision within the Company:
Oversees quality parameters in the
Company’s production processes,
performs raw milk quality control,
supervises tasting sessions, and monitors
companies providing raw milk testing
services.
Virginija
Vaitkuvienė
(Independent Member)
Member of the Company’s Supervisory
Board
Elected as a member of the Supervisory
Board on August 2, 2021, during the
Annual General Meeting of Shareholders,
for a four-year term.
Education: Kaunas Polytechnic Institute,
Dairy and Dairy Product Technology,
Engineer-Technologist.
Participation in other companies,
institutions, and organizations: Does not
participate in the activities of other
companies, institutions, or organizations.
Areas of supervision within the Company:
Oversees production processes and new
product development.
During 2024, the following amounts were allocated to the
Supervisory Board members for their work on the board:
Gražina Norkevičienė – €11,741
Virginija Vaitkuvienė – €11,741
Linas Siraštanovas – €11,741
No loans, guarantees, or asset transfers were provided to the
Supervisory Board members.
The Company’s Board is a collegial management body that
represents the Company’s shareholders between their meetings
and makes decisions on key economic and business matters of
the Company. The Board does not perform supervisory
functions, as these are carried out by the Supervisory Board.
The Board members have powers as stipulated by laws, the
Company’s Articles of Association, and the Board’s internal
regulations. Each Board member is responsible for specific
assigned areas of the Company's economic activities.
Currently, the Board consists of five (5) members. The
Supervisory Board elects the Board members for a term of up to
four years, with no limit on the number of terms they may serve.
It is important to note that no special rules regulate the election
or replacement of Board members. The Company follows the
provisions of the Law on Companies and its Articles of
Association. There are no specific policies regarding age,
gender, education, or professional experience for Board
member selection; instead, candidates are evaluated based on
qualities that best align with the interests of the Group and
shareholders.
The Board is chaired by the Chairman, who is elected from
among the Board members. Certain aspects related to the Board
and its activities are outlined in the Corporate Governance Code
Compliance Report.
The Board members not only perform general and legally
assigned functions but also carry out delegated, specialized
individual functions directly related to the Company's
operations. Additionally, some functions are focused on
prevention measures to mitigate various external negative
impacts.
Below are the details of the Board members of ŽEMAITIJOS
PIENAS, AB.
Robertas
Pažemeckas
Member of the Company’s Board since
2021-08-24, elected as a Board member
until the end of the current Board’s term.
Chairman of the Board.
Education: Master’s degree in Law,
Vilnius University.
Current Employment: General Director
of the Company.
Participation in the management of other
companies: Does not participate in the
management of other companies.
Company Shares Owned: Owns 2,540
shares of the Company.
The owned shareholding represents less
than 0.05% of the total Company shares.
COMPANY BOARD MEMBERS AS OF 2024-12-31
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended 31 December 2024
42
Marius Dromantas
Member of the Company’s Board since
2021-08-24, elected as a Board member
until the end of the current Board’s term.
Education: Bachelor’s degree in
Transport Engineering, Kaunas
University of Technology.
Master’s degree in Transport
Engineering, Vilnius Gediminas
Technical University.
Current Employment: Logistics Director
of the Company.
Participation in the management of other
companies: Board Member of Čia
Market, UAB (Company code:
141354683, Address: Sedos g. 35a,
Telšiai, LT-87101). Company Shares
Owned:
Does not own Company shares.
Dalia Gecienė
Member of the Company’s Board since
2021-08-24, elected as a Board member
until the end of the current Board’s term.
Education: Kaunas Polytechnic Institute
(KTU), Engineer-Economist.
Current Employment: Chief Accountant
of the Company.
Participation in the management of other
companies: Does not participate in the
management of other companies.
Company Shares Owned: Owns 475,160
shares of the Company.
The owned shareholding represents
1.14% of the total Company shares.
Algirdas
Pažemeckas
Member of the Company’s Board since
2022-07-27, elected as a Board member
until the end of the current Board’s term.
Education: Higher university degree –
Kaunas Polytechnic Institute,
Mechanical Engineer.
Current Employment: ŽEMAITIJOS
PIENAS, AB.
Participation in the management of other
companies: Does not participate in the
management of other companies.
Company Shares Owned: The
shareholding owned jointly with spouse
under common joint ownership rights
represents 33.71% of the total Company
shares.
Monika
Jasiulionienė
Member of the Company’s Board since
2021-08-24, elected as a Board member
until the end of the current Board’s term.
Education: Bachelor’s degree in Food
Chemistry and Engineering, Kaunas
University of Technology.
Master’s degree in Production
Engineering, Kaunas University of
Technology.
Current Employment: Production
Director of ŽEMAITIJOS PIENAS, AB.
Participation in the management of other
companies: Does not participate in the
management of other companies.
Company Shares Owned: Does not own
Company shares..
During 2024, ŽEMAITIJOS PIENAS, AB Board members did
not receive any salaries or other monetary compensations for
their work on the Board.
Board member Monika Jasiulionienė, as of December 31, 2024,
had an outstanding loan balance of €117,822.86. The loans were
granted with interest and secured by real estate collateral.
No other Board members were granted loans, guarantees, or
asset transfers.
All Board members are employees of the Company under
employment contracts, and they receive salaries based on their
respective job positions.
The Company’s manager – Chief Executive Officer (CEO)
operates in accordance with the Company’s Articles of
Association, the decisions of the General Meeting of
Shareholders, the decisions of the Board, and other local acts of
the Company.
The CEO is elected by the Company’s Board. The CEO
organizes the Company’s daily operations and performs the
actions necessary to carry out its functions, implement the
decisions of the Company’s governing bodies, and ensure the
Company’s operations.
The Company’s Chief Executive Officer is responsible and
regularly reports to the Board.
The Company does not apply special rules governing the
election or replacement of the CEO. When carrying out these
actions, the Company follows the provisions of the Law on
Companies and the Company’s Articles of Association.
The Company’s manager, management, and supervisory body
members are elected in accordance with legal requirements,
taking into account their abilities, qualifications, and
professional experience. Each candidate, before being elected to
the respective body, fills out a conflict of interest declaration.
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended 31 December 2024
43
The Company believes that this selection system fully aligns
with the interests of the Company and the vast majority of
shareholders.
The Company’s administration consists of the Chief
Executive Officer (CEO), Production Director, Logistics
Director, Finance Director, Chief Accountant, Sales and
Marketing Director, Human Resources and Legal Department
Director, and other employees performing administrative
functions. The Company’s administration is led by the Chief
Executive Officer. The Company’s departments are structural
units responsible for executing and implementing the decisions,
assignments, and other instructions of the Company’s Board
and the Chief Executive Officer.
Robertas
Pažemeckas
Chief Executive Officer (CEO)
Employed at the Company since 2002-
08-26.
Company Shares Owned: Owns 2,540
shares of the Company.
The owned shareholding represents less
than 0.05% of the total Company shares.
The position of Finance Director is
currently vacant.
Dalia Gecienė
Chief Accountant
Employed at the Company since 1986-
07-29.
Company Shares Owned: Owns 475,160
shares of the Company.
The owned shareholding represents
1.14% of the total Company shares.
The position of Sales and Marketing
Director is currently vacant.
Monika
Jasiulionienė
Production Director
Employed at the Company since 2020-
08-10.
Company Shares Owned: Does not own
Company shares.
Marius Dromantas
Logistics Director
Employed at the Company since 2003-
12-01.
Company Shares Owned: Does not own
Company shares.
The position of Human Resources and
Legal Department Director is currently
vacant.
Severina Butkė
Head of Marketing
Employed at the Company since 2018-
11-28.
Education: Vilnius Gediminas Technical
University, Bachelor’s degree in
Communication.
Company Shares Owned: Does not own
Company shares.
Nijolė
Penkovskienė
Head of Procurement Department
Employed at the Company since 2017-
07-03.
Education: Higher education.
Company Shares Owned: Does not own
Company shares.
The Company’s Audit Committee consists of three members.
On June 19, 2023, the Supervisory Board elected the following
individuals as members of the Audit Committee, two of whom
are independent:
- Nijolė Zibalienė (Chairwoman)
- Regina Domarkienė
- Sigita Leonavičienė
Main Functions of the Audit Committee: Conducting
unexpected financial audits and inventory checks of material
assets. Providing recommendations for process optimization.
Performing other duties as assigned by legal acts.
The Audit Committee also serves an advisory role to the
Supervisory Board, with the primary goal of enhancing the
efficiency of the Supervisory Board’s oversight of the
Company’s financial management and ensuring that decisions
are made impartially and thoroughly considered.
It is important to note that the Company has not established any
other committees or governing bodies.
Financial Benefits and Transactions: No loans, guarantees, asset
transfers, bonuses, additional payments, royalties, or other
compensations were provided to Audit Committee members.
Two Audit Committee members received €5,000 each under
service contracts.
Sigita Leonavičienė
Audito komiteto narė nuo 2017 m. 2023-
06-19 buvo perrinkta naujai kadencijai
iki narį išrinkęs Bendrovės organas
atšauks iš pareigų.
Regina Domarkienė
Audito komiteto nepriklausoma narė,
išrinkta 2023-06-19 kadencijai iki narį
išrinkęs Bendrovės organas atšauks iš
pareigų.
Nijolė Zibalienė
Audito komiteto pirmininkė –
nepriklausoma narė, išrinkta 2023-06-19
kadencijai iki narį išrinkęs Bendrovės
organas atšauks iš pareigų.
INFORMACIJA APIE ADMINISTRACIJĄ, 2024-12-31
AUDITO KOMITETO NARIAI
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended 31 December 2024
44
The governing bodies of Šilutės Rambynas, ABF (hereinafter –
Šilutės Rambynas) are: (i) General Meeting of Shareholders, (ii)
Board of Directors, and (iii) Sole executive body – the
Company’s Manager. Administrative employees operate under
the CEO’s supervision. The Company does not have a
Supervisory Board or an Audit Committee.
The competence of the General Meeting of Shareholders, as
well as shareholders' rights and obligations, are defined by the
Law on Companies of the Republic of Lithuania, other legal
acts, and the Company’s Articles of Association. Any
amendments or new provisions to the Articles of Association
follow the standard legal procedure.The Board’s activities,
election, and replacement follow the same rules as those of
ŽEMAITIJOS PIENAS, AB, in accordance with the Law on
Companies and the Company’s Articles of Association. Board
members do not have special or additional powers beyond those
defined by law. They are not assigned specific operational areas,
except for duties outlined in their employment contracts, if they
are also employees of the Company.responsibilities defined in
their employment contracts if they are employees of the
Company.
Algirdas
Bladžinauskas
He was re-elected as a member of the
Company’s Board for a new term from
2023-04-20 until the end of the current
Board’s term (2027-04-20).
Chairman of the Board.
Education: Lithuanian Agricultural
Academy, Master’s degree in
Agronomy.
Employment: Chief Executive Officer
of Šilutės Rambynas.
He does not participate in the
management of other companies.
He does not own any shares of Šilutės
Rambynas.
Irena
Baltrušaitienė
She was re-elected as a member of the
Board for a new term from 2023-04-20
until the end of the current Board’s term
(2027-04-20).
Education: Kaunas Polytechnic
Institute, Master’s degree in Dairy and
Dairy Product Technology.
Employment: Unemployed.
She does not participate in the
management of other companies.
She does not own any shares of Šilutės
Rambynas.
Linas Puskunigis
He was re-elected as a member of the
Company’s Board for a new term from
2023-04-20 until the end of the current
Board’s term (2027-04-20).
Education: Lithuanian Agricultural
Academy, Master’s degree in
Economics and Organization.
Employment: Chief Accountant of
Šilutės Rambynas.
He does not participate in the
management of other companies.
He owns 2,076 shares of Šilutės
Rambynas, representing 0.24% of the
total shares.
Robertas Pavelskis
He was re-elected as a member of the
Company’s Board for a new term from
2023-04-20 until the end of the current
Board’s term (2027-04-20).
Education: Vytautas Magnus University
Agricultural Academy.
Employment: Technical Manager at AB
“ŽEMAITIJOS PIENAS”.
He does not participate in the
management of other companies.
He does not own any shares of the
Company.
MANAGEMENT OF THE SUBSIDIARY ŠILUTĖS RAMBYNAS
, ABF
CHIEF EXECUTIVE OFFICER
(CEO)
BOARD OF DIRECTORS
PRODUCTION
UNIT
GENERAL MEETING OF
SHAREHOLDERS
ŠILUTĖS RAMBYNAS VALDYBOS NARIAI, 31-12-2024
QUALITY
MANAGER
TECHNICAL
DEPARTMENT
TRANSPORT
UNIT
ADMINISTRATION
UNIT
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended 31 December 2024
45
Renata Rupšienė
She was re-elected as a member of the
Company’s Board for a new term from
2023-04-20 until the end of the current
Board’s term (2027-04-20).
Education: Kaunas University of
Technology – Bachelor’s degree in Food
Chemistry and Engineering;
Kaunas University of Technology,
Master’s degree in Production
Engineering.
Employment: Production Director at AB
“ŽEMAITIJOS PIENAS”.
She does not participate in the
management of other companies.
She does not own any shares of the
Company.
The administration of Šilutės Rambynas consists of the Chief
Executive Officer (CEO), Production Director, Technical
Director, Transport Manager, Sales Manager, Production
Manager, Chief Accountant, and other employees. The CEO
leads the company’s administration.The directors/managers
implement the goals and tasks set by the Company’s governing
bodies, carry out functions according to their assigned
competencies, and manage subordinate employees.
During the reporting period (2024), no amounts were allocated
to the members of the Šilutės Rambynas Board for their work
on the Board.
The administration directors/managers were allocated a total of
€229,000 in salary based on their employment contracts. On
average, each administration manager received €57,228.
During the reporting period, no guarantees or warranties were
provided to the Board members, CEO, or Chief Accountant, and
no assets or other property rights were transferred.
Board members, the CEO, and the Chief Financial Officer/Chief
Accountant do not have any significant material obligations to
the company, and the company has no obligations to these
individuals.
No guarantees or warranties or other measures to secure the
management or other entities' (such as the CEO, Chief Financial
Officer) obligations were provided on behalf of the issuer during
2024, nor did the issuer grant any loans to these individuals.
During the 2024 period, ŽEMAITIJOS PIENAS, AB and
Šilutės Rambynas, ABF did not enter into any transactions with
related parties as defined by Article 372 of the Law on
Companies of the Republic of Lithuania. Other transactions
between the parties are specified in the Company’s financial
statements.
CEO AND ADMINISTRATION OF ŠILUTĖS
RAMBYNAS
OTHER GOVERNANCE INFORMATION
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended 31 December 2024
46
ŽEMAITIJOS PIENAS, AB, acting in accordance with Article
12, Section 3 of the Securities Law of the Republic of Lithuania
and Section 24.4 of the Listing Rules of AB “NASDAQ
Vilnius”, discloses in this document how the Company
complies with the NASDAQ Vilnius Listed Companies
Corporate Governance Code, including its specific provisions
and recommendations.
If the Company does not comply with the Code or any of its
provisions or recommendations, it must specify the particular
provisions or recommendations that are not being followed and
provide the reasons for non-compliance. Additionally, any other
explanatory information as required by this form must be
provided.
The Company’s governance structure consists of four levels: the
General Meeting of Shareholders, the Supervisory Board, the
Board of Directors, and the CEO.
In 2024, the Supervisory Board consisted of three members,
while the Board of Directors consisted of five members. The
members of the Board of Directors are elected and removed by
the Supervisory Board. On the other hand, the function of
electing and removing Supervisory Board members lies with the
General Meeting of Shareholders. The Board of Directors,
within the powers granted by law, elects and dismisses the
Company’s CEO.
The Company essentially complies with the recommendations
of the NASDAQ Vilnius Listed Companies Corporate
Governance Code, except for the recommendations related to
the establishment of nomination and remuneration committees
and the assignment of certain functions to the competencies of
these committees (Sections 5.2 and 5.3).
The Company maintains the position that the creation of these
bodies would be excessive, disproportionate to the Company’s
governance objectives, and would increase administrative costs.
Moreover, the Board of Directors and the Supervisory Board are
responsible for performing these functions (within their
respective competencies). In the Company’s view, the
committees would even duplicate functions.
PRINCIPLES / RECOMMENDATIONS
YES / NO / NOT
APPLICABLE
COMMENT
Principle I:
The General Meeting of Shareholders, impartial treatment of shareholders, and shareholder rights within the Company’s
governance system should ensure the impartial treatment of all shareholders. The Company’s governance system should protect
shareholder rights.
1.1. All shareholders should be provided with equal
opportunities to access information and documents required
by law and to participate in making important decisions for
the company. Yes
The Company publicly discloses the most significant
information, presents it at the General Meetings of
Shareholders, and provides opportunities for
shareholders to familiarize themselves with it and
participate in the management of the company in
accordance with the procedures and methods prescribed
by legal acts.
1.2. It is recommended that the company’s capital consist
solely of shares that provide their holders with equal voting,
ownership, dividend, and other rights.
Yes
The Company's shares grant all shareholders equal
rights.
1.3. It is recommended to provide investors with the
opportunity to familiarize themselves in advance, i.e., before
purchasing shares, with the rights granted by newly issued or
already existing shares.
Yes
The recommendations are followed in accordance with
the procedures established by legal acts..
1.4. For transactions of critical importance, such as the
transfer of all or nearly all of the company’s assets, which
would essentially mean the transfer of the company, the
approval of the General Meeting of Shareholders should be
obtained.
Yes
In accordance with the procedures and conditions
established by legal acts.
1.5. The procedures for organizing and participating in the
General Meeting of Shareholders should provide
shareholders with equal opportunities to participate and
should not violate their rights and interests. The selected
venue, date, and time for the General Meeting of
Shareholders should not hinder active shareholder
participation. In the notice calling the General Meeting of
Shareholders, the company should specify the latest date by
which proposed resolution drafts can be submitted.
Yes
In accordance with the procedures and conditions
established by legal acts.
INFORMATION ON COMPLIANCE WITH THE NASDAQ VILNIUS LISTED COMPANIES CODE
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended 31 December 2024
47
1.6. To ensure that shareholders residing abroad can access
information, it is recommended that, where possible, the
documents prepared for the General Meeting of
Shareholders be publicly disclosed in advance, not only in
Lithuanian but also in English and/or other foreign languages.
The minutes of the General Meeting of Shareholders, after
being signed, and/or the decisions made, should also be
publicly disclosed not only in Lithuanian but also in English
and/or other foreign languages. It is recommended that this
information be published on the company’s website. Not all
documents may be made publicly available if their disclosure
could harm the company or reveal commercial secrets.
Yes
The recommendations are followed, ensuring the rights
of shareholders living abroad to access and/or
familiarize themselves with the information.
1.7. Shareholders entitled to vote should be given the
opportunity to vote at the General Meeting of Shareholders
either in person or without attending. No obstacles should be
placed for shareholders to vote in advance by filling out a
general voting ballot.
Yes
Shareholders are provided with the opportunity to vote
both in advance and directly at the shareholders'
meetings.
1.8. To increase shareholders' participation in the General
Meetings of Shareholders, companies are recommended to
widely apply modern technologies, thus allowing
shareholders to participate and vote in the General Meetings
using electronic communication methods. In such cases, the
security of transmitted information must be ensured, and the
identity of the participant and voter can be verified.
Yes
The Company, having assessed the shareholders'
reasonable, real, and practical proposals regarding the
use of electronic means in the General Meetings of
Shareholders, as well as considering other conditions,
including the interests of all shareholders, economic
costs, technological capabilities, and other aspects,
would consider the recommendation.
1.9. The notice of the upcoming General Meeting of
Shareholders should disclose the new candidates for the
collegial body members, the proposed compensation for
them, and the proposed appointment of the audit firm if these
issues are included in the agenda. When proposing the
election of a new collegial body member, it is recommended
to provide information about their education, work
experience, and any other managerial positions held (or
proposed to be held).
Yes
The recommendation is followed based on objective and
reasonable possibilities.
1.10. Members of the company’s collegial bodies, the
administration's managers, or other competent individuals
related to the company, who can provide information related
to the agenda of the General Meeting of Shareholders,
should attend the General Meeting. Proposed candidates for
the collegial body should also attend the General Meeting if
the election of new members is included in the General
Meeting agenda.
Yes
The recommendation is followed based on objective and
reasonable possibilities.
Principle 2: Supervisory Board
2.1. Functions and Responsibility of the Supervisory Board
The Company’s Supervisory Board should ensure the representation of the company and its shareholders' interests, accountability
to the shareholders, and objective and impartial supervision of the company’s activities and its governing bodies. Additionally, the
Supervisory Board should continuously provide recommendations to the company’s governing bodies. The Supervisory Board
should ensure the integrity and transparency of the company’s financial accounting and control systems.
2.1.1. The members of the Supervisory Board should act
honestly, diligently, and responsibly in the interests of the
company and its shareholders, representing their interests
while considering the interests of employees and the well-
being of society.
Yes
The majority of the Supervisory Board is independent,
which ensures that their actions are carried out
responsibly in relation to all stakeholders.
2.1.2. When the decisions of the Supervisory Board could
affect the interests of the company's shareholders differently,
the Supervisory Board should act impartially toward all
shareholders. It should ensure that shareholders are properly
Yes
The majority of the Supervisory Board is independent,
which ensures that their actions are carried out
responsibly with regard to all stakeholders.
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended 31 December 2024
48
informed about the company’s strategy, risk management and
control, and conflict of interest resolution.
2.1.3. The Supervisory Board should remain impartial when
making decisions that are significant to the company’s
operations and strategy. The work and decisions of
Supervisory Board members should not be influenced by the
individuals who elected them.
Yes
The majority of the Supervisory Board is independent,
which ensures that their actions are carried out
responsibly with respect to all stakeholders.
2.1.4. Supervisory Board members should clearly express
their dissent if they believe that a Supervisory Board decision
could harm the company. Independent members of the
Supervisory Board should:
a) Remain independent when conducting analysis and
making decisions;
b) Not seek or accept any undue benefits that may raise
doubts about their independence.
Yes
2.1.5. The Supervisory Board should ensure that the
company’s tax planning strategies are developed and
implemented in compliance with legal acts, aiming to avoid
harmful practices that are not aligned with the long-term
interests of the company and its shareholders, which could
result in reputational, legal, or other risks.
Yes
2.1.6. The company should ensure that the Supervisory Board
is provided with sufficient resources (including financial
resources) necessary to perform its duties, including the right
to receive all necessary information and the right to seek
independent professional advice from external legal,
accounting, or other specialists regarding matters within the
Supervisory Board and its committees' competences.
Yes
Conditions are created to ensure the proper performance
of duties.
2.2. Formation of the Supervisory Board
The procedure for forming the Supervisory Board should ensure the 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
a diversity of qualifications, professional experience, and
competencies, as well as strive for gender balance. To
maintain a proper balance of qualifications within the
Supervisory Board, it should be ensured that the members, as
a whole, possess diverse knowledge, opinions, and
experience necessary for properly fulfilling their tasks.
Yes
2.2.2. The members of the Supervisory Board should be
appointed for a defined term, with the possibility of being
individually re-elected for a new term, in order to ensure the
necessary professional experience growth.
Yes
2.2.3. The Chairman of the Supervisory Board should be an
individual whose current or previous positions would not
hinder the impartial performance of duties. A former CEO or
Board member should not immediately be appointed as the
Chairman of the Supervisory Board. When the company
decides not to follow these recommendations, information
should be provided about the measures taken to ensure the
impartiality of the activities.
Yes
2.2.4. Each member of the Supervisory Board should
dedicate sufficient time and attention to performing their
duties. Each member should commit to limiting their other
professional commitments (especially managerial positions
in other companies) so that they do not interfere with the
Yes
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended 31 December 2024
49
proper performance of their duties as a Supervisory Board
member. If a Supervisory Board member attended fewer than
half of the Supervisory Board meetings during the company’s
financial year, shareholders should be informed about this.
2.2.5. When proposing the appointment of a Supervisory
Board member, it should be disclosed which members are
considered independent. The Supervisory Board may decide
that a certain member, although meeting the independence
criteria, cannot be considered independent due to specific
personal or company-related circumstances.
Yes
2.2.6. The remuneration for the Supervisory Board members
for their activities and participation in meetings should be
approved by the General Meeting of Shareholders.
Yes
The annual budget for the remuneration of the
Supervisory Board members is determined by the
company's General Meeting of Shareholders.
2.2.7. Each year, the Supervisory Board should conduct a
self-assessment of its performance. This should include an
evaluation of the Supervisory Board's structure, organization
of work, and ability to function as a group, as well as an
evaluation of each member's competence and work efficiency
and whether the Supervisory Board has achieved its set
performance goals. The Supervisory Board should publish
relevant information at least once a year about its internal
structure and operational procedures.
Yes Partially implemented.
Principle 3: The Board
The Board should ensure the implementation of the company’s strategy, as well as proper corporate governance, taking into
account the interests of shareholders, employees, and other stakeholder groups.
3.1.1. The Board should ensure the implementation of the
company’s strategy, as approved by the Supervisory Board,
if one is established. In cases where the Supervisory Board is
not established, the Board is also responsible for approving
the company’s strategy.
Yes
The Board implements and executes strategic plans and
objectives.
3.1.2. The Board, as a collegial management body of the
company, performs the functions assigned to it by the Law
and the company’s Articles of Association. In cases where
the company does not have a Supervisory Board, among
other things, it performs the oversight functions prescribed by
the Law. When performing its functions, the Board should
consider the needs of the company, shareholders, employees,
and other stakeholder groups, accordingly aiming for the
creation of sustainable business.
Yes
The Board, in performing its assigned functions, takes
into account the needs of the company, shareholders,
employees, and other stakeholder groups in order to
create a sustainable business.
3.1.3. The Board should ensure that the laws and internal
policies of the company, applicable to the company or the
group of companies to which it belongs, are followed. It
should also establish appropriate risk management and
control measures to ensure regular and direct accountability
of executives.
Yes
3.1.4. The Board should also ensure that measures included
in the OECD’s good practice recommendations regarding
internal control, ethics, and compliance are implemented in
the company to ensure adherence to applicable laws, rules,
and standards.
Yes
As far as possible.
3.1.5. When appointing the company’s CEO, the Board
should consider the proper balance of the candidate’s
qualifications, experience, and competence.
Taip
3.2. Formation of the Board
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended 31 December 2024
50
3.2.1. The members of the Board, elected by the Supervisory
Board or General Meeting of Shareholders (if no Supervisory
Board is established), should collectively ensure diversity in
qualifications, professional experience, and competencies,
and also strive for gender balance. To maintain a proper
balance of qualifications within the Board, it should be
ensured that the members, as a whole, possess diverse
knowledge, opinions, and experience necessary for properly
fulfilling their tasks.
Yes
3.2.2. The names, surnames, information about the
candidates' education, qualifications, professional
experience, current positions, other important professional
commitments, and potential conflicts of interest should be
disclosed in the Supervisory Board meeting, in which the
Board members will be elected, without violating the data
protection laws. If no Supervisory Board is formed, this
information should be provided to the General Meeting of
Shareholders. The Board should collect this information
every year about its members and include it in the company’s
annual report.
Yes
3.2.3. All new Board members should be familiarized with
their duties, the company’s structure, and its operations.
Yes
All members are familiarized with their rights and
duties.
3.2.4. Board members should be appointed for a defined term,
with the possibility of being individually re-elected for a new
term to ensure the necessary professional experience growth
and sufficiently frequent re-confirmation of their status.
Yes
3.2.5. The Chairman of the Board should be someone whose
current or former positions do not hinder the impartial
performance of duties. When no Supervisory Board is
established, a former CEO should not immediately be
appointed as the Chairman of the Board. If the company
decides not to follow these recommendations, information
should be provided about the measures taken to ensure
impartiality in its activities.
Yes/No
The Chairman of the Board holds the position of CEO
but does not vote when decisions are made that could
lead to a conflict of interest.
3.2.6. Each Board member should dedicate sufficient time
and attention to performing their duties. If a Board member
attended fewer than half of the Board meetings during the
company’s financial year, the Supervisory Board should be
informed, and if no Supervisory Board is formed, the General
Meeting of Shareholders should be notified.
Yes
3.2.7. If, in cases prescribed by law, when electing the Board,
and when no Supervisory Board is formed, some members of
the Board are independent, it should be disclosed which
Board members are considered independent. The Board may
decide that a certain member, although meeting all the
independence criteria set by law, may still not be considered
independent due to specific personal or company-related
circumstances.
Not relevant
3.2.8. The remuneration for the Board members’ activities
and participation in Board meetings should be approved by
the General Meeting of Shareholders.
Yes
The remuneration budget for independent members is
approved by the company's General Meeting of
Shareholders. Board members who are employed by the
company under an employment contract do not receive
additional remuneration.
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3.2.9. Board members should act honestly, diligently, and
responsibly in the interests of the company and its
shareholders, representing their interests, while also
considering other stakeholders. When making decisions, they
should not pursue personal interests, and they should be
subject to non-compete agreements. They should also refrain
from using business information and opportunities related to
the company’s activities for personal benefit, thereby not
violating the company’s interests.
Yes
3.2.10. Each year, the Board should conduct a self-
assessment of its performance. This should include an
evaluation of the Board’s structure, work organization, and
ability to function as a group, as well as an evaluation of each
Board member’s competence and work efficiency and an
evaluation of whether the Board has achieved its established
goals. The Board should publish relevant information about
its internal structure and operational procedures at least once
a year, in compliance with data protection laws.
Yes Partially implemented.
Principle 4: The Work Procedure of the Company’s Supervisory Board and Board
The established work procedure for the Supervisory Board, if it is formed, and the Board should ensure the efficient functioning
of these bodies and decision-making, while promoting active collaboration between the company’s governing bodies.
4.1. The Supervisory Board and the Board, if established,
should closely collaborate to benefit both the company and
its shareholders. Good corporate governance requires open
discussion between the Board and the Supervisory Board.
The Board should regularly, and immediately when
necessary, inform the Supervisory Board about all important
company matters related to planning, business development,
risk management and control, and compliance with
obligations within the company. The Board should inform the
Supervisory Board about actual deviations in business
development from previously formulated plans and
objectives, specifying the reasons for those deviations.
Yes
4.2. It is recommended that meetings of the company’s
collegial bodies be held with appropriate frequency based on
a pre-approved schedule. Each company decides on the
frequency of meetings of collegial bodies, but it is
recommended that meetings be held frequently enough to
ensure continuous decision-making on essential corporate
governance issues. Meetings of the company’s collegial
bodies should be held at least once per quarter.
Yes
An advance schedule is approved, specifying the
meeting time, date, and agenda.
4.3. The members of the collegial body should be informed
in advance about the scheduled meeting to allow sufficient
time for proper preparation for the discussion of the matters
on the agenda and enable a discussion, after which decisions
can be made. Along with the notice of the scheduled meeting,
all relevant material related to the meeting's agenda should be
provided to the members of the collegial body. The agenda
should not be changed or supplemented during the meeting,
except when all members of the collegial body are present
and agree to such changes or additions, or when urgent
matters concerning the company need to be addressed.
Yes
They are informed in advance via email and/or other
means.
4.4. In order to coordinate the work of the company’s
collegial bodies and ensure an efficient decision-making
process, the chairs of the collegial supervisory and
management bodies should coordinate the dates of meetings,
their agendas, and work closely together to resolve other
governance-related issues. The Supervisory Board meetings
Yes
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
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should be open to the members of the Board, especially when
matters related to the dismissal, responsibility, or
remuneration of Board members are being discussed.
Principle: Nomination, Remuneration, and Audit Committees
5.1. Purpose and Formation of Committees
The committees established within the company should enhance the effectiveness of the Supervisory Board, or if no Supervisory
Board is formed, the Board, which performs oversight functions, ensuring that decisions are made after proper consideration and
helping to organize the work in a way that essential conflicts of interest do not influence the decisions. The committees should
operate independently and with integrity, providing recommendations related to decisions of the collegial body, but the final
decision is made by the collegial body itself.
5.1.1. Taking into account the specific circumstances related
to the company, the chosen corporate governance structure,
the company's Supervisory Board, or in cases where it is not
established, the Board, which performs oversight functions,
forms committees. It is recommended for the collegial body
to establish nomination, remuneration, and audit committees.
Yes/No The audit committee has been formed.
5.1.2. Companies may decide to form fewer than three
committees. In such cases, the companies should provide an
explanation as to why they chose an alternative approach and
how the chosen approach meets the objectives set for the
three separate committees.
The functions of the committees are currently carried out
by the collegial bodies themselves.
5.1.3. In companies, the functions assigned to committees by
the legal acts may, in certain cases, be carried out by the
collegial body itself. In such cases, the provisions of this
Code related to committees (especially regarding their role,
activities, and transparency), where applicable, should be
applied to the entire collegial body.
Yes/No The principle is partially implemented.
5.1.4. Committees created by the collegial body should
generally consist of at least three members. Depending on
legal requirements, committees may be formed with only two
members. The members of each committee should be
selected primarily based on their competence, with a
preference for independent members of the collegial body.
The Chairman of the Board should not be the chairman of the
committees.
Yes
5.1.5. The powers of each formed committee should be
defined by the collegial body itself. The committees should
carry out their duties in accordance with the established
powers and regularly inform the collegial body about their
activities and results. The powers of each committee,
defining its role and specifying its rights and duties, should
be disclosed at least once a year (as part of the information
that the company publishes annually about its governance
structure and practices). The company should also publish in
its annual report, in compliance with the laws governing
personal data processing, the reports of the existing
committees on their composition, the number of meetings,
and members' participation in meetings during the past year,
as well as their main activities and results.
Yes/No
5.1.6. To ensure the independence and objectivity of the
committees, members of the collegial body who are not
members of the committee should generally have the right to
attend committee meetings only upon invitation from the
committee. The committee may invite or require certain
company employees or experts to attend the meeting. The
chairman of each committee should have the opportunity to
Yes
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended 31 December 2024
53
maintain direct communication with the shareholders. The
situations when this should occur should be specified in the
rules governing the committee’s activities.
5.2. Nomination Committee.
5.2.1. The main functions of the Nomination Committee
should be as follows: 1) to select candidates for vacant
positions of supervisory, management body members, and
administrative heads, and recommend them to the collegial
body for consideration. The Nomination Committee should
assess the balance of skills, knowledge, and experience in the
management body, prepare a description of the functions and
abilities required for the specific position, and evaluate the
time needed to fulfill the commitment; 2) to regularly assess
the structure, size, composition, members' skills, knowledge,
and activities of the supervisory and management bodies, and
provide recommendations to the collegial body on how to
achieve the necessary changes; 4) to give appropriate
attention to succession planning.
No
Not established, the functions are carried out by the
collegial bodies.
5.2.2. When addressing issues related to the members of the
collegial body who are employed by the company and the
administrative heads, the company’s CEO should be
consulted, granting him 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) to submit proposals to the collegial body for
consideration regarding the remuneration policy applicable to
the members of the supervisory and management bodies and
the administrative heads. This policy should cover all forms
of remuneration, including fixed salary, performance-based
pay, incentive systems using financial instruments, pension
schemes, severance payments, and conditions under which
the company can recover amounts or suspend payments,
specifying the circumstances under which this would be
appropriate; 2) to submit proposals to the collegial body
regarding the individual remuneration of the members of the
collegial bodies and administrative heads to ensure that it
aligns with the company's remuneration policy and the
evaluation of these individuals' performance; 3) to regularly
review the remuneration policy and its implementation..
No
Not established, the functions are carried out by the
collegial bodies.
5.4. Audit Committee
5.4.1. The main functions of the audit committee are defined
in the legal acts regulating the activities of the audit
committee.
Yes
5.4.2. All committee members should be provided with
detailed information related to the company's accounting,
financial, and operational specifics. The company's
management should inform the audit committee about the
accounting methods for significant and unusual transactions,
where accounting may be carried out in different ways.
Yes
All members of the audit committee are familiarized
with the specifics of the company's operations, except
for what is considered confidential information.
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended 31 December 2024
54
5.4.3. The audit committee should decide whether the
Chairman of the Board, the CEO, the Chief Financial Officer
(or senior staff responsible for finance and accounting), the
internal auditor, and the external auditor should attend its
meetings (if so, when). The committee should have the ability
to meet with the relevant individuals without the members of
the governing bodies present, if necessary.
Yes
Conditions are provided for the implementation of the
principle.
5.4.4. The audit committee should be informed about the
internal auditor's work program and receive internal audit
reports or periodic summaries. The audit committee should
also be informed about the external auditor's work program
and should receive a report from the audit firm describing all
relationships between the independent audit firm and the
company and its group.
Yes
5.4.5. The audit committee should check whether the
company complies with applicable provisions regulating
employees' ability to file complaints or report suspicions of
violations within the company anonymously, and should
ensure that a procedure is in place for the proportional and
independent investigation of such matters and appropriate
follow-up actions.
Yes
5.4.6. The audit committee should report on its activities to
the Supervisory Board, or if the Supervisory Board is not
established, to the Board, at least once every six months,
during the approval of the annual and half-year reports.
Yes
Principle: Avoidance and Disclosure of Conflicts of Interest
The company's governance system should encourage members of the company's supervisory and management bodies to avoid
conflicts of interest and ensure a transparent and effective mechanism for disclosing conflicts of interest among the members of the
company's supervisory and management bodies.
A member of the company’s supervisory or management
body should avoid situations where their personal interests
conflict or may conflict with the company’s interests. If such
a situation arises, the member of the supervisory or
management body should inform the other members of the
same body or the governing body that elected them, or the
company’s shareholders, within a reasonable timeframe,
about the conflict of interest situation, specifying the nature
of the interests and, if possible, their value.
Yes
The principle is followed, as each member of the
supervisory and management bodies submits a written
declaration and confirms their interests, committing to
avoid conflicts of interest.
Principle: The Company's Remuneration Policy
The company's established remuneration policy, along with its review and publication procedure, should prevent potential conflicts
of interest and abuse in determining the remuneration of members of the collegial bodies and administrative heads, as well as ensure
the transparency, public availability, and alignment of the company's remuneration policy with the long-term company strategy.
7.1. The company should approve and publish its
remuneration policy on the company's website, which should
be regularly reviewed and align with the company’s long-
term strategy.
Yes
The company implements a remuneration policy for the
CEO, Board members, and Supervisory Board members,
which is publicly disclosed.
7.2. The remuneration policy should cover all forms of
remuneration, including fixed salary, performance-based
remuneration, incentive systems using financial instruments,
pension schemes, severance payments, and the conditions
that outline situations where the company can recover paid
amounts or suspend payments.
Yes
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended 31 December 2024
55
7.3. To avoid potential conflicts of interest, the remuneration
policy should stipulate that members of collegial bodies
performing supervisory functions should not receive
remuneration that depends on the company’s performance.
Yes
7.4. The remuneration policy should provide sufficient detail
regarding the severance pay policy. Severance payments
should not exceed a specified amount or the equivalent of a
set number of annual salaries, and should generally not be
greater than the equivalent of two years of fixed salary.
Severance payments should not be made if the contract is
terminated due to poor performance.
Not relevant
Severance payments are not specified in the company's
remuneration policy.
7.5. If the company has an incentive system based on
financial instruments, the remuneration policy should provide
sufficient information about the retention of shares after the
rights are granted. In cases where remuneration is based on
share allocation, the right to shares should not be granted for
at least three years after their allocation. After the rights are
granted, members of the collegial bodies and administrative
heads should retain a certain number of shares until the end
of their term, depending on the need to cover any costs related
to purchasing the shares.
Not relevant
The company does not have an incentive system based
on financial instruments.
7.6. The company should publish information on the
implementation of the remuneration policy on the company’s
website, focusing on the remuneration policy for the collegial
bodies and management for the upcoming, and where
applicable, subsequent financial years. This should also
include a review of how the remuneration policy was
implemented in the previous financial year. Such information
should not contain commercially valuable information.
Special attention should be given to significant changes in the
company’s remuneration policy compared to the previous
financial year.
Yes
Information about the implementation of the company’s
remuneration policy and the average salaries of different
employee groups is publicly disclosed in the company’s
annual report, which is published on the company’s
website.
7.7. It is recommended that the remuneration policy or any
significant changes to the remuneration policy be included in
the agenda of the General Meeting of Shareholders. Schemes
under which members of the collegial body and employees
are compensated with shares or stock options should be
approved by the General Meeting of Shareholders.
Yes
The mentioned schemes are not applied in the
company.
Principle: The Role of Stakeholders in Corporate Governance
The corporate governance system should recognize the rights of stakeholders as established by law or mutual agreements and
promote active collaboration between the company and its stakeholders in creating the company’s prosperity, jobs, and financial
stability. In the context of this principle, the term "stakeholders" includes investors, employees, creditors, suppliers, customers,
local communities, and other individuals with an interest in the specific company.
8.1. The corporate governance system should ensure that the
rights and legitimate interests of stakeholders are respected.
Yes
The implementation of the 8th principle is ensured by
the precise oversight and control of the company’s
activities by state institutions, regulators, and
supervisory authorities.
The company conducts consultations and meetings with
employee representatives regarding the operational
processes carried out within the company.
Stakeholders can participate in the company’s
governance as provided by law.
8.2. The corporate governance system should enable
stakeholders to participate in the company’s governance in
accordance with the law. Examples of stakeholder
participation in corporate governance could include the
involvement of employees or their representatives in making
important decisions for the company, consultations with
employees or their representatives on corporate governance
and other significant matters, employee participation in the
company’s share capital, creditor involvement in corporate
governance during the company’s insolvency, and more.
Yes
8.3. When stakeholders participate in the corporate
governance process, they should be provided with the
necessary information to familiarize themselves with.
Yes
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended 31 December 2024
56
8.4. Stakeholders should be provided with a means to
confidentially report illegal or unethical practices to the
collegial body responsible for oversight.
Yes
Principle: Disclosure of Information
The corporate governance system should ensure that information about all essential company matters, including its financial
situation, operations, and corporate governance, is disclosed in a timely and accurate manner.
9.1. Without violating the company’s confidential
information and trade secrets management procedures, as
well as the legal requirements governing the processing of
personal data, the company should disclose public
information that should include, but is not limited to:
9.1.1. the company’s activities and financial results;
9.1.2. the company’s operational goals and non-financial
information;
9.1.3. individuals who own the company’s shares, directly
and/or indirectly, and/or together with related persons, as
well as the group structure and interrelations of companies,
indicating the ultimate beneficiary;
9.1.4. members of the company’s supervisory and
management bodies who are considered independent, the
company’s CEO, their shares or votes in the company,
participation in the governance of other companies, their
competence, and remuneration;
9.1.5. reports of existing committees regarding their
composition, number of meetings, and member participation
in meetings over the past year, as well as their main activities
and results;
9.1.6. possible major risk factors, the company’s risk
management and oversight policy;
9.1.7. the company’s transactions with related parties;
9.1.8. key issues related to employees and other stakeholders
(e.g., human resources policy, employee participation in the
company’s governance, incentivizing with company shares
or stock options, relations with creditors, suppliers, local
communities, etc.);
9.1.9. the company’s governance structure and strategy;
9.1.10. corporate social responsibility policies, anti-
corruption initiatives and measures, significant ongoing or
planned investment projects. This list is considered minimal,
and companies are encouraged not to limit themselves to only
disclosing the information listed here. This principle of the
Code does not exempt the company from the obligation to
disclose information required by legal acts.
Yes
The information is disclosed publicly in accordance
with the legal requirements, and conditions are provided
for shareholders to access it through other means,
except for information or data that are confidential.
9.2. When disclosing the information specified in point 9.1.1,
it is recommended that the company, which is a parent
company to other companies, disclose information about the
consolidated results of the entire group.
Yes Please refer to the above comment regarding point 9.1.
ŽEMAITIJOS PIENAS, AB CONSOLIDATED MANAGEMENT REPORT
For the twelve-month period ended 31 December 2024
57
9.3. When disclosing the information specified in point 9.1.4,
it is recommended to provide information about the
professional experience, qualifications, and potential
conflicts of interest of the members of the company’s
supervisory and management bodies, and the CEO, which
could affect their decisions. It is also recommended to
disclose the remuneration or other income received by the
members of the supervisory and management bodies, and the
CEO from the company, as detailed in Principle 7.
Yes Please refer to the above comment regarding point 9.1.
9.4. The information should be disclosed in such a way that
no shareholders or investors are discriminated against
regarding the method and scope of information they receive.
The information should be disclosed to all at the same time.
Yes Please refer to the above comment regarding point 9.1.
Principle: Selection of the Company’s Audit Firm
The mechanism for selecting the company’s audit firm should ensure the independence of the audit firm's conclusions and
opinions..
10.1. In order to obtain an objective opinion on the
company’s financial position and financial performance, the
audit of the company’s annual financial statements and the
financial information presented in the annual report should be
performed by an independent audit firm.
Yes The audit is performed by an independent company.
10.2. It is recommended that the nomination of the audit firm
be proposed to the General Meeting of Shareholders by the
company’s Supervisory Board, and if no Supervisory Board
is established, by the company’s Board.
Yes
The audit firm is selected through a public tender
process from multiple (at least three) proposals.
10.3. If the audit firm has received payment from the
company for non-audit services, the company should disclose
this publicly. This information should also be available to the
company’s Supervisory Board, and if no Supervisory Board
is established, to the company’s Board when considering
which audit firm’s nomination to propose to the General
Meeting of Shareholders.
Yes
1
ŽEMAITIJOS PIENAS AB
Independent Auditor’s Report,
Consolidated Annual Report,
Financial Statements,
and Consolidated Financial statements
for the year ended 31 December 2024
ŽEMAITIJOS PIENAS, AB
Registration number 180240752, Sedos str. 35, Telšiai, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER, 2024
2
CONTENTS
PAGE
FINANCIAL STATEMENTS AND CONSOLIDATED FINANCIAL STATEMENTS:
STATEMENTS OF FINANCIAL POSITION -------------------------------------------------
3
STATEMENTS OF COMPREHENSIVE INCOME------------------------------------------
4
STATEMENTS OF CHANGES IN EQUITY--------------------------------------------------
5-6
STATEMENTS OF CASH FLOW----------------------------------------------------------------
7
EXPLANATORY NOTES---------------------------------------------------------------------------
8-51
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, 2024
(All amounts in EUR thousands unless otherwise stated)
3
The Group | The Company | ||||
As at 31 | As at 31 | As at 31 | As at 31 | ||
Notes | December | December | December | December | |
ASSETS | 2024 | 2023 | 2024 | 2023 | |
Non-current assets | |||||
Intangible assets | 5 | 218 | 144 | ||
Property, plant and equipment | 5 | 72.030 | 58.868 | ||
Investment property | 6 | 2.219 | 2.468 | ||
Right-of-Use assets | 7 | 894 | 1.367 | ||
Investments in subsidiaries and associates | 1 | 3.150 | 3.150 | ||
Loans granted | 8 | 1.307 | 1.400 | ||
Other financial assets | - | - | |||
Deferred income tax asset | 27 | 1.414 | 395 | ||
Total non-current assets | 81.232 | 67.792 | |||
Current assets | |||||
Inventories | 9 | 49.492 | 48.225 | ||
Prepayments | 299 | 388 | |||
Trade accounts receivable | 10 | 26.797 | 23.235 | ||
Other accounts receivable | 11 | 3.931 | 1.636 | ||
Cash and cash equivalents | 12 | 26.294 | 15.905 | ||
Total current assets | 106.813 | 89.389 | |||
TOTAL ASSETS | 188.045 | 157.181 | |||
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 | 10.200 | ||
Retained earnings | 111.243 | 92.020 | |||
Equity attributable to equity holders | 134.561 | 115.338 | |||
of the Company | |||||
Non-controlling interest | 16 | - | - | ||
Total Equity | 134.561 | 115.338 | |||
Non-current liabilities | |||||
Grants received | 14 | 2.672 | 2.175 | ||
Loans received | 19 | 9.284 | 7.041 | ||
Obligations under finance lease | 18 | 515 | 1.126 | ||
Deferred Corporate income tax liability | - | - | |||
Long term provision for defined employee benefits | 15 | 6.661 | 3.669 | ||
Total non-current liabilities | 19.132 | 14.011 | |||
Current liabilities | |||||
Loans received | 19 | 3.234 | 2.933 | ||
Obligations under finance lease | 18 | 766 | 796 | ||
Trade accounts payable | 20 | 21.498 | 15.751 | ||
Income tax payable | 1.544 | 2.225 | |||
Accrued expenses and other current liabilities | 15, 21 | 7.310 | 6.127 | ||
Total current liabilities | 34.352 | 27.832 | |||
Total liabilities | 53.484 | 41.843 | |||
TOTAL EQUITY AND LIABILITIES | 188.045 | 157.181 |
The accompanying explanatory notes are an integral part of these consolidated and Company 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, 2024
(All amounts in EUR thousands unless otherwise stated)
4
The Group | The Company | ||||
Notes | 2024 | 2023 | 2024 | 2023 | |
REVENUE FROM CONTRACTS WITH | 22 | 306.653 | 277.305 | ||
CUSTOMERS | |||||
SALES | 22 | ||||
Cost of sales | ( | ( | (238.832) | (219.987) | |
GROSS PROFIT | 67.821 | 57.318 | |||
Operating expenses | 23 | ( | ( | (41.943) | (34.120) |
Other operating income and expenses | 24 | 565 | 209 | ||
PROFIT (LOSS) FROM OPERATIONS | 26.443 | 23.407 | |||
Financial income and expenses | 25 | ( | 754 | (401) | |
PROFIT (LOSS) BEFORE TAX | 27.197 | 23.006 | |||
Income tax benefit (expense) | 26 | ( | ( | (2.840) | (3.338) |
NET PROFIT (LOSS) | 24.357 | 19.668 | |||
ATTRIBUTABLE TO: | |||||
Equity holders of the Company | 24.357 | 19.668 | |||
Non-controlling interest | - | - | |||
24.357 | 19.668 | ||||
Basic and diluted earnings per share | 17 | 0.59 | 0.47 | ||
(EUR) | |||||
Other comprehensive income (loss) not to be reclassified to profit or loss in subsequent periods | |||||
Actuarial gains (losses) from long term | ( | (3.058) | 199 | ||
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 | ( | (3.058) | 199 | ||
Total comprehensive income (loss) for the year, net of tax | 21.299 | 19.867 | |||
ATTRIBUTABLE TO: | |||||
Equity holders of the Company | 21.299 | 19.867 | |||
Non-controlling interest | - | - | |||
21.299 | 19.867 |
The accompanying explanatory notes are an integral part of these consolidated and Company 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 2024
(All amounts in EUR, in thousands, unless otherwise stated)
5
Equity | Non- | Total | ||||||
The Group | Share | Own shares | Legal | Other | Retained | attributable to | controlling | equity |
capital | (-) | reserve | reserves | earnings | equity holders | |||
of the Company | interest | |||||||
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 | ( | |||||||
Dividends paid | ( | ( | ( | |||||
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 2024 | ( |
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 2024
(All amounts in EUR thousands unless otherwise stated)
6
The Company
Share
capital
Own
shares
(-)
Legal
reserve
Other
reserves
Retained
earnings
Total equity
Balance as of 31 December
2022
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
Dividends paid
-
-
-
-
(2.076)
(2.076)
Net profit
-
-
-
-
24.357
24.357
Other comprehensive income
-
-
-
-
(3.058)
(3.058)
Total comprehensive income
-
-
-
-
21.299
21.299
Acquisition of own shares
-
-
-
-
-
-
Transfer to/from reserves
-
-
-
-
-
-
Used of reserves
-
-
-
-
-
-
Authorized capital increase-
decrease
-
-
-
-
-
-
Balance as of 31 December 2024
12.104
(389)
1.403
10.200
111.243
134.561
The accompanying explanatory notes are an integral part of these consolidated and Company 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 2024
(All amounts in EUR thousands unless otherwise stated)
7
The Group | The Company | ||||
Cash flows to operating activities | Notes | 2024 | 2023 | 2024 | 2023 |
Profit (loss) for the period | 24.357 | 19.668 | |||
Adjustments: | |||||
Depreciation and amortization | 5,6 | 5.757 | 5.545 | ||
Amortization of grants received | 14 | ( | ( | (228) | (253) |
Depreciation right-of-use assets | 7 | 704 | 705 | ||
Gain (loss) on disposal and write offs of non-current assets | ( | (181) | 4 | ||
Decrease (increase) in deferred tax asset | 27 | ( | (1.019) | 100 | |
Impairment (reversal) of accounts receivable | 10 | ( | (8) | 532 | |
Net financial expenses (income) | 377 | 427 | |||
Impairment (reversal) of inventories to net realizable value | 9 | ( | ( | (65) | (2.441) |
Elimination of non-cash items | ( | (3.058) | 325 | ||
Net cash flows from ordinary activities before changes in working | 26.636 | 24.612 | |||
capital | |||||
Changes in working capital: | |||||
(Increase) decrease in inventories | 9 | ( | (1.203) | 20.424 | |
(Increase) decrease in trade receivables | 10 | ( | (3.554) | 180 | |
(Increase) decrease in prepayments | ( | 88 | (129) | ||
(Increase) decrease in other receivables | ( | (2.236) | 538 | ||
(Decrease) increase in trade payables | 20 | ( | 5.747 | (3.920) | |
(Decrease) increase other accounts payable | 21,22 | 5.616 | 2.651 | ||
Decrease) increase income tax payables | ( | ( | (2.222) | (666) | |
Net cash flows from operating activities | 28.872 | 43.690 | |||
Cash flows from (to) investing activities | |||||
(Acquisition) of intangible assets and property, plant and equipment. | 5 | ( | ( | (18.952) | (12.215) |
Proceeds on sale of property, plant and equipment | 389 | 100 | |||
Acquisition of right-of-use assets | 7 | ( | ( | (239) | (219) |
Repayment of loans granted | 8 | 1.369 | 2.484 | ||
Loans granted | 8 | ( | ( | (1.335) | (1.267) |
Interest received | 26 | 785 | 210 | ||
Net cash flows (to) investing activities | ( | ( | (17.983) | (10.907) | |
Cash flows from (to) financing activities | |||||
Dividends paid | 13 | ( | (1.975) | - | |
(Acquisition) of own shares | 13 | - | - | ||
Grants received | 14 | 725 | 56 | ||
Financial lease payments | 18 | ( | ( | (641) | (786) |
Loan received | 19 | 5.476 | 3.724 | ||
Loan (payments) | 19 | ( | ( | (2.933) | (20.235) |
Other financial (income) and expenses | 26 | ( | (490) | 44 | |
Interest (payments) | ( | ( | (662) | (745) | |
Net cash flows from (to) financial activities | ( | ( | (500) | (17.942) | |
Net increase (decrease) in cash and cash equivalents | 10.389 | 14.841 | |||
Cash and cash equivalents at the beginning of the year | 15.905 | 1.064 | |||
Cash and cash equivalents at the end of the year | 26.294 | 15.905 |
The accompanying explanatory notes are an integral part of these consolidated and Company 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 2024
(All amounts in EUR thousands unless otherwise stated)
8
31 12 2024 | 31 12 2023 | ||||
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 | December | activities | |||||
Group | consolidation | 2024 | 2023 | 2024 | |||
Šilutės | Klaipėdos g. | Cheese | |||||
Rambynas | 3, Šilutė, | 87,82% | 87,82% | 3.150 | 3.150 | 15.779 | 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 2024
(All amounts in EUR thousands unless otherwise stated)
9
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 2024
(All amounts in EUR thousands unless otherwise stated)
10
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 2024
(All amounts in EUR thousands unless otherwise stated)
11
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 2024
(All amounts in EUR thousands unless otherwise stated)
12
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 2024
(All amounts in EUR thousands unless otherwise stated)
13
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 2024
(All amounts in EUR thousands unless otherwise stated)
14
Company’s code 180240752, Sedos str. 35, Telšiai, Lithuania FOR THE YEAR ENDED 31 DECEMBER 2024 (All amounts in EUR thousands unless otherwise stated) | ŽEMAITIJOS PIENAS AB EXPLANATORY NOTES | CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS | |
15 |
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 2024
(All amounts in EUR thousands unless otherwise stated)
16
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 2024
(All amounts in EUR thousands unless otherwise stated)
2023 | ||||
USD 1 | EUR 0,957488 | USD 1 | = | EUR 0,904977 |
17
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 2024
(All amounts in EUR thousands unless otherwise stated)
18
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 2024
(All amounts in EUR thousands unless otherwise stated)
19
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 2024
(All amounts in EUR thousands unless otherwise stated)
20
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 2024
(All amounts in EUR thousands unless otherwise stated)
21
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 2024
(All amounts in EUR thousands unless otherwise stated)
22
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 2024
(All amounts in EUR thousands unless otherwise stated)
23
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 2024
(All amounts in EUR thousands unless otherwise stated)
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 2024
(All amounts in EUR thousands unless otherwise stated)
25
The Group | Aquired rights | Computer | Licenses | Total | |
and patents | software | ||||
Acquisition cost | |||||
As of 31 December 2022 | 355 | 142 | 634 | 1.131 | |
-acquisition | 74 | 31 | 6 | 111 | |
-reclassification | - | - | - | - | |
-sold or written-off assets | (0) | (8) | (300) | (308) | |
As of 31 December 2023 | 429 | 165 | 340 | 934 | |
-acquisition | 70 | 46 | 55 | 171 | |
-reclassification | - | - | - | - |
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 2024
(All amounts in EUR thousands unless otherwise stated)
-sold or written-off assets | - | - | - | - |
As of 31 December 2024 | 499 | 211 | 395 | 1.105 |
| Accumulated amortisation | ||||
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 |
-amortization | 69 | 16 | 12 | 97 |
-reclassification | - | - | - | - |
-amortization of sold and written-off assets | - | - | - | - |
As of 31 December 2024 | 386 | 156 | 345 | 887 |
| Net Book Value | ||||
As of 31 December 2022 | 107 | 5 | 19 | 131 |
As of 31 December 2023 | 112 | 25 | 7 | 144 |
As of 31 December 2024 | 113 | 55 | 50 | 218 |
The Company | Aquired rights | Computer | Licenses | Total | |
| and patents | software | ||||
Acquisition cost | |||||
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 | |
-acquisition | 70 | 46 | 55 | 171 | |
-reclassification | - | - | - | - | |
-sold or written-off assets | - | - | - | - | |
As of 31 December 2024 | 499 | 190 | 395 | 1.084 | |
| Accumulated amortisation | |||||
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 | |
-amortization | 69 | 16 | 12 | 97 | |
- reclassification | - | - | - | - | |
-amortization of sold and written-off assets | - | - | - | - | |
As of 31 December 2024 | 386 | 135 | 345 | 866 | |
Net Book Value | |||||
As of 31 December 2022 | 107 | 5 | 19 | 131 | |
As of 31 December 2023 | 112 | 25 | 7 | 144 | |
As of 31 December 2024 | 113 | 55 | 50 | 218 |
26
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 2024
(All amounts in EUR thousands unless otherwise stated)
Land, | Machinery | Other | Construction | |||
| property, | in progress | |||||
The Group | buildings and | and | Vehicles | plant and | and | Total |
constructions | equipment | |||||
| equipment | prepayments | |||||
Acquisition cost | ||||||
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) | - |
-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 |
-acquisition | - | 2.743 | 1.015 | 410 | 15.466 | 19.634 |
-sold or written-off assets | (180) | (3.471) | (770) | (132) | - | (4.553) |
-reclassification | 305 | 6.315 | 95 | 10 | (6.725) | - |
-transfers to investment property | - | - | - | - | - | - |
-transfers from investment property | 707 | - | - | - | - | 707 |
As of 31 December 2024 | 28.641 | 103.833 | 13.488 | 5.618 | 21.245 | 172.825 |
Accumulated depreciation | ||||||
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 | ||||||
-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 |
-depreciation | 594 | 4.270 | 672 | 391 | - | 5.927 |
| -depreciation of written-off and sold | (77) | (3.451) | (684) | (129) | - | (4.341) |
| assets | ||||||
-reclassification (subsidiary) | - | - | - | - | - | - |
-transfers to investment property | - | - | - | - | - | - |
-transfers from investment property | 642 | - | - | - | - | 642 |
As of 31 December 2024 | 12.169 | 66.856 | 9.643 | 4.038 | - | 92.706 |
Impairment | ||||||
As of 31 December 2022 | - | - | - | - | - | - |
-impairment losses | - | - | - | - | - | - |
-transfers to investment property | - | - | - | - | - | - |
-reversal of impairment | - | - | - | - | - | - |
As of 31 December 2023 | - | - | - | - | - | - |
-impairment losses | - | - | - | - | - | - |
-transfers to investment property | - | - | - | - | - | - |
-reversal of impairment | - | - | - | - | - | - |
As of 31 December 2024 | - | - | - | - | - | - |
Net book value | ||||||
As of 31 December 2022 | 17.277 | 33.440 | 3.549 | 1.789 | 3.465 | 59.520 |
As of 31 December 2023 16.799 |
27
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 2024
(All amounts in EUR thousands unless otherwise stated)
Changes in property, plant and equipment of the Company: | |||
Land, | Machinery | Other | Construction |
| property, | in progress | ||
buildings and |
28
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 2024
(All amounts in EUR thousands unless otherwise stated)
29
Acquisition cost | The Group | The Company |
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 |
-acquisition | - | - |
-transfers from property, plant and equipment | - | - |
-reversals (subsidiary) | - | - |
-sold or written-off investment property | - | - |
-transfers to property, plant and equipment | (707) | - |
As of 31 December 2024 | 3.929 | 3.899 |
Accumulated depreciation | ||
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 |
-depreciation | 249 | 249 |
-transfers to property, plant and equipment | (642) | - |
-reversals (subsidiary) | - | - |
-sold or written-off investment property | - | - |
-transfers from property, plant and equipment | - | - |
As of 31 December 2024 | 1.692 | 1.680 |
Impairment | ||
As of 31 December 2022 | - | - |
-impairment losses | - | - |
-reversal of impairment | - | - |
-transfers from property, plant and equipment | - | - |
As of 31 December 2023 | - | - |
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 2024
(All amounts in EUR thousands unless otherwise stated)
Net book value, Eur thousand: | ||
As of 31 December 2022 | 2.754 | 2.670 |
As of 31 December 2023 | 2.551 | 2.468 |
As of 31 December 2024 | 2.237 | 2.219 |
30
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 2024
(All amounts in EUR thousands unless otherwise stated)
| Impairment | (181) | (14) | - | (195) |
| As of 31 December 2023 | ||||
Impairment losses | (18) | 9 | - | (9) |
| Impairment | (199) | (5) | - | (204) |
| As of 31 December 2024 | ||||
Net book value, Eur thousand: | ||||
As of 31 December 2022 | 1.752 | 92 | - | 1.844 |
As of 31 December 2023 | 1.204 | 163 | - | 1.367 |
As of 31 December 2024 | 801 | 93 | - | 894 |
The Company | Land, buildings and | Movable | Vehicles | Total | |
Acquisition cost | constructions | property | |||
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 | |
-acquisition | 283 | - | - | 283 | |
-reclassification | - | - | - | - | |
-the end of the contract | (259) | - | - | (259) | |
Acquisition cost | |||||
- | As of 31 December 2024 | 2.570 | 236 | - | 2.806 |
Accumulated depreciation | |||||
As of 31 December 2022 | 538 | 508 | - | 1.046 | |
-depreciation | 623 | 82 | - | 705 | |
-reclassification | - | - | - | - | |
-the end of contract | - | (531) | - | (531) | |
Accumulated depreciation | |||||
As of 31 December 2023 | 1.161 | 59 | - | 1.220 | |
-depreciation | 625 | 79 | - | 704 | |
-reclassification | - | - | - | - | |
-the end of the contract | (216) | - | - | (216) | |
Accumulated depreciation | |||||
As of 31 December 2024 | 1.570 | 138 | - | 1.708 | |
| Impairment | (204) | - | - | (204) | |
| As of 31 December 2022 | |||||
Impairment loses | 23 | (14) | - | 9 | |
| Impairment | (181) | (14) | - | (195) | |
| As of 31 December 2023 | |||||
Impairment loses | (18) | 9 | - | (9) | |
| Impairment | (199) | (5) | - | (204) | |
| As of 31 December 2024 | |||||
Net book value, Eur thousand: | |||||
As of 31 December 2022 | 1.752 | 92 | - | 1.844 | |
As of 31 December 2023 | 1.204 | 163 | - | 1.367 | |
As of 31 December 2024 | 801 | 93 | - | 894 |
31
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 2024
(All amounts in EUR thousands unless otherwise stated)
The Group | The Company | |||||||
| 31 | Dec 2024 | 31 | Dec 2023 | 31 | Dec 2024 | 31 | Dec 2023 | |
Loans granted: | 2.387 | 2.421 | 2.387 | 2.421 | ||||
Loans granted to related parties | 192 | 300 | 192 | 300 | ||||
Loans granted to milk suppliers | 1.905 | 1.849 | 1.905 | 1.849 | ||||
Loans granted to the staff | 290 | 272 | 290 | 272 | ||||
Loans granted to not related parties | - | - | - | - | ||||
Current portion of loans granted (Note 11) | (1.080) | (1.021) | (1.080) | (1.021) | ||||
| In the number loans granted to milk supplier | - | - | - | - | ||||
| impairment | ||||||||
Non- current loans granted | 1.307 | 1.400 | 1.307 | 1.400 |
The Group | The Company | ||||||
| 31 | Dec 2024 31 | Dec 2023 | 31 | Dec 2024 | 31 | Dec 2023 | |
Raw materials | 6.794 | 6.743 | 5.998 | 5.957 | |||
Finished goods and work in progress | 46.143 | 45.225 | 44.381 | 43.130 | |||
Goods for resale | 399 | 489 | 399 | 489 | |||
53.336 | 52.457 | 50.778 | 49.576 | ||||
Less: Allowance for inventories | (1.658) | (1.877) | (1.286) | (1.351) | |||
Total | 51.678 | 50.580 | 49.492 | 48.225 |
The Group | The Company | |||||||
Dec 2024 | 31 | Dec | 31 | Dec | 31 | Dec | ||
| 2023 | 2024 | 2023 | ||||||
Balance at beginning of year | 1.877 | 4.198 | 1.351 | 3.792 | ||||
Additional allowance made | - | - | - | - | ||||
Reversals of allowance made | (219) | (2.321) | (65) | (2.441) | ||||
Write-off | - | - | - | - | ||||
Balance at end of year | 1.658 | 1.877 | 1.286 | 1.351 | ||||
32
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 2024
(All amounts in EUR thousands unless otherwise stated)
The Group | The Company | |||||||
| 31 | Dec 2024 | 31 | Dec 2023 | 31 | Dec 2024 | 31 | Dec 2023 | |
Trade accounts receivable | 24.189 | 22.087 | 24.154 | 22.068 | ||||
Accounts receivable from related parties | 2.740 | 1.270 | 2.719 | 1.251 | ||||
Total accounts receivable: | 26.929 | 23.357 | 26.873 | 23.319 | ||||
Allowance for bad debts | (76) | (84) | (76) | (84) | ||||
Allowance for bad debts of related parties | - | - | - | - | ||||
Net trade receivables: | 26.853 | 23.273 | 26.797 | 23.235 |
The Group | The Company | |||||
2024 | 2023 | 2024 | 2023 | |||
Balance at beginning of year | 84 | 193 | 84 | 193 | ||
Additional allowance made | - | - | - | - | ||
Reversals of allowance made | (8) | (109) | (8) | (109) | ||
Write-off | - | - | - | - | ||
Balance at end of year | 76 | 84 | 76 | 84 |
| Trade accounts | Trade accounts receivables past due | ||||
The Group | More than 120 | ||||
| receivables, not | Less than 60 days | 60-120 days | Total | ||
(EUR thousand) | past due | days | |||
Trade account receivables | 20.353 | 3.732 | 29 | 75 | 24.189 |
Allowance formed | - | - | (1) | (75) | (76) |
| Trade accounts receivables | 1.478 | 599 | 446 | 217 | 2.740 |
| from related parties | |||||
Allowance formed | - | - | - | - | - |
| Trade accounts | Trade accounts receivables passed due | ||||
The Company | More than 120 | ||||
| receivables, not | Less than 60 days | 60-120 days | Total | ||
(EUR thousand) | past due | days | |||
Trade account receivables | 20.318 | 3.732 | 29 | 75 | 24.154 |
Allowance formed | - | - | (1) | (75) | (76) |
33
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 2024
(All amounts in EUR thousands unless otherwise stated)
| Trade accounts receivables | 1.457 | 599 | 446 | 217 | 2.719 |
| from related parties | |||||
Allowance formed | - | - | - | - | - |
| Trade accounts | Trade accounts receivables which due term has passed | ||||
The Group | receivables, | More than 120 | |||
(EUR thousand) | which period | Less than 60 days | 60-120 days | days | Total |
| has not passed | |||||
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 | Trade accounts receivables which due term has passed | ||||
The Company | receivables, | More than 120 | |||
(EUR thousand) | which period | Less than 60 days | 60-120 days | days | Total |
| has not passed | |||||
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 | - | - | - | - | - |
The Group | The Company | |||||||
| 31 | Dec 2024 | 31 | Dec 2023 | 31 | Dec 2024 | 31 | Dec 2023 | |
Prepaid income tax | - | - | - | - | ||||
Current portion of long-term loans granted (Note 8) | 1.080 | 1.021 | 1.080 | 1.021 | ||||
VAT receivable | 2.302 | 520 | 2.302 | 520 | ||||
Other receivables | 1.201 | 747 | 1.201 | 747 | ||||
4.583 | 2.288 | 4.583 | 2.288 | |||||
Other receivables allowance formed* | (652) | (652) | (652) | (652) | ||||
Total: | 3.931 | 1.636 | 3.931 | 1.636 |
The Group | The Company | |||||||
| 31 | Dec 2024 | 31 | Dec 2023 | 31 | Dec 2024 | 31 | Dec 2023 | |
Cash at bank | 31.690 | 18.092 | 25.992 | 15.751 | ||||
Cash on hand | 50 | 26 | 50 | 26 | ||||
Provided guarantees* | 252 | 128 | 252 | 128 | ||||
Total: | 31.992 | 18.246 | 26.294 | 15.905 |
34
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 2024
(All amounts in EUR thousands unless otherwise stated)
35
The Group | The Company | |
Grants received | ||
As of 31 December 2022 (balance) | 11.101 | 8.651 |
- received | - | - |
As of 31 December 2023 (balance) | 11.101 | 8.651 |
- received | 654 | 725 |
As of 31 December 2024 (balance) | 11.755 | 9.376 |
Accumulated amortisation | ||
As of 31 December 2022 (balance) | 8.365 | 6.223 |
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 2024
(All amounts in EUR thousands unless otherwise stated)
- amortization | 291 | 253 |
As of 31 December 2023 (balance) | 8.656 | 6.476 |
- amortization | 263 | 228 |
As of 31 December 2024 (balance) | 8.919 | 6.704 |
Net book value (EUR thousand) | ||
As of 31 December 2022 | 2.736 | 2.428 |
As of 31 December 2023 | 2.445 | 2.175 |
As of 31 December 2024 | 2.836 | 2.672 |
The amounts of the grant received are amortized in equal parts within the respective useful service life of the asset
acquired from these funds. Grant amortization is included in the statement of comprehensive income, under the
caption ‘Cost of Sales’ and reduces depreciation costs of non-current assets.
As according to the grant agreement, the Company and the Group is obligated to fulfil the requirements related to
Company and Group revenue and net profit. In 2024, the Company and the Group was in compliance with the grant
agreement requirements.
In 2022, the Company signed a support agreement with the National Paying Agency under the Ministry of Agriculture
for the implementation of the Rules on Support for Investments in the Processing, Marketing and/or Development of
Agricultural Products, applicable from 2019. Under this agreement, the Company has been granted support of EUR
725 thousand in 2024 to compensate for the purchase of a microfiltration unit - milk purification system.
On 21 December 2016 ABF Šilutės Rambynas signed a support contract for the project "Support for investments in
processing, marketing and/or development of agricultural products" under the measure "Investments in tangible
assets" of the Lithuanian Rural Development Programme 2014-2020, according to which ABF Šilutės Rambynas was
granted support of EUR 700,810 for the project "Increasing the efficiency of milk processing by modernising the
material base". For non-achievement of the project's monitoring indicators, ABF Šilutės Rambynas had to reimburse
to the National Paying Agency in 2024 EUR 71 thousand of the support received (EUR 31 thousand for the year 2021
and EUR 40 thousand for the year 2022 for the non-achievement of the project's indicators).
The Company | ||||
| 31 | Dec 2024 | 31 | Dec 2023 | |
Long term liability of post retirements employee benefits | 1.368 | 691 | ||
| Short term liability of post retirements employee benefits | 314 | 214 | ||
| (Note 21) | ||||
Long term liability under additional rewards policy | 5.294 | 2.978 | ||
| Short term liability under additional rewards policy | 612 | 440 | ||
| (Note 21) | ||||
Total: | 7.588 | 4.323 |
The Group | |||
| 31 | Dec 2024 | 31 | |
Long term liability of post retirements employee benefits | 1.403 | 727 | |
| Short term liability of post retirements employee benefits | 367 | 277 | |
| (Note 21) | |||
Long term liability under additional rewards policy | 5.467 |
36
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 2024
(All amounts in EUR thousands unless otherwise stated)
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 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 |
Change accounted in the statements of comprehensive income | 222 | 207 |
Actuarial (gain) loss | 3.058 | 3.058 |
Balance as at 31 December 2024 | 7.904 | 7.588 |
| 31 | Dec 2024 | 31 | Dec 2023 | |
Discount rate | 4,5% | 3,78-5,55% | ||
Inflation rate | 6,45% | 4,16% | ||
Turnover rate | 20%-24% | 20%-24% |
Silutes Rambynas ABF | ||||
| 31 | Dec 2024 | 31 | Dec 2023 | |
Current assets | 9.013 | 6.433 | ||
Non-current assets | 9.391 | 9.233 | ||
Current liabilities | 2.002 | 2.087 | ||
Non-current liabilities | 458 | 295 | ||
Revenue | 44.583 | 33.339 | ||
Profit | 2.765 | 1.611 | ||
Total comprehensive income | 2.765 | 1.611 |
37
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 2024
(All amounts in EUR thousands unless otherwise stated)
The Group | The Company | |||||||
| 31 | Dec 2024 | 31 | Dec 2023 | 31 | Dec 2024 | 31 | Dec 2023 | |
Dividends declared | 2.076 | - | 2.076 | - | ||||
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 | 0.05 | - |
2024 12 31 | 2023 12 31 | |||
Minimal | Present value of | Minimal | Present value of | |
The Group | financial lease | financial lease | financial lease | financial lease |
payments | minimal | payments | minimal | |
| payments | payments | |||
Less than 1 year | 780 | 766 | 821 | 796 |
2 – 5 years | 526 | 515 | 1.158 | 1.126 |
| Minimal financial lease payments, EUR | 1.306 | 1.281 | 1.979 | 1.922 |
| thousand | ||||
Less: future interest | (25) | - | (57) | - |
Present value of minimal financial lease | 1.281 | 1.281 | 1.922 | 1.922 |
payments, EUR thousand |
2024 12 31 | 2023 12 31 | |||
Minimal | Present value of | Minimal | Present value of | |
The Company | financial lease | financial lease | financial lease | financial lease |
payments | minimal | payments | minimal payments | |
| payments | ||||
Less than 1 year | 780 | 766 | 821 | 796 |
2 – 5 years | 526 | 515 | 1.158 | 1.126 |
| Minimal financial lease payments, EUR | 1.306 | 1.281 | 1.979 | 1.922 |
| thousand | ||||
Less: future interest | (25) | - | (57) | - |
| Present value of minimal financial lease | 1.281 | 1.281 | 1.922 | 1.922 |
| payments, EUR thousand |
38
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 2024
(All amounts in EUR thousands unless otherwise stated)
39
EUR | 8.767 | 3.724 | |||
AB SEB bank | Overdraft limit | 2028-06-07 | EUR | - | - |
Total: thousand EUR | 12.517 | 9.974 |
The Group | The Company | |||
31 st Dec 2024 | 31 st Dec 2023 | 31 st Dec 2024 | 31 st Dec 2023 | |
Payables to suppliers | 18.286 | 14.471 | 17.306 | 13.273 |
Annual bonuses to the suppliers of raw material* | 1.400 | - | 1.400 | - |
Payables to related parties | 845 | 184 | 1.849 | 1.816 |
Advances received | 967 | 734 | 943 | 662 |
Total: | 21.498 | 15.389 | 21.498 | 15.751 |
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 2024
(All amounts in EUR thousands unless otherwise stated)
40
The Group | The Company | |||
31 st Dec 2024 | 31 st Dec 2023 | 31 st Dec 2024 | 31 st Dec 2023 | |
Vacation reserve | 1.693 | 1.464 | 1.464 | 1.269 |
Bonuses for employees | - | - | - | - |
Wages and salaries payable | 1.783 | 1.607 | 1.588 | 1.447 |
Social security payable | 1.264 | 1.113 | 1.139 | 1.004 |
Dividends payable | 858 | 772 | 858 | 772 |
Payables based on defined obligations to employees (Note | 1.033 | 762 | 925 | 654 |
15) | ||||
Management Bonus | - | - | - | - |
Accrued expenses | 500 | 288 | 500 | 288 |
Taxes payable, other than income tax | 920 | 753 | 817 | 662 |
Other short-term liabilities | 55 | 85 | 19 | 31 |
Total: | 8.106 | 6.844 | 7.310 | 6.127 |
Sales, EUR thousand | Variation in % | ||
The Group | As comparing 2024 with | ||
2024 | 2023 | 2023 | |
Fermented cheese | 137.958 | 118.465 | 16.45% |
Fresh dairy products | 97.842 | 95.584 | 2,36% |
Butter and spreadable fat mixes | 34.936 | 27.783 | 25,75% | |
Dry dairy products | 22.381 | 24.849 | (9,93)% | |
Other | 14.526 | 11.323 | 28,29% | |
Total: | 307.643 | 278.004 | 10,66% |
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 2024
(All amounts in EUR thousands unless otherwise stated)
41
The Group | The Company | |||
2024 | 2023 | 2024 | 2023 | |
Sales, EUR thousand: | ||||
Lithuania | 147.317 | 139.220 | 147.852 | 140.049 |
EU countries | 110.238 | 97.931 | 109.357 | 97.068 |
Other countries | 50.088 | 40.853 | 49.444 | 40.188 |
Total, EUR thousand: | 307.643 | 278.004 | 306.653 | 277.305 |
The Group | The Company | |||
2024 | 2023 | 2024 | 2023 | |
Wages, salaries and social security** | 20.928 | 18.553 | 20.507 | 18.144 |
Marketing expenses | 7.692 | 7.652 | 7.692 | 7.650 |
Rent and insurance | 1.011 | 827 | 982 | 802 |
Logistic services | 2.748 | 1.564 | 2.517 | 1.375 |
Repairs | 924 | 280 | 915 | 275 |
Materials | 1.476 | 1.225 | 1.424 | 1.176 |
IT consulting | 432 | 424 | 413 | 413 |
Taxes, other than income tax | 1.209 | 867 | 1.082 | 756 |
Consulting* | 234 | 283 | 183 | 243 |
Depreciation or amortisation | 1.108 | 1.159 | 1.071 | 1.123 |
Business trips | 67 | 213 | 66 | 213 |
Trade accounts receivable impairment (reversal) | (8) | 532 | (8) | 532 |
Utilities | 428 | 403 | 245 | 293 |
Production for advertising purposes | 129 | 114 | 128 | 113 |
Telecommunication | 60 | 55 | 56 | 51 |
Pension reserve and other employee related accruals | 222 | 50 | 207 | 41 |
Employee bonuses | 2.164 | 2.011 | 2.164 | 2.011 |
Other expenses | 2.410 | 1.459 | 2.363 | 1.350 |
Inventory allowance (reversal)* | 307 | (1.914) | (64) | (2.441) |
Total: | 43.541 | 35.757 | 41.943 | 34.120 |
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 2024
(All amounts in EUR thousands unless otherwise stated)
42
Rent Income | The Group | The Company | ||
31 st Dec 2024 | 31 st Dec 2023 | 31 st Dec 2024 | 31 st Dec 2023 | |
Less than 1 year | 445 | 657 | 443 | 658 |
2 – 5 years | 1.384 | 1.109 | 1.328 | 1.109 |
Over 5 years | 1.388 | 709 | 1.388 | 709 |
Total: | 3.217 | 2.475 | 3.159 | 2.476 |
Income from financial and investment activities | 2024 | The Group | 2023 | 2024 | The Company | 2023 |
Interest income | 785 | 210 | 785 | 210 | ||
Foreign currency exchange gain | 499 | - | 499 | - | ||
Other financial income | 117 | 190 | 117 | 190 | ||
Goodwill/merger result | - | - | - | - | ||
1.401 | 400 | 1.401 | 400 | |||
Expenses from financial and investment activities | ||||||
Foreign currency exchange (loss) | - | (53) | - | (53) | ||
Interest expense | (662) | (745) | (662) | (745) | ||
Other financial expenses | 15 | (3) | 15 | (3) | ||
(647) | (801) | (647) | (801) | |||
Total: | 754 | (401) | 754 | (401) |
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 2024
(All amounts in EUR thousands unless otherwise stated)
The Group | The Company | |||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||
Profit before tax | 30.453 | 25.063 | 27.197 | 23.006 | ||||||||
Income tax, applying valid tax rate (15%) | 4.542 | 3.521 | 4.080 | 3.451 | ||||||||
Permanent differences | (625) | 375 | (464) | 169 | ||||||||
Investment incentive utilization | (901) | (282) | (901) | (282) | ||||||||
Change in deferred tax allowance | - | - | - | - | ||||||||
Deffered tax recognition from investment incentive that was not previously recognised | - | - | - | - | ||||||||
| Impact of the change in the deferred corporate tax rate | 141 | - | 125 | - | ||||||||
| from 2025 | ||||||||||||
Income | tax | expenses | (income) | reported | in | the | 3.157 | 3.614 | 2.840 | 3.338 | ||
| statement of comprehensive income | ||||||||||||
The correction of prior year income tax | - | - | - | - | ||||||||
Income | tax | expenses | (income) | reported | in | the | 3.157 | 3.614 | 2.840 | 3.338 | ||
| statement of comprehensive income |
The Group | The Company | |||||||
| 31 | Dec 2024 | 31 | Dec 2023 | 31 | Dec 2024 | 31 | Dec 2023 | |
Deferred income tax asset | ||||||||
Accounts receivable | 117 | 110 | 117 | 110 | ||||
Inventory allowance | 265 | 282 | 206 | 203 | ||||
Accrued vacation reserve | 235 | 191 | 234 | 190 | ||||
Other accrued expenses | 1.491 | 698 | 1.440 | 654 | ||||
Tax loss | - | 93 | - | - | ||||
Investment incentive | - | - | - | - | ||||
Total deferred income tax asset | 2.108 | 1.374 | 1.997 | 1.157 | ||||
Deferred income tax asset realization allowance* | (-) | (-) | (-) | (-) | ||||
Deferred income tax asset (after realization allowance) | 2.108 | 1.374 | 1.997 | 1.157 | ||||
| Deferred income tax liability | ||||||||
Change in depreciation rates of tangible assets | (945) | (1.081) | (583) | (762) | ||||
Total deferred income tax liability, in total | (945) | (1.081) | (583) | (762) | ||||
Deferred income tax asset, net | 1.163 | 293 | 1.414 | 395 |
43
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 2024
(All amounts in EUR thousands unless otherwise stated)
44
The Group | The Company | |||
31 12 2024 | 31 12 2023 | 31 12 2024 | 31 12 2023 | |
Cash and cash equivalents | 31.992 | 18.246 | 26.294 | 15.905 |
Loans granted | 1.307 | 1.400 | 1.307 | 1.400 |
Trade accounts receivable | 26.853 | 23.273 | 26.797 | 23.235 |
Other accounts receivable | 3.931 | 1.636 | 3.931 | 1.636 |
Other | - | - | - | - |
Total financial assets | 64.083 | 44.555 | 58.329 | 42.176 |
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 2024
(All amounts in EUR thousands unless otherwise stated)
45
The Group | The Company | |||
2024 12 31 | 2023 12 31 | 2024 12 31 | 2023 12 31 | |
Customer No. 1 | 16% | 17% | 16% | 17% |
Customer No. 2 | 10,3% | 11% | 10,3% | 11% |
Customer No. 3 (related | 1% | 3% | 1% | 3% |
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 2024
(All amounts in EUR thousands unless otherwise stated)
46
On | Up to 3 | From 3 | From 1 | More | ||||
The Group | months to | to 5 | than | Total | ||||
demand | months | 1 year | years | 5 years | ||||
Trade payables | - | 15.204 | - | - | - | 15.204 |
On | Up to 3 | From 3 | From 1 | More | ||
The Company | months to | to 5 | than | Total | ||
demand | months | 1 year | years | 5 years | ||
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 |
Other financial debts | - | - | - | - | - | - |
Balance as of 31 December 2023 | - | 17.354 | 2.126 | 8.167 | 27.647 | |
Trade payables | - | 19.649 | - | - | - | 19.649 |
Trade payables to related parties | - | 1.849 | - | - | - | 1.849 |
Loans received | - | 808 | 2.426 | 9.284 | - | 12.518 |
Financial lease | - | 208 | 558 | 515 | - | 1.281 |
Other financial debts | - | - | - | - | - | - |
Balance as of 31 December 2024 | - | 22.514 | 2.984 | 9.799 | - | 35.297 |
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 2024
(All amounts in EUR thousands unless otherwise stated)
47
1 | 29 | 1 | ||
HUF | 351 | 13 | 351 | 13 |
Other | 2 | - | 2 | - |
Total: | 44.981 | 40.286 | 42.564 | 39.668 |
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 2024
(All amounts in EUR thousands unless otherwise stated)
29. RELATED PARTY TRANSACTIONS
| 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: 40003786632, 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: | 75186066 | 9, | address: | 10 | Rue | de | Production and sale of dairy products | ||||||
8. Dziugas USA L.L.C. | Penthievre 75008, Paris | 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 | ||||||||||||||
10. Dziugas Poland | Company code: 368496450, address: ul. Luki Wielke 5, | of | Activities | agents | trading | in | food | and | |||||||
| Warsaw, Poland | beverages | ||||||||||||||
11. Baltic Holding, UAB | Klaipėda | Company code: 302688114, address: Įgulos g. 18B -4, | IT services | ||||||||||||
12. Nepriklausoma tyrimų laboratorija, UAB | Telšiai | Company code: 110824551, address: Narutavičių g. 4, | analysis services | Laboratory and other tests of materials and | |||||||||||
13. Dziugas Deutschland GmbH | 20354 | Hamburg , Germany | Company code: HRB 154342, address: Neuer Wall 41, | Marketing and product sales | |||||||||||
14. Dziugas Hungary Kft | Podmaniczky u. 57.2 emelet 14, Hungary | Company code: 01-09-325932, address: 1064 Budapest, | products | Wholesale import, sales and marketing of dairy | |||||||||||
15. Dziugas UK Ltd | Company code 11405400, address: 124 City Road , | of | Activities | agents | trading | in | food | and | |||||||
| London EC1V, Great Britain | beverages | ||||||||||||||
16. Danutė Pažemeckienė | Virvytės 36, Telšiai | Rent of premises | |||||||||||||
17. Monika Jasiulionienė | Beržų g. 2-52, Telšiai | Loan granted | |||||||||||||
Sales to and purchases from related parties (EUR thousand):
The Group
The Company
31 12 2024
31 12 2023
31 12 2024
31 12 2023
1)Sales
Sales of goods
To the subsidiary
Šilutės Rambynas ABF
-
-
1.887
1.132
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 2024
(All amounts in EUR thousands unless otherwise stated)
49
-
-
1.887
1.132
To other related parties
Klaipėdos pienas AB
1.758
1.454
1.701
1.403
Žemaitijos pieno investicija AB
0
496
0
-
Čia Market UAB
5.615
5.490
5.615
5.491
Dziugas USA LLC
-
-
-
-
Dziugas UK Ltd
4.733
898
4.733
898
S.A.R.Dziugas France
-
-
-
-
Dziugas Deutschland GmbH
0
0
0
0
Dziuugas Hungary Kft
773
430
773
430
Dziugas Eesti OU
0
0
0
0
Dziugas Poland | 2.022 | 1.553 | 2.022 | 1.553 |
Nepriklausoma tyrimų laboratorija UAB | 32 | 21 | 30 | 19 |
Muizas piens SIA | 645 | 756 | 645 | 756 |
Sales of inventory and services | 15.578 | 11.098 | 15.519 | 10.550 |
To the subsidiary | ||||
Šilutės Rambynas ABF | - | - | 54 | 30 |
To other related parties | - | - | 54 | 30 |
Klaipėdos pienas AB | 650 | 651 | 650 | 649 |
Žemaitijos pieno investicija AB | 62 | 67 | 62 | 67 |
Samogitija UAB | 1 | 0 | 1 | 0 |
Čia Market UAB | 420 | 395 | 409 | 386 |
Muizas piens SIA | 5 | 4 | 5 | 4 |
Nepriklausoma tyrimų laboratorija UAB | 84 | 101 | 60 | 62 |
S.A.R.Dziugas France | - | 1 | - | 1 |
Dziugas UK Ltd | 1 | 2 | 1 | 2 |
Dziugas Deutschland GmbH | 1 | 1 | 1 | 1 |
Dziugas Hungary Kft | 12 | 10 | 12 | 10 |
Dziugas Eesti OU | 5 | 8 | 5 | 8 |
Dziugas USA LLC | - | - | - | - |
Dziugas Poland | 52 | 35 | 52 | 35 |
1.293 | 1.275 | 1.258 | 1.225 | |
Total Sales: | 16.871 | 12.373 | 18.718 | 12.937 |
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 2024
(All amounts in EUR thousands unless otherwise stated)
50
- | - | - | ||
Other related parties | ||||
Samogitija UAB | 0 | - | 0 | - |
Čia Market UAB | 297 | 709 | 296 | 707 |
Klaipėdos pienas AB (including loan) | 1.210 | 477 | 1.190 | 461 |
Žemaitijos pieno investicija UAB | - | - | - | - |
Muizas piens SIA | 52 | 128 | 52 | 128 |
Dziugas Hungary Kft | 120 | 30 | 120 | 30 |
Dziugas Deutschland GmbH | - | 1 | - | 0 |
S.A.R.Dziugas France | - | 8 | - | 8 |
Dziugas Eesti Ou | - | - | - | - |
Dziugas Poland | 191 | 81 | 191 | 81 |
Dziugas UK Ltd | 1.062 | 136 | 1.062 | 136 |
Dziugas USA LLC | - | - | - | - |
2.932 | 1.570 | 2.911 | 1.551 | |
Total balances of receivables: | 2.932 | 1.570 | 2.911 | 1.551 |
The Group | The Company | ||||
4) Balances of payables | 31 12 2024 | 31 12 2023 | 31 12 2024 | 31 12 2023 | |
Subsidiary | |||||
Šilutės Rambynas ABF | - | - | 1.037 | 1.661 | |
- | - | 1.037 | 1.661 | ||
Other related parties | |||||
Žemaitijos pieno investicija UAB | 427 | 16 | 427 | 16 | |
Klaipėdos pienas AB | - | - | - | - | |
Čia Market UAB | - | - | - | - | |
Muizas piens SIA | 0 | - | - | - | |
Samogitija UAB | - | 11 | - | 11 | |
Nepriklausoma tyrimų laboratorija UAB | 372 | 126 | 339 | 96 | |
Dziugas Poland | - | - | - | - | |
Dziugas UK Ltd | - | - | - | - | |
S.A.R.Dziugas France | - | - | - | - | |
Dziugas USA LLC | - | - | - | - | |
Dziugas Deutschland GmbH | - | - | - | - | |
Dziugas Hungary Kft | - | - | - | - | |
Dziugas Eesti OU | 47 | 32 | 46 | 32 | |
846 | 185 | 812 | 155 | ||
Total balances of payables: | 846 | 185 | 1.849 | 1.816 |
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 2024
(All amounts in EUR thousands unless otherwise stated)
51
52
2024
INFORMATION ON
SUSTAINABILITY MATTERS
2
Content
ABOUT THIS REPORT ....................................................................................... 6
BP-1 – General basis for preparation of sustainability statements ........................................................... 6
BP-2 Disclosures in relation to specific circumstances .............................................................................. 6
MANAGING SUSTAINABILITY MATTERS ......................................................... 7
GOV-1 – The role of the administrative, management, and supervisory bodies ................................... 7
GOV-1 – The role of the administrative, management and supervisory bodies .................................... 9
GOV-2 Information provided to and sustainability issues addressed by the Group's administrative,
management and supervisory bodies ......................................................................................................... 9
GOV-3, E1 GOV-3 Integration of sustainability-related performance in incentive schemes .............. 9
GOV-4 – Statement on due diligence .......................................................................................................... 9
GOV-5 – Risk management and internal controls over sustainability reporting .................................. 10
STRATEGY, BUSINESS MODEL, AND VALUE CHAIN ...................................... 11
SBM–1 Strategy, business model, and value chain .................................................................................. 11
SBM-2 - Stakeholder interests and views .................................................................................................. 14
DOUBLE MATERIALITY ASSESSMENT ............................................................ 18
SBM-3 – Material impacts, risks, opportunities, and their interaction with the strategy and business
model ............................................................................................................................................................ 18
Climate risk assessment and management .............................................................................................. 22
IRO-1 - Description of the process to identify and assess material impacts, risks, and opportunities
........................................................................................................................................................................ 24
IRO-2 – Disclosure Requirements in ESRS covered by the undertaking’s sustainability statement .. 27
ENVIROMENTAL AREA ................................................................................... 28
E1 CLIMATE CHANGE .................................................................................... 29
SBM-3 - Material impacts, risks, opportunities, and their interaction with the strategy and business
model ............................................................................................................................................................ 29
E1-1 - Transition plan for climate change mitigation .............................................................................. 30
E1-2 – Policies related to climate change mitigation and adaptation ................................................... 30
E1-3 – Actions and resources in relation to climate change policies .................................................... 30
E1-4 - Targets related to climate change mitigation and adaptation ................................................... 31
E1-6 - Gross Scopes 1, 2, 3 and Total GHG emissions ............................................................................ 34
E1-7 - GHG removals and GHG mitigation projects financed through carbon credits ...................... 38
3
E1-8 - Internal carbon pricing ..................................................................................................................... 38
E1-9 Anticipated financial effects from material physical and transition risks and potential climate-
related opportunities ................................................................................................................................... 39
E3 WATER AND MARINE RESOURCES ........................................................... 40
SBM-3 – Material impacts, risks, opportunities, and their interaction with the strategy and business
model ............................................................................................................................................................ 40
E3-1 – Policies related to water and marine resources ........................................................................... 40
E3-2 – Actions and resources related to water and marine resources .................................................. 41
E3-3 – Targets related to water and marine resources ............................................................................ 41
E3-4 – Water consumption .......................................................................................................................... 42
E4 BIODIVERSITY AND ECOSYSTEMS ........................................................... 44
SBM 3 – Material impacts, risks, opportunities, and their interaction with the strategy and business
model ............................................................................................................................................................ 44
E4-1 – Transition plan and consideration of biodiversity and ecosystems in the strategy and
business model ............................................................................................................................................ 44
E4-2 – Policies related to biodiversity and ecosystems ........................................................................... 45
E4-3 – Actions and resources related to biodiversity and ecosystems ................................................. 45
E4-4 – Targets related to biodiversity and ecosystems ........................................................................... 45
E5 RESOUCE USE AND CIRCULAR ECONOMY .............................................. 47
SBM-3 - Material impacts, risks, opportunities, and their interaction with strategy and the business
model ............................................................................................................................................................ 47
E5-1 - Policies related to resource use and circular economy. MDR-P. Policies adopted to manage
material sustainability matters. ................................................................................................................... 48
E5-2 - Actions and resources related to resource use and circular economy. MDR-A. Actions and
resources in relation to material sustainability matters. .......................................................................... 49
E5-3 - Targets related to resource use and circular economy ............................................................... 50
E5-4 - Resource inflows ............................................................................................................................... 52
E5-5 - Resource outflows ............................................................................................................................. 52
EU Taxonomy Alignment Overview ............................................................... 55
Other Taxonomy-eligible Activities ........................................................................................................... 57
Calculation of Taxonomy Indicators .......................................................................................................... 57
SOCIAL PART .................................................................................................. 69
S1 OWN WORKFORCE ................................................................................... 70
SBM-3 – Material impacts, risks, opportunities, and their interaction with the strategy and business
model ............................................................................................................................................................ 70
S1-1 – Policies related to own workforce .................................................................................................. 71
4
S1-2 – Processes for engaging with own workforce and workers’ representatives about impacts ... 72
S1-3 – Processes to remediate negative impacts and channels for own workforce to raise concerns
........................................................................................................................................................................ 72
S1-4 – Taking action on material impacts on own workforce, and approaches to managing material
risks and pursuing material opportunities related to own workforce, and effectiveness of those
actions ........................................................................................................................................................... 73
S1-5 – Targets related to managing material negative impacts, advancing positive impacts, and
managing material risks and opportunities .............................................................................................. 75
S1-6 – Characteristics of the undertaking’s employees ........................................................................... 76
S1-7 – Characteristics of non-employees in the undertaking’s own workforce ................................... 78
S1-8 – Collective bargaining coverage and social dialogue .................................................................. 78
S1-10 – Adequate wages ............................................................................................................................. 79
S1-11 – Social protection ............................................................................................................................. 79
S1-13 – Training and skills development metrics ..................................................................................... 79
S1-14 – Health and safety metrics .............................................................................................................. 80
S1-16 – Remuneration metrics (pay gap and total remuneration) ......................................................... 81
S1-17 – Incidents, complaints, and severe human rights impacts ......................................................... 81
GOVERNANCE INFORMATION ..................................................................... 82
G1 BUSINESS ETHICS ..................................................................................... 83
SBM-3 – Material impacts, risks, opportunities, and their interaction with the strategy and business
model ............................................................................................................................................................ 83
G1-1 – Business conduct policies and corporate culture ........................................................................ 84
G1-2 – Management of relationships with suppliers ............................................................................... 85
G1-3 – Prevention and detection of corruption and bribery .................................................................. 85
G1-4 – Incidents of corruption or bribery ................................................................................................. 86
G1-6 – Payment practices ............................................................................................................................ 86
PRODUCT SAFETY AND QUALITY .................................................................. 87
SBM-3 – Material impacts, risks, opportunities, and their interaction with the strategy and business
model ............................................................................................................................................................ 87
Policies MDR-P – Policies adopted to manage material sustainability matters .................................... 88
Actions MDR-A – Actions and resources in relation to material sustainability matters ....................... 90
Targets MDR-T – Tracking effectiveness of policies and actions through targets ............................... 90
Minimum disclosure requirement – Metrics MDR-M – Metrics in relation to material sustainability
matters ........................................................................................................................................................... 92
ESRS index table ............................................................................................ 93
6
ABOUT THIS REPORT
This section presents the consolidated information on sustainability matters of AB ŽEMAITIJOS
PIENAS (operating at Sedos g. 35, LT-87101 Telšiai, hereinafter referred to as ‘Žemaitijos pienas’, the
Company) and its subsidiary ABF Šilutės Rambynas (operating at Klaipėdos g. 3, Šilutė, hereinafter
referred to as ‘Šilutės rambynas’ or the Subsidiary Company), and its subsidiaries (together referred
to as the Group) (hereinafter referred to as ‘the sustainability report or statement’). The report has
been prepared in accordance with the European Sustainability Reporting Standards (ESRS).
BP-1 – General basis for preparation of sustainability statements
The sustainability information in this report has been prepared on consolidated basis. The scope of
consolidation of sustainability information is the same as that of financial statements, thus ensuring
consistency and coherence between financial and sustainability data.
This Sustainability Report provides an overview of the Group's achievements and targets in
environmental, social, and governance (ESG) areas. External sustainability experts were consulted in
the preparation of the report.
The Sustainability Report covers the Group's direct activities and the upstream and downstream
elements of its value chain as defined in section 5.1 of ESRS 1.
The Group has not exercised the option to withhold certain information on intellectual property,
know-how or innovation results, as set out in Section 7.7 of ESRS 1, ‘Classified and sensitive
information and information on intellectual property, know-how, or results of innovation’. The Group
has not used the option not to disclose information on future business developments or matters
relating to ongoing negotiations as set out in Articles 19a(3) and 29a(3) of Directive 2013/34/EC.
BP-2 Disclosures in relation to specific circumstances
For this report, the Group follows the short, medium, and long-term definitions as set out in ESRS 1
section 6.4 ‘Definition of short-, medium- and long-term for reporting purposes.’
Value chain estimates were not used and no material errors were identified in prior periods. There
were also no changes in the preparation and presentation of sustainability information that affect the
comparability of data.
In addition to the information required to be provided under the ESRS, the Company includes in its
Sustainability Report the disclosures required under Article 8 of Regulation (EU) 2020/852 of the
European Parliament and of the Council (EU Taxonomy Regulation) and the Commission
Delegated Regulations setting out the content, including how the disclosures shall be provided.
The following information is incorporated by reference to the other parts of the Management
Report: - ESRS 2 GOV-1 (information on the composition and number of members of the Group's
administrative, management and supervisory bodies, distinguishing between executive and non-
executive members and experience).
7
MANAGING SUSTAINABILITY MATTERS
GOV-1 – The role of the administrative, management, and supervisory bodies
Composition of the members of the administrative, management and supervisory bodies
The Group's governing bodies with the highest decision-making powers are the Boards of
Žemaitijos pienas and Šilutės Rambynas. They act as collegial management bodies, representing the
shareholders between their meetings and making decisions on the most critical issues of the Group's
business activities. The group also has a supervisory board that elects the management board
members. The governing bodies are composed of 5 members, 40% of whom are females and 60%
males; the gender balance on the board is 2:3, with no independent members.
Information on the composition and number of members of the Group's administrative,
management and supervisory bodies is broken down into executive and non-executive members,
as well as experience in relation to the Group's sectors, products, and geographic locations is
provided in the Management Report (reference: Consolidated Management Report, Corporate
Governance Information - pages 37-40).
There are no employee representatives on the administrative, management, and supervisory bodies.
However, the Group has a Works Council composed of 11 members nominated and elected by the
Group's employees. This Council represents the interests of the employees and participates in the
discussion of matters relating to the employment relationship.
Role and responsibilities of administrative, management, and supervisory bodies
The Group's Boards of Directors consider and approve the operational and management structure,
determine employee positions, and establish regulations for branches and representative offices.
Each month, it also approves the range and quantity of products to be made available for free
tastings for market research or development purposes. In addition, the Board decides on the posts
to be filled by competitive recruitment and establishes the manager's job description and
remuneration.
There is no specific member assigned to oversee impacts, risks, and opportunities, but it is
envisaged that specific individuals from the Board will be appointed. Thus, at present, the Group's
regulations, the mandate of the Board or other relevant policy documents do not define the
responsibility of administrative, management, and supervisory bodies for managing impacts, risks,
and opportunities in the area of sustainability.
To date, Board members have been involved in sustainability issues at the project level, i.e. through
concrete actions related to sustainability issues. They receive information on the implementation of
related projects, projects planned and under implementation, and the progress made by the
initiatives. Progress towards the targets is discussed in the monthly Board reports, which assess
results and inputs.
8
During the reporting period, the Group's sustainability issues and sustainability reporting were
handled by a Sustainability Group, approved by order of the Chief Executive Officer. The
Sustainability Group consists of specialists from different areas of the Group. The Sustainability
Group is made up of the Group's Heads of Departments, who are responsible for the involvement
of their departments in sustainability initiatives and tasks. The Group's main objective is to
coordinate and promote sustainability initiatives across all Group processes.
The Sustainability Group coordinates and monitors the implementation of the objectives set and
reports on progress to the Boards.
The Group does not yet have specific controls to manage impacts, risks, and opportunities –
sustainability issues are addressed through the application of general management principles.
Decision-making on sustainability issues is embedded in day-to-day business processes.
The Supervisory Board carries out a quarterly assessment of the members of the Management Board
to determine whether the bodies have the right skills and expertise to manage the relevant issues.
During the reporting period, in order to ensure competent oversight and management of
sustainability issues, the Group engaged external experts and consultants to fill the knowledge gaps
in certain sustainability areas. The Group used sustainability consultants to ensure the quality of the
double materiality assessment, climate risk assessment, GHG emissions calculation, and
sustainability reporting.
9
GOV-1 – The role of the administrative, management and supervisory bodies
The role of the Group's administrative, management and supervisory bodies in relation to business
ethics is governed by the Rules of Procedure of the Management Board and the Rules of Procedure
of the Supervisory Board.
The Group encourages the members of its administrative, management and supervisory bodies to
develop their expertise in business ethics by actively participating in business ethics conferences
and training.
GOV-2 Information provided to and sustainability issues addressed by the Group's
administrative, management and supervisory bodies
In the first year of the report, as part of the double materiality assessment, the Sustainability Group
assessed all the themes on the ESRS list and other sustainability themes of interest to the Group. As
this is the first time that double materiality has been assessed during the reporting period, the Group
does not yet have regular procedures in place for communicating significant impacts, risks, and
opportunities to its administrative, management, and supervisory bodies.
GOV-3, E1 GOV-3 Integration of sustainability-related performance in incentive schemes
The Group does not currently have an incentive scheme or a wage policy related to sustainability
issues, including climate-related aspects.
GOV-4 – Statement on due diligence
Although the Group does not have a formalised due diligence system in place, certain elements of
it are applied in the Group's operations. The key elements and steps listed in Chapter 4 "Due
Diligence" of ESRS 1 relate to several horizontal and thematic disclosure requirements under ESRS.
In the table below, the Group indicates how and where the key aspects and steps of the due
diligence process are reflected in its sustainability report.
Table 1. Core elements of due diligence
CORE ELEMENTS OF DUE DILIGENCE
PARTS OF THE SUSTAINABILITY STATEMENT
a) Integrating due diligence into the governance,
strategy, and business model
GOV-1, GOV-2, GOV-3, SBM-3
(b) Involvement of affected stakeholders in all
key stages of due diligence
GOV-2, SBM-2, IRO-1, MDR-P, S1-2
(c) Identification and assessment of negative
impacts
IRO-1, SBM-3
d) Taking action to address these negative
impacts
MDR-A, E1-3 , E3-2, E4-3, E5-2, S1-4, G1
10
e) Monitoring and communicating the
effectiveness of these efforts
MDR-M, MDR-T, E1-4, E1-5, E1-6, E3-3, E3-4, E4-
4, E5-3, E5-5, S1-5,S1-6, S1-7, S1-8, S1-9, S1-10,
S1-11, S1-13, S1-16, S1-17, G1-6
GOV-5 – Risk management and internal controls over sustainability reporting
During the reporting period, the Group did not have a specific formalised risk assessment and
control framework for sustainability reporting risks. The Group has not yet formally identified specific
risks related to sustainability reporting.
The Group's internal control processes for sustainability reporting are based on common business
procedures that include data collection, analysis, and reporting. These processes apply to all of the
Group's key activities, including disclosures relating to material sustainability issues.
To ensure the completeness and accuracy of the data in the sustainability report, a control measure
is to involve a large number of employees responsible for data submission and report preparation.
The data collection process is organised by the Sustainability Group, which allocates responsibilities
among the heads of the different units, who in turn allocate responsibilities to relevant employees.
As sustainability reporting risks have not yet been identified, risk assessment and internal control
findings have not yet been prepared and presented to administrative, management, and supervisory
bodies.
11
STRATEGY, BUSINESS MODEL, AND VALUE CHAIN
SBM–1 Strategy, business model, and value chain
Žemaitijos pienas, together with its Subsidiary Company are engaged in the production and
marketing of dairy products. Its products include cheese and cheese products, pre-packaged
cheese, processed cheese, processed spreadable cheese, cream, buttermilk blends, milk fat,
pasteurised cream, dried dairy products, and fresh dairy products. The Group sells its products
under the brand names 'Džiugas', 'Germantas', 'Žemaitijos', 'Magija', 'Pik-Nik', 'Rambyno', 'Dobilas',
'Gaja', and 'TICHĖ', etc.
The main activities of Šilutės rambynas are the production and sale of fermented cheeses and cheese
products, unripened cheeses, and the production and sale of pasteurised cream and pasteurised
whey. It also provides rental, transport, warehousing, milk collection point services, and other
services.
During the reporting period, the following changes occurred in the product groups: 27 new product
launches and 12 product discontinuations or replacements.
The Group's products are marketed in 49 countries. Sales are made through retailers, distributors,
and other partners. There have been no changes in markets or customers. The search for new
markets is ongoing and the product range is being expanded in individual markets with a focus on
shelf products.
The Group employs a total of 1,480 salaried employees, including:
● 108 employees in Vilnius
● 94 employees in Kaunas
● 86 employees in Panevėžys
● 2,342 employees in Telšiai
● 330 employees in Šilutė
The Group has no products that are banned in certain markets. The Group is not active in the sectors
identified in paragraph 40(d) of ESRS 2 SBM-1.
The Group is developing a sustainability strategy that will outline key objectives and aims to have it
in place by 2026. The development of the sustainability strategy is planned to commence in May
2025.
12
Table 2. Value chain description
Part of the value chain
Upstream (before the Group's direct operations)
Group activities
Downstream (after the Group's direct operations)
Activity
● Cow rearing, care, forage quality, milking,
raw milk indicators, and milk transport.
● Raw milk suppliers – Lithuanian dairy farms.
● Suppliers of additional raw materials
(enzymes, sugar, salt, flavourings, and other
components used in production
processes).
● Suppliers of equipment, repair, and
maintenance services.
● Checking milk quality.
● Pasteurisation and processing of milk.
● Production of dairy products (cheese,
cream, pasteurised products,
buttermilk, milk fat, fresh dairy
products).
● Product packaging, storage, and
logistics.
● The main production processes take
place in Telšiai and Šilutė.
● Sales of dairy products through retail chains
and distributors.
● Exports to 48 countries, priority markets – EU
countries, the UK.
● Leading distribution channels are retail,
distributors and distributors.
● Product sales through retail chains,
specialised stores.
● End use in homes, restaurants, and food
production.
● Waste management: recycling of unused
products.
● Recycling of unused products.
Resources and key dependencies
● Raw materials and natural resources ● Fixed assets ● Human resources
● IT and technological resources ● Financial resources
● Services and intellectual property ● Energy
13
The Group's business model focuses on the production and sale of dairy products. The key inputs
required for the production process and the Group's operations are:
● Raw milk is supplied by Lithuanian farmers. The Group cooperates with milk producers who
sell the milk directly from the farms or deliver the raw milk to a milk collection point. Raw milk
is purchased from 10 different groups of raw milk sellers at addresses confirmed and
specified in an open-ended contract.
● Additional raw materials such as enzymes, sugar commodities, salts, flavourings, and other
components are used in the production processes (international producers with long-term
contracts).
The Group's main products are dairy products: cheese (fermented, processed, processed,
spreadable), cream, pasteurised products, buttermilk, dairy fats, and fresh dairy products.
The Group's activities create benefits for stakeholders. Customers are assured of high-quality dairy
products that meet international safety and quality standards. Investors are assured of a consistently
growing export market and stable financial performance, while suppliers are assured of long-term
cooperation with one of the largest dairy producers in Lithuania. The Company's objectives include
organising and carrying out the activities set out in its Articles of Association with a view to generating
revenue and profit while ensuring the satisfaction of the shareholders' proprietary interests and the
well-being of employees.
Current benefits:
● For clients:
○ High-quality dairy products that meet strict food safety and quality standards.
○ A wide range of products to meet different consumer needs, including lactose-
free, organic, and innovative products. The product range is continuously
expanded each year to meet consumer expectations.
○ Sustainability - natural raw materials, optimising packaging, and reducing
environmental pollution.
● For investors:
○ Stable financial growth and market share gains in both domestic and export
markets.
○ Efficient optimisation of production processes to reduce costs and increase
profitability.
○ Innovation in production processes and new product development that increases
competitive advantage.
● Other stakeholders:
○ Employees receive ongoing training and professional development opportunities.
○ For suppliers, long-term collaborative relationships ensure stable supply chains for
raw materials.
○ For the community - social responsibility initiatives, supporting local organisations,
and promoting wellness.
Anticipated future benefits:
● For clients:
14
○ New, even healthier and more innovative products in line with global food trends.
○ Digital solutions to better inform consumers about the composition, origin, and
benefits of products.
○ Further development of the sustainability strategy - more recyclable packaging and
optimised production processes.
● For investors:
○ Expanding into new markets to increase export volumes and strengthen the
international brand.
○ New production technologies to process milk more efficiently and create higher
value-added products.
○ Strengthening the risk management strategy to ensure stable and sustainable
growth.
● Other stakeholders:
○ For employees - better working conditions, incentive schemes, and pay rises.
○ For suppliers - even closer cooperation and modernised supply chains.
For the community – sustainable activities based on ecological and social principles, and new
support initiatives for local projects.
SBM-2 - Stakeholder interests and views
The Group identifies and assesses the interests of its stakeholders in the dairy sector to ensure its
success. The table below shows how the Group's strategy and business model takes into account
the interests and views of stakeholders.
15
Table 3. Involvement of key stakeholders
Key stakeholders
Categories
of covered
entities
How you are involved and the purpose of involvement
How the Group takes into account the results of the engagement
Employees
All
Employees are involved in the organisation through clear communication,
motivation systems, decision-making, development opportunities, and
welfare to increase their motivation, productivity, and loyalty.
The Group takes into account employees' participation in surveys or meetings
where they can express their opinions on organizational policies, working
conditions, or potential changes. A Work Council is also in place, providing
employees with the opportunity to contribute to the development of new
initiatives and the resolution of issues. By integrating employees' interests and
perspectives into the Group’s strategy and business model, the organization can
foster a cohesive and sustainable work environment where employees feel
valued, motivated, and engaged. This, in turn, enhances work quality,
strengthens the company’s reputation, and supports long-term success.
The Board
All
The purpose of the engagement is to ensure effective governance,
transparency, including the Group's development and long-term success.
The Group takes the results of the engagement into account, measuring
employee, supplier and other stakeholder satisfaction, achievement of
business objectives, performance indicators, and sustainability achievements.
The board makes strategic decisions to improve processes, strengthen
collaboration, and ensure the long-term success of the organisation.
Suppliers
25% of the
required
number of
letters have
been sent out
Suppliers are involved in the Group's activities through clear principles of
cooperation, sustainability requirements, quality control, and common
objectives to ensure supply chain efficiency and responsible operations.
The Group takes into account the results of supplier engagement through
reliability of supply, quality indicators, and efficiency of cooperation.
Controlling
authorities
Key
institutions
surveyed
Controlling authorities are involved in the Group's activities through
regulatory compliance, regular audits, certification, and cooperation to
ensure legal and responsible operations in accordance with regulations
The Group takes into account the results of regulatory engagement through
regulatory compliance, audit findings and certifications. The Board assesses
regulatory compliance and makes decisions on operational improvements and
compliance.
16
and standards.
Future
generations
Surveyed
participants
who took part
in this
programme
Future generations are involved in the Group's activities by promoting
innovation, sustainability, and social responsibility. Providing them with
opportunities to learn, develop, and contribute to the development of
responsible business.
With a view to engaging future generations, the Group assesses its social
responsibility, environmental achievements, and the impact of innovation. The
Board develops a long-term strategy to ensure a sustainable future and create
a positive legacy for the younger generation.
Clients
25% of
respondents
were
interviewed
on request
The aim of engagement is to build long-term relationships, ensure
satisfaction and loyalty, as well as promote mutual benefit and innovation.
The Group takes into account the results of customer and partner engagement
through satisfaction indicators, the effectiveness of the collaboration, and the
achievement of common goals. The Board makes decisions on improving
strategies, strengthening long-term relationships and creating new
opportunities to ensure sustainable and mutually beneficial relationships.
An anonymous survey was carried out between 13 December 2023 and 5 January 2024 to gauge stakeholders' views on key sustainability areas. The
questionnaire was sent to targeted contacts from each stakeholder group and a total of 369 responses were received. The data collected allowed the
Group to carry out a double assessment of materiality.
Changes to the Group's strategy and business model
The Group has revised its strategy and business model to incorporate stakeholders' interests and views. The main changes include:
● Finding and using more sustainable packaging materials in production processes, while reducing environmental impact;
● Optimising the supply chain to reduce CO2 emissions and promote sustainable transport;
● Improving conditions for employees, taking into account their feedback and assessments of the working environment;
● Ongoing dialogues with milk suppliers, customers, and other partners to ensure transparency and cooperation on sustainability.
17
Planned next steps and timetable
Planned actions and estimated timeframes for their implementation:
● 2025 - Full supply chain analysis and implementation of new sustainability standards;
develop a long-term plan for cooperation with milk suppliers; develop pilot projects on the
use of recycled packaging.
● 2026 - Fully integrate sustainability principles into the Group's business model and
operations.
Impact on relations with and views of stakeholders
The actions to be implemented are expected to have a positive impact on relations with
stakeholders:
● Trust between the Group and its milk suppliers will be strengthened through more
transparent communication and implementation of sustainability strategies.
● Employee engagement and satisfaction will increase due to better working conditions and
the Group's commitment to sustainability.
● Customers will welcome the Group's efforts to reduce its CO2 footprint and promote
sustainable dairy products.
Informing administrative, management, and supervisory bodies
The administrative, management, and supervisory bodies shall be kept informed of the views and
interests of stakeholders in the following ways:
● Regular Board meetings to analyse stakeholder feedback.
● Annual and quarterly reports outlining the main sustainability challenges and how to
address them.
● Internal seminars and training on sustainability policies and their implementation within the
Group.
● Dedicated working groups are responsible for involving stakeholders and assessing their
needs.
These actions ensure that the Group's decision-makers are aware of the key sustainability issues and
can adjust strategy and actions accordingly.
18
DOUBLE MATERIALITY ASSESSMENT
SBM-3 – Material impacts, risks, opportunities, and their interaction with the strategy and
business model
The table below summarises the results of the double materiality assessment - the material impacts,
risks, and opportunities identified.
All significant impacts, risks, and opportunities under SBM-3 and other thematic requirements of the
ESRS are detailed later in this report under the relevant sustainability themes.
Meanings of symbols:
+ Positive impact
(F)
⚫
Actual impact
🟡
- Opportunities
- Negative impact
(G)
⚪
Potential impact
❗
- Risks
sh - short
m - medium
l - long
19
Table 4. Material impacts, risks and opportunities
ESRS/
Sustainability
topic
Material sub-topic
Material impacts
Material risks and (or) opportunities
Value chain
Upstrea
m
Group
activitie
s
Downstre
am
E1 Climate
change
Climate change adaptation
Climate change mitigation
Energy
(-) ⚫ GHG emissions from the Group's
activities (sh., m., l. periods)
(-) ⚫ GHG emissions emitted in the
value chain (sh., l. periods)
❗
Failure to meet customers' sustainability expectations can
lead to reputational damage and loss of customers, while
increasing reporting requirements - increasing costs of
adaptation - relevant both internally and along the value
chain (m., l. periods) - Transformation risks
Y
Y
E3 Water and
marine
resources
Water consumption
Water discharges
(+)
⚫
Group reduces water
consumption and reuses collected
water (sh., m., l. periods)
(+) ⚫
Polluted wastewater is recycled
(sh., m., l. periods)
Unidentified
Y
E4 Biodiversity
and
ecosystems
Impacts on the extent and
condition of ecosystems.
Unidentified
❗
Due to environmental factors, the deterioration of
ecosystems and the spread of diseases, the Group may face
declining quality/reduced quantity/volatility of raw material
prices (l. period).
Y
Y
20
E5 Circular
economy
Resource inflows, including
resource use
Resource outflows related to
products and services
W
aste
(-) ⚫
Packaging and other waste
generated in operations and value
chains. (sh., m. periods)
❗
Decreasing availability of raw milk and fluctuations in
prices, leading to rising costs and production disruptions
(e.g. due to droughts, diseases, or stricter environmental
requirements for livestock farming) (m., l. periods)
❗ Rising consumer expectations and stricter EU
requirements for sustainable packaging (sh., m., l. periods).
Y
Y
Y
S1 Own
workforce
Working conditions
(Occupational health and
safety (incl. human rights).
Equal treatment and
opportunities for all
Other work-related rights
(-)
⚪
The worker may suffer negative
physical or psychological impacts as a
result of the potential injury (sh. period)
(+)
⚪
Ensuring diversity and inclusion
of people with disabilities beyond legal
requirements (sh., m., l. periods)
(+) ⚫ Additional training based on
employees' needs (sh., m., l. periods)
🟡
By focusing on health, safety, diversity and training, the
company improves its image (sh., m., l. periods).
Y
G1 Business
ethics
Corporate culture
Corruption and bribery
❗
Corrupt practices can expose the Group to significant
financial penalties, adversely affecting its financial position
and long-term profitability (sh., m., l. periods).
Y
Animal welfare
❗F
ailure of suppliers to comply with animal welfare
standards (sh., m., l. periods).
Y
21
Management of relationships
with suppliers, including
payment practices
❗
Failure to evaluate / inadequate evaluation of suppliers
on the basis of environmental and social criteria can lead to
reputational damage and financial penalties (sh., m., l.
periods).
Y
Y
N/A
Product safety and quality
❗
Product safety and quality issues, which can lead to
reputational damage, loss of customers and financial losses,
adversely affecting the Group's image (sh., m., l. periods).
🟡
Opportunity to strengthen product safety and quality by
acquiring new equipment in the production units and, as
appropriate, informing consumers about the safety and
quality of the products, thereby increasing confidence in the
Group and its products (sh., m. periods).
Y
In this report, the Group provides for the first time a list of identified material impacts, risks, and opportunities in accordance with the double materiality
assessment set out in the Corporate Sustainability Reporting Directive (EU) 2022/2464 (CSRD) and the European Sustainability Reporting Standards
(ESRS). It is noted that the Group is continuously improving its processes to identify actual and potential impacts, risks, and opportunities - and therefore
the list of sustainability topics identified through the double materiality assessment will be regularly reviewed in the future and may be subject to
adjustments. The results of the previous materiality assessment conducted by the Group in accordance with the GRI Standards methodology can be
found in the Group's previous Sustainability Report for 2023.
22
Climate risk assessment and management
E1 Climate change: SBM-3 – Material impacts, risks and opportunities and their interaction
with strategy and business model, IRO-1 - Description of the process to identify and assess
material impacts, risks and opportunities, a description of the processes for identifying and
assessing risks and opportunities
In 2024, in preparation for the CSRD sustainability reporting requirements, the Group conducted a
climate change risk and opportunity assessment in accordance with the ESRS requirements and the
EU Taxonomy Regulation’s "Do No Significant Harm" criteria for climate change adaptation (as
outlined in Annex A of the Taxonomy Delegated Acts No. 2021/2178 and No. 2023/2486). The
assessment guidelines have been developed on the basis of the recommendations of the Task
Force on Climate-related Financial Disclosures (TCFD) and the scenario analysis guidelines for non-
financial companies. Physical climate risks and transitional risks and opportunities were identified
and assessed through scenario analysis. The assessment is based on the best available information
and is planned to be reviewed on an annual basis and/or in the event of a significant change in
operational circumstances, or the renewal of significant physical and transitional event forecasts.
Physical risk assessment
The assessment of physical risks has been carried out in proportion to the scale and expected
duration of the Group's activities. The time periods for the assessment were set as follows: short - up
to 2026, medium - from 2026 to 2030, long - from 2030 and 2050. These time periods were chosen
taking into account the adaptive nature of the Group's operations and the ease with which they can
adapt to physical climate-related events - i.e. an assessment of an even longer time period beyond
2050 would not be appropriate, as the available climate projections are subject to a high degree of
uncertainty, and the Group's direct activities are likely to have been adapted by then.
The assessment was based on the introductory report "Preparation of climate change projections up
to 2100"[1]
1
prepared by the Ministry of the Environment's programme "Environment, Energy and
Climate Change"[2]
2
(projections on a 12x12 km grid) and the "Study of climate change risks for the
middle of the 21st century"prepared by the Lithuanian Hydro-meteorological Service, Climate and
Research Division[4] (projections by county). The IPCC scenarios RCP4.5 and RCP8.5 for typical air
emission concentrations were analysed based on the data from these sources.
The Group assessed climate-related risks throughout its operations and supply chain. In particular,
the Group's assets or operations were analysed to determine whether they would be adversely
affected if a climate-related hazard were to occur in its most extreme form, including in combination
with other climate-related hazards. Further, an assessment was made as to whether the potential
1
Preparation of climate change projections, a national study on the sensitivity and vulnerability of Lithuanian municipalities
to climate change and a climate change adaptation plan for the most vulnerable municipality. PHASE I: PREPARATION OF
CLIMATE CHANGE PROJECTIONS UP TO 2100. INTRODUCTORY REPORT; report prepared for the Ministry of Environment
of the Republic of Lithuania, Riga 2022).
2
Study of climate change risks for the mid-21st century (study commissioned by the Lithuanian Hydrometeorological Service,
Climate and Research Division; analysis commissioned by the Association of Lithuanian Banks, Vilnius 2023).
23
adverse effects on the assets or business activities could have a material adverse effect on the
economic performance. If it was determined that adverse impacts on economic performance were
possible, the likelihood of the specific risk and the magnitude of the financial impact would be further
assessed. The significance of the risks was assessed by the likelihood and the financial impact: High
- Very Important/Significant (final scores 15-25), Medium - Significant (5-14), and Low - Not Significant
(0-4).
No material climate risks have been identified.
The climate risk assessment considered the full list of physical hazards as set out in Appendix A to
Commission Delegated Regulation (EU) 2021/2139.
Assessment of transitional risks and opportunities
The timeframes used for the assessment of the risks of conversion were: short - up to 2026, medium
- 2026 to 2030, long - 2030 and 2050. The Group analysed foreseeable and potential events under
a zero emissions scenario by 2050, which is in line with the Paris Agreement and with the European
Green Deal's ultimate objective of achieving climate neutrality by 2050. The assessment was carried
out in accordance with the TCFD guidelines, examining the TCFD classification of climate-related
transistional events.
The main assumptions considered and the identified transformation risks are summarised in Table
5.
Table 5. Material climate-related transitional risks
Risk assessment
Transformation events (TCFD)
Potential financial impact
Policy and
legal and
market
Increased pricing of
GHG emissions
The EU may introduce higher emissions taxes or other
regulatory measures which would increase the Group's costs
Exposure to litigation
Penalties for non-compliance with climate change
regulation.
Increased cost of raw
materials
Increased input costs due to the requirements of adaptation
to climate mitigation in agriculture and dairy farming.
Planned Risk Management - developing strategies to adapt to potential tax and regulatory changes
to minimise financial impact and ensure sustainable business development; education, learning
initiatives.
Shifting to less polluting alternatives and green energy can help to differentiate Group in the
marketplace, enhance its reputation, attract consumers who value sustainability, take advantage of
government incentives, and, in the long term, optimize costs and increase resilience to the impacts
of climate change.
24
IRO-1 - Description of the process to identify and assess material impacts, risks, and
opportunities
The enactment of the Corporate Sustainability Reporting Directive (EU) 2022/2464 (CSRD) and the
European Sustainability Reporting Standards (ESRS) established double materiality as the basis for
disclosing sustainability information. At the end of 2024, the Group carried out its first assessment
of double materiality in light of the new sustainability reporting requirements. The purpose of this
analysis is to identify the environmental, social, and governance sustainability issues that are most
important to the Group. These will inform the scope of sustainability disclosures and shape the
Group's future strategy.
The Group's process for assessing double materiality has been designed in accordance with the
requirements of ESRS. The materiality assessment was carried out in consultation with external and
internal experts, taking into account the best information available at the time of the assessment.
ESRS does not prescribe a specific methodology for how the Group should plan or conduct a double
materiality assessment. Therefore, the Group has developed a process that is consistent with the
requirements and criteria set out in the ESRS. This takes into account the nature and circumstances
of its operations as well as the best practices that have been applied to date. The Group has
considered both impact and financial materiality along with their interrelationships in its materiality
analysis.
The process of identifying and assessing significant impacts, risks, and opportunities involved the
heads of departments and specialists responsible for activities related to the Group's significant
sustainability matters. The assessment also considered the list of sustainability matters to be included
in the materiality assessment provided by ESRS (ESRS 1, AR 16).
The Group has assessed the significance of each sustainability matter individually, based on the ESRS
criteria, taking into account the specificities and circumstances of its own operations. The assessment
of materiality was based, to the extent possible, on objective information, expert insights, and
generally accepted scientific advice. Impacts, risks, and opportunities have been assessed in the
short, medium, and long term, which are consistent with the definitions of the time periods set out
by ESRS.
Key steps for assessing the Group's double materiality:
1. Context analysis (value chain and business model).
2. Identifying existing and potential impacts, risks, and opportunities.
3. Assessing the materiality of impacts, risks, and opportunities.
4. Summarising, reviewing, and validating the significance of results.
The Group's other due diligence processes to identify, assess and monitor the Group's current and
potential positive and negative impacts across the value chain and the use of stakeholder
consultation are summarised together with the information disclosed in accordance with the
disclosure requirements of GOV-4. All significant impacts, risks, and opportunities, including factors
that increase the risk of adverse impacts, are detailed in accordance with the requirements of the
standard later in this report - together with the information disclosed under the relevant topical
ESRS.
25
In the materiality analysis, the Group considered the impacts, risks, and opportunities associated
with the Group through its own operations or as a result of its business relationships.
The double materiality assessment process was developed and based on the Group's risk
management methodology as well as the Group's previous materiality assessment. The materiality
matrix was updated in early 2024. The previous materiality assessment was based on the Global
Reporting Initiative (GRI) methodology with stakeholder engagement (through a survey). The results
of the double materiality assessment are planned to be reviewed annually.
Impact assessment. A sustainability issue is significant in terms of impact when it relates to the
Group's significant actual or potential, positive or negative impacts on people or the environment in
the short, medium and long term: an inside-out perspective.
In assessing the materiality of the impacts, the Group has followed the general criteria of the ESRS
(Section 3.2 ‘Significant Issues and Materiality of Information’ of ESRS 1) and the European Financial
Reporting Advisory Group (EFRAG) practical Implementation Guidance. The Group assessed the
materiality of actual negative effects based on the severity of the effect and the materiality of
potential adverse effects based on the severity and likelihood.
The assessment of the severity of the impact is based on the scale, scope, and irreversible nature of
the impact. In assessing potential negative impacts on human rights, the strength of the impact is
more important than the likelihood. The Group has therefore applied the appropriate weighting to
increase the strength of the impact, relative to the likelihood when assessing human rights-related
issues. The Group assessed the significance of positive impacts in terms of scaleand scope for actual
impacts and acle, scope, and likelihood for potential impacts.
Financial impact assessment. In assessing the risks and opportunities that have or may have a
financial impact, the Group has considered the linkages between its impact and dependences, as
well as the risks and opportunities that may arise from that impact and dependences.
To determine financial materiality, the Group assessed risks and opportunities based on the
likelihood, magnitude, and nature of the impact using quantitative and qualitative thresholds.
Probability was assessed on a scale of 1 to 5, where 1 is a very low probability (less than 20%), 5 is a
very high probability (more than 80%). The financial impact was assessed on the basis of the
following thresholds: very low (Up to 5% of EBITDA), low (5%-15% of EBITDA), medium (15%-30% of
EBITDA), high (30%-50% of EBITDA), very high (>50% of EBITDA).
For the double materiality assessment, the Group only assessed risks related to sustainability.
The decision on the assessment of impacts and risk were discussed in Group’s working sessions to
which those responsible in the relevant fields were invited. The assessment was then reviewed and
approved by the Group's responsible persons.
The double materiality assessment process has been developed based on the Group's risk
management methodology but is not currently integrated into the Group's overall risk assessment
and management process. The process for identifying, assessing, and managing sustainability-
related opportunities is also not integrated into the Group's overall governance process. The need
to integrate these processes will be considered within the Group in light of best practices emerging
and prevailing in the market.
26
IRO-1 E3 Description of the processes to identify and assess material water and marine
resources-related impacts, risks and opportunities
The Group has analysed its assets and activities to identify actual and potential water-related impact,
risks and opportunities in its operations and value chain. The Group has identified that significant
impacts relate to water used in the Group's production activity.
In Telšiai, the Company uses fresh water for its operations, which is extracted from its own boreholes
at a waterworks for production purposes.
The Group also has a mineral water borehole, TICHĖ, from which high quality mineral water is
extracted. It is bottled using advanced production technology, equipment compliant with EU
standards and a quality and food safety management system to ensure a high quality product.
The Group did not identify any significant impacts, risks or opportunities related to these activities
this year. However, as part of the double materiality assessment next year, the Group intends to
increase its focus on these activities in order to further assess the potential long term impacts and
ensure sustainable development of the activities.
Consultations with affected communities on this issue have been carried out to the extent described
in SBM-2.
IRO-1 E4 Description of processes to identify and assess material biodiversity and ecosystem-
related impacts, risks and opportunities
The Group conducted the assessment of significant impacts, risks, dependencies and opportunities
following the process described in the IRO-1 methodology.
Physical risks identified: The Group may be exposed to declining raw material quality/declining
volumes/volatility in price due to environmental factors and deteriorating ecosystems, spreading
diseases.
The Group does not have operations in areas of sensitive biodiversity.
IRO-1 E5 Description of the processes to identify and assess material resource use and circular
economy-related impacts, risks and opportunities
The Group has carried out the assessment of significant impacts, risks, dependencies and
opportunities according to the process described in the IRO-1 methodology. The Group has
analysed its assets and activities to determine its actual and potential impacts, risks and opportunities
in its operations and upstream and downstream parts of the value chain.
Consultations with affected communities on this issue were carried out to the extent described in
SBM-2.
27
IRO-2 – Disclosure Requirements in ESRS covered by the undertaking’s sustainability
statement
A list of the disclosure requirements complied with in the preparation of the Sustainability Report,
taking into account the outcome of the materiality assessment, is provided in the section of this
report 'ESRS content index.'
A table of all the datapoints that derive from other EU legislation as listed in Appendix B of the ESRS,
is provided in the section 'List of datapoints in cross-cutting and topical standards that derive from
other EU legislation'.
The material information to be disclosed has been identified through a double materiality
assessment following the criteria set out in Section 3.2 'Material issues and materiality of information'
of ESRS 1.
Minimal disclosure requirements
The group discloses information in accordance with the minimum disclosure requirements
regarding policies (MDR-P), actions (MDR-A), metrics (MDR-M), and targets (MDR-T), along with the
relevant disclosure requirements set out in the thematic ESRS, as presented in this sustainability
report.
28
ENVIROMENTAL AREA
29
E1 CLIMATE CHANGE
SBM-3 - Material impacts, risks, opportunities, and their interaction with the strategy and
business model
The Double Materiality Assessment ("DMA") identified material impacts and risks, which are
summarised in the table in ESRS Chapter 2 SBM-3 - Material impacts, risks, opportunities, and their
interaction with the strategy and business model. No material opportunities were identified. This
section provides additional information based on SBM-3 and other applicable requirements.
During the reporting period, the Group performed its first DMA assessment, which included an
assessment of the impacts and risks associated with its operations and business model. The Group
has already started to review and update its business model and strategy in light of these factors. The
main objectives are to reduce environmental impacts and increase sustainability performance by
incorporating renewable energy sources and reducing CO₂ emissions, both in the Group's
operations and by supporting dairy farmers in the process.
Customers are increasingly expressing a need for data regarding the Group's sustainability
performance, which poses a risk of losing or not attracting customers if the sustainability
expectations of customers are not met. This could lead the Group to reputational damage.
Material impacts and risks have a direct impact on the organisation of the Group's operations.
Business model adaptation: Promoting innovation in product development, reducing emissions in
production.
Impact on the value chain:
• The initial value chain. This is where most of the impacts are concentrated, especially in
agriculture due to methane emissions from cows, but also in transport and logistics
processes. This is why the following actions are being taken:
o Partnerships with farmers to promote sustainable farming practices.
o Investing in smart technologies to better manage the supply of raw materials and
reduce losses.
Impact on decision-making: An internal policy is in place to promote energy saving and waste
reduction.
In the longer term, increased investment is planned for R&D, which will focus on low carbon
products. The Group also plans to reorientate its production processes to reduce energy
consumption and switch to renewable energy sources.
Greenhouse gas (GHG) generated by the Group's dairy processing activities and value chain have a
negative impact on the environment and people. These emissions contribute to climate change,
which amplifies the greenhouse effect and can lead to extreme weather events, as well as harming
human health.
30
Impacts arise directly from the Group's choice of business model. By integrating sustainability
principles into its operations, the Group is better positioned to reduce negative impacts on the
environment and people and to create positive impacts in the long term.
The Group's impacts on people and the environment also arise both through its direct activities and
through its business relationships. Responsible management of these relationships and reduction of
impacts requires both optimisation of internal processes and careful selection of partners and
cooperation with sustainable suppliers and partners.
The current quantitative financial impact has not yet been determined, but the Group's material risks
may have an impact on its financial position, results of operations, and cash flows. In the short term,
the focus should be on regulatory developments, the implementation of sustainability initiatives, and
the strategic management of resources and investments. This is in order to avoid material
adjustments to the number of assets and liabilities in future reporting periods.
The Group does not disclose detailed information about the overall expected financial impact and
the financial sources of the strategy when exercising the option of transitional provisions.
To date, the Group has only carried out an initial analysis of the resilience of the strategy and business
model through a climate risk assessment, which has been carried out using a qualitative
approach. This assessment identified material transition risks and determined how they are
managed.
E1-1 - Transition plan for climate change mitigation
The Group does not have a transition plan related to its efforts to mitigate climate change. The plan
is expected to be developed and approved by the end of 2026.
The Group does not currently have a plan in place to ensure that its economic activities comply with
the criteria set out in Commission Delegated Regulation EU 2021/2139.
E1-2 – Policies related to climate change mitigation and adaptation
The Group does not currently have a policy on material sustainability matters. A policy is expected
to be adopted and approved by the end of 2026.
E1-3 – Actions and resources in relation to climate change policies
Undertakings of the Group are taking action to manage key climate change issues without a specific
policy. Information on actions taken during the reporting period and those planned for the future is
presented below.
The Group establishes annual investment, as well as operational and savings plans to meet its
sustainability objectives and to reduce negative environmental impacts.
The main mitigation actions can be categorised by decarbonisation levers into renewable energy
consumption and fuel switching for a more sustainable transport fleet.
The following key actions were implemented in the reporting year:
31
● Investments in renewable energy: more than €6 million was invested into renewable
electricity generation facilities. This will allow the Group's operations to independently
produce green electricity, contributing to the creation of a sustainable energy
infrastructure and reducing greenhouse gas emissions. The Group's objective is to meet
up to 70% of its electricity demand from renewable generation.
o One of the projects is the construction of wind turbines. Wind turbines with a
nameplate total active generating capacity of 8,400 kW have been built in 2024
and are currently undergoing commissioning and retrofitting.
● Introduction of more sustainable transport: the Group is renewing its transport fleet by
investing in more sustainable vehicles such as electric and hybrid cars.
Planned actions:
● Continue investments in projects for renewable energy generation.
● The Group plans to carry out an energy audit of its processes and installations in 2026.
The Group's target of 70% of its electricity needs being met by renewable generation does not
currently have a clearly defined timeframe. However, taking into account current investments and
realistic opportunities, the Group plans to reach a 50% share of renewable energy by 31 December
2025. The Group has used sustainable financial instruments to implement the actions. A bank has
also provided a green loan for the purchase of wind turbines.
The capital expenditure for wind turbines in 2024, according to the relevant part of the financial
statements, amounted to EUR 6,872,399. These costs are directly related to the Group's investments
in renewable energy generation and the achievement of its long-term sustainability objectives. The
Group has not currently determined the amount of future financial resources. This information will
be determined for the next reporting period.
Information on the key performance indicators required under Commission Delegated Regulation
(EU) 2021/2178 is provided in the EU Taxonomy Alignment Overview section. A capital expenditure
plan, in accordance with Commission Delegated Regulation (EU) 2021/2178, has not been foreseen
for this reporting period.
E1-4 - Targets related to climate change mitigation and adaptation
The Group does not have set measurable and result-oriented targets to manage material
sustainability issues within the topic of climate change, including GHG emission reduction
targets. Targets are planned to be set by the end of 2026.
There is also no formal monitoring process to track the effectiveness of the mitigation actions
envisaged to date.
The Group's main objective is to comply with the requirements of the European Union and the
commitments of the Republic of Lithuania to achieve zero emissions balance by 2050. Therefore, the
planned detailed targets to be set will be aligned with this objective.
32
E1-5 – Energy consumption and mix
This part of the report discloses information on energy consumption related to the Group's
operations. The data is presented in Tables 6, 7.
Table 6.Energy consumption and mix
Energy consumption and mix
2023
2024
Žemaitijo
s pienas
Šilutės
rambyna
s
Group
Žemaitijo
s pienas
Šilutės
rambyna
s
Group
(1) Fuel consumption from coal and
coal products (MWh)
0
0
0
0
0
0
(2) Fuel consumption from crude oil
and petroleum products (MWh)
25,968
19,918
45,886
25,868
16,879
42,747
33
(3) Fuel consumption from natural
gas (MWh)
11,719
0
11,719
15,063
2,436
17,499
(4) Fuel consumption from other
fossil sources (MWh)
0
0
0
0
0
0
(5) Consumption of purchased or
acquired electricity, heat, steam, and
cooling from fossil sources (MWh)
25,393
4,433
29,825
15,597
2,880
18,477
(6) Total fossil energy
consumption (MWh) (calculated as
the sum of lines 1 to 5)
63,079
24,351
87,430
56,527
22,195
78,722
Share of fossil sources in total
energy consumption (%)
52.05%
100.00%
60.07%
44.86%
90.61%
52.31%
(7) Consumption from nuclear
sources (MWh)
0
0
0
0
0
0
Share of consumption from
nuclear
sources in total energy
consumption (%)
0
0
0
0
0
0
(8) Fuel consumption for renewable
sources, including biomass (also
comprising industrial and municipal
waste of biologic origin, biogas,
renewable hydrogen, etc.) (MWh)
58,121
0
58,121
58,399
0
58,399
(9) Consumption of purchased or
acquired electricity, heat, steam, and
cooling from renewable sources
(MWh)
0
0
0
11,078
2,299
13,377
(10) The consumption of self-
generated non-fuel renewable
energy (MWh)
0
0
0
0
0
0
(11) Total renewable energy
consumption (MWh) (calculated as
the sum of lines 8 to 10)
58,121
0
58,121
69,476
2,299
71,776
34
Share of renewable sources in
total energy consumption (%)
47.95%
0.00%
39.93%
55.14%
9.39%
47.69%
Total energy consumption (MWh)
(calculated as the sum of lines 6,
and 11)
121,200
24,351
145,551
126,004
24,494
150,498
Both Žemaitijos pienas and Šilutės rambynas did not generate electricity in the reporting year.
Žemaitijos pienas's activities produced heat energy (steam) at the boiler house at Sedos str. 35:
54,404 MWh from biofuel chips (SM2); 4214.521 MWh from natural gas. The following energy was
consumed directly for production purposes: natural gas - 9, 995.988 MWh, liquid petroleum gas - 1,
013.048 MWh.
Table 7. Energy intensity
Energy intensity per net revenue
2023
2024
% N/N-1
Total energy consumption from
activities in high climate impact sectors
per net revenue from activities in high
climate impact sectors (MWh / EUR)
0.0005236
0.0004891973981
-6.56%
Note. Based on data from the manufacturing sector with high climate impact (CEA 105100).
Table 8. Net revenue from activities in high climate impact sectors, EUR
Details of net income
2023
2024
Net revenue from activities in high climate impact
sectors used to calculate energy intensity
278,003,792
307,640,000
Total net revenue (Financial statements)
278,003,792
307,640,000
Note. Reference to the revenue line in the financial statements: company and consolidated financial statements,
Revenue from contracts with customers - 307,643.
E1-6 - Gross Scopes 1, 2, 3 and Total GHG emissions
In Table 9, Group discloses the amount of GHG emissions.
Table 9. GHG emissions
Emission type
Retrospective data
35
Base year
2023
2024
Comparison
with base year
Comparison
with previous
year (% N / N-
1)
Scope 1 GHG emissions
Gross Scope 1 GHG emissions (tCO2eq)
15,180
15,288
0.7%
0.7%
Percentage of Scope 1
GHG emissions from regulated emission
trading schemes (%)
0
0
Scope 2 GHG emissions
Gross location-based Scope 2 GHG emissions
(tCO2eq)
17,353
10,738
-38.1%
-38.1%
Gross market-based Scope 2 GHG emissions
(tCO2eq)
4,507
4,814
6.8%
6.8%
Significant scope 3 GHG emissions
Total Gross indirect (Scope 3) GHG emissions
(tCO2eq)
552,622
596,162
7.9%
7.9%
1 Purchased goods and services
535,641
576,919
7.7%
7.7%
2. Capital goods
3,362
4,634
37.8%
37.8%
3 Fuel and energy-related
Activities (not included in Scope1 or Scope 2)
4,438
4,558
2.7%
2.7%
4 Upstream transportation and distribution
1,389
1,761
26.8%
26.8%
5 Waste generated in opera%tions
147
107
-27.2%
-27.2%
6. Business travelling
27
54
99.3%
99.3%
7. Employee commuting
587
622
6.0%
6.0%
8. Upstream leased assets
0
0
36
9 Downstream transportation
7,032
7,507
6.8%
6.8%
10 Processing of sold products
0
0
-
-
11. Use of sold products
0
0
-
-
12 End-of-life treatment of sold products
0
0
-
-
13 Downstream leased assets
0
0
-
-
14. Franchises
0
0
-
-
15. Investments
0
0
-
-
Total GHG emissions
Total GHG emissions (location- based)
(tCO2eq)
585,155
622,187
6.3%
6.3%
Total GHG emissions (market- based)
(tCO2eq)
572,309
616,264
7.7%
7.7%
In addition, in 2024, the activities generated 38,014t of CO2 of biological origin, which was emitted
from the combustion of biofuels. These emissions were from activities at the Žemaitijos pienas
boiler house and the Vilnius branch due to the consumption of central heating. In 2023, the activity
generated 37,836 t of biogenic CO2.
Table 10. GHG intensity
GHG intensity per net revenue
Base year
2023
2024
Comparison with
base year
Comparison with
previous year (% N /
N-1)
Total GHG emissions (location-
based) per net revenue
(tCO2eq/EUR)
0.00206
0.00200
-2.7%
-2.7%
Total GHG emissions (market-
based) per net revenue
(tCO2eq/EUR)
0.00210
0.00202
-3.9%
-3.9%
Note: Cross-referenced to the net income line or disclosure in the business’ financial statements: the line item
in the consolidated financial statements is revenue from contracts with customers.
GHG calculation methodology
The calculations are based on the Greenhouse Gas Protocol (GHG) and IPCC guidelines.
37
The assessment includes all emissions-conforming activities within the Group's undertakings that
comply with the operational control principles, and an assessment of the three GHG scopes.
The calculation of emissions includes not only CO₂, but also other greenhouse gases (CH4, N2O,
HFCs) produced in the activity by converting them to CO₂-eq. according to the standard coefficients
(IPCC AR5), and denoting the final total number CO₂-eq.
Sources of emission factors used:
- IPCC
- IPCC AR5 for refrigerants
- European Environment Agency guidelines for air pollution inventories
- Association of Issuing Bodies (AIB, residual mix and production mix) for electricity
- DEFRA
- IEA for energy losses
- Cornell Hotel Sustainability Benchmarking (CHSB) Index 2021
- PROBAS database
- AGRIBALYSE, 2023
- Journal of Dairy Science Volume 105, Issue 12, December 2022, pages 9713-9725
In 2024, 100% of Scope 3 emissions are estimated based on activity-specific data.
The assumptions and assessment thresholds for scope 3 emissions are set out below:
Purchases of goods and services: Purchases of basic raw materials (by weight, from 3 tonnes) are
assessed.
Fixed Assets: Total expenditure on fixed assets is assessed using category average expenditure
emission factors.
Fuel and energy related activities (not included in scope 1 or 2): Total expenditure on fixed assets
is valued using category average expenditure emission factors.
Upstream transport and distribution: Total expenditure on transport (third party services) is
assessed.
Waste generated from operations: Waste transferred for management according to the GPAIS
report.
Business travel: Costs for flights, bus and train tickets and taxis. Also, overnight accommodation
costs.
Employee mobility: Employees' travel to work by private transport (results extrapolated from staff
survey responses).
Upstream rental property: Not relevant, all related emissions are included in the scope 1 and
scope 2 assessment.
38
Downstream transport: Road and sea transport are assessed based on origin-destination points
and weight of goods.
Processing of downstream products: Not relevant, no emissions.
Use of downstream products: Not relevant, no emissions.
End-of-life disposal of products sold: Not counted due to low significance and lack of reliable data,
small amounts of emissions occur through packaging put on the market, but no information
available on its handling.
End-of-line leased assets: Not relevant, no emissions.
Franchises: Not relevant, no emissions.
Investments: Not relevant, no emissions.
E1-7 - GHG removals and GHG mitigation projects financed through carbon credits
The Group has not implemented or contributed to projects to absorb or store GHG emissions.
The Group has not financed any mitigation projects through the purchase of carbon credits.
E1-8 - Internal carbon pricing
The Group does not apply carbon pricing systems.
39
E1-9 Anticipated financial effects from material physical and transition risks and potential
climate-related opportunities
The Group, taking advantage of the option to gradually disclose information, does not indicate the
financial impact of climate-related physical and transition risks and potential opportunities.
40
E3 WATER AND MARINE RESOURCES
SBM-3 – Material impacts, risks, opportunities, and their interaction with the strategy and
business model
The significant impacts identified in the Double Materiality Assessment (DMA) are summarised in a
table in ETAS Chapter 2 SBM-3 – Material impacts, risks, opportunities and their interaction with the
strategy and business model section. No risks and opportunities have been identified; therefore, no
information is available on the associated financial impacts. This section provides additional
information based on SBM-3 and other applicable requirements.
The Group continuously assesses the opportunities for water savings and more efficient wastewater
management. This is done to measure the impact on the Group’s business model, value chain, and
strategic decisions.
The Group sets specific targets for reducing wastewater pollution, which are stricter than those set
out in the contracts with wastewater operators or in the IPPC permits. There are also targets to reduce
water and wastewater consumption per unit of product produced.
Production optimisation and polluting wastewater collection solutions, including the use of
wastewater for animal feeding and biogas production, have helped to reduce the BOD7 thresholds
for wastewater pollution. Developing innovative and sustainable practices is expected to help the
Group gain a competitive advantage and strengthen its relationship with conscious consumers and
partners.
By transferring polluted wastewater to biogas production, the Group helps reduce environmental
emissions and protect soil and water bodies from contamination.
In addition, one of the Group's activities is producing mineral water, so sustainable water use is
essential both for the business model and the long-term strategy.
The impact arises directly from the Group's choice of business model. By integrating sustainability
principles into its operations, the Group is better positioned to reduce negative environmental
impacts and create positive impacts for both the present and long-term future. .
The Group did not carry out a resilience analysis of its strategy and business model during the
reporting period, except for these areas which were analysed as part of the double materiality
assessment.
E3-1 – Policies related to water and marine resources
The Group has no policy on significant sustainability issues related to water consumption. A policy
is planned to be adopted and approved by the end of 2026. The policy will set out clear principles
for sustainability management at the Group level, along with responsibilities and guidelines for
action. The policy will address the use and extraction of water and marine resources in its operations
and the prevention and reduction of water pollution and wastewater treatment.
41
E3-2 – Actions and resources related to water and marine resources
Key actions to reduce wastewater volume and pollution (BOD) are implemented without a specific
policy.
It is not the first year that the Group has implemented actions to optimise production and capture
polluted wastewater for use in animal feeding and biogas production, thus reducing the BOD7
limits for wastewater pollution. In addition, water consumption is being reduced to improve
resource efficiency and water collected is being reused where possible.
There are no time limits for completing these actions as they are ongoing.
Progress achieved in previous reporting periods includes a reduction in BOD7 levels from 1,280
mg/L to 1,100 mg/L, in accordance with the contractual agreement with the wastewater manager
and the requirements of the IPPC.
The Group does not expect to incur significant operating and capital costs to implement the actions
presented during the reporting period. The Group plans to conduct a detailed assessment in 2025
to determine the significance of these costs for future financial performance.
The Group does not categorise the actions in the hierarchy of mitigation measures as specified in
the ETAS, using the voluntary disclosure exemption.
E3-3 – Targets related to water and marine resources
The Company has set a measurable and results-oriented objective for this topic. Achieving this
objective contributes to the sustainable use of water and the strengthening of environmental
responsibility. Objective: Reduce the BOD7 indicator for wastewater pollution from 1,280 mg/l
to 800 mg/l by 2030.
The target for wastewater pollution is more ambitious than the targets set in the contracts with
wastewater operators or in the IPPC requirements. This target is linked to the strategic objective of
saving water and reducing wastewater pollution, thereby optimising operating costs, reducing water
supply and wastewater management costs, and making better use of resources.
The objective covers the activities of Žemaitijos pienas at the Sedos str. 35, Telšiai plant.
Progress has been measured since 2018, when the baseline value for the BOD7 effluent pollution
indicator was 1,720 mg/l. During 2018-2023, the indicator value was reduced to 1,280 mg/l through
various measures. In 2024, the indicator value was already down to 1,100 mg/l.
Tests performed by an accredited laboratory shall determine the BOD7 effluent pollution indicator.
The effluent pollution indicator has been coordinated with the wastewater manager. Following a
change in the agreed BOD7 indicator with the wastewater manager, the IPPC was updated. The
data collection and calculation processes remained unchanged.
The meterOn system is used to monitor and analyse wastewater pollution indicators.
42
E3-4 – Water consumption
Information on the Group's water consumption during the reporting period is presented in Table 11. Data relating to wastewater pollution is determined
by an accredited laboratory in accordance with certified standards.
Table 11. Water consumption in 2024
Total Water Consumption
(m³)
Total Water Recycled and Reused (m³)
Water intensity: total water consumption in its own
operations in m3 per million EUR net revenue
Total *
1,234,512
3,383,630
4,013
Žemaitijos pienas
Freshwater boreholes
994,660
3,383630
Mineral water borehole
16,037
0
Municipal water
131
0
Šilutės Rambynas
Municipal water
98,830
0
Borehole water
124,854
0
Note: All data presented here is collected by direct measurement. Remark. The Iamus system monitors and analyses water consumption, while wastewater pollution indicators
are monitored via the meterOn system. Also, wastewater pollution (BOD) data is visualised on a screen in the production corridor so all employees can see the last 10 days of
wastewater pollution indicators. The amount of circulating water and reused water consists of the amount of chilled water circulated (water is cooled to +2C in the compressor
43
room and fed into production as a refrigerant for production processes, then returned and cooled again - circulation in the system) and the water/condensate from the
products that has been used for the initial rinsing/cooling process - instead of being discharged to the sewerage.
44
E4 BIODIVERSITY AND ECOSYSTEMS
SBM 3 – Material impacts, risks, opportunities, and their interaction with the strategy and business model
Double Materiality Assessment (DMA) has identified significant risks, which are summarised in the table in ETAS
2 SBM 3 – Material impacts, risks, opportunities, and their interaction with the strategy and business model. This
section provides additional information based on SBM-3 and other applicable requirements.
The Group assesses the impact of changes in the environment and ecosystems on its business model, supply
chain, and strategy. The main risks identified are that the Group may face future deterioration in milk quality,
declining raw material volumes (milk scarcity), and volatile raw material prices. This can be due to environmental
factors, changing ecosystems, and the spread of diseases. The specific strategies and plans to respond to these
risks will be more clearly defined once the sustainability strategy has been approved in 2026.
Risks arising from increased environmental regulations or disruptions in the supply of raw materials may lead to
increased costs and reduce the Group's profitability and cash flow - for example, if the Group's supply chain
cannot adapt to climate change or environmental requirements. In that example, it may be necessary to make
significant adjustments to asset values, by reducing the value of long-lived assets or changing inventory values
due to production constraints. The current financial impact has not yet been identified, nor is it expected that
the effect on the Group will occur in the next financial year (the risk is assessed to be in the long term).
The Group did not analyse the resilience of its strategy and business model during the period under review,
except for the areas that were carried out as part of the double materiality assessment.
This risk was not addressed in the previous year's Sustainability Report, which was prepared in accordance with
GRI requirements.
No significant impacts have been identified for this topic. The Group's activities also do not directly impact land
degradation, desertification, or soil sealing. No significant direct impacts on threatened species have been
identified.
The Group's activities are also not directly related to impacts on sensitive biodiversity areas. However, if there
are farmers in the supply chain whose activities could impact such sites, the Group would inform the responsible
authorities, such as the Environmental Protection Agency or the Ministry of Agriculture.
E4-1 – Transition plan and consideration of biodiversity and ecosystems in the strategy and business
model
The Group plans to adopt a sustainability strategy in 2026, followed by a biodiversity and ecosystem resilience
analysis. The assessment will cover the physical, transformational, and systemic risks associated with these areas.
This will also cover the Group's operations as well as both the upstream and downstream elements of the value
chain.
45
E4-2 – Policies related to biodiversity and ecosystems
The Group does not currently have an adopted Biodiversity and Ecosystems Policy but plans to adopt one in
2026.
The Group does not currently have a policy on sustainable land use, sustainable ocean use, or reducing
deforestation.
In the future, the Group plans to assess both the need and the feasibility for adopting these policies, considering
the specificities of its operations, legislative requirements, and stakeholder expectations.
E4-3 – Actions and resources related to biodiversity and ecosystems
Following the adoption of the policy, the objectives will be set out and the main actions taken or planned will be
disclosed.
The Group does not have an action plan requiring significant operating or capital expenditure. There are
currently no financial instruments or resources available to implement such actions.
The Group has not earmarked and does not provide separate financial resources for the actions; therefore, no
such amounts are recognised in the financial statements. Each investment or project is evaluated on its own
merits when deciding on the most appropriate source of financing.
The Group also does not currently apply specific countervailing actions for impacts, as no significant
environmental impacts have been identified.
However, the Group uses some environmentally friendly raw materials, focuses on sustainable transport,
reduces emissions, and raises environmental awareness among its employees. It also manages pollution to
avoid contributing to direct impacts on biodiversity loss – E1 Climate Change and E5 Resource use and circular
economy.
E4-4 – Targets related to biodiversity and ecosystems
The Group does not currently have measurable, results-oriented targets, but plans to define them once the
policy is adopted. The Group does not monitor their effectiveness further as no specific actions are underway or
foreseen regarding this area. The Group generally monitors the impact of its sustainability-related actions, risks,
and opportunities, assessing their effectiveness through regular internal audits and external evaluations. Based
on these observations, the Group updates its action plans as necessary to ensure that it meets its sustainability
objectives and that its activities are compatible with environmental requirements.
The Group has not identified any significant effects on biodiversity under the ETAS assessment of significance,
and the associated ecological thresholds do not apply. However, the Group monitors certain ecological
thresholds that may impact its future activities, taking into account potential risks.
46
Currently, the Group does not specify targets based on the Kunming and Montreal Global Biodiversity Strategy
and aspects of the 2030 EU Biodiversity Strategy.
47
E5 RESOUCE USE AND CIRCULAR ECONOMY
SBM-3 - Material impacts, risks, opportunities, and their interaction with strategy and the business model
Material impacts and risks identified in the Double Materiality Assessment (DMA) are summarised in a table in
ESRS 2, section SBM-3 - Material impacts, risks, opportunities, and their interaction with the strategy and business
model. This section provides additional information based on SBM-3 and other applicable requirements.
The materiality assessment identifies that the main material impacts and risks arise in the Company's operations
and throughout the value chain. Negative impacts relate to the generation of packaging and other waste both
within the Group and downstream value chain. This includes both waste generated during the production
process and packaging of final products. Packaging waste, if not properly recycled or recovered, can contribute
to plastic pollution, while waste generated within the Group can contribute to pollution from organic waste and
other production residues.
Packaging is subject to increasingly stringent EU requirements on sustainability. These requirements, combined
with increasing consumer expectations for environmentally friendly solutions, pose a risk to the Group's ability
to ensure the availability of sustainable and recycled materials, including the appropriate aesthetic quality of
products.
In addition, there are material risks due to the possible declining availability of raw milk and fluctuations in farm-
gate prices caused by various factors such as climate change (e.g. droughts), livestock diseases, or increasingly
stringent environmental requirements. This can have a direct impact on production costs.
The Group's material impact and risks have a direct impact on the Group's business model, value chain, strategy,
and decision-making. In light of these factors, the Group has already started to review and update its business
strategy to mitigate environmental impacts and manage risks:
• Strengthening the integration of circular economy principles.
• Innovation in product development is encouraged, for example, in more sustainable packaging.
• Investing in smart technologies that allow more precise management of raw material supply and
reducing losses.
• Increasing the focus on the use of sustainable packaging and ensuring recyclability.
• Informing consumers about sustainable choices and the environmental impact of products.
• In the short term, internal policies have been adopted to promote waste reduction.
Waste generation is directly linked to the Group's business model, which focuses on the production and
distribution of dairy products. The dairy processing processes require a certain amount of materials, which
results in the generation of waste plastics and other materials. In addition, the production process inevitably
generates waste related to the processing of raw materials.
The business model, based on production and distribution, also relies on standardised, single-use packaging,
which is essential to ensure food safety.
48
The materiality assessment has identified that the Group's impacts arise directly from its activities, in particular
from the waste it generates.
Waste falls into several categories:
• Packaging necessary for transporting and protecting ingredients so that they reach the production
process.
• Packaging waste generated during production.
• Ancillary waste that is not directly related to products but is generated during the course of business
operations.
There has been no material financial impact on the Group's financial position, results of operations, or cash flows
at this time. There is also no risk that the number of assets and liabilities will need to be materially adjusted in
the next annual reporting period.
However, if the Group fails to comply with EU requirements, certain financial penalties are possible, the exact
amounts of which have not been determined. In addition, non-compliance with EU regulations may lead to
reputational risks related to negative public perception of the Group's performance. The Group may also be
subject to higher fees in order to maintain product quality and meet consumer expectations.
The Group did not carry out an analysis of the resilience of its strategy and business model during the period
under review, outside of the areas listed above, which was carried out as part of the double materiality
assessment.
The Group recognises the importance of sustainability issues in its operations and is actively working to integrate
sustainability principles into its strategic decisions. Integrating sustainability into strategy is essential for long-
term resilience and success, while efforts are made to ensure that decisions taken are consistent with long-term
sustainability principles. Actions related to building resilience are described in more detail in section E5-2 -
Actions and resources related to resource use and circular economy.
No material changes in impacts, risks, or opportunities were identified during the reporting period. However,
we continuously monitor the business environment and analyse trends in the supply chain, regulatory
environment, and market, in order to identify potential material changes in a timely manner.
E5-1 - Policies related to resource use and circular economy. MDR-P. Policies adopted to manage material
sustainability matters.
The Group does not currently have a policy adopted to address all the material impacts and risks but plans to
have a sustainability policy adopted by the end of 2026. However, some of the material sustainability issues are
already included in existing policies:
49
● The "Quality and Food Safety Policy" sets out the objective of "Protecting the environment by
reducing material and energy consumption in all stages of production". On this basis, production
processes and the use of packing and packaging materials are continuously reviewed in order to
comply with the EU's requirements. The commitments in the Policy apply to both Žemaitijos pienas
and Šilutė rambynas.
● The "Waste Management Policy" focuses on waste prevention, including reuse and recycling to
reduce environmental impacts. It promotes eco-design and the use of waste as a resource,
implementing the principles of the circular economy. This policy applies to Žemaitijos pienas
activities.
There is no single person within the Group responsible for the implementation of these policies, but
responsibility is divided among several individuals by function, based on internal orders. The implementation of
the "Quality and Food Safety Policy" is based on the requirements of the BRCGS, IFS, FSSC food safety standards
(the certificates held by Žemaitijos pienas are listed, while Šilutė s rambynas has only FSSC and BRCGS).
In setting the policies, the expectations of customers, consumers, and clients are taken into account, as
expressed through the questionnaires and through the opinions of the Quality Line. The principles of the circular
economy are also applied. Only Group employees are made aware of the existing policies that must be followed.
The Group does not currently have a specific policy to reduce the use of primary resources or to increase the
use of secondary (recycled) resources, nor does it have a strategy in place for the sustainable sourcing of
renewable resources.
E5-2 - Actions and resources related to resource use and circular economy. MDR-A. Actions and resources
in relation to material sustainability matters.
The Group's actions implemented during the year under review, future plans, and their expected results are set
out below.
To achieve the '’Quality and Food Safety Policy’' objective of protecting the environment by reducing material
and energy consumption at all stages of production, processes and the selection of packing and packaging
materials are continuously reviewed.
In 2024, the Group continued to strengthen its sustainability initiatives, building on the achievements of 2023,
but focusing on new solutions and improvements. In 2024, the waste management system was improved and
built on the waste segregation process previously initiated. This allows the Group to increase the amount of
recycled materials and further reduce the volume of waste generated, which directly contributes to the circular
economy.
The implementation of an annual savings plan, which is continuously monitored, optimises the use of resources,
reduces costs, and improves overall business efficiency. In addition, the Undertaking continues to innovate in
packaging. Building on previous trials, such as the PurePak project, new packaging solutions are being
introduced to reduce the use of both plastic and cardboard. This increases the recycling potential of packaging
and contributes to stimulating innovation, which is important when reducing the negative impact on the
environment.
50
The use of reusable containers is being developed for the movement of products between production units and
to the market, thereby reducing corrugated cardboard consumption.
The choice of raw material suppliers and the cost of their purchases are assessed in the context of the use of
sustainable packaging.
In addition, projects are being developed to use 100% recycled packaging materials and to improve packaging
design, with the aim of reducing cost of packaging materials and improving recycling rates. The use of a recycled
cap (a flexible plastic overlay designed to protect the product packaging from the effects of inclination) has
already been implemented in the milk production unit, saving both packaging weight and financial resources.
The suitability of the packaging for the product is balanced with the maximum shelf life and packaging
pollution taxes.
Future plans include the introduction of a sustainable supply chain management system and staff training on the
practical application of sustainability and circular economy principles, which will increase workers competencies
and improve the implementation of sustainability initiatives.
A savings plan is drawn up annually and monitored on an ongoing basis (interim reports are made to ensure
that the savings plan is implemented). Savings measures are identified for individual items rather than for the
category as a whole in order to better manage resources and optimise costs.
Key actions cover production and supply chain areas and waste management in the Group's operating
geography, which includes production sites and the supply chain. Involvement of Stakeholder Groups, including
employees and suppliers, is a priority.
The specific timeframes for the completion of key actions will be determined according to their nature and the
Group's strategic priorities.
Currently, the main financial resources allocated to the Action Plan are based on cost-saving principles, which
are achieved through the review and optimisation of processes, without additional investments. This means that
the focus is on analysing existing processes and improving their efficiency in order to reduce costs and achieve
better results without significant additional costs.
The amount of financial resources allocated to this plan is in line with the underlying financial statements, as
most of the costs relate to better management of existing resources rather than new investments.
E5-3 - Targets related to resource use and circular economy
The Group does not currently have a formally adopted Sustainability Policy addressing circular economy
challenges but plans to develop one by the end of 2026. Nevertheless, the Group is committed to reducing the
environmental impact of its activities and to achieving a positive impact.
For 2025, the production divisions have set the following targets:
51
• Gradually switch to packaging made from recyclable plastics. Aiming for the use of recycled PET material
in packaging (25%). There are risks due to lack of high quality recycled material and visual changes in
the final packaging, which may affect consumer choices (waste hierarchy level - recycling).
• Reducing or replacing waste from packaging materials with reusable materials (prevention level of the
waste hierarchy).
• Increase the use of recycled packaging materials (secondary and tertiary corrugated cardboard and
plastic containers, waste hierarchy level – recycling).
• Optimising packaging in terms of composition, type, and weight (prevention level of the waste
hierarchy).
The scope of the targets covers the Group's activities and the upstream and downstream parts of the value chain.
Specific actions and targets are set out in internal documents and apply to individual items rather than in
aggregate.
Increasing the use of recycled packaging materials (secondary and tertiary corrugated cardboard and plastic
containers) is an ongoing task with a gradual implementation. Specific milestones and deadlines are set in
internal documents.
Packaging optimisation targets (in terms of composition, types, and weight) are based on internal
methodologies and take into account EU sustainability requirements.
Stakeholders have not been specifically involved in setting targets for each of the material sustainability issues.
However, the Group takes their expectations and regulatory requirements into account when assessing
sustainability priorities and formulating strategic objectives.
There were no changes to the targets, indicators, measurement methodologies, assumptions, constraints, or
data collection processes during the reporting period.
The Group does not intend to set additional measurable targets as the main objective is to meet the
requirements of EU legislation without compromising product quality.
The Group monitors and measures the effectiveness of its policies and actions related to material sustainability
impacts, risks, and opportunities.
• Reducing plastic in packaging:
A change in milk packaging was launched in 2024 to reduce the amount of plastic in the packaging without
affecting product safety and quality. Organic milk "Dobilas" and "Žemaitijos pienas 3,2 % fat" have been
launched in the new PurePak packaging and 41, 000 kg less plastic has been put on the market since the change
was initiated. In addition, the change from secondary to reusable containers has resulted in an additional 5, 300
kg of plastic not being placed on the market.
• Corrugated board optimisation:
52
Corrugated cardboard boxes have also been optimised, with the elimination of adhesive tape, to reduce
corrugated cardboard consumption, facilitate the work of employees, and optimise packaging materials. These
changes result in 43, 700 kg less corrugated boards being placed on the market in 2024. The packaging
optimisation resulted in a 28% reduction in box weight and a 15% increase in logistics efficiency due to
optimised pallet loading.
• Use of recycled tertiary packaging:
Where possible, tertiary packaging made from 100% recycled plastic was used, resulting in 800 kg less plastic
on the market, per year. These results demonstrate the Group's consistent commitment to reducing its
environmental impact and optimising the use of packaging.
The Group's objective is to meet the requirements of EU legislation without compromising product quality. As
the policy only provides for savings, without specific percentage or quantitative indicators set, it is the savings
themselves that are currently being assessed.
The initial savings estimate is based on the previous year's sales data, while the actual savings are calculated on
the basis of real-time data. All changes made are backed up by tests, test reports and, where necessary, product
compliance studies. Savings plans shall not only show the monetary value of the savings, but also the amount of
raw materials saved, such as cardboard and plastic.
The targets relate to packaging recyclability and packaging reduction. The Group's target of 25% recycled PET
raw material in PET packaging (on a mass balance basis) is mandatory in order to meet the requirements of the
circular economy.
E5-4 - Resource inflows
The risks identified in relation to resource inflows relate to raw milk. This resource is further described in ETAS 2
SBM-1 - Strategy, Business Model, and Value Chain.
E5-5 - Resource outflows
The Group's main products and materials that are the result of the Group's production process are described in
more detail in ETAS 2 SBM-1 - Strategy, Business Model, and Value Chain.
Product logistics tables have been developed detailing the material, category, and weight of the packaging
used to package the product. For each material used, a separate package description is assigned. This details
the compatibility of the package with the product to be packaged, as well as the components and properties of
its constituents.
53
Table 12. Proportion of recyclable materials in packaging
Category
Share of recycled materials
2024
Packaging
51.27 %
Note: Percentage derived from total non-hazardous waste when considering non-hazardous recyclables (i.e. corrugated
cardboard, mono containers, metals).
Table 13. Waste generated from operations
Category
2024
Total quantity (tonnes)
Hazardous waste
(tonnes)
Non-hazardous waste
(tonnes)
Waste generated
1,283.251
103.277
1,179.974
Note: No radioactive waste is generated during the activity.
Table 14. Breakdown of waste diverted from disposal
Type of processing
operation
2024
Total quantity (tonnes)
Hazardous waste
(tonnes)
Non-hazardous waste
(tonnes)
Diverted to secondary use
331.808
0
331.808
Diverted for recycling
657.9
0
657.9
Other recovery operations
161.22
103.277
57.943
54
Table 15. Waste directed to disposal
Type of disposal
2024
Total quantity (tonnes)
Hazardous waste
(tonnes)
Non-hazardous waste
(tonnes)
Combustion
132.319
0
132.319
Disposal in landfill
0
0
0
Other disposal operations
0
0
0
Notes: The waste manager carries out the disposal procedure, but the waste is not sent to landfill.
Table 16. Non-recycled waste
Category
2024
Total quantity (tonnes)
Percentage (%)
Non-Recycled Waste
132.319
10.31
Notes: Non-recycled waste is the sum of waste sent for disposal.
The waste generated by the Group's activities is directly related to the dairy sector. The composition
of waste includes both product packaging released on the market and waste generated within the
Group during the production process. These values are recorded in the GPAIS system.
A specific feature of the sector is the waste that becomes contaminated after coming into contact with
dairy products and needs to be handled separately due to the fermentation process.
The Group uses several methodologies to calculate the data, depending on the nature and origin of
the waste streams. Waste management is carried out in accordance with contracts with waste
handlers.
The waste streams generated, depend on the nature of the products produced and the packaging
used. In addition, part of the waste is related to the handling of incoming packaging for the transport
of ingredients.
55
EU Taxonomy Alignment Overview
The European Union’s (EU) Taxonomy (Taxonomy Regulation, 2020/852, and related delegated acts) is a
classification system for economic activities designed to direct private investments toward environmentally
sustainable activities that contribute to the environmental objectives of the European Green Deal.
The Taxonomy defines the following environmental objectives:
● CCM – Climate Change Mitigation.
● CCA – Climate Change Adaptation.
● WTR – Sustainable Use and Protection of Water and Marine Resources.
● CE – Transition to a Circular Economy.
● PPC – Pollution Prevention and Control.
● BIO – Protection and Restoration of Biodiversity and Ecosystems.
The Taxonomy establishes science-based criteria to assess the sustainability of activities. Business activities that
fall within the scope of the Taxonomy and meet its defined criteria can be classified as sustainable and attract
green investments.
A taxonomy-eligible 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 determined that their economic activity
revenues (Turnover), capital expenditures (CapEx), and/or operating expenses (OpEx) are related to activities
described in the delegated acts must conduct an analysis and disclose to what extent their activities meet the
Taxonomy criteria according to these indicators. A taxonomy-aligned activity is defined as a taxonomy-eligible
activity that meets the Taxonomy's technical screening criteria, i.e., makes a substantial contribution to at least
one of the six environmental objectives, does not cause significant harm (DNSH) to the remaining five, and meets
the requirements for the minimum safeguards.
This report, in accordance with the provisions of the Taxonomy Regulation and related delegated acts, presents
the key performance indicators of the Group (Žemaitijos pienas together with its subsidiary) and information on
the alignment of its activities with Taxonomy criteria.
ir žmogaus teisių pagrindinių principų. Atitiktį būtiniausių apsaugos priemonių sąlygai grupė patikrino pagal
Europos Komisijos Tvaraus finansavimo platformos (angl. Platform on Sustainable Finance) ataskaitą „Final
Report on Minimum Safeguards” (2022 m.).
Identification of Taxonomy-eligible Activities and Calculation of Indicators
The Group engages in taxonomy-eligible activities and/or invests in taxonomy-eligible measures that can
contribute to climate change mitigation. The Group does not carry out activities that contribute to other
environmental objectives of the Taxonomy.
56
In 2024, a comprehensive climate risk assessment was conducted to determine whether the activity does not
cause significant harm to climate change adaptation. No significant physical risks that could impact operations
or assets were identified, therefore the activity is considered to meet the DNSH criterion for climate change
adaptation.
It is important to emphasize that the Group meets the minimum safeguards requirement: it has implemented
recommended socially responsible and ethical business measures as set out in the OECD Guidelines for
Multinational Enterprises and adheres to the UN Guiding Principles on Business and Human Rights. The group's
compliance with the minimum safeguards requirement was verified based on the European Commission’s
Platform on Sustainable Finance report, “Final Report on Minimum Safeguards” (2022).
Changes Compared to the Previous Reporting Period
In 2024, the Group reviewed its list of taxonomy-eligible activities – compared to 2023, additional applicable
Taxonomy activities were identified, while some activities were no longer included. Following the climate risk
assessment, it was determined that no CCA (Climate Change Adaptation) activities apply to the Group;
therefore, this report does not include activities that make a substantial contribution to this objective.
In addition, the acquisition of wind turbines was reassigned to a different activity based on the applicable
Taxonomy activity definition. While in 2023 they were classified under CCM 7.6, in 2024 they were reclassified
under CCM 4.3, as this classification more accurately reflects the definition of the Taxonomy activity.
Furthermore, only revenues and expenditures that precisely align with the definitions of Taxonomy activities
were included in the Taxonomy activity indicators. Specifically, transportation vehicles classified under CCM 6.5
and CCM 6.6 were reviewed to ensure compliance with the required standards, namely EURO 5 and EURO 6 for
light-duty vehicles and EURO 6e for heavy-duty vehicles.
When calculating the OpEx indicator, compared to 2023, operating expenses related to production and raw
material collection costs that meet the Taxonomy definition were included. The calculated indicators are
available in Tables 1B, 2B, and 3B.
Taxonomy-aligned Activities
Installation, maintenance and repair of energy efficiency equipment
This activity applies to the replacement of ventilation systems (air handling units) carried out by the Group's
companies in 2024. It is one of the listed measures that significantly contribute to climate change mitigation, as
the equipment belongs to energy efficiency class A or B—the two highest commonly used energy efficiency
classes. The activity was assessed against the DNSH criteria for the remaining environmental objectives, and it
was determined that it does not cause any harm.
Installation, maintenance and repair of charging stations for electric vehicles in buildings (and parking
spaces attached to buildings)
57
The Group acquired an electric vehicle charging station, which is classified as an activity that significantly
contributes to climate change mitigation. The activity was assessed against the DNSH criteria for the remaining
environmental objectives, and it was determined that it does not cause any harm.
Transport by motorbikes, passenger cars and light commercial vehicles
The Group acquired passenger cars that meet the low-emission vehicle criteria (CO₂ <50 g/km until 31-12-2025)
and an electric vehicle (0 g CO₂e/km). The activity was assessed against the DNSH criteria for the remaining
environmental objectives, and it was determined that it does not cause any harm.
Electricity generation from wind power
The Group installed two wind turbines that will generate electricity from wind energy, which is considered an
activity that significantly contributes to climate change mitigation. The activity was assessed against the DNSH
criteria for the remaining environmental objectives, and it was determined that it does not cause any harm.
Production of heat/cool from bioenergy
The Group operates heat and steam generation equipment that uses biofuel, which aligns with the objectives of
significantly contributing to climate change mitigation. The activity was assessed against the DNSH criteria for
the remaining environmental objectives, and it was determined that it does not cause any harm.
Other Taxonomy-eligible Activities
Currently, other taxonomy-eligible activities identified within the Group’s companies are classified as taxonomy-
not-aligned, as they do not yet meet one or more technical screening criteria or lack the necessary information
or evidence for a complete assessment. Detailed information and related indicators are provided below in the
Taxonomy table templates. In the future, the Group plans to systematically strive for greater alignment with the
Taxonomy requirements.
Calculation of Taxonomy Indicators
The following information presents the calculated Taxonomy indicators. All disclosed indicators related to
taxonomy-eligible activities avoid double counting, as specific expenditure amounts are assigned to only one
taxonomy-eligible activity. The Group does not have a capital expenditure plan aimed at expanding taxonomy-
aligned economic activities or enabling taxonomy-eligible economic activities to become aligned.
Revenue
The Group's core activities are not currently included in the Taxonomy; therefore, the Taxonomy criteria do not
apply to them. However, the fact that an activity is not included in the Taxonomy does not mean that it cannot
be conducted in an environmentally sustainable manner.
58
The Group's companies generate revenue from other additional activities that are included in the Taxonomy. A
portion of the revenue received by the Company and its subsidiary in 2024 corresponds to the following
activities defined in the Taxonomy:
● Rental of premises to third parties – Acquisition and ownership of buildings.
The share of revenue from taxonomy-aligned activities was calculated by dividing the revenue from products
and services related to z
The fact that the Group's core activities are not currently included in the Taxonomy list under the revenue
indicator does not mean that they cannot be conducted in an environmentally sustainable manner. The list of
taxonomy-eligible activities and criteria is continuously updated, and in the future, the taxonomy-eligible
activities applicable to the Group may be expanded to include activities relevant in terms of revenue.
Table 1A. Turnover by Taxonomy Objectives
Proportion of turnover / Total turnover
Taxonomy-aligned per objective
Taxonomy-eligible per objective
CCM
0%
0.12%
CCA
0%
0%
WTR
0%
0%
CE
0%
0%
PPC
0%
0%
BIO
0%
0%
59
Capital Expenditures (CapEx)
A portion of the Group's long-term asset investments in 2024 aligns with the following activities defined in the
Taxonomy:
● Improvement of long-term assets – Acquisition and ownership of buildings.
● Acquisition of ventilation equipment – Installation, maintenance and repair of energy efficiency
equipment.
● Acquisitions – Installation, maintenance and repair of charging stations for electric vehicles in buildings
(and parking spaces attached to buildings).
● Acquisition of transportation vehicles – Freight transport services by road.
● Acquisition of transportation vehicles – Transport by motorbikes, passenger cars and light commercial
vehicles.
● Acquisition of wind turbines – Electricity generation from wind power.
The capital expenditures (CapEx) for taxonomy-aligned activities were calculated by dividing the investments
related to taxonomy-eligible activities defined in the Taxonomy by the total capital expenditures under the
Taxonomy (see Tables 2A and 2B). The CapEx under the Taxonomy includes only those acquisitions required
under the EU Taxonomy Regulation.
The financial statement line that best corresponds to the CapEx indicator under the Taxonomy is the line "5.
Intangible and tangible fixed assets; Total asset acquisitions" in the Company and Consolidated Financial
Statements Explanatory Notes, with a total amount of 19,634 thousand EUR.
Table 2A. Capital Expenditures (CapEx) by Taxonomy Objectives
Proportion of CapEx / Total CapEx
Taxonomy-aligned per objective
Taxonomy-eligible per objective
CCM
38.25%
44.77%
CCA
0%
0%
WTR
0%
0%
CE
0%
0%
PPC
0%
0%
BIO
0%
0%
60
Operating Expenditures (OpEx)
A portion of the Group's operating expenses in 2024 aligns with the following activities defined in the Taxonomy:
● Expenditures for the maintenance or repair of owned buildings – Acquisition and ownership of buildings.
● Expenditures for the maintenance or repair of ventilation equipment – Installation, maintenance and
repair of energy efficiency equipment.
● Expenditures for the maintenance or repair of transport vehicles – Freight transport services by road.
● Expenditures for the maintenance or repair of transport vehicles – Transport by motorbikes, passenger
cars and light commercial vehicles.
● Periodic maintenance and repair of equipment – Production of heat/cool from bioenergy.
The definition of operating expenses (OpEx) in the Taxonomy differs from the commonly used definition in
financial accounting and covers a much smaller portion of expenses. Under the Taxonomy definition, only asset
maintenance and repair costs, as well as short-term rental expenses, are included in the OpEx denominator. The
operating expenses indicator was calculated by dividing the operating expenses related to activities defined in
the Taxonomy by the total operating expenses under the Taxonomy (see Tables 3A and 3B).
Table 3A. Operating Expenses (OpEx) by Taxonomy Objectives
Proportion of OpEx / Total OpEx
Taxonomy-aligned per objective
Taxonomy-eligible per objective
CCM
3.48%
66.34%
CCA
0%
0%
WTR
0%
0%
CE
0%
0%
PPC
0%
0%
BIO
0%
0%
61
1B Table. 2024 Turnover by Taxonomy
2024 Financial year
2024
Substantial contribution criteria
DNSH criteria ('Does Not Significantly
Harm')
Economic activities
Code(s)
Absolute
turnover
Proportion
of
turnover
year
2024
Climate
change
mitigation
Climate
change
adaptation
Water
Pollution
Circular
economy
Biodiversity
Climate
change
mitigation
Climate
change
adaptation
Water
Pollution
Circular
economy
Biodiversity
Minimum
safeguards
Proportion
of
Taxonomy
-
aligned
(A.1.)
or
-
eligible
(A.2.)
turnover
year
2023
Category
(enabling
activity)
Category
(transitional
activity)
Text
Thousa
nd
EUR
%
Y; N;
N/EL
Y;N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y/N
Y/N
Y/
N
Y/
N
Y/
N
Y/
N
Y/N
%
E
T
A. TAXONOMY ELIGIBLE ACTIVITIES
A.1. Environmental sustainable activities (Taxonomy-aligned)
None
-
0
0%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Turnover of environmentally sustainable activities
(Taxonomy-aligned) (A.1)
0%
0%
0%
0%
0%
0%
0%
-
-
-
-
-
-
-
0%
Of which enabling
0%
0%
0%
0%
0%
0%
0%
-
-
-
-
-
-
-
0%
-
Of which transitional
0
0%
-
-
-
-
-
-
-
-
0%
-
62
A.2. Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
Acquisition and ownership of buildings
CCM
7.7
380
0.12%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.14%
Turnover of Taxonomy-eligible but not environmentally
sustainable activities (not Taxonomy-aligned activities) (A.2)
0.12%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
1.89%
Turnover of Taxonomy-eligible activities (A.1+A.2)
0.12%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
1.89%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Turnover of Taxonomy-non-eligible activities
307
262
99.88%
TOTAL (A+B)
307
643
100%
Explanation of Abbreviations:
Y – Yes, Taxonomy-eligible and Taxonomy-aligned activity with the relevant environmental objective;
N – No, Taxonomy-eligible but not Taxonomy-aligned activity with the relevant environmental objective.
N/EL – Not eligible, Taxonomy-non-eligible activity for the relevant environmental objective;
EL – Taxonomy-eligible activity for the relevant objective;
63
2B Table. 2024 capital expenditures (CapEx) by Taxonomy
2024 Financial year
2024
Substantial contribution criteria
DNSH criteria ('Does Not Significantly Harm')
Economic activities
Code(s)
CapEx
Proportion
of
CapEx
year
2024
Climate
change
mitigation
Climate
change
adaptation
Water
Pollution
Circular
economy
Biodiversity
Climate
change
mitigation
Climate
change
adaptation
Water
Pollution
Circular
economy
Biodiversity
Minimum
safeguards
Proportion
of
Taxonomy
-
aligned
(A.1.)
or
eligible
(A.2.)
CapEx
year
2023
Category
(enabling
activity)
Category
(transitional
activity)
Text
Thousand
EUR
%
Y; N; N/EL
Y;N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
E
T
A. TAXONOMY ELIGIBLE ACTIVITIES
A.1. Environmental sustainable activities (Taxonomy-aligned)
Installation, maintenance and repair of energy
efficiency equipment
CCM 7.3
711
6.02%
Y
N/EL
N/EL
N/EL
N/EL
N/EL
-
Y
-
Y
-
-
Y
0%
E
-
Installation, maintenance and repair of charging
stations for electric vehicles in buildings (and
parking spaces attached to buildings)
CCM7.4
8
0.07%
Y
N/EL
N/EL
N/EL
N/EL
N/EL
-
Y
-
-
-
-
Y
0%
E
-
Transport by motorbikes, passenger cars and light
commercial vehicles
CCM6.5
92
0.46%
Y
N/EL
N/EL
N/EL
N/EL
N/EL
-
Y
-
Y
Y
-
Y
0%
-
T
Electricity generation from wind power
CCM 4.3.
6 872
34.21%
Y
N/EL
N/EL
N/EL
N/EL
N/EL
-
-
Y
-
Y
Y
Y
0%
-
-
CapEx of environmentally sustainable activities (Taxonomy-
aligned) (A.1)
38.25%
38.25%
0%
0%
0%
0%
0%
-
Y
Y
Y
Y
Y
Y
0%
64
Of which enabling
6.09 %
6.09 %
0%
0%
0%
0%
0%
-
Y
Y
Y
Y
Y
Y
0%
-
Of which transitional
0.46 %
0.46 %
-
Y
Y
Y
Y
Y
Y
0%
-
A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
EL; N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
Acquisition and ownership of buildings
CCM 7.7
353
1.76%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.89%
Freight transport services by road
CCM 6.6
798
3.97%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
3.87%
Transport by motorbikes, passenger cars and light
commercial vehicles
CCM 6.5
157
0.78%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.75%
CapEX of Taxonomy-eligible but not environmentally sustainable
activities (not Taxonomy-aligned activities) (A.2)
6.51%
6.51%
0 %
0 %
0 %
0 %
0 %
59.18%
CapEX of Taxonomy-eligible activities (A.1+A.2)
44.77%
44.77%
0 %
0 %
0 %
0 %
0 %
59.18%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
CapEx of Taxonomy-non-eligible activities
11 096
55.23%
TOTAL (A+B)
20 088
100.00%
Explanation of Abbreviations:
Y – Yes, Taxonomy-eligible and Taxonomy-aligned activity with the relevant environmental objective;
N – No, Taxonomy-eligible but not Taxonomy-aligned activity with the relevant environmental objective.
N/EL – Not eligible, Taxonomy-non-eligible activity for the relevant environmental objective;
EL – Taxonomy-eligible activity for the relevant objective;
65
3B Table. 2024 operational expenditures (OpEx) by Taxonomy
2024 Financial year
2024
Substantial contribution criteria
DNSH criteria ('Does Not Significantly
Harm')
Economic activities
Code(s)
O
pEx
Proportion
of
CapEx
year
2024
Climate
change
mitigation
Climate
change
adaptation
Water
Pollution
Circular
economy
Biodiversity
Climate
change
mitigation
Climate
change
adaptation
Water
Pollution
Circular
economy
Biodiversity
Minimum
safeguards
Proportion
of
Taxonomy
-
aligned
(A.1.)
or
eligible
(A.2.)
CapEx
year
2023
Category
(enabling
activity)
Category
(transitional
activity)
Text
Thousa
nd EUR
%
Y; N; N/EL
Y;N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y/
N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
E
T
A. TAXONOMY ELIGIBLE ACTIVITIES
A.1. Environmental sustainable activities (Taxonomy-aligned)
Installation, maintenance and repair of energy
efficiency equipment
CCM7.3
1
0.05%
Y
N/EL
N/EL
N/EL
N/EL
N/EL
-
Y
-
Y
-
-
Y
0%
E
-
Production of heat/cool from bioenergy
CCM4.24
95
4.01%
Y
N/EL
N/EL
N/EL
N/EL
N/EL
-
Y
Y
Y
-
Y
Y
0%
-
-
OpEx of environmentally sustainable activities (Taxonomy-
aligned) (A.1)
96
4.07%
4.07%
0%
0%
0%
0%
0%
-
Y
Y
Y
Y
Y
Y
0%
Of which enabling
0.05%
0.05%
0%
0%
0%
0%
0%
-
Y
Y
Y
Y
Y
Y
0%
E
Of which transitional
0%
0%
-
Y
Y
Y
Y
Y
Y
0%
T
P
A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
66
EL; N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
Acquisition and ownership of buildings
CCM 7.7
1 147
48.67%
EL
N/EL
N/E
N/E
N/E
N/E
5.55%
Installation, maintenance and repair of energy
efficiency equipment
CCM 7.3
20
0.85%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0 %
Freight transport services by road
CCM 6.6
253
10.75%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
47.25%
Transport by motorbikes, passenger cars and light
commercial vehicles
CCM 6.5
61
2.59%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
1.36%
OpEx of Taxonomy-eligible but not environmentally
sustainable activities (not Taxonomy-aligned activities) (A.2)
62.85%
62.85%
0 %
0 %
0 %
0 %
0 %
56.74%
OpEx of Taxonomy-eligible activities (A.1+A.2)
66.92%
66.92%
0 %
0 %
0 %
0 %
0 %
56.74%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
OpEx of Taxonomy-non-eligible activities
780
33.08%
TOTAL (A+B)
2 357
100.00%
Explanation of Abbreviations:
Y – Yes, Taxonomy-eligible and Taxonomy-aligned activity with the relevant environmental objective;
N – No, Taxonomy-eligible but not Taxonomy-aligned activity with the relevant environmental objective.
N/EL – Not eligible, Taxonomy-non-eligible activity for the relevant environmental objective;
EL – Taxonomy-eligible activity for the relevant objective;
67
Activities related to nuclear energy and fossil gas
The group does not engage in taxonomy-eligible activities related to nuclear energy and fossil gas; however, it does conduct taxonomy-non-eligible
activities related to fossil gas, specifically the maintenance and repair expenses of its own gas boilers. The following information is disclosed in
accordance with Annex XII, templates 1 and 5, which apply to the disclosure of information about this activity. Templates 2–4 are not applicable.
Template 1. Nuclear and fossil gas related activities
Row
Nuclear energy related activities
1
The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity generation facilities that produce energy
from nuclear processes with minimal waste from the fuel cycle.
NO
2
The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce electricity or process heat, including for the
purposes of district heating or industrial processes such as hydrogen production, as well as their safety upgrades, using best available technologies.
NO
3
The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat, including for the purposes of
district heating or industrial processes such as hydrogen production from nuclear energy, as well as their safety upgrades.
NO
Fossil gas related activities
4
The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce electricity using fossil gaseous fuels.
NO
5
The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool and power generation facilities using fossil gaseous
fuels.
NO
6
The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation facilities that produce heat/cool using fossil gaseous fuels.
YES
68
Template 5. Taxonomy non-eligible economic activities
Row
Economic activities
Amount,
thousand Eur
Percentage
1
Amount and proportion of economic activity referred to in row 1 of Template 1 that is taxonomy-non-eligible in accordance with Section
4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
Not applicable
2
Amount and proportion of economic activity referred to in row 2 of Template 1 that is taxonomy-non-eligible in accordance with Section
4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
Not applicable
3
Amount and proportion of economic activity referred to in row 3 of Template 1 that is taxonomy-non-eligible in accordance with Section
4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
Not applicable
4
Amount and proportion of economic activity referred to in row 4 of Template 1 that is taxonomy-non-eligible in accordance with Section
4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
Not applicable
5
Amount and proportion of economic activity referred to in row 5 of Template 1 that is taxonomy-non-eligible in accordance with Section
4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
Not applicable
6
Amount and proportion of economic activity referred to in row 6 of Template 1 that is taxonomy-non-eligible in accordance with Section
4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
2,02
0.26%
7
Amount and proportion of other taxonomy-non-eligible economic activities not referred to in rows 1 to 6 above in the
denominator of the applicable KPI
791,30
99.74%
8
Total amount and proportion of taxonomy-non-eligible economic activities in the denominator of the applicable KPI
793,32
100%
69
SOCIAL PART
70
S1 OWN WORKFORCE
SBM-3 – Material impacts, risks, opportunities, and their interaction with the strategy and
business model
The material impacts and opportunities identified in the Double Materiality Assessment (DMA) are
summarised in the table in ETAS Chapter 2 SBM-3 – Material impacts, risks, opportunities, and their
interaction with the strategy and business model. No risks were identified. This section provides
additional information based on SBM-3 and other applicable requirements.
The Group’s activity contributes to positive and negative actual and potential impacts on employees.
The Group strategically pursues diversity beyond legal requirements, including disability inclusion
and gender quotas, thereby positively impacting employees. Additional training is provided to
enhance competence and motivation, based on the needs of employees and managers.
Occupational safety incidents are possible – workers could suffer both physical and psychological
negative effects if injured.
The Group is exposed to the identified significant impacts through its operations. The Group's
significant impacts are also directly linked to its business model and operational strategy, which
includes policies to promote diversity, inclusion of people with disabilities and gender quotas, as
well as employee development through training and competence building. These factors are
integrated into the organisation's operating principles and are considered part of the Group's long-
term success.
The Group's strategy and business model are closely linked to the significant opportunities arising
from exposure to and dependence on its workforce.
As a result of the opportunities identified, the Group does not foresee any material financial impact
in 2024 or in the near term that would require a material adjustment to the number of assets and
liabilities in the Group’s financial statements. The Group does not provide detailed information on
the strategy's overall financial impact and financial sources due to the phased disclosure option.
The Group did not perform a resilience analysis of its strategy and business model during the
reporting period, except for the analysis conducted as part of the double materiality assessment.
Significant impacts cover all employees, all of whom work in Lithuania. The Group's DMA showed
that workers in production, support and service departments, and transport, have the highest risk of
injury. Significant negative impacts are associated with isolated potential incidents.
In the case of a significant positive impact, everyone is allowed to participate in training, raising
competences and qualifications, thus contributing to their professional development, regardless of
the location or nature of the employee's job.
The positive impacts also create additional opportunities for the Group in terms of its workforce.
Trained employees are upskilled, the Group's performance improves, and its credibility as a supplier
improves. All the significant opportunities arising from the impact and dependence on the workforce
relate to all employees within the Group.
71
The Group has no significant impact on its workforce related to transition plans to reduce negative
environmental impacts and ensure climate neutral operations. In addition, the Group has not
identified any operations that could pose a significant risk of forced or compulsory labour and child
labour, either by type of operation or by country of operation.
The Group found that migrants from foreign countries who have residence permits in Lithuania, but
do not understand the language in which the work rules and instructions are written, may be at
greater risk of harm. This can hinder adaptation to the workplace, achieving agreed work results,
and pose a higher risk of workplace safety.
S1-1 – Policies related to own workforce
The Group has a number of policies relating to the significant sustainability issues related to its own
workforce and their management. The policies referred to apply to all employees of the Group.
The CEO is responsible for the implementation of all the following policies. The policy is available to
stakeholders through the internal document management system, at meetings or upon request to
the line manager or the HR department.
1. Occupational health and safety policy. The main objective of the policy is 0 (zero)
accidents at work and continuous improvement of working conditions.
All of the Group's structural units and divisions have a designated trained health and safety
employee or divisional employee responsible for the safety, health, and fire safety of the
employees in the division. They carry out regular risk assessments, control violation checks,
instruction of workers, while performing other functions to ensure the safety and health of
workers. The Group also has an Occupational Accident Prevention Policy.
2. Human rights policy. The policy covers aspects such as prohibiting child labour, preventing
forced labour, and equal opportunities. In developing and implementing this policy, the
Group is committed to complying with the provisions of the legislation in force within the
Republic of Lithuania, the International Bill of Human Rights, and the requirements of its
suppliers and/or clients.
The Group's policy towards its workforce is in line with internationally recognised
instruments, including the UN Guiding Principles on Business and Human Rights. The policy
is based on the key provisions of these principles.
The Group ensures the involvement of employees through the election of employee
representatives (Works Council), allowing them to express their views on a wide range of
issues relating to the working environment and conditions.
The Group uses various tools to monitor, prevent, or remedy human rights violations. This
includes the use of a Labour Council, microclimate surveys, and the establishment of
requirements and recommendations. The implementation of these initiatives helps to ensure
workers' rights and well-being.
72
3. Equal opportunities policy. This policy aims to eliminate discrimination, including
harassment, while promoting equal opportunities, and increasing diversity and inclusion.
The Group's policy covers all the grounds of discrimination listed: racial and ethnic origin,
sexual orientation, gender identity, disability, age, religion, political opinion, nationality,
social origin, and other forms of discrimination covered by European Union and national
legislation.
The Group has no specific policy commitments regarding inclusion, or affirmative action,
towards groups with exceptionally high vulnerability risks.
The Group implements policies to prevent and reduce discrimination and to address
identified cases. Employees can anonymously inform the Human Resources Department of
a possible incident of discrimination, thus ensuring transparency and an adequate response.
S1-2 – Processes for engaging with own workforce and workers’ representatives about
impacts
Most employees participate in these processes through their representatives. Representatives are
considered to be line managers. In addition, worker representatives are elected to the Occupational
Safety and Health Committee, which contributes to inclusiveness. Involvement is also carried out
through workers' participation in microclimate surveys or other surveys as well as through
information and communication.
There is no regular involvement - it occurs on an as-needed or situation-specific basis. Involvement
occurs at certain stages of a project, for example, during an apprenticeship or mentoring project,
through participation, and outreach. Such processes can only take place with the approval of the
Director-General.
The Group assesses the effectiveness of its own workforce engagement based on various indicators,
such as the results of microclimate surveys. These surveys allow the progress of employee
engagement to be monitored and areas for improvement to be identified. They also seek to learn
about the views of particularly vulnerable or marginalised groups within the workforce, such as
women, migrants, or people with disabilities. These tools help to assess their experiences and
identify potential areas for improvement.
The Group has processes in place for engaging its own workforce but does not currently have formal
procedures in place to implement them.
S1-3 – Processes to remediate negative impacts and channels for own workforce to raise
concerns
The Group's overall approach is to seek to ensure an effective response to potential and actual
impacts on its own employees to whom it has contributed or with whom it is associated. To this end,
processes have been established to manage significant sustainability issues, which all employees
are required to follow. For example, the standard of procedures - Personnel Management (PR-03),
defines the processes by which the Company invests in the development and competences of its
employees in various areas in order to increase their motivation and empower them to do their job
even better.
73
Feedback boxes have been introduced internally. They provide a direct channel for the workforce
to express concerns or needs. The purpose of these boxes is communicated to the workforce during
induction training on the first day of employment.
The Group has a grievance mechanism for reporting and dealing with employee issues. The internal
document management system, notice boards, displays in public areas, and managerial
communication to employees, are used to ensure that these channels are available to employees.
Employees are also informed during induction training on their first day of employment.
Although there is no separate policy on protection from retaliation, this is partly covered by the
Violence and Harassment Prevention Policy, which guarantees the complainants’ anonymity.
Issues raised and resolved are monitored through dialogue with complainants, maintaining
anonymity where necessary, and aligning with existing internal policies. This process helps to ensure
the effectiveness of communication channels.
S1-4 – Taking action on material impacts on own workforce, and approaches to managing
material risks and pursuing material opportunities related to own workforce, and
effectiveness of those actions
The Group uses various tools to manage material sustainability issues without specific policies,
except for human rights issues.
1. Safety and health. The Group has preventive measures, including systematic risk
assessment, employee training, and strengthening of control mechanisms. This ensures the
safety of the working environment and the well-being of employees while improving the
organisation's resilience to risks.
The Group has established an Occupational Safety and Health Service consisting of
occupational safety and health specialists to implement key measures.
To prevent injuries and adverse physical effects, the Group conducts regular occupational
risk assessments of its workplaces, while organising employee briefings and training, as well
as carrying out internal controls. Psychosocial risk assessments help to prevent psychological
adverse effects. All employees are covered by accident insurance, providing financial
protection and support in the event of an accident.
2. Education. All Group employees can improve their knowledge and skills in person or
remotely through internal and external training, courses, seminars, conferences or
exhibitions. In 2024, training was organised on time planning and management, the art of
negotiation, development of the managerial reserve, training for mentors and coaches, as
well as delegation and enforcement training.
74
3. Human rights. The Group implements a Human Equal Rights Policy and anti-discrimination
measures to ensure equal opportunities for all employees. During the reporting year, the
following key actions were implemented:
• Selection and recruitment, regardless of age, gender, race, or other discriminatory
factors.
• A transparent pay system, where pay is determined by job title, without gender or
other distinctions.
• Monitoring the distribution of men and women to ensure gender equality within the
organisation.
• A training programme on violence and harassment prevention is approved and
implemented.
All of the above actions apply to all employees of the Group, regardless of their job title or work
location. These measures are implemented in all the Group's areas of activity and in the
geographical areas in which it operates.
Training on violence and harassment prevention will be implemented in 2025. Other key actions,
such as fair selection, a transparent pay system, and monitoring of gender distribution are ongoing
processes with no fixed end date.
The Group pursues these objectives and implements related actions:
75
• Assessing employee job satisfaction to evaluate and improve working conditions.
• Monitoring of actual results, such as employee recommendations to new colleagues in
return for a fixed monetary incentive.
• A safe and continuously improving working environment.
• Fair pay.
• To support physical health, a range of health improvement offers from partners.
• Employee involvement and feedback through an open dialogue with the organisation.
No actual negative impacts were recorded during the reporting period. As this is the first time
reporting under ETAS, there is no information on the progress of implementation of actions
disclosed in previous reporting periods.
Internal resources are currently being used to implement the actions and no additional financial
resources are foreseen in 2025 for the implementation of the disclosed actions.
The Group monitors and evaluates the effectiveness of actions and initiatives on the basis of the
following indicators:
• Increase in employee job satisfaction.
• No cases of discrimination or violation of equal rights.
These indicators help to quantify the impact of the measures and ensure that they effectively
contribute to a positive working environment.
The Group determines what action to take in response to actual or potential negative impacts on its
workforce, based on the complaints received, if any, the issues raised and changes in the legislation
of the Republic of Lithuania.
The Group ensures that its practices do not have an material negative impacts on its own workforce.
One of the measures is the strict adherence to working hours in order to avoid employee fatigue,
which can lead to mistakes or accidents.
The Group allocates different resources to managing significant impacts, involving different levels
of management. Top management develops strategies related to working conditions and employee
well-being, while department heads are responsible for communication and employee
development. The Works Council assesses the impact of change across the business.
S1-5 – Targets related to managing material negative impacts, advancing positive impacts,
and managing material risks and opportunities
In terms of the impacts and opportunities identified, the Group's main qualitative goal today is to
increase the dissemination and access to information among its employees. The Group does not
have measurable results-oriented targets but plans to set them during 2025.
The Group monitors the effectiveness of its policies and actions in relation to significant
sustainability-related impacts, risks, and opportunities. This is done through employee job
76
satisfaction surveys and questionnaires. The aim is to increase the job satisfaction rate by 5-10%.
Progress will be measured between May 2024 and May 2025. The survey will cover 500 employees.
As a general procedure, the Group's own workforce and employee representatives are involved in
the target-setting process. Employee representatives are involved in agreeing the strategy or
objectives, and employees can express their views on a range of issues through surveys, including
anonymous responses. The Group monitors its performance against the targets set. The Group's
half-year and annual results are publicly available.
S1-6 – Characteristics of the undertaking’s employees
Information on the Group's employees is presented in Tables 17, 18, 19, 20.
Table 17. Employee breakdown by gender in 2024
Gender
Number of employees
Male
804
Female
676
Other
N/A
Not reported
N/A
Total Employees
1,480
Note. The actual total number of employees of the Group at the end of the reporting period (31.12.2024),
without considering the full-time equivalent worked, is presented. Information on the gender breakdown of the
number of employees is also disclosed in the Company's financial statements on page 23 of the Annual
Report.
Table 18. Employee breakdown by gender and by employment contract in 2024
Category
Number of employees (by gender)
FEMALE
MALE
OTHER
(*)
NOT DISCLOSED
TOTAL**
Number of employees
676
804
N/A
N/A
1,480
Number of permanent
employees
630
755
N/A
N/A
1,385
Number of temporary
employees
46
49
N/A
N/A
95
77
Number of non-guaranteed
hours employees
0
0
N/A
N/A
0
Notes: *Gender as self-reported by employees.
** The actual total number of employees in the Group at the end of the reporting period (31.12.2024), without
considering the full-time equivalent worked, is shown. During the reporting period, only Žemaitijos pienas had
temporary employees.
Table 19. Employee breakdown by region and by employment contract in 2024
Category
Number of employees (by region)
Vilnius
Kaunas
Panevėžys
Telšiai
Šilutė
TOTAL
Number of employees
54
47
43
1,171
165
1,480
Number of permanent
employees
54
46
43
1,077
165
1,385
Number of temporary
employees
0
1
0
94
0
95
Number of non-guaranteed
hours employees
0
0
0
0
0
0
Notes: based on end-of-period data (31.12.2024)
78
Table 20. Employee turnover in 2024
Group company
Employees who left or were made redundant*
Rate of employee
turnover**
Žemaitijos pienas
146
11%
Šilutė rambynas
38
23%
Total
184
12%
Note: *The aggregate of the number of employees who left voluntarily or due to dismissal, retirement, or death
in service.
** Number of resignations or redundancies (by number of employees) divided by total number of employees
(by number of employees).
The employee turnover rate has remained stable for several years and is considered positive. By
analysing the causes of turnover and comparing it with the performance of similar companies in
similar activities or geographical locations, the company provides favourable working conditions
that encourage employees to stay with the organisation and reduce turnover.
S1-7 – Characteristics of non-employees in the undertaking’s own workforce
In 2024, the Group did not have any non-employees classified as its own workforce. In determining
the disclosure, the definition of non-employees is that non-employees are either self-employed
persons who have entered into service contracts with the Group's entities, or persons who are
provided by entities principally engaged in recruitment activities.
S1-8 – Collective bargaining coverage and social dialogue
The Group does not have by a collective agreement and therefore the percentage of salaried
employees covered by a collective agreement is 0%.
S1-9 – Diversity metrics
Table 21. . Gender Distribution at Top Management Level in 2024
Category
Gender distribution at top management level
Number
Percentage
Male
7
50
Female
7
50
Total
14
100
Note: The definition of top management used is the one used in the Group’s internal documents, i.e. the highest
level of management, including the members of the Board.
79
Table 22. Distribution of Employees by Age Group in 2024
Number of employees
Percentage of total employees
Under 30 Years Old
183
12
30-50 Years Old
719
49
Over 50 Years Old
578
39
Total
1,480
100
S1-10 – Adequate wages
All employees within the Group are paid a fair wage in accordance with their contractual obligations
and existing laws.
S1-11 – Social protection
All employees in the Group are covered by social protection against loss of income in the event of
sickness, either through public programmes or through benefits offered by the company. The
Company complies with the requirements of the Labour Code of the Republic of Lithuania and other
legal acts regarding the social security coverage of employees.
S1-13 – Training and skills development metrics
Table 23. Percentage of employees that participated in regular performance and career development reviews in
2024
Category
Percentage of employees that participated in regular
performance and career development reviews
Total, out of which:
91
Male
85
Female
97
80
Table 24. Average number of training hours per employee and by gender in 2024
Kategorija
Average number of training hours per employee
Total, out of which:
3.65
Male
3.06
Female
4.38
S1-14 – Health and safety metrics
All employees are covered by the Group's health and safety management system based on national
legal requirements. Information on incidents related to the health of the Group's employees is
presented in Table 25.
Table 25. Health and safety indicators for 2024
Employees of the Group:
Number of deaths due to work-related injuries and work-related ill health
0
Number of work-related accidents to be recorded
8
Total annual hours worked by all employees
508,199
Recordable work-related accident rate
15.74
Number of recordable work-related health problems
0
Number of working days lost due to work-related injuries and deaths due to accidents at
work, work-related health disorders, and deaths due to health disorders
602
Non-employees classified as own labour:
Number of working days lost due to work-related injuries and deaths due to accidents at
work, work-related health disorders, and deaths due to health disorders
81
S1-16 – Remuneration metrics (pay gap and total remuneration)
Table 26. Gender pay gap, %
Year
Gender pay gap for all employees, %*
2024
14
*Formula used to calculate the gender pay gap: (Average hourly earnings before tax of male employees -
Average hourly earnings before tax of female employees) / Average hourly earnings before tax of male
employees 𝑥 100
Table 27. Total remuneration ratio
Year
Ratio of total annual remuneration for the highest
paid person to the average total annual
remuneration for all employees (excluding the
highest paid person)*
2024
3/1
*Formula used to calculate the total remuneration ratio: Annual total remuneration of the highest paid person
in the company / Average annual total remuneration of salaried employees (excluding the highest paid person)
S1-17 – Incidents, complaints, and severe human rights impacts
During the reporting period, there were no incidents of discrimination, including harassment,
recorded within the Group. Also, there were no complaints received through established channels.
No fines, penalties, or compensation for damages were imposed as a result.
In the area of human rights, no significant incidents involving the Group's workforce have been
identified and no fines, penalties, or compensation have been applied.
.
82
GOVERNANCE INFORMATION
83
G1 BUSINESS ETHICS
SBM-3 – Material impacts, risks, opportunities, and their interaction with the strategy and
business model
The Double Materiality Assessment (DMA) has identified significant risks, which are summarised in
the Double Materiality Assessment Table in ETAS 2 SBM-3 – Material impacts, risks, opportunities,
and their interaction with the strategy and business model. No impacts and opportunities were
identified. The DMA was carried out for the first time and is therefore not comparable to the previous
period. This section provides additional information based on SBM-3 and other applicable
requirements.
The Group's risks related to suppliers' non-compliance with environmental and social criteria can
adversely affect its business model, value chain and decision-making. This can lead to reputational,
financial and legal losses, supply disruptions and higher costs if a switch to more sustainable
suppliers is required. To mitigate these risks, the Group can introduce more stringent supply chain
verification mechanisms, conduct supplier audits, promote sustainable solutions and invest in
supplier training to ensure compliance with environmental and social standards.
The Group's operations may also be materially affected by risks related to corrupt practices and non-
compliance with animal welfare standards in the value chain. Corrupt practices can damage the
company's reputation, lead to legal and financial losses and reduce stakeholder confidence.
In the Group's value chain, failure to comply with animal welfare standards can have a significant
impact on the business model, reputation and supply chain. Non-compliance can lead to negative
public and customer reactions, diminishing brand equity and customer loyalty. In addition,
reputational risks can lead to financial losses, increased costs for reputational recovery and reduced
revenues. Supply chain risks arise from potential supply disruptions when suppliers lose certification
or do not meet requirements.
In order to manage these risks, the Group carries out regular farm audits - all new suppliers are
audited before the start of their cooperation and existing suppliers are assessed every three years.
Training is also provided to suppliers and staff to raise awareness of animal welfare standards. The
Group promotes transparency by publicising its actions and achievements in this area, thereby
building customer trust and increasing accountability throughout the value chain.
The assessment has not identified any material risks and opportunities that currently have a material
financial impact on the Group's financial position, performance, or cash flows. No significant risks
and opportunities that could result in a material adjustment to the number of assets and liabilities
within the Group’s financial statements for the next annual reporting period have been identified.
The Group does not currently have a validated strategy and business model resilience analysis for
the risks identified in this topic. These risks have been assessed and analysed to the extent that they
involve were involved in the assessment of double materiality.
84
G1-1 – Business conduct policies and corporate culture
The Group has adopted the following documents and measures to manage significant business
ethics issues and to promote the Group's corporate culture, which include:
• Code of Conduct – sets out basic principles of conduct, transparency, and integrity.
Ethics and work culture are ensured by continuously improving working conditions and
internal communication, and by promoting employee engagement. Information is
provided to employees on demand, including through reports, meetings or surveys.
• Whistleblowing procedures – allowing anonymous reporting of possible
infringements.
• Violence and harassment prevention policy - to ensure a safe working environment,
free from discrimination or abuse.
• Human Rights Policy – embeds a commitment to respect and protect human rights in
all activities. It also adheres to the Group's core values of integrity, transparency,
diversity and equality, and its responsibility for quality.
• Anti-corruption policy – sets out measures and mechanisms to reduce the risk of
corruption.
• Code of Conduct for Responsible Business – regulates responsible business practices
to achieve social and environmental responsibility.
• Equal opportunities policy – ensuring equal opportunities for all employees,
regardless of gender, age, nationality, or other differences.
• A fair and non-discriminatory reward system – which supports the motivation and
well-being of staff, including annual awards for top performers, a continuously
improving working environment, events, wellness programmes, training and
development.
The implementation of these documents and measures is continuously monitored to ensure their
effectiveness and compliance with the Group's values and legal requirements.
The Group ensures whistleblower protection through an approved reporting channel and clearly
defined whistleblowing and complaint handling procedures. In addition, internal whistleblowing
systems for whistleblowers are in place across the Group and are publicly available. All employees
are made aware of the reporting procedures during their initial induction training.
The Group guarantees the protection of whistleblowers from retaliation by ensuring their anonymity
in accordance with the applicable legislation, implementing Directive (EU) 2019/1937 of the
European Parliament and the Council. The Group has an approved whistleblower protection policy
and has established procedures for the prompt, independent and objective handling of business
ethics incidents, which includes corruption and bribery.
Business ethics training is available on request.
The Group does not have an animal welfare policy.
85
G1-2 – Management of relationships with suppliers
The Group has no specific policy to prevent late payments, particularly for SMEs. However, the
Group adheres to fair business practices and ensures timely supplier payments.
The Group has a coherent supplier management strategy to minimise supply chain risks and ensure
compliance with sustainability principles.
• Supplier evaluation and audit. Risk assessments are carried out before the contract is
signed and reviewed annually. Suppliers shall complete an approved "Supplier
Assessment" form and an "Audit Questionnaire" during periodic audits.
• Improving supplier performance. Both staff and suppliers are encouraged to improve
continuously. Procurement procedure documents are updated, suppliers are evaluated
on quality and other relevant indicators, feedback is given, and seminars and training
are organised.
• Principles of responsible business. The Group adheres to a "Responsible Business
Code", which includes human rights, environmental protection, and responsible
business principles. This code is publicly available online and sent to suppliers when
they sign a contract with the company.
• Supplier diversification and monitoring. Keeping the list of suppliers up to date. The
Group works with a wide range of suppliers, but carries out a thorough risk assessment,
monitors supplier performance, conducts audits, and has clear contracts. Diversification
of sources of supply is also undertaken.
• Ensuring stability of supply. The Group aims to develop long-term supplier
relationships and provide supply chain stability. Periodic audits verify the quality of
goods received.
• Supplier evaluation system. The evaluation is carried out on a 100-point system - if a
supplier scores less than 70 points, it cannot supply goods or raw materials to the group.
Conclusions and feedback follow the audit.
• Specifics of milk supply. Long-term contracts are signed with milk producers to ensure
the continuity of raw material supply. The producer must give 30 days' notice of
termination. Sanctions provided for milk sales contracts are also applicable. Milk
producers are regularly visited and festivals and seminars are organised.
This strategy enables the Group to manage its supply chain efficiently, ensure quality, and minimise
supply risks.
The Group considers social and environmental criteria when selecting suppliers. Preference is given
to suppliers that ensure a sustainable supply chain and meet social responsibility standards.
G1-3 – Prevention and detection of corruption and bribery
The Group has adopted a Corruption Prevention Policy, which sets out procedures to prevent,
detect, and respond to allegations or incidents of corruption and bribery. Investigators or the
86
Investigation Committee are separated from the various levels of management involved in the area
in question.
The Group's job roles which carry the highest risk of corruption and bribery are: purchasing
manager, finance director, as well as the sales and marketing director. Reporting results to
administrative, management, and supervisory bodies is carried out in accordance with established
internal procedures through minutes and internal orders.
The Group shall ensure its policies are accessible and understandable to all stakeholders.
Employees are informed of the company's policy through internal processes, while social partners
are informed through contracts.
The Group does not provide anti-corruption and anti-bribery training.
During the reporting period, the Group did not receive any convictions for breaches of anti-
corruption and anti-bribery laws, nor were any fines imposed.
G1-4 – Incidents of corruption or bribery
In 2024, there were no convictions against the Group for breaches of anti-corruption and anti-bribery
laws. No fines have been imposed on the Group for such offences. As a result, no anti-corruption
and anti-bribery actions have been taken to address the breaches.
In 2024, the Group was not found guilty of any breaches of anti-corruption and anti-bribery
legislation. The Group has also not been found guilty of bribery of foreign officials in international
business transactions.
G1-6 – Payment practices
The Group pays invoices over different periods depending on the nature of the supply. The payment
period for the main raw material, milk, is 15 days. The average time to pay other invoices (excluding
raw milk) is 35.5 days.
The Group's standard payment terms vary depending on the supplier category. Raw milk is subject
to a standard payment term of 15 days. For the other main categories of suppliers, which account
for 18% of total invoices (excluding raw milk), the payment term is 54 days. The remaining 80% of
invoices (excluding raw milk) are settled within 31 days. There are no exclusions or other conditions
related to SMEs.
The Group currently has no pending legal proceedings for late payments.
To calculate the average time to pay invoices, invoices for the most important categories received
during the reference period (excluding raw milk invoices) were analysed. The methodology applied
is based on the summation of the total days of payment and dividing by the total number of invoices
(excluding raw milk).
87
PRODUCT SAFETY AND QUALITY
SBM-3 – Material impacts, risks, opportunities, and their interaction with the strategy and
business model
The double materiality assessment has identified food safety as the primary risk in the Group's
operations. A key concern is the potential introduction of foreign matter into products, including
wood, plastic, metal, or glass fragments, each of which poses a significant threat to consumer health
and carries reputational and financial risks for the Group. Additionally, failure to ensure proper
pasteurization of the primary raw material could compromise product safety, adversely affecting
consumer health and leading to reputational and financial repercussions. Furthermore, the presence
of undeclared allergens, particularly peanuts, poses a serious health risk to consumers with allergies,
with potential economic and reputational consequences for the Group.
Accordingly, the Group has identified opportunities to strengthen product safety and quality by
acquiring new equipment in production units and, accordingly, by informing consumers about
allergens and traces of allergens in products.
This is also relevant to potential customer product safety and compliance complaints. Particular
attention is paid to the accuracy of labelling information, particularly the explicit declaration of
allergens and possible traces of allergens, to ensure consumer safety and compliance with
legislation.
All identified risks are summarised in table 3 Material impacts, risks and opportunities; no significant
impacts were identified. This section provides additional information based on SBM-3 and other
applicable requirements. The DRV was carried out for the first time and is therefore not comparable
to the previous period. This section provides additional information based on SBM-3 and other
applicable requirements.
Product safety and quality issues can significantly impact the Group's business model, leading to
loss of customer confidence, reputational damage, and financial losses.
The primary raw material, milk, is pasteurised to ensure product safety and the final products are
subjected to safety testing. In addition, allergenic ingredients are used in the production process,
and all potential allergens are declared on the label to ensure consumer awareness and safety.
Risk management measures must be considered to ensure that products meet the highest safety
standards. In response to these risks, the Group continuously improves product safety and quality
by investing in new production equipment and implementing preventive measures. Metal detectors
and X-Ray equipment detect possible foreign bodies in products.
Allergens are related to the Group's core business as milk is classified as an allergenic or intolerant
food. In addition, the Group has implemented and approved an add-on to its HACCP programme,
Allergen Management. This action helps to accurately identify and control the presence of allergens
in products, ensuring that they are declared in labelling information. Priority is given to ingredients
with no traces of allergens. However, if the ingredient is an allergen, all the necessary information is
provided in the product's labelling to ensure consumer awareness and safety.
88
The assessment has not identified any material risks and opportunities that already have a material
financial impact on the Company's financial position, results of operations, or cash flows. Significant
risks and opportunities that could result in a material adjustment to assets and liabilities in the
financial statements for the next annual reporting period have not been identified. Compared to the
previous reporting period, in 2023-2024, the Group did not receive any substantiated claims for
customer health problems related to foreign objects (wood, glass, plastic, metal) or allergens in food
products. There have also been no substantiated product safety complaints from customers or
regulatory authorities and no product recalls.
From the financial perspective, the main risk when a foreign body is detected in food is reputational
damage, which can lead to a loss of consumer confidence and have a negative impact on sales and
overall financial results.
In addition, product quality problems or undeclared allergens could lead to consumer complaints,
which would further affect the Group's image and market position. These risks can affect both short-
term sales and long-term brand perception at the consumer level.
The Group's strategy and business model are resilient in the face of significant impacts and risks.
Each year, "Food Safety and Quality Targets" are adopted, with a target of 0 substantiated consumer
complaints. The achievement of the targets is assessed quarterly and reports are produced.
In addition, an annual assessment is carried out to determine whether the corrective measures taken
have been effective, i.e. whether claims have been repeated. The "Food Safety and Quality
Objectives" also include investments to improve product safety and quality - the implementation of
which is monitored quarterly.
Policies MDR-P – Policies adopted to manage material sustainability matters
The Group has an approved and regularly updated "Company Policy on Glass, Plastic, Metal, Wood,
" ensuring that production processes meet the highest safety standards.
The Group has developed and adopted other documents/policies to manage significant
sustainability issues related to food safety and quality:
• Annex A - "The Company's policy on glass";
• Annex B - "The Company's metal policy";
• Annex C - "Company policy on plastics";
• Annex D - "Company policy on wood and ceramics"
The aforementioned policies outline the use of equipment and tools made from relevant materials
in production. Each policy will specify management and control measures to maintain the current
standards while also committing to replacing such materials, where feasible, with alternatives less
likely to become foreign bodies. Policy reviews are conducted annually or more frequently if
changes occur.
• Annex to the HACCP programme - "Allergen management". This document specifies
the management of allergenic ingredients (segregation, use, handling, frequency of
89
testing, etc.). The purpose of the document is to ensure that allergenic products do not
present a risk of cross-contamination to other products.
• "Quality and Food Safety Policy" discusses the implementation of investments through
the prism of food safety and quality. The policy assesses how the Group's investments
contribute to achieving the "Food Safety and Quality Culture Policy" indicators.
There are also control schemes for products and ingredients, which set out the testing frequency.
Tests are carried out on both intermediate and final products, as well as the production environment
(surfaces, effluents, water, etc.). This ensures the ultimate effectiveness for contamination control.
Group policies apply without exception. The safety and quality of products comply with the criteria
set out in the legislation. In the event of any non-compliance, the actions set out in the procedures
are applied to ensure compliance and the safety of consumers.
The General Director is responsible for implementing the policies at the highest level.
The Group adheres to the following third country standards and initiatives to ensure food safety and
quality:
• Global Food Safety Standard (BRCGS)
• International Food Safety Standard (IFS)
• ISO 22000 Food Safety System (FSSC 22000)
• Halal certification
• Certification according to Kosher requirements
• Organic Food Certificate
• Rainforest Alliance Certificate
• Additional requirements for retail chains
Šilutės Rambynas additionally complies with:
• BRCGS certificate
• FSSC 22000 certification
• Halal certificate
• Certificate of organic production
Policy-making considers all consumers' interests to ensure food safety, quality, and compliance with
EU and individual market legislation.
All new wmployees are made aware of the policy by signing it.
In addition, annual training sessions are organised for staff to remind them of key aspects of the
policies, including:
• Consumer exposure to allergens,
• Proper use of chemicals and disinfectants,
• Proper waste sorting and environmental requirements.
90
Actions MDR-A – Actions and resources in relation to material sustainability matters
In pursuing its policy objectives, the Group takes the following actions:
• 100% inspection of all products produced with foreign object detection equipment.
• Analysis of ingredients to ensure their safety and quality.
• Ingredients are purchased from approved suppliers only.
• Continuous monitoring of products and the production environment through testing in
independent and accredited laboratories.
The scope of the key actions covers the entire production process, ensuring product safety and
quality:
• Foreign body control: filters, sieves, foreign body detection equipment.
• Allergen control: cross-contamination and trace allergen testing.
• Ensuring product safety and quality: tests are carried out in accordance with approved
control schemes, in collaboration with independent and accredited laboratories.
• Staff training: regular training, covering proper use of chemicals and waste
segregation.
Control activities are carried out continuously to ensure the highest food safety and quality
standards. To meet food safety and quality objectives, investments are approved annually and
evaluated quarterly.
HACCP (Hazard Analysis and Critical Control Point) actions are continuously carried out to avoid
potential product non-compliance and to reduce the risk of consumers falling into the affected
group. The tests provided in the control schemes are also regularly carried out, monitored, and
evaluated to ensure food safety and quality.
The implementation of food safety and quality objectives is continuously evaluated and analyzed.
Environmental and product safety test results are regularly monitored to ensure ongoing oversight,
identify necessary improvements, and enhance overall food safety performance.
Food safety and quality objectives are developed in the context of the investments planned for the
period concerned. Implementing the investments and the Food Safety and Quality Objectives is
evaluated quarterly, ensuring continuous monitoring. Examining and evaluating product and
environmental test results is also done to maintain high food safety standards.
The approved Investment Plan identifies the amount allocated to each planned activity and relates
it to the investments in food safety and quality reported in the financial statements.
Targets MDR-T – Tracking effectiveness of policies and actions through targets
The Group has set the following food safety and quality objectives:
• 0 substantiated claims per month - all claims that are captured from different delivery
channels are to be analysed.
• 0 product recalls - if any such recalls occur, they would be recorded in the RASFF
system.
91
• Meet the requirements of international GFSI-recognised standards and trade networks
- certification processes are continuously aligned with vendors to meet market needs.
• Improving the production process and technology, saving costs - periodic monitoring
and evaluation of the test results is carried out and the data is recorded in a quarterly
monitoring table.
• Monitoring and evaluation of the results of periodic tests.
These targets are evaluated monthly, quarterly and annually to ensure continuous process
improvement and compliance with the highest standards.
The significant issues identified are directly related to the Group's core dairy product production
business. The scope of the objectives covers all the products the Group puts out and their value
chain.
Geographical coverage - all locations and markets where the Group's products are distributed.
Consumer complaints have been recorded for over 15 years, allowing them to speak directly to an
employee. Consumer feedback is constantly evaluated and considered in decisions on product
improvements.
• No product recalls were made in 2024.
• In 2024, the company was additionally certified by the Rainforest Alliance.
• Other GFSI certifications have been passed and certification processes continue.
The objectives are based on:
• Consumer and customer surveys - to continuously monitor their views on product
quality and safety.
• Evaluation of certification processes - capturing the number of observations identified
during certification, as well as the changes in those observations.
• Quarterly monitoring of cost savings implementation - analysing the savings achieved
by optimising production processes.
These approaches are aligned with national, EU, and international requirements, considering the
principles of sustainable development and the specificities of the local market.
The high certification rating (IFS 99.09% top level / BRC AA+) confirms an adequate food safety
and quality system that ensures consumer confidence in the company's products. Process
optimisation and cost savings are measured both in monetary terms and raw material savings
compared to previous periods.
As one of the key stakeholders, consumers provide continuous feedback on the quality of the
company's products. This feedback helps shape the company's objectives, including targets of 0
monthly substantiated complaints and 0 product recalls.
An analysis of the significant environmental risk factors regarding food safety and quality has
resulted in control charts with planned tests and their periodicity. The results of the investigations
are continuously monitored, analysed, and evaluated to ensure the effectiveness of policies and
actions.
92
Minimum disclosure requirement – Metrics MDR-M – Metrics in relation to material
sustainability matters
All indicators used to assess performance and effectiveness in relation to significant impacts, risks,
or opportunities, and the methodologies for measuring them, are described in MDR-T.
External bodies have validated the indicators: the State Food and Veterinary Office (SVVT) and the
certification agencies that issue the relevant certificates.
The indicators are not measured in monetary terms.
93
ESRS index table
Applicable ESRS Sector
Not available
ESRS 2 General Disclosures
Disclosure Requirement
Page
1. Basis for preparation
BP-1
General basis for preparation of sustainability statements
xx
BP-2
Entities included in the organisation's sustainability
reporting
xx
2. Governance
GOV-1
The role of the administrative, management and
supervisory bodies
xx
GOV-2
Information provided to and sustainability matters
addressed by the undertaking’s administrative,
management and supervisory bodies
xx
GOV-3
Integration of sustainability-related performance in
incentive schemes
xx
GOV-4
Statement on due diligence
xx
GOV-5
Risk management and internal controls over sustainability
reporting
xx
3. Strategija
SBM-1
Strategy, business model and value chain
xx
SBM-2
Interests and views of stakeholders
xx
SBM-3
Material impacts, risks and opportunities and their
interaction with strategy and business model
xx
94
4. Impact, risk and opportunity management
4.1 Disclosures on the materiality assessment process
IRO-1
Description of the process to identify and assess material
impacts, risks and opportunities
xx
IRO-2
Disclosure Requirements in ESRS covered by the
undertaking’s sustainability statement
xx
4.2 Minimum disclosure requirement on policies and actions
MDR-P
Policies adopted to manage material sustainability
matters
xx
MDR-A
Actions and resources in relation to material sustainability
matters
xx
5. Metrics and targets
MDR-M
Metrics in relation to material sustainability matters
xx
MDR-T
Tracking effectiveness of policies and actions through
targets
xx
Environmental topics
ESRS E1 Climate Change
Governance
E1 GOV-3
Integration of sustainability-related performance in
incentive schemes
xx
Strategy
E1-1
Transition plan for climate change mitigation
xx
E1 2 SBM-3
Material impacts, risks and opportunities and their
interaction with strategy and business model
xx
Impact, risk and opportunity management
E1 IRO-1
Description of the processes to identify and assess
material climate-related impacts, risks and opportunities
xx
95
E1-2
Policies related to climate change mitigation and
adaptation
xx
E1-3
Actions and resources in relation to climate change
policies
xx
Metrics and targets
E1-4
Targets related to climate change mitigation and
adaptation
xx
E1-5
Energy consumption and mix
xx
E1-6
Gross Scopes 1, 2, 3 and Total GHG emissions
xx
E1-7
GHG removals and GHG mitigation projects financed
through carbon credits
xx
E1-8
Internal carbon pricing
xx
E1-9
Anticipated financial effects from material physical and
transition risks and potential climate-related opportunities
xx
ESRS E3 Water and marine resources
Impact, risk and opportunity management
E3 IRO-1
Description of the processes to identify and assess material
pollution-related impacts, risks and opportunities
XX
E3-1
Policies related to water and marine resources
xx
E3-2
Actions and resources related to water and marine
resources policies
xx
96
E3-3
Targets related to water and marine resources
xx
E3-4
Water consumption
xx
ESRS E4 Biodiversity and ecosystems
Strategy
E4-1
Transition plan and consideration of biodiversity and
ecosystems in strategy and business model
xx
E4 SBM-3
Material impacts, risks and opportunities and their
interaction with strategy and business model
xx
Impact, risk and opportunity management
E4 IRO-1
Description of processes to identify and assess material
biodiversity and ecosystem-related impacts, risks and
opportunities
xx
E4-2
Policies related to biodiversity and ecosystems
xx
E4-3
Actions and resources related to biodiversity and
ecosystems
xx
Metrics and targets
E4-4
Targets related to biodiversity and ecosystems
xx
E4-6
Anticipated financial effects from biodiversity and
ecosystem-related impacts, risks and opportunities
The information is not
disclosed, utilizing the
option for phase-in
disclosure.
ESRS E5 Resource use and circular economy
Impact, risk and opportunity management
97
E5 IRO-1
Description of the processes to identify and assess
material resource use and circular economy-related
impacts, risks and opportunities
xx
E5-1
Policies related to resource use and circular economy
xx
E5-2
Actions and resources related to resource use and
circular economy
xx
Metrics and targets
E5-3
Targets related to resource use and circular economy
xx
E5-4
Resource inflows
xx
E5-5
Resource outflows
xx
E5-6
Anticipated financial effects from resource use and
circular economy-related impacts, risks and opportunities
The information is not
disclosed, utilizing the
option for phase-in
disclosure.
Social topics
ESRS S1 Own workforce
Strategy
S1 SBM-2
Interests and views of stakeholders
xx
S1 SBM-3
Material impacts, risks and opportunities and their
interaction with strategy and business model
xx
Impact, risk and opportunity management
S1-1
Policies related to own workforce
xx
S1-2
Processes for engaging with own workers and workers’
representatives about impacts
xx
S1-3
Processes to remediate negative impacts and channels
for own workers to raise concerns
xx
98
S1-4
Taking action on material impacts on own workforce, and
approaches to mitigating material risks and pursuing
material opportunities related to own workforce, and
effectiveness of those actions
xx
Metrics and targets
S1-5
Targets related to managing material negative impacts,
advancing positive impacts, and managing material risks
and opportunities
xx
S1-6
Characteristics of the undertaking’s employees
xx
S1-7
Characteristics of non-employee workers in the
undertaking’s own workforce
xx
S1-8
Collective bargaining coverage and social dialogue
xx
S1-9
Diversity metrics
xx
S1-10
Adequate wages
xx
S1-11
Social protection
xx
S1-12
Persons with disabilities
The information is not
disclosed, utilizing the
option for phase-in
disclosure.
S1-13
Training and skills development metrics
xx
S1-14
Health and safety metrics
xx
S1-15
Work-life balance metrics
The information is not
disclosed, utilizing the
option for phase-in
disclosure.
S1-16
Compensation metrics (pay gap and total compensation)
xx
S1-17
Incidents, complaints and severe human rights impacts
xx
99
Governance topics
ESRS G1 Business Conduct
Governance
G1 GOV-1
The role of the administrative, supervisory and
management bodies
xx
Impact, risk and opportunity management
G1 IRO-1
Description of the processes to identify and assess
material impacts, risks and opportunities
xx
G1-1
Corporate culture and Business conduct policies and
corporate culture
xx
G1-2
Management of relationships with suppliers
xx
G1-3
Prevention and detection of corruption and bribery
xx
Metrics and targets
G1-4
Confirmed incidents of corruption or bribery
xx
G1-6
Payment practices
xx
100
List of datapoints in cross-cutting and topical standards that derive from other EU
legislation
This appendix is an integral part of the ESRS 2. The table below illustrates the datapoints in ESRS 2 and topical ESRS that derive from other EU
legislation.
Requirement and related
datapoint
SFDR
referenc
e
Pillar 3 reference
Benchmark Regulation25
reference
EU
Climate Law26
reference
Page
ESRS 2 GOV-1
Board's gender diversity
paragraph 21 (d)
Indicator
number 13
of Table #1
of Annex 1
Commission Delegated Regulation (EU)
2020/181627, Annex II
xx
ESRS 2 GOV-1
Percentage of board members who
are independent paragraph 21 (e)
Delegated Regulation (EU) 2020/1816,
Annex II
xx
ESRS 2 GOV-4
Statement on due
diligence
paragraph 30
Indicator
number 10
Table #3 of
Annex 1
xx
101
ESRS 2 SBM-1
Involvement in activities
related to fossil fuel
activities
paragraph 40 (d) i
Indicators
number 4
Table
#1 of Annex
1
Article 449a Regulation (EU)
No 575/2013;
Commission Implementing
Regulation (EU)
2022/245328Table 1:
Qualitative information on
Environmental risk and Table
2: Qualitative information on
Social risk
Delegated Regulation (EU) 2020/1816,
Annex II
xx
ESRS 2 SBM-1
Involvement in activities
related to chemical
production
paragraph 40 (d) ii
Indicator
number 9
Table #2 of
Annex 1
Delegated Regulation (EU) 2020/1816,
Annex II
xx
ESRS 2 SBM-1
Involvement in activities related to
controversial
weapons
paragraph 40 (d) iii
Indicator
number 14
Table #1 of
Annex 1
Delegated Regulation (EU)
2020/181829, Article 12(1) Delegated
Regulation (EU) 2020/1816, Annex II
xx
ESRS 2 SBM-1
Involvement in activities
related to cultivation
and production of
tobacco
Delegated Regulation (EU) 2020/1818,
Article 12(1) Delegated Regulation (EU)
2020/1816, Annex II
xx
102
paragraph 40 (d) iv
ESRS E1-1
Transition plan to reach climate
neutrality by 2050
paragraph 14
Regulation (EU)
2021/1119, Article 2(1)
xx
ESRS E1-1
Undertakings excluded
from Paris-aligned
Benchmarks
paragraph 16 (g)
Article 449a
Regulation (EU) No
575/2013; Commission
Implementing Regulation
(EU) 2022/2453 Template 1:
Banking book-Climate
Change transition risk:
Credit quality of exposures
by sector, emissions and
residual maturity
Article12.1 (d) to (g), and Article 12.2
xx
103
ESRS E1-4
GHG emission
reduction targets
paragraph 34
Indicator
number 4
Table #2 of
Annex 1
Article 449a
Regulation (EU) No
575/2013; Commission
Implementing Regulation
(EU) 2022/2453 Template 3:
Banking book – Climate
change transition risk:
alignment metrics
Delegated Regulation (EU) 2020/1818,
Article 6
xx
ESRS E1-5
Energy consumption from fossil
sources disaggregated
by sources (only high
climate impact sectors)
paragraph 38
Indicator
number 5
Table #1
and
Indicator n.
5 Table #2
of Annex 1
xx
104
ESRS E1-5 Energy
consumption and mix paragraph 37
Indicator
number 5
Table #1 of
Annex 1
xx
ESRS E1-5
Energy intensity
associated with
activities in high climate
impact sectors
paragraphs 40 to 43
Indicator
number 6
Table #1 of
Annex 1
xx
105
ESRS E1-6
Gross Scope 1, 2, 3
and Total GHG
emissions
paragraph 44
Indicators
number 1
and 2 Table
#1 of Annex
1
Article 449a; Regulation (EU)
No 575/2013; Commission
Implementing Regulation
(EU) 2022/2453 Template 1:
Banking book – Climate
change transition risk: Credit
quality of exposures by
sector, emissions and
residual maturity
Delegated Regulation (EU) 2020/1818,
Article 5(1), 6 and 8(1)
xx
106
ESRS E1-6
Gross GHG emissions
intensity
paragraphs 53 to 55
Indicators
number 3
Table
#1 of Annex
1
Article 449a Regulation (EU)
No 575/2013; Commission
Implementing Regulation
(EU) 2022/2453 Template 3:
Banking book – Climate
change transition risk:
alignment metrics
Delegated Regulation (EU) 2020/1818,
Article 8(1)
xx
ESRS E1-7
GHG removals and
carbon credits
paragraph 56
Regulation (EU)
2021/1119, Article 2(1)
xx
107
ESRS E1-9
Exposure of the
benchmark portfolio to
climate-related physical
risks
paragraph 66
Delegated Regulation (EU) 2020/1818,
Annex II Delegated Regulation (EU)
2020/1816, Annex II
xx
ESRS E1-9
Disaggregation of monetary amounts
by acute and chronic physical risk
paragraph 66 (a)
ESRS E1-9
Location of significant
assets at material
physical risk
paragraph 66 (c).
Article 449a Regulation (EU)
No 575/2013; Commission
Implementing Regulation
(EU) 2022/2453 paragraphs
46 and 47; Template 5:
Banking book - Climate
change physical risk:
Exposures subject to
physical risk.
xx
108
ESRS E1-9 Breakdown
of the carrying value of
its real estate assets
by energy-efficiency
classes
paragraph 67 (c).
Article 449a Regulation (EU)
No 575/2013;
Commission Implementing
Regulation (EU) 2022/2453
paragraph 34;Template
2:Banking book -Climate
change transition risk: Loans
collateralised by immovable
property - Energy efficiency
of the collateral
xx
109
ESRS E1-9
Degree of exposure of
the portfolio to climate-
related opportunities
paragraph 69
Delegated Regulation (EU) 2020/1818,
Annex II
xx
ESRS E2-4
Amount of each pollutant listed in
Annex II of the E-PRTR Regulation
(European Pollutant Release and
Transfer Register) emitted to air,
water and soil, paragraph 28
Indicator
number 8
Table #1 of
Annex 1
Indicator
number 2
Table #2 of
Annex 1
Indicator
number 1
Table #2 of
Annex 1
Indicator
number 3
Table #2 of
Annex 1
Not material
ESRS E3-1
Water and marine resources
paragraph 9
Indicator
number 7
Table #2 of
Annex 1
xx
110
ESRS E3-1
Dedicated policy paragraph 13
Indicator
number 8
Table 2 of
Annex 1
xx
ESRS E3-1
Sustainable oceans and seas
paragraph 14
Indicator
number 12
Table #2 of
Annex 1
xx
ESRS E3-4
Total water recycled and reused
paragraph 28 (c)
Indicator
number 6.2
Table #2 of
Annex 1
xx
ESRS E3-4
Total water consumption in m3 per
net revenue on own operations
paragraph 29
Indicator
number 6.1
Table #2 of
Annex 1
xx
111
ESRS 2- IRO 1 - E4
paragraph 16 (a) i
Indicator
number 7
Table #1 of
Annex 1
xx
ESRS 2- IRO 1 - E4
paragraph 16 (b)
Indicator
number 10
Table #2 of
Annex 1
xx
ESRS 2- IRO 1 - E4
paragraph 16 (c)
Indicator
number 14
Table #2 of
Annex 1
xx
ESRS E4-2
Sustainable land / agriculture
practices or policies
paragraph 24 (b)
Indicator
number 11
Table #2 of
Annex 1
xx
112
ESRS E4-2
Sustainable oceans / seas practices
or policies
paragraph 24 (c)
Indicator
number 12
Table #2 of
Annex 1
xx
ESRS E4-2
Policies to address deforestation
paragraph 24 (d)
Indicator
number 15
Table #2 of
Annex 1
xx
ESRS E5-5
Non-recycled waste paragraph 37 (d)
Indicator
number 13
Table #2 of
Annex 1
XX
ESRS E5-5
Hazardous waste and radioactive
waste paragraph 39
Indicator
number 9
Table #1 of
Annex 1
XX
113
ESRS 2- SBM3 - S1
Risk of incidents of forced labour
paragraph 14 (f)
Indicator
number 13
Table #3 of
Annex I
XX
ESRS 2- SBM3 - S1
Risk of incidents of child labour
paragraph 14 (g)
Indicator
number 12
Table #3 of
Annex I
XX
ESRS S1-1
Human rights policy commitments
paragraph 20
Indicator
number 9
Table #3
and
Indicator
number 11
Table #1 of
Annex I
XX
114
ESRS S1-1
Due diligence policies on issues
addressed by the fundamental
International Labor Organisation
Conventions 1 to 8,
paragraph 21
Delegated Regulation (EU) 2020/1816,
Annex II
XX
ESRS S1-1
processes and measures for
preventing trafficking in human
beings
paragraph 22
Indicator
number 11
Table #3 of
Annex I
XX
ESRS S1-1
workplace accident prevention policy
or management system paragraph
23
Indicator
number 1
Table #3 of
Annex I
XX
115
ESRS S1-3
grievance/complaints handling
mechanisms paragraph 32 (c)
Indicator
number 5
Table #3 of
Annex I
XX
ESRS S1-14
Number of fatalities and number and
rate of work-related accidents
paragraph 88 (b) and (c)
Indicator
number 2
Table #3 of
Annex I
Delegated Regulation (EU) 2020/1816,
Annex II
XX
ESRS S1-14
Number of days lost to injuries,
accidents, fatalities or illness
paragraph 88 (e)
Indicator
number 3
Table #3 of
Annex I
XX
116
ESRS S1-16
Unadjusted gender pay gap
paragraph 97 (a)
Indicator
number 12
Table #1 of
Annex I
Delegated Regulation (EU) 2020/1816,
Annex II
XX
ESRS S1-16
Excessive CEO pay ratio
paragraph 97 (b)
Indicator
number 8
Table #3 of
Annex I
XX
ESRS S1-17
Incidents of discrimination paragraph
103 (a)
Indicator
number 7
Table #3 of
Annex I
XX
117
ESRS S1-17 Non-respect of UNGPs
on Business and Human Rights and
OECD
paragraph 104 (a)
Indicator
number 10
Table #1
and
Indicator n.
14 Table #3
of Annex I
Delegated Regulation (EU) 2020/1816,
Annex II Delegated Regulation (EU)
2020/1818 Art 12 (1)
XX
ESRS 2- SBM3 – S2
Significant risk of child labour or
forced labour in the value chain
paragraph 11 (b)
Indicators
number 12
and n. 13
Table #3 of
Annex I
Not material
ESRS S2-1
Human rights policy commitments
paragraph 17
Indicator
number 9
Table #3
and
Indicator n.
11 Table #1
of Annex 1
Not material
118
ESRS S2-1 Policies related to value
chain workers
paragraph 18
Indicator
number 11
and n. 4
Table #3 of
Annex 1
Not material
ESRS S2-1Non-respect of UNGPs on
Business and Human Rights
principles and OECD guidelines
paragraph 19
Indicator
number 10
Table #1 of
Annex 1
Delegated Regulation (EU) 2020/1816,
Annex II Delegated Regulation (EU)
2020/1818, Art
Not material
ESRS S2-1
Due diligence policies on issues
addressed by the fundamental
International Labor Organisation
Conventions 1 to 8,
paragraph 19
Delegated Regulation (EU) 2020/1816,
Annex II
Not material
119
ESRS S2-4
Human rights issues and incidents
connected to its upstream and
downstream value chain
paragraph 36
Indicator
number 14
Table #3 of
Annex 1
Not material
ESRS S3-1
Human rights policy commitments
paragraph 16
Indicator
number 9
Table #3 of
Annex 1
and
Indicator
number 11
Table #1 of
Annex 1
Not material
ESRS S3-1
non-respect of UNGPs on Business
and Human Rights, ILO principles or
and OECD guidelines
paragraph 17
Indicator
number 10
Table #1
Annex 1
Delegated Regulation (EU) 2020/1816,
Annex II Delegated Regulation (EU)
2020/1818, Art 12 (1)
Not material
120
ESRS S3-4
Human rights issues and incidents
paragraph 36
Indicator
number 14
Table #3 of
Annex 1
Not material
ESRS S4-1 Policies related to
consumers and end-users paragraph
16
Indicator
number 9
Table #3
and
Indicator
number 11
Table #1 of
Annex 1
Not material
ESRS S4-1
Non-respect of UNGPs on Business
and Human Rights and OECD
guidelines
paragraph 17
Indicator
number 10
Table #1 of
Annex 1
Delegated Regulation (EU) 2020/1816,
Annex II Delegated Regulation (EU)
2020/1818, Art 12 (1)
Not material
121
ESRS S4-4
Human rights issues and incidents
paragraph 35
Indicator
number 14
Table #3 of
Annex 1
Not material
ESRS G1-1
United Nations Convention against
Corruption paragraph 10 (b)
Indicator
number 15
Table #3 of
Annex 1
XX
ESRS G1-1
Protection of whistle- blowers
paragraph 10 (d)
Indicator
number 6
Table #3 of
Annex 1
XX
ESRS G1-4
Fines for violation of anti-corruption
and anti-bribery laws paragraph 24
(a)
Indicator
number 17
Table #3 of
Annex 1
Delegated Regulation (EU) 2020/1816,
Annex II)
XX
122
ESRS G1-4
Standards of anti- corruption and
anti- bribery
paragraph 24 (b)
Indicator
number 16
Table #3 of
Annex 1
XX
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Independent Practitioners' Limited Assurance Report on AB Žemaitijos pienas consolidated
Sustainability Statement
To: the Management of AB Žemaitijos pienas
Limited assurance conclusion
We have performed a limited assurance engagement on the consolidated sustainability information of AB
Žemaitijos pienas Group (hereinafter – the Group) as at and for the year ended 31 December 2024, presented
in the section “Information on Sustainability Matters” the Consolidated Management Report (hereinafter – the
Sustainability Statement), in order to determine whether it has been prepared in accordance with the Law on
Reporting by Undertakings and Groups of Undertakings of the Republic of Lithuania and the European
Sustainability Reporting Standards (ESRS).
Based on the procedures performed and the evidence obtained, nothing has come to our attention that causes
us to believe that the Group’s Sustainability Statement as at and for the year ended 31 December 2024 is not,
in all material respects, prepared in accordance with the Law on Reporting by Undertakings and Groups of
Undertakings of the Republic of Lithuania, including:
• compliance with the European Sustainability Reporting Standards (ESRS), including that the process
carried out by the Group to identify the information disclosed in the Sustainability Statement (hereinafter
– the Process) is in accordance with the description provided in the Double materiality assessment
subsection “Description of the process to identifying and assess material impacts, risks, and
opportunities (IRO-1)”; and
• compliance of the disclosure provided in subsection “EU Taxonomy Alignment Overview” of the
Sustainability Statement with Article 8 of Regulation (EU) 2020/852 (hereinafter – the Taxonomy
Regulation).
Our conclusion on the Sustainability Statement does not cover any other information presented together with
the Sustainability Statement, including the Consolidated and Separate Financial Statements and the
Consolidated Management Report for the year ended 31 December 2024.
Basis for conclusion
We performed our limited assurance engagement on the Sustainability Statement in accordance with
International Standard on Assurance Engagements (ISAE) 3000 (Revised) “Assurance Engagements Other
than Audits or Reviews of Historical Financial Information”, issued by the International Auditing and Assurance
Standards Board (IAASB). Our responsibilities under this standard are further described in the section “Our
Responsibility” of our conclusion.
We complied with the independence and other ethical requirements set out in the International Code of Ethics
for Professional Accountants (including International Independence Standards), issued by the International
Ethics Standards Board for Accountants (IESBA).
Our firm applies International Standard on Quality Management 1 (ISQM 1), “Quality Management for Firms that
Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements”,
issued by the IAASB. Under this standard, the firm is required to design, implement, and operate a system of
quality management, including policies and procedures related to compliance with ethical requirements,
professional standards, and applicable legal and regulatory requirements.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our conclusion.
Reg. Code 300056169 | VAT Code LT100001220914 | Register of Legal Entities of the Republic of Lithuania | Member of Grant Thornton International Ltd
Grant Thornton Baltic UAB
Vilnius | Upės st. 21-1 | 08128 Vilnius | Lithuania | info@lt.gt.com
Kaunas | Jonavos st. 60C | 44192 Kaunas | Lithuania | kaunas@lt.gt.com
Klaipėda | Taikos av. 52C | 91184 Klaipėda | Lithuania | klaipeda@lt.gt.com
T +370 5 212 7856 | www.grantthornton.lt
Other matter
The subject matter information for the year ended 31 December 2023 was not part of our limited assurance
engagement; therefore, we do not express a conclusion or any assurance on this information.
Inherent limitations in the preparation of the Sustainability Statement
When providing forward-looking information in accordance with ESRS, the Group's management is required to
prepare such information based on disclosed assumptions about potential future events and possible future
actions of the Group. It is likely that actual results will differ, as anticipated events often do not occur as expected.
In determining the disclosures in the Sustainability Report, the Group's management interprets undefined legal
and other concepts. These undefined legal and other concepts may be subject to varying interpretations,
including in terms of legal compliance, and are therefore inherently uncertain.
Management’s responsibilities for the Sustainability Statement
The Group’s management is responsible for designing, implementing, and maintaining a process to identify the
information reported in the Sustainability Statement in accordance with the ESRS, and for disclosing this process
in the Double materiality assessment subsection “Description of the Process for Identifying and Assessing
Material Impacts, Risks and Opportunities (IRO-1)” of the Sustainability Statement. This responsibility includes:
• understanding the context in which the Group’s activities and business relationships take place, as well
as identifying the relevant affected stakeholders;
• identifying actual and potential (both negative and positive) impacts related to sustainability matters, as
well as risks and opportunities that affect or could reasonably be expected to affect the Group’s financial
position, financial performance, cash flows, access to finance, or cost of capital in the short, medium, or
long term;
• assessing the materiality of the identified impacts, risks, and opportunities related to sustainability
matters by selecting and applying appropriate thresholds; and
• developing methodologies and making assumptions that are reasonable in the circumstances.
In addition the Group’s management is responsible for the preparation of the Sustainability Statement in
accordance with the Law on Reporting by Undertakings and Groups of Undertakings of the Republic of Lithuania,
including:
• compliance with the ESRS;
• the preparation of the disclosure presented in subsection “Disclosure in accordance with Article 8 of
Regulation (EU) 2020/852 (the Taxonomy Regulation)” of the Sustainability Statement, in accordance
with Article 8 of Regulation (EU) 2020/852 (hereinafter – the Taxonomy Regulation); and
• the design, implementation and maintenance of such internal controls as the Group's management
deems necessary to enable the preparation of the Sustainability Statement that is free from material
misstatement, whether due to fraud or error; and
• the selection and application of appropriate sustainability reporting methods, as well as the development
of assumptions and estimates related to individual sustainability disclosures that are reasonable in the
circumstances;
• the making of judgments and estimates that are reasonable in the circumstances;
• the prevention and detection of fraud;
• the selection of the content of the Sustainability Statement, including the identification of and
engagement with intended users in order to understand their information needs;
Reg. Code 300056169 | VAT Code LT100001220914 | Register of Legal Entities of the Republic of Lithuania | Member of Grant Thornton International Ltd
Grant Thornton Baltic UAB
Vilnius | Upės st. 21-1 | 08128 Vilnius | Lithuania | info@lt.gt.com
Kaunas | Jonavos st. 60C | 44192 Kaunas | Lithuania | kaunas@lt.gt.com
Klaipėda | Taikos av. 52C | 91184 Klaipėda | Lithuania | klaipeda@lt.gt.com
T +370 5 212 7856 | www.grantthornton.lt
• the setting of targets, goals, and other performance indicators, and the implementation of actions to
achieve such targets, goals, and performance indicators;
• the supervision of other personnel involved in the preparation of the Sustainability Statement.
Those charged with governance are responsible for overseeing the process of preparing the Group's
Sustainability Statement.
Our responsibilities
Our engagement is to plan and perform the assurance engagement to obtain limited assurance on whether the
Sustainability Statement is free from material misstatement, whether due to fraud or error, and to issue our
limited assurance conclusion to the Group’s management. Misstatements, whether due to fraud or error, are
considered material if it is reasonable to expect that, individually or in aggregate, they could influence the
decisions of users taken based on the Sustainability Statement as a whole.
Our responsibility related to the Process applied to the Sustainability Statement:
• to obtain an understanding of the Process, but not for the purpose of expressing a conclusion on the
effectiveness of the Process, including the results of the Process; and
• to design and perform procedures to evaluate whether the Process is consistent with the Group’s
description of the Process as disclosed in the subsection “EU Taxonomy Alignment Overview”.
Our other responsibilities related to the Sustainability Statement include:
• to obtain an understanding of the Group’s control environment, processes and information systems
relevant to the preparation of the Sustainability Statement, but without assessing the design of specific
control activities, obtaining evidence about their implementation, or testing their operating effectiveness;
• to identify disclosures in which material misstatements due to fraud or error could arise; and
• to design and perform procedures responsive to those Sustainability Statement disclosures where
material misstatements could arise. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal controls.
Summary of the work we performed as the basis for our conclusion
The limited assurance engagement involves performing procedures to obtain evidence regarding the
compliance of the Sustainability Statement. We designed and performed our procedures to obtain sufficient and
appropriate evidence to provide a basis for our conclusion on the Sustainability Statement. The nature, timing,
and extent of the procedures depended on our understanding of the Sustainability Statement and other
engagement circumstances, including the identification of disclosures where material misstatements may arise
due to fraud or error. Throughout the engagement, we exercised professional judgment and maintained
professional skepticism.
In performing the limited assurance procedures related to the Process, we:
• Obtained an understanding of the Process by:
✓ making inquiries to understand the sources of information used by the Group’s management (e.g.,
stakeholder engagement, business plans, and strategy documents); and
✓ reviewing the Group’s internal documentation of the Process; and
• Evaluated whether the evidence obtained through our procedures regarding the Process was consistent
with the description of the Process disclosed in the subsection “EU Taxonomy Alignment Overview”.
Reg. Code 300056169 | VAT Code LT100001220914 | Register of Legal Entities of the Republic of Lithuania | Member of Grant Thornton International Ltd
Grant Thornton Baltic UAB
Vilnius | Upės st. 21-1 | 08128 Vilnius | Lithuania | info@lt.gt.com
Kaunas | Jonavos st. 60C | 44192 Kaunas | Lithuania | kaunas@lt.gt.com
Klaipėda | Taikos av. 52C | 91184 Klaipėda | Lithuania | klaipeda@lt.gt.com
T +370 5 212 7856 | www.grantthornton.lt
In performing the limited assurance procedures related to the Sustainability Statement, we:
• obtained an understanding of the Group’s reporting processes related to the preparation of the
Sustainability Statement by:
✓ making inquiries to understand the Group’s reporting process related to the preparation of the
Sustainability Statement;
✓ assessing the data governance processes, information systems, and working methods used to
collect and consolidate the Sustainability Statement disclosures; and
• evaluated whether the material information identified through the Process was included in the
Sustainability Statement;
• evaluated whether the structure and presentation of the Sustainability Statement complied with the
ESRS;
• made inquiries with relevant personnel and performed analytical procedures on selected disclosures
within the Sustainability Statement;
• performed detailed assurance procedures on a sample basis for selected disclosures in the
Sustainability Statement;
• obtained evidence regarding the methods, assumptions, and data used in preparing material estimates
and forward-looking information, and how those methods were applied;
• obtained an understanding of the process for identifying taxonomy-eligible and taxonomy-aligned
economic activities, and the corresponding disclosures in the Sustainability Statement;
• performed other procedures related to EU taxonomy disclosures.
The nature, timing, and extent of the procedures performed in a limited assurance engagement are different
from, and less extensive than, those required in a reasonable assurance engagement. As a result, the level of
assurance obtained in a limited assurance engagement is substantially lower than the level that would have
been obtained had a reasonable assurance engagement been performed.
Auditor
Jurgita Matulaitienė
Auditor’s certification No. 000469
April 3, 2025
Jonavos str. 60C, Kaunas
Grant Thornton Baltic UAB
Audit company’s certification No. 001513
CONFIRMATION BY RESPONSIBLE PERSONS
April 2025
Telšiai
We, Robertas Pažemeckas, Director General of Žemaitijos pienas, AB, and Dalia Gecienė, senior
accountant, hereby confirm that to our knowledge the attached 2024 audited consolidated statements
of Žemaitijos pienas, AB and the Company’s financial statements drawn up according to the
International Financial Reporting Standards adopted for application in the European Union
correspond to reality and fairly reflect the assets, liabilities, financial situation, profit or loss and cash
flow of the Company and the Group of Companies, and the consolidated report of the Management
provides a fair overview of business development and performance, the state of the of the Company
and the Group of Companies with key risks and uncertainties faced, with a description as well as
information on sustainability issues prepared in accordance with the European Sustainability
Reporting Standards and provisions implementing the provisions of Part 4 of Article 8 of Regulation
(EU) 2020/852 of the European Parliament and of the Council on the establishment of a framework
to facilitate sustainable investment and amending Regulation (EU) 2019/2088.
General director Robertas Pažemeckas
Senior accountant Dalia Gecienė