VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

VILNIAUS BALDAI AB

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS

FOR THE FY 2024 ENDED 31 AUGUST 2024,

PREPARED ACCORDING TO THE INTERNATIONAL FINANCIAL REPORTING STANDARDS AS

ADOPTED BY THE EUROPEAN UNION,

PRESENTED TOGETHER WITH INDEPENDENT AUDITOR’S REPORT

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

CONTENTS

CONSOLIDATED MANAGEMENT REPORT ....................................................................................................................... 3

OBJECTIVE REVIEW OF THE COMPANIES GROUP’S POSITION, ACTIVITY AND DEVELOPMENT ........................................ 3

COMPANY MANAGEMENT REPORT ................................................................................................................................ 14

COMPANY REMUNERATION POLICY................................................................................................................................ 22

AB "VILNIAUS BALDAI" CORPORATE SOCIAL RESPONSIBILITY (SUSTAINABILITY) REPORT .............................................. 24

VILNIAUS BALDAI AB REPORT ON THE COMPLIANCE WITH THE GOVERNANCE CODE FOR THE COMPANIES LISTED ON

THE STOCK EXCHANGE NASDAQ VILNIUS REGULATED MARKET FOR THE FY2024 ........................................................ 25

CONSOLIDATED AND COMPANY‘S FINANCIAL STATEMENTS ........................................................................................ 40

CONSOLIDATED AND COMPANY‘S STATEMENT OF FINANCIAL POSITION ..................................................................... 40

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE

INCOME ........................................................................................................................................................................... 42

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENT OF CHANGES IN EQUITY .................................................... 43

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENT OF CASH FLOWS ................................................................ 45

NOTES TO THE FINANCIAL STATEMENTS ........................................................................................................................ 47

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

CONSOLIDATED MANAGEMENT REPORT

28 November 2024

OBJECTIVE REVIEW OF THE COMPANIES GROUP’S POSITION, ACTIVITY AND

DEVELOPMENT

COMPANIES COMPOSING THE GROUP

Vilniaus Baldai AB (hereinafter “the Company”) prepares both separate Company’s and consolidated financial statements.

The Group (hereinafter “the Group”) consists of Vilniaus Baldai AB and subsidiary ARI-LUX UAB in which the Company

directly controls 100% of shares.

GENERAL INFORMATION ABOUT THE COMPANY:

Name

Joint stock company Vilniaus Baldai AB

Legal form

Joint stock company

Code

121922783

VAT payer’s code

LT219227811

LEI code

529900MJDB8L13ZF6G26

Authorised capital

EUR 4,508,069.72, divided into 3,886,267 ordinary registered

shares with the par value of EUR 1.16 each

Office address

Pramones str. 23, Guopstu vil., LT-21148 Traku district

Telephone

(+370~5) 252 57 00

E-mail

info@vilniausbaldai.lt

Internet website

www.vilniausbaldai.lt

Registration date and place

9 February 1993, Vilnius City Board

is collected and stored

Main type of activity

Design, production and selling of furniture

GENERAL INFORMATION ABOUT THE SUBSIDIARY:

Name

Limited liability company ARI-LUX UAB

Legal form

Limited liability company

Code

120989619

VAT payer’s code

LT209896113

Authorised capital

EUR 2,896

Office address

Pramones str. 23, Guopstu vil., LT-21148 Traku district

Telephone

(+370~5) 252 57 44

E-mail

info@ari-lux.lt

Registration date and place

28 October 1991, Vilnius City Board

is collected and stored

Main type of the activity

Packaging

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

1. OBJECTIVE REVIEW OF THE COMPANIES GROUP’S POSITION, ACTIVITY AND DEVELOPMENT,

CHARACTERISATION OF THE MAIN TYPES OF RISKS AND UNCERTAINTIES FACED BY THE COMPANY

The 2024 financial year was exceptionally successful for the Company. This is the second consecutive year in which the

Company has been fully operating in the new factory, and so far, the results have fully met and even exceeded expectations.

The Group’s EBITDA, which is arguably the best measure of the company’s performance, reached a record level, more than

doubled compared to the previous financial year (in 2024, EBITDA reached 17,703 thousand EUR (18.2%), compared to

8,772 thousand EUR (9.0%) in 2023). Some of the main reasons contributing to this result include:

- raw material costs compared to sales revenue decreased by almost 9 percentage points, due to a significantly reduced

proportion of non-compliant products as well as the decrease of the raw material prices, both in Lithuania and in foreign

markets.

- production efficiency, measured as output per hour worked, has grown by double digits for the second consecutive year.

In the 2023 financial year, efficiency increased by about 50%, and in 2024 by another 23%.

- electricity usage efficiency, measured as output per 1 kWh of electricity consumed, grew by 50% in the 2023 financial year

and by an additional 30% in 2024 financial year.

- a strong level of working capital allowed the Company to fully focus on its core activity (furniture production) while also

stabilizing production plans and managing sales fluctuations through inventory.

In terms of sales and the global furniture market, a gradual recovery is becoming noticeable after several years of stagnation.

Although the Company’s sales in the 2024 financial year were 0.6% lower than in 2023, the volume of units sold increased

by 7.2%. The Company expects similar organic growth in the coming year.

In addition to this organic sales growth, it is important to note that in the last quarter of the 2024 financial year, the Company

participated in tenders organized by its main client, IKEA, for both existing and new products. The tender results confirmed

that the Company is competitive and able to compete with the largest furniture manufacturers in Europe. As a result, the

Company expanded its sales portfolio with three new furniture families, which will contribute to both revenue growth and

portfolio diversification. Sales volumes for existing furniture families also grew by approximately 7%. However, the 2025

financial year will be a transitional period, and the full impact of the new portfolio will not yet be realized.

For the 2025 financial year, the Company has set ambitious goals to further accelerate its ongoing transformation. Plans

include significantly increasing investments in production, logistics, and quality automation, as well as continuing and

completing the digitalization project (new ERP software) that has already begun. Investments in employee training will also

be increased, focusing particularly on skills in automation, technology, and product development.

Among the Company's other top priorities for the 2025 financial year are further implementation of LEAN methodologies,

work safety, environmental protection, improving working conditions for employees, and engaging in new product

development.

Main risks faced by the Group:

Economic risk factors. The sales to the main customer Swedish IKEA constituted approximately 99,5% of total sales of

Vilniaus baldai AB during 2024 (in 2023 – 99,6%). Furniture accounted for 99,7% of the Company’s sales during 2024 (in

2023 – 99,6%), while the rest came from sales of raw materials and waste of raw materials.

Global economy development trends do have an impact on the Company’s main customer development pace as well as the

demand fluctuation of furniture produced by the Company.

The Company competes with the world furniture producers.

Political risk factors. Changing geopolitical situation has an impact on the international trade flows. Although potential risks

exist, the current global military conflicts have no significant impact on the Company’s operations. The Company's sensitivity

to changes in economic and tax policy is not exceptional compared to other businesses operating in the country. It is

expected that the new Lithuanian government will aim to increase both the minimum wage and other social benefits.

However, this should not affect the Company, as it aims to pay competitive rather than minimum wages and is committed to

continuous improvement of working conditions through efficiency investments. There are no state-imposed requirements or

restrictions impacting the issuer's activities.

Social risk factors. The Company faces an ongoing shortage of engineering specialists due to external circumstances – a

lack of such professionals is felt throughout the market, and current education, training, and incentive programs do not meet

the actual demand for specialists. To address this, the Company implements long-term internal programs to support

employee education, provide theoretical and practical training, and enhance competencies and qualifications. This financial

year, the Company successfully continued its internal learning academies (such as the Operator Academy), expanded

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

cooperation with vocational schools, contributed to the training of electricians, provided resources for student internships,

actively participated in career fairs and events, joined exam boards, shared knowledge and motivation in presentations for

Engineering Day, and carried out other initiatives.

The Company also contributes to addressing other social and labor market issues by collaborating with educational and

governmental institutions, municipality, and companies to offer temporary work opportunities to employees from other

organizations during downtime. Additionally, the Company helps reduce unemployment in the region by actively hiring

individuals from both nearby and more distant areas, ensuring they have access to free, convenient, and regular

transportation.

An active labor union also operates within the Company, representing the interests of the employees.

Supply. The Company is currently not experiencing any disruptions in raw material supply or availability, as raw material

producers are only partially utilizing their production capacities. However, there remains the risk of an increase in the scale

of ongoing military conflicts and the related negative effect on markets and the supply of raw materials.

Recently, raw material prices have stabilized. The Company does not expect significant fluctuations in either direction

(upward or downward) in the near future.

From a long-term and strategic point of view, the Company aims to establish a long-term partnership with reliable suppliers,

and at the same time secure alternatives for supply of the main raw materials.

Technical and technological risk factors. The Alldevice program is used for the planning of periodic and preventive works,

with the help of which work for technicians and operators is planned for the regularly performed preventive maintenance of

the equipment.

According to the IKEA IPS methodology, equipment maintenance is continuously and systematically improved, with the aim

of reducing the number of failures and increasing the availability of equipment by involving both technicians and line operators

in this process. Line failure analytics allow us to predict weak points in lines and proactively manage the risk of failure. The

Company pays a lot of attention to employee training and skill development. For this purpose, employees are sent for

internships to manufacturers of equipment used in furniture production. Additionally, active collaboration and exchange of

best practices are conducted with other furniture manufacturers both in Lithuania and Europe.

During the financial year 2024, the Company started to implement a new ERP software tailored to manufacturing companies'

profiles. The new ERP will not only provide enhanced functionalities but also feature good security practices to ensure that

the Company's business operations are adequately protected from various cyber threats and breaches. The launch of the

new enterprise management system is scheduled for the second half of the 2025 financial year.

The physical and moral condition of the main production equipment is good and does not pose a risk to the Company's

operations.

Ecological risk factors. The Company uses energy and natural resources in its operations, which poses a risk of

environmental pollution. The Company is committed to protecting the environment and continuously reducing its negative

impact by using resources efficiently, including energy and natural resources, and by complying with legal and standard

requirements related to quality, environmental protection, and all its activities. To manage environmental risks and improve

performance, the Company has implemented quality and environmental management systems that comply with ISO 9001

and ISO 14001 standards.

The ISO 9001 Quality Management System is a set of procedures and actions that help the organization improve its daily

operations, ensure product quality, reduce costs, save time, increase productivity, and maintain good relationships with

customers. Every year, the procedures are reviewed, performance effectiveness is analyzed, and improvement actions are

planned.

The ISO 14001 Environmental Management System ensures the identification of significant environmental protection

aspects, the implementation of preventive measures, the assignment of responsible persons, and the execution of a

monitoring program. Employees of the company are trained and certified. Adhering to this standard helps ensure compliance

with legal requirements and significantly reduces ecological and environmental risks. On July 17, 2024, an ISO system

maintenance audit was conducted. No non-compliance or observations were found during the audit. There were no

production restrictions due to environmental pollution.

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

More than half of the furniture produced by the Company is made using hollow-core panel technology, replacing solid wood

with core filling made from recycled paper. This allows for up to a five-fold reduction in wood raw material consumption. The

Company uses 100% primary wood sourced from socially responsibly managed forests. The company has implemented the

FSC® (FSC-C104209) Chain of Custody system tracking the product’s journey from the forest or (in the case of secondary

raw materials) from the moment of recycling to the point where it is sold with the FSC® label and/or finished and labeled with

the FSC® tag. FSC® Chain of Custody certification ensures that only certified raw materials are used in production. This

eliminates the risk that the raw materials might be mixed with non-certified ones. An annual FSC® maintenance audit was

conducted on February 13, 2024.No non-compliance or observations were found during the audit.

Repayment of loans. The rise in interbank interest rates stabilized at the beginning of the 2024 financial year, and the

subsequent decline, which is projected for the future, will have a direct impact on the reduction of the Company’s loan

servicing costs. Loan repayments were made according to the schedules agreed upon with creditors. Information on the

terms and conditions of repayment of financial liabilities, credit and interest rate risks of the Group and the Company is

provided in the notes to the financial statements for the financial year ended on August 31, 2024 (Notes 12 and 23).

After the end of the reporting period, the Company refinanced its financial obligations to the European Bank for

Reconstruction and Development (EBRD), AS Citadele Banka Lithuanian branch, KŪB Pagalbos verslui fondas and Invalda

privatus kapitalas AB using newly obtained financing from Šiaulių Bankas AB. This decision provided the Company with a

more favorable loan repayment schedule and lower debt servicing costs, which will allow the freed-up cash flows to be

directed toward necessary investments (Note 28).

Characteristics of internal control and risk management systems related to the preparation of consolidated financial

statements of the Group and the Company. The compliance with the requirements for the preparation of the set of the

consolidated financial statements, internal control and financial risk management systems, legal acts regulating the

preparation of the set of the consolidated financial statements is supervised by the Audit Committee established on 22

December 2021.

The Company's Chief Accountant and Chief Financial Officer regularly review the International Financial Reporting

Standards (IFRS) adopted in the European Union to ensure timely implementation of all changes in the financial statements,

analyze transactions material to the Group and the Company, ensure fair and timely collection of information and periodically

inform senior management about the progress of the financial statements.

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

The Audit Committee:

Tomas Bubinas

Position

Independent Member of the Audit Committee, elected to the Audit Committee 22/12/2021, end of the term – 2025

Work experience

2013–2022 Chief Operating Officer at Biotechpharma UAB

2010–2012 Senior Director at TEVA Biopharmaceuticals USA

2001–2010 Chief Financial Officer at SICOR Biotech / TEVA Baltic

1999–2001 Senior Manager at PricewaterhouseCoopers

1994–1999 Senior Auditor, Manager at Coopers & Lybrand

Education

Master’s degree in economics at Vilnius University and Executive MBA of BMI (Baltic Management Institute), a fellow

member of the Association of Chartered Certified Accountants (ACCA) and a registered Lithuanian Sworn Auditor

Participation in Vilniaus baldai AB authorised capital

Number of shares and of voting rights

Vaidas Savukynas

Position

Member of the Audit Committee, elected to the Audit Committee on 22/12/2021, end of the term – 2025

Work experience

Since 2013 Chief Financial Officer at Invalda Privatus Kapitalas AB

2011–2013 Chief Financial Officer at food retail chain Narodnyi in Kyrgyz Republic

2010–2010 Director of Administration at Zemaitijos Pienas AB

1998–2009 Chief Financial Officer and Financial Analyst at concern MG Baltic and its companies (MG Baltic Trade,

Apranga, Minvista)

1993–1995 Chief Executive Officer at brokerage company Bankoras

1990–1993 Marketing Manager at Lietuvos Birza AB

Education

Vilnius University diploma in economics, master’s degree in social sciences at Stockholm University (Sweden), Financial

sector schemes introductory courses in Leeds University (Great Britain)

Participation in Vilniaus baldai AB authorised capital

Number of shares and of voting rights

Danutė Kadanaitė

Position

Member of the Audit Committee, elected to the Audit Committee on 22/12/2021, end of the term – 2025

Work experience

From 2014 Head of “Verus Sensus” UAB

2009 UAB “Legisperitus” – a lawyer

2008 – 2009 AB FMĮ “Finasta” – a lawyer

2008 AB “Invalda” – a lawyer

1999 – 2002 Attorney Artūras Šukevičius office – administrator

1994 – 1999 UAB FMĮ “Apyvarta” – a legal adviser

Education

Master of Finance Law at M. Romeris University, Bachelor of Law at Law University of Lithuania, Manager at International

Business School.

Participation in Vilniaus baldai AB authorised capital

Number of shares and of voting rights

The Company’s Head of Finance department is responsible for the preparation of the consolidated financial statements,

ensures the collection of information from Group companies, its’ timely and fair processing and preparation for the financial

statements.

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

2. THE ANALYSIS OF THE FINANCIAL AND NON-FINANCIAL ACTIVITY RESULTS, INFORMATION RELATED TO

THE ENVIRONMENTAL AND PERSONNEL MATTERS

Indicators characterising the operation of the Group in the period of 2020–2024:

Indicator

2024 m.

2023 m.

2022 m.

2021 m.

2020 m.

Net profitability = net profit / sales * 100

10.30%

1.62%

1.45%

0.17%

6.86%

Average return on assets ROA = net profit /

(assets at the beginning of the period + assets at

the end of the period) / 2 *100

12.04%

1.91%*

1.70%*

0.20%*

7.12%*

Return on equity ROE = net profit / equity*100

26.25%

5.65%

5.52%

0.69%

20.38%*

Net earnings per share EPS = net profit /

number of shares

2.58

0.41

0.38

0.04

1.29

Debt ratio = liabilities / assets

0.55

0.65

0.69

0.71

0.70

Debt to equity coefficient = liabilities / equity

1.22

1.90

2.20

2.47

2.37

Current ratio = current assets / current

liabilities

1.29

0.99*

0.80*

0.64*

0.86*

Asset’s turnover = sales / (assets at the

beginning of the period + assets at the end of the

period) / 2

1.17

1.18*

1.17*

1.04*

Book value of share = equity / number of

9.82

7.24

6.82

6.43

6.35

Turnover (million EUR)

97.27

97.87

100.74

99.36

73.32

Gross profit (million EUR)

19.00

7.75

-0.18

7.35

9.46

Net profit (million EUR)

10.02

1.59

1.46

0.17

5.03

EBITDA (million EUR)

17.70

8.77

8.51

5.52

7.25

EBIT (million EUR)

13.23

4.22*

3.58*

1.48

4.27

Dividends per share (for the prior accounting

period) (EUR)

Earnings per share P/E

3.20

15.90

21.53

239.79

6.57

The lowest share price (EUR)

6.00

6.15

7.00

8.05

5.70

The highest share price (EUR)

9.35

8.40

10.80*

11.20

11.6

Closing price (EUR)

8.25

6.50

8.1

10.60

8.5

Capitalisation (million EUR)

32.06

25.26

31.48

41.19

33.03

* - indicated corrections of indicators which were previously reported the consolidated and company’s financial statements

for the FY 2023 ended 31 August 2023.

** - EBITDA is calculated without considering the impact of IFRS 16.

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

PRODUCTION AND SALES

Vilniaus baldai AB designs, produces flat-pack furniture. The production of the Company is produced from wood particle

boards, using board on frame technology, which allows to produce lightweight, yet massively looking furniture. When

employing this technology less raw materials can be used, and stable quality of the production is attained. Each year new

products are developed and production technologies of existing ones are improved taking into consideration the needs of

consumers and prevailing tendencies. The planning system implemented in the Company is constantly developed to achieve

higher production flexibility and efficiency.

Modern equipment, purchased from such world-renowned manufacturers as Schelling, Burkle, Weeke, Wikoma, Biesse,

Biele, Cefla, etc., enables to manufacture different types of the furniture, coated with plywood, pigment or foil.

The volumes of Company’s production in terms of value in the period of 2020–2024:

Production

2024

2023

2022

2021

2020

thousand

EUR

thousand

EUR

thousand

EUR

thousand

EUR

thousand

EUR

Furniture

100,288

97,169

96,447

100,581

71,207

Other production

Total

100,288

97,169

96,447

100,581

71,207

Production per employee (at sales prices), working on employment contract basis, 2020–2024 (thousand EUR / year):

In the 2024 financial year, production volume (at sales prices) increased by 3%, while production per employee grew by

25%. The optimal utilization of human resources in recent years has been enabled by the Company's investments in modern

equipment, optimal inventory management, production planning, and the improvement of production process efficiency. In

the medium term, the Company plans significant investments in production automation, robotization, and the implementation

of new technologies, which will ensure a consistent increase in competitiveness in the furniture manufacturing sector. Over

the next 3-5 years, approximately 30 million EUR is expected to be invested in this area.

103,8

123,7

124,0

175,7

220,4

2020 2021 2022 2023 2024

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

Production sales according to the markets in the period of 2020–2024:

Sales

2024

2023

2022

2021

2020

Thousand

EUR

Thousand

EUR

Thousand

EUR

Thousand

EUR

Thousand

EUR

Lithuania

545

0.56

683

0.70

798

0.79

477

0.48

338

0.46

Overseas

96,727

99.44

97,185

99.30

99,940

99.21

98,887

99.52

72,986

99.54

Total

97,272

100.00

97,868

100.00

100,738

100.00

99,364

100.00

73,324

100.00

The Company‘s sales in Lithuania consisted not only of furniture but also of raw materials and raw material waste sales.

SUPPLY

Vilniaus baldai AB has introduced an effective system of the purchase of raw materials and services. The Company maintains

strategic relations with suppliers and constantly searches for new opportunities in the markets of raw materials and services.

The purchase process is distinguished into strategic and operational purchases. The Company aims to manage the supply

risk; therefore, main raw materials may be supplied by principal or alternative suppliers. Vilniaus baldai AB has implemented

and continuously improves the assessment system of suppliers; audits of suppliers are carried out.

The Company establishes long-term contracts with its suppliers. The Company acquires the main raw materials from the

local, Polish, Slovak and German suppliers. The main suppliers are IKEA Industry Lietuva UAB, “Woodeco“ Sp.z.o.o., IKEA

Components S.R.O, IKEA Industry Polska Sp.zo.o., Homanit Krosno Odrzanskie SP, Rehau UAB, Remmers Baltica UAB.

The local supply of the raw materials is pre-conditioned by the cheap transportation costs and good relations with the major

suppliers.

ENERGY

Vilniaus baldai AB during 2024 the Company consumed 11,824 thousand kWh of electricity (2022 – 14,158 thousand kWh),

the electricity consumption for production of EUR 1 amounted to 0,118 kWh (2023 – 0,146 kWh).

The increase in the Company's energy efficiency in recent years is iliustrated by the chart below, which compares the

produced output with electricity consumed. While production volumes have remained stable in value terms, the amount of

energy used per 1 EUR of produced output has decreased throughout the analyzed period. A particularly significant

improvement in electricity consumption per 1 EUR of produced output was recorded in the 2023–2024 financial years,

despite downward trends in sales prices during 2024.

22 367

28 617

23 141

14 158

11 824

0,314

0,285

0,240

0,146

0,118

0,000

0,050

0,100

0,150

0,200

0,250

0,300

0,350

5 000

10 000

15 000

20 000

25 000

30 000

35 000

2020 2021 2022 2023 2024

Consumption of electricity, thousand kWh

Consumption of electricity (kWh) per 1 EUR of production

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

The Company uses electricity in production activities generated from renewable resources. A long-term fixed-price electricity

supply contract with an independent provider has enabled the Company to stabilize and forecast energy costs, avoiding

potential price fluctuations in the energy market.

EMPLOYEES

The Company has an efficient and fair compensation system designed to attract, retain, and motivate employees. All

employment contracts with employees, including management, are concluded in compliance with the requirements of the

Labor Code of the Republic of Lithuania. The remuneration procedures are based on clear, accessible, and uniformly applied

rules for all employees, as outlined in the Company’s collective agreement. This agreement was updated on December 5,

2023. Its goal is to ensure harmonious teamwork, guarantee a high standard of working conditions, remuneration, and other

employment terms for various categories of employees, as well as to provide additional social benefits beyond those

stipulated by Lithuanian law.

The collective agreement covers the procedures for establishing, amending and terminating employment contracts; working

hours and rest time; compensation terms; employee skill development; workplace safety and medical services; social

welfare; guarantees for labor union activities; and protections for elected employee representatives. If the terms of the

collective agreement are more favorable than those in an individual employment contract, the collective agreement takes

precedence.

The remuneration system clearly defines employee categories and the positions assigned to these categories. The

remuneration provisions set forth in the system and its appendices are applied to prevent any form of discrimination, including

by gender. Men and women receive equal pay for the same or equivalent work. Job responsibilities, required qualifications

(if specific to a position), and mandatory or optional skill development requirements are set forth in the job descriptions and/or

employment contracts.

Compensation consists of a fixed and variable component. The fixed component is the employee’s basic monthly salary

specified in the employment contract, paid monthly. The variable component is awarded based on the Company’s

performance. Employees may also receive bonuses for acquired qualifications and/or additional pay for extra work or the

execution of additional duties or tasks.

The main criteria for the compensation and motivation system are employee competence, the level of responsibility and

complexity of the position, individual achievements, and contribution to the overall company performance. Vilniaus baldai AB

ensures a proper work-rest schedule, the right to annual or other statutory leave, and a fair salary that matches the

employee's qualifications. All company employees receive a salary higher than the national minimum wage.

There were 507 employees working in the Group and 446 employees at the Company as of the end of FY2024

(522 at the Group and 459 at the Company as of the end FY2023). The average age of the employees is 42 years.

71 207

100 581

96 447

97 169

100 288

22 367

28 617

23 141

14 158

11 824

5 000

10 000

15 000

20 000

25 000

30 000

35 000

20 000

40 000

60 000

80 000

100 000

120 000

2020 2021 2022 2023 2024

Production, kEur Consumption of electricity, thousand kWh

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

The average number of the Company’s recorded employees, working on an employment contract basis, in the period of

2020–2024:

2024

2023

2022

2021

2020

Executive personnel

Specialists

Workers

394

493

707

748

629

Total

453

553

778

813

686

Remuneration comprises a basic and variable component. A variable component of remuneration depends on the

Company’s results of operations.

The average wages of the employees in the period of 2020–2024, EUR:

2024

2023

2022

2021

2020

Executive personnel

8,271

6,209

5,592

6,480

5,765

Specialists

3,247

2,983

2,647

2,399

2,534

Workers

2,432

2,135

1,893

1,782

1,690

Total

2,621

2,279

2,001

1,881

1,800

Vilniaus Baldai AB maintains social dialogue and partnership with employee representatives – the independent trade union

of Vilniaus Baldai AB.

3. REFERENCES AND ADDITIONAL EXPLANATIONS ABOUT THE INFORMATION PRESENTED IN THE ANNUAL

FINANCIAL STATEMENTS

All information is presented in the annual financial statements and the explanatory notes.

4. INFORMATION ABOUT OWN SHARES

The Company did not have any own shares, did not acquire or transfer any in the reporting period.

5. INFORMATION ABOUT THE BRANCHES AND REPRESENTATIVE OFFICES OF THE COMPANY

The Company does not have any branches or representative offices.

6. IMPORTANT EVENTS, WHICH HAVE OCCURED AFTER FINANCIAL YEAR END

After the end of the reporting period, the Company signed agreements with Šiaulių bankas AB for a EUR 30 million financing

(of which EUR 24 million is a long-term loan for a 5-year period and EUR 6 million is a 2-year credit line) to cover existing

long-term financial liabilities.

Together with this financing and its own funds, the Company fully covered its obligations to the European Bank for

Reconstruction and Development (EBRD), AS Citadele Banka Lithuanian branch, KŪB Pagalbos verslui fondas, and Invalda

privatus kapitalas AB.

The loan repayment schedule and reduced debt servicing costs agreed with Šiaulių bankas AB will positively impact the

cash flow, allowing for an expansion of investments in production automation, robotics, the implementation of new

technologies, process improvements, and strengthening the team and its competencies. This also serves as a strong

external signal that the Company's recent results are considered sustainable and its growth prospects are believed to be

positive.

7. OPERATING PLANS AND FORECASTS OF THE GROUP’S ACTIVITY

Although the new factory project in the Trakai district was formally completed in 2022, it is only in the 2024 financial year

that we managed to realize its opportunities and begin to see its still unrevealed potential.

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

For the second consecutive year, we have improved the efficiency of both production and energy resource efficiency by

double-digit percentages, allowing us to compete with the most advanced and largest factories in Europe. The Company’s

performance in the main client IKEA's procurement competitions, which took place in the last quarter of this year, best

confirms this. We expanded our product portfolio with three new furniture families, which will contribute to both revenue

growth and portfolio diversification. The sales volume of existing furniture families increased by about 7%. However, the

financial year 2025 will be a transitional period, and the full effect of the new portfolio will not be fully visible yet.

To meet the new demands of the client and to ensure sustainable competitive growth, the Company plans to invest up to 30

million EUR in the automation of production, quality, and logistics over the next 3-5 years. Special attention and additional

resources will be allocated to employee qualification improvement, particularly in the areas of automation, technology, and

product development.

Sustainability will also be a key focus in the upcoming financial year. Along with the 2025 financial statements, the Company

will present a sustainability report, which will be audited. The Company's goal and strategy is to make sustainability an

accepted and integrated part of the business operations.

8. INFORMATION ABOUT THE RESEARCH AND DEVELOPMENT ACTIVITY OF THE COMPANY

The Company did not carry out any research or development activity. The Company used the results of the customers’

research.

9. WHEN THE GROUP EMPLOYS FINANCIAL INSTRUMENTS AND WHEN IT IS IMPORTANT FOR THE VALUATION

OF THE COMPANY’S ASSETS, EQUITY, LIABILITIES, FINANCIAL POSITION AND ACTIVITY RESULTS OF THE

COMPANY, THE COMPANY DISCLOSES THE OBJECTIVES OF THE FINANCIAL RISK MANAGEMENT, ITS POLICY

FOR HEDGING MAJOR TYPES OF FORECASTED TRANSACTIONS FOR WHICH HEDGE ACCOUNTING IS USED,

AND COMPANY’S EXPOSURE TO PRICE RISK, CREDIT RISK, LIQUIDITY RISK AND CASH FLOW RISK

The Group did not use any financial instruments, which are important to the evaluation of the Group’s assets, liabilities,

financial position and operation results.

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

COMPANY MANAGEMENT REPORT

1. INFORMATION ON THE CONTRACTS WITH THE INTERMEDIARIES OF THE PUBLIC TURNOVER OF THE

SECURITIES

All of the Company’s obligations under the securities accounting agreements and dividend payments to shareholders are

fulfilled by Siauliu bankas AB (Seimyniskiu str. 1A, Vilnius).

2. STRUCTURE OF THE ISSUER’S AUTHORISED CAPITAL

Structure of the authorised capital of Vilniaus baldai AB:

Type of shares

Number of

shares, units

Nominal value,

EUR

Total nominal

value, EUR

Share in the

authorised

capital, %

Ordinary registered shares

3,886,267

1.16

4,508,069.72

100.00

The Company’s authorised share capital is divided into 3,886,267 ordinary registered shares with the par value of EUR 1.16

each. The shares are uncertificated. They are recorded in personal securities accounts of shareholders. These accounts are

managed following the procedure established by regulatory legislation on the securities market.

Rights and obligations carried by the shares

The shareholders have no property obligations to the Company, except for the obligation to pay up, in the established

manner, all the shares subscribed for at their issue price.

If the General Meeting takes a decision to cover the losses of the Company from additional contributions made by the

shareholders, the shareholders who voted "for" shall be obligated to pay the contributions. The shareholders who did not

attend the General Meeting or voted against such a resolution shall have the right to refrain from paying additional

contributions.

A shareholder shall repay to the Company any dividends paid out in violation of the mandatory norms of the Law on

Companies of the Republic of Lithuania, if the Company proves that the shareholder knew or should have known thereof.

The shareholders have the following property and non-property rights:

1. to receive a part of the Company’s profit (dividends);

2. to receive Company’s funds when the authorized capital of the Company is decreased in order to pay the

Company’s funds to the shareholders;

3. to receive shares without payment if the authorized capital is increased out of the Company’s funds except in cases

provided for by the Law on Companies of the Republic of Lithuania;

4. to have the pre-emption right in acquiring shares or convertible debentures issued by the Company, except in cases

when the General Meeting in the manner prescribed in the Law on Companies of the Republic of Lithuania decides

to withdraw the pre-emption right in acquiring the Company’s newly issued shares or convertible debentures for all

the shareholders;

5. to lend the Company in the manner prescribed by laws, but the Company, borrowing from its shareholders has no

right to mortgage its property to shareholders. The interest shall not exceed the average interest rate of commercial

banks in the lender’s place of residence or business in force at the time of the loan contract when the Company is

borrowing from the shareholder. In this case it is prohibited to the Company and its shareholders to agree on a

higher interest rate;

6. to receive a part of assets of the Company in liquidation;

7. other statutory property rights;

8. the rights, indicated in items 1–4, are granted to those persons who were the Company’s shareholders at the tenth

day after the decision that was accepted at the end of general shareholders’ meeting (hereinafter – at the end of

right record day);

9. to participate in general shareholders’ meetings;

10. to submit the questions related to the agenda of general shareholders’ meetings to the Company in advance;

11. to vote at general shareholders’ meetings according to voting rights carried by their shares. Each registered ordinary

share carries one vote at the general shareholders’ meeting except the exceptions indicated in the Law on

Companies of the Republic of Lithuania. The right to vote at the general shareholders’ meetings may be prohibited

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

or restricted by the Law on Companies of the Republic of Lithuania and other cases established by law, as well as,

when the ownership of the share is being disputed;

12. to receive information on the Company as indicated in the Law on Companies of the Republic of Lithuania;

13. to file a claim with the court for reparation of the Company’s damage resulting from nonfeasance or malfeasance

by the Company’s executive and board members of their obligations prescribed by the Law on Companies of the

Republic of Lithuania and other laws as well as Company’s regulations;

14. to authorize natural or legal person to represent him in relations with the Company and other persons;

15. other non-property rights established by the Law on Companies of the Republic of Lithuania, other laws or the

Company’s regulations.

3. SHAREHOLDERS

Total number of the shareholders as of 31 of August 2024 is 1,388.

The shareholders who had upon the property rights or possessed more than 5% of the issuer’s authorised capital as of

31 August 2024:

Names of the companies, office addresses,

codes

Number of shares

owned under the

property rights, units

Part of the

authorised

capital, %

Part of the votes,

Invalda Privatus Kapitalas AB, company code

303075527, Zalgirio str. 92-901, Vilnius

3,407,135

87.67

There are no shareholders, having any special rights of control.

There are no voting rights restrictions.

The Company is not aware of any agreements between the shareholders, because of which the transfer of the securities

and (or) the voting right could be limited.

1 343

Distribution of the shareholders of

Vilniaus Baldai AB by country,

31/08/2024

Lithuania Latvia Estonia Other

87,67%

12,33%

Authorised capital structure, %

Invalda privatus kapitalas, AB Other

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

4. INFORMATION ABOUT THE ISSUER’S STOCK EXCHANGE TRADING ON THE REGULATED MARKETS

The Company’s ordinary shares are registered on the Secondary list of Nasdaq Vilnius AB.

The main characteristics of shares:

Type of shares

VP ISIN code

Abbreviation

Number of

shares, units.

Nominal

value, EUR

Total nominal

value, EUR

Ordinary registered shares

LT0000104267

VBL1L

3,886,267

1.16

4,508,069.72

Trading statistics of the Company‘s shares:

2024

2023

2022

2021

2020

Price of the shares, EUR:

- opening

6.50

8.10

10.60

8.50

7.15

- highest

9.35

8.40

10.80

11.20

11.60

- lowest

6.00

6.15

7.00

8.05

5.70

- closing

8.25

6.50

8.10

10.60

8.50

Turnover of shares, units

23,649

14,553

22,441

30,623

40,167

Turnover of shares, EUR

174,181

100,226

202,900

308,827

309,662

Total number of transactions, units

709

645

821

1,138

708

Capitalization, million EUR

32.06

25.26

31.48

41.19

33.03

Shares turnover and price of Vilniaus baldai AB in the period of 01/09/2019–31/08/2024:

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

Comparison of the price of shares of Vilniaus baldai AB with the OMXBB and OMXV index in the period of 01/09/2019–

31/08/2024:

5. DIVIDENDS

The general shareholders’ Meeting decides upon dividend payment and sets the amount of dividends. The company pays

out the dividends within 1 month after the day of adoption of the resolution on profit distribution. Persons have the right to

receive dividends if they were shareholders of the Company at the end of the tenth working day after the day of the general

shareholders’ meeting which issued the resolution to pay dividends.

Vilniaus baldai AB dividend payments during the past 5 years:

Dividendai

2024

(for 2023)

2023

(for 2022)

2022

(for 2021)

2021

(for 2020

2020

(for 2019)

Dividend (Eur)

Dividend per share (Eur)

Number of shares

3,886,267

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

6. ORDER OF CHANGING OF THE ISSUER’S ARTICLES OF ASSOCIATION

The Articles of Company are changed by the resolution of the General Meeting of shareholders, adopted by the majority of

more than 2/3 of all the votes.

7. ISSUER’S BODIES

The Company has the General Meeting of shareholders, a one-man management body – chief executive officer (General

Manager) and the collegial management body – the Board. The Company does not have Supervisory Board.

The Board of the Company consists of 3 members. It is elected for the period of four years by the General Meeting. The

Board of the Company elects and withdraws and dismisses from the position the Chief Executive Officer, determines his

salary, confirms the job descriptions, appoints him and imposes penalties.

The competence of the General Manager and the Board of the Company, the procedure of their appointment and removal

does not differ from what is specified in the Law on Companies. The Board is made up of people with different professional

experiences and competencies.

The Board and Administration of the Company:

Vytautas Bucas

Position

Chairman of the Board, elected to the Board on 12/04/2007, re-elected on 27/04/2012, 05/07/2016

and 08/10/2020, end of the term – 2024.

Work experience

Since May 2013 Adviser, Chairman of the Board of Invalda Privatus Kapitalas AB

2006–May 2013 Adviser of Invalda LT AB, Board member (since May 2007 until May 2013

Chairman of the Board)

2006–2007 Director of Invaldos NekilnAojamojo Turto Fondas AB

2000–2006 SEB Bankas AB, Board member, Vice President, CFO, Head of IT Department

1992–2000 Senior Auditor, Senior Manager, Manager at Arthur Andersen

Participation in the activities of other companies

Number of shares and of

voting rights

Chairman of the Board of Invalda Privatus Kapitalas AB

39.63%

Chairman of the Board of Bordena UAB

0.00%

Board Member of Švytėjimas UAB

0.00%

Dalius Kaziunas

Position

Board member, elected to the Board on 29/04/2010, re-elected on 27/04/2012, 05/07/2016 and

08/10/2020, end of the term – 2024.

Work experience

Since May 2013 CEO, Board member of Invalda Privatus Kapitalas AB

2012–May 2013 President of Invalda LT AB, Board member (until 30/04/2012)

2008–2011 Adviser and Board member of Invalda LT AB

2008–2009 Director of Bankas Finasta AB

1996–February 2008 assistant of financial broker of FMI Finasta AB, financial broker, Director

Participation in the activities of other companies

Number of shares and of

voting rights

CEO and Board Member of Invalda Privatus Kapitalas AB

1.70%

Chairman of the Board of Lauko Gelininkystes Bandymu Stotis UAB

0.00%

Member of the Supervisory Board at Vernitas AB

0.00%

Chairman of the Board of Invetex UAB

0.00%

Member of the Board of Bordena UAB

0.00%

Chairman of the Board of Svytejimas UAB

0.00%

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

Andrius Anusauskas

Position

Chairman of the Board, elected to the Board on 08/10/2020, end of the term – 2024.

Work experience

Since May 2022 General manager at Inreal valdymas UAB

2018 – 2022 Finance director at Inreal valdymas UAB

2013 – 2018 Finance project manager at Invalda privatus kapitalas AB

2008 – 2013 Finance project manager at Invalda AB

2006 – 2008 CFO at SNORO fondų valdymas UAB

2004 – 2006 Accountant at Finasta AB FMĮ

2002 – 2004 Accountant at Labochema, UAB

Participation in the activities of other companies

Number of shares and

voting rights

Member of the Board at Invetex UAB

0.00 %

Member of the Board at Lauko Gėlininkystės Bandymų Stotis UAB

0.00 %

Director at Kulpės slėnis UAB

0.00 %

Director at Invetex UAB

0.00 %

Director at Inreal UAB

0.00 %

Director at Deltuvis UAB

0.00 %

Director at DOMMO Nerija UAB

0.00 %

Director at Inreal valdymas UAB

0.00 %

Director at POMUS UAB

100.00%

Jonas Krutinis

Position

Head of Finance Department since 23/02/2015, Head of Finance since 12/10/2015, General

manager since 15/05/2018.

Work experience

2014–2015 Business Intelligence Manager at SEB Baltics

2006–2014 Deputy Chairman of the Management Board, Head of Business Support, CFO at SEB

Bank, Russia

2002–2006 Head of Planning at SEB Vilniaus bankas AB

1999–2002 Business Consultant at Arthur Andersen UAB

1997–1999 Analyst at VB Vilfima UAB

1995–1997 Specialist at CSDL

Participation in the activities of other companies

Number of shares and of

voting rights

Board member of Autoverslas UAB

0.00%

Chairman of the Board of Autoverslo terminalas UAB

0.00%

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

The Company’s key management personnel include the Company’s General Manager, Chief Financial Officer, Chief

Operating Officer, Head of Technical Services, Head of HR, Head of Purchasing, Strategic Projects Manager and Head of

Business Development. In 2024 the average monthly remuneration to the management of the Company amounted to EUR

63 thousand (2023 – EUR 50 thousand). The remuneration is not paid to the Board members of the Company.

Remuneration to the management members of the Company (in thousand EUR) during the past 5 years:

2024

2023

2022

2021

2020

Wages, salaries

745

586

539

732

604

Social security contributions

Total

759

598

549

744

615

In the 2024 financial year, the total amount of annual bonuses paid to the Company’s management for the results achieved

during the reporting period was 109,000 EUR (no bonuses were paid for results achieved during the reporting period in the

2023 financial year). During 2024 the Company did not transfer any assets to the Board members, the Company’s General

Director, Head of Finance department; it also did not provide any guarantees or warranties, by which the performance of

their liabilities would be secured.

8. SIGNIFICANT AGREEMENTS IN WHICH THE COMPANY IS INVOLVED AND WHICH WOULD BECOME EFFECTIVE,

WOULD CHANGE OR WOULD BE TERMINATED IF THE CONTROL OF ISSUER CHANGED

During 2024 no material agreements were signed which would become effective, would change or would be terminated if

the control of the issuer changed. Furthermore, there were no agreements signed during 2024 between the Company and

its body, employees which allow compensations if they resign or are fired without the justified reason or their work finishes

as a result of the change of the issuer’s control.

9. RELATED PARTY TRANSACTIONS

The parties are considered related when one party has the possibility to control the other one or have significant influence

over the other party in making financial and operating decisions. The related parties of the Company as of 31 August 2024

were:

1. ARI-LUX UAB (the subsidiary) – reg.no 120989619, address Pramones str. 23, Guopstu vil., LT-21148 Trakai district,

2. Invalda Privatus Kapitalas AB (ultimate shareholder) – reg.no 303075527, address Žalgirio str. 92-901, LT-09303

Vilnius,

3. entities controlled by Invalda Privatus Kapitalas AB:

- Bordena UAB – reg.no 304073881, address Žemaičių str. 49B, Ariogala, LT-60253 Raseinių district,

- Svytejimas UAB – reg.no 123017127, address Švenčionių str. 110A, Nemenčinė, Vilnius district,

- Panerių konversija UAB – reg.no 305993224, address Žalgirio str. 94-1, LT-09300 Vilnius.

The related parties of the Company as of 31 August 2023 were:

1. ARI-LUX UAB (the subsidiary) – reg.no 120989619, address Pramones str. 23, Guopstu vil., LT-21148 Trakai district,

2. Invalda Privatus Kapitalas AB (ultimate shareholder) – reg.no 303075527, address Žalgirio str. 92-901, LT-09303

Vilnius,

3. entities controlled by Invalda Privatus Kapitalas AB:

- Bordena UAB – reg.no 304073881, address Žemaičių str. 49B, Ariogala, LT-60253 Raseinių district,

- Svytejimas UAB – reg.no 123017127, address Švenčionių str. 110A, Nemenčinė, Vilnius district,

- Inreal valdymas UAB – reg.no 222894170, address Žalgirio str. 94, LT-09300 Vilnius,

- Inreal Geo UAB – reg.no 302604810, address Žalgirio str. 94, LT-09300 Vilnius,

- Panerių konversija UAB – reg.no 305993224, address Žalgirio str. 94-1, LT-09300 Vilnius.

Transactions with the Group’s related parties in 2024 and 2023 and the balances in 2024 and 2023 are provided in the notes

(Note 25) to the consolidated and Company’s financial statements for the year 2024.

10. INFORMATION REGARDING COMPLIANCE WITH THE GOVERNANCE CODE OF LISTED COMPANIES

The Company complies with the principles set out by the governance code of companies listed on Nasdaq Vilnius AB stock

exchange. Compliance with the governance code in accordance with the form approved by the stock exchange is disclosed

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

in the appendix to this management report: “Vilniaus baldai AB report on the compliance with the governance code for the

companies listed on the stock exchange Nasdaq Vilnius regulated market for the FY2024”.

11. DATA ON THE PUBLICLY DISCLOSED INFORMATION

The publicly disclosed information about Vilniaus baldai AB for the financial year of 2024 can be found on the Company’s

website www.vilniausbaldai.lt.

Summary of publicly disclosed information since 1 September 2023:

Date of disclosure

Brief description of disclosed information

29/10/2024

VILNIAUS BALDAI AB interim condensed consolidated financial statement for the twelve

months of FY2024 ended August 31

27/09/2024

VILNIAUS BALDAI AB refinances long-term financial liabilities

19/08/2024

Resolutions of the general shareholders meeting of VILNIAUS BALDAI AB on 19/08/2024

26/07/2024

Convocation of the general shareholders meeting of VILNIAUS BALDAI AB and draft

resolutions

28/06/2024

VILNIAUS BALDAI AB result for activity and unaudited interim condensed consolidated

financial statements for the nine months of FY 2024

29/03/2024

VILNIAUS BALDAI AB interim condensed consolidated report and consolidated financial

statements for the six months of FY 2024

29/12/2023

VILNIAUS BALDAI AB result for activity and non audited condensed interim consolidated

financial statement for the three months of FY 2024

28/12/2023

Resolutions of the Annual General Shareholders Meeting of VILNIAUS BALDAI AB on

28/12/2023

22/12/2023

VILNIAUS BALDAI AB investor's calendar for 2024FY

07/12/2023

Convocation of the general shareholders meeting of VILNIAUS BALDAI AB and draft

resolutions

28/11/2023

Vilniaus Baldai AB Responsible Persons Confirmation

24/11/2023

VILNIAUS BALDAI AB annual audited information for the year 2023

27/10/2023

AB "VILNIAUS BALDAI" interim condensed consolidated financial statement for the twelve

months of FY2023 ended August 31

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

COMPANY REMUNERATION POLICY

Vilniaus baldai AB (hereinafter – the Company) prepared the Company Remuneration Report (hereinager – the Report) for

the 2024 financial year, which started on 1 September 2023 and ended on 31 August 2024. The Report is prepared in

accordance with the Law of the Republic of Lithuania on Financial Reporting as well as other legal acts. The Company

Remuneration Policy was approved by the Company’s shareholders at the General Meeting (hereinafter – the GM) held on

8 October 2020. The Report outlines the principles of remuneration for each member of the Board of Directors (hereinafter

– the Board) and the Audit Committee as well as provides information about other financial benefits.

Remuneration of Members of Board of Directors

Members of the Board are elected for the duration of four years as specified in the Articles of Association. Bonuses to the

members of the Board are approved and become payable by the decision of the Company’s shareholders at the GM in

accordance with relevant legal acts.

Once the total amount of the bonuses available for distribution is approved at the GM, members of the Board determine how

such bonus is divided among the members of the Board, depending on each member’s contribution to Company’s

performance.

Members of the Board may receive remuneration from the Company according to clauses of their contracts of employment

with the Company. Such clauses must be approved by the Board as well as the Audit Committee in advance.

Should members of the Board enter into Directors‘ Service Contracts with the Company, such contracts shall come into force

only by the decision taken at the GM.

Members of the Board shall not be entitled to receive any other types of remuneration or other benefits from the Company

unless such benefits are agreed at the GM.

Remuneration of the General Manager

The General Manager shall receive renumeration consisting of a fixed and variable portions:

1. Fixed remuneration is a fixed salary amount payable monthly and in accordance with the non-fixed term employment

contract between the General Manager and the Company. Such salary amount is determined by the Board.

2. Variable remuneration is portion of the renumeration which depends on the financial performance of the Company. The

amount of variable renumeration is determined by the Board and is payable on an annual basis.

The Board has the right to approve contractual arrangements between the General Manager and the Company in respect

of additional pensions benefits, early retirement benefits as well as payments in respect of termination of the contract of

employment.

The Company does not make any deferred payments of renumeration and does not exercise the option to recover a variable

portion of remuneration.

Company Remuneration Policy for FY2024

The remuneration policy is in line with the Company's strategy, long-term goals and interests, and has the following aims:

1. to ensure competitive remuneration of the key management personnel, corresponding to the financial results of the

Company;

2. increase the transparency of the Company and the accountability of key management personnel and enable

shareholders, potential investors and interested parties to get a complete and reliable picture of the remuneration

awarded to each member of key management personnel;

3. avoid conflicts of interest and discrimination on any basis while determining the remuneration of key management

personnel and members of the Board

The Company does not form any Remuneration or other relevant committees. The function of these committees is performed

by the Board of the Company.

There were no deviations from the remuneration policy during the 2024 financial year.

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

Key financial indicators of the Group during the period of FY2020 to FY2024:

2024

2023

2022

2021

2020

Net profitability = net profit / turnover * 100

10.30%

1.62%

1.45%

0.17%

6.86%

EBITDA margin = EBITDA / turnover * 100

18.20%

8.96%

8.44%

5.55%

9.89%

Turnover (million EUR)

97.27

97.87

100.74

99.36

73.32

Net profit (million EUR)

10.02

1.59

1.46

0.17

5.03

EBITDA (million EUR)

17.70

8.77

8.51

5.52

7.25

EBIT (million EUR)

13.23

4.22*

3.58*

1.48

4.27

* - indicated corrections of indicators which were previously reported the consolidated and company’s financial statements

for the FY 2023 ended 31 August 2023.

Remuneration of Company‘s employees consists of a fixed and variable portions. The variable portion of remuneration is

based on performance of the Company.

Remuneration of Company‘s employees during the period of FY2020 to FY2024, EUR:

2024

2023

2022

2021

2020

Executive personnel

8,271

6,423

5,592

6,480

5,765

Specialists

3,247

2,983

2,647

2,399

2,534

Workers

2,432

2,135

1,893

1,782

1,690

Total

2,621

2,279

2,001

1,881

1,800

Information about the Renumeration to the Members of the Board and Key Management Personnel in FY2024

In FY2024 the remuneration was not paid to the Board members of the Company.

In FY2024 a fixed portion of remuneration of 100 thousand EUR was paid to the General Manager, in accordance with the

non-fixed term employment contract between the General Manager and the Company.

Remuneration of the General Manager of the Company in FY2024:

Fixed remuneration,

EUR

Variable renumeration,

EUR

Other benefits,

EUR

Jonas Krutinis

99,661

50,000

23,214

The General Manager of the Company did not receive any renumeration from the Company which belongs to the Group of

companies, as defined by the Law of the Republic of Lithuania on Consolidated Financial Reporting by Groups of

Undertakings. The General Manager of the Company was not offered and did not receive any Company shares or options

of the Company shares. The Company does not make any deferred payments of renumeration and does not exercise the

option to recover a variable portion of remuneration.

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

AB "VILNIAUS BALDAI" CORPORATE SOCIAL RESPONSIBILITY (SUSTAINABILITY) REPORT

The Company’s sustainability report is published on the Company’s website at www.vilniausbaldai.lt and on stock exchange

AB Nasdaq Vilnius.

General Manager Jonas Krutinis

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

VILNIAUS BALDAI AB REPORT ON THE COMPLIANCE WITH THE

GOVERNANCE CODE FOR THE COMPANIES LISTED ON THE STOCK

EXCHANGE NASDAQ VILNIUS REGULATED MARKET FOR THE FY2024

1. Summary of the Corporate Governance Reporting Form

According to the Articles of Association of Vilniaus baldai AB (hereinafter – “the Company”), the governing bodies of the

Company are the General Meeting of Shareholders, the Board of Directors, and the Company's General Manager. The

Company does not have a Supervisory Board. The functions of the Supervisory Board, as specified in the Law on Companies

of the Republic of Lithuania, are performed by the Company's Board of directors, which is elected for a term of four years.

An Audit committee operates within the Company, while Remuneration and Nomination committees are not established.

2. Structured table for disclosure

The Company, following Article 12(3) of the Law on Securities of the Republic of Lithuania and item 25.4 of the Trading

Rules of the stock exchange NASDAQ Vilnius AB, discloses its compliance with the Governance Code, approved for the

companies listed on the regulated market, and its specific provisions. In the event of non-compliance with the Code or with

certain provisions thereof, it must be specified which provisions are not complied with and the reasons of non-compliance.

PRINCIPLES/ RECOMMENDATIONS

YES/NO/

NOT

APPLICAB

COMMENTARY

1. Principle 1: General meeting of shareholders, equitable treatment of shareholders, and shareholders’ rights

1.1 The corporate governance framework should ensure the equitable treatment of all shareholders. The corporate

governance framework should protect the rights of shareholders.

1.1.1. All shareholders should be provided with access to

the information and/or documents established in the

legal acts on equal terms. All shareholders should be

furnished with equal opportunity to participate in the

decision-making process where significant corporate

matters are discussed.

Yes

The Company fully follows the provisions

listed in this recommendation.

1.1.2. It is recommended that the company’s capital should

consist only of the shares that grant the same rights

to voting, ownership, dividend and other rights to all

of their holders.

Yes

The Company’s capital consists of

ordinary shares that grant the same rights

to all their holders.

1.1.3. It is recommended that investors should have access

to the information concerning the rights attached to

the shares of the new issue or those issued earlier in

advance, i.e. before they purchase shares.

Yes

The Company fully follows the provisions

listed in this recommendation.

1.1.4. Exclusive transactions that are particularly important

to the company, such as transfer of all or almost all

assets of the company which in principle would mean

the transfer of the company, should be subject to

approval of the general meeting of shareholders.

Yes

The last such significant transaction was

the sale of the premises of the old factory,

which was approved in the general

shareholders meeting.

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

1.1.5. Procedures for convening and conducting a general

meeting of shareholders should provide shareholders

with equal opportunities to participate in the general

meeting of shareholders and should not prejudice the

rights and interests of shareholders. The chosen

venue, date and time of the general meeting of

shareholders should not prevent active participation

of shareholders at the general meeting. In the notice

of the general meeting of shareholders being

convened, the company should specify the last day

on which the proposed draft decisions should be

submitted at the latest.

Yes

All the shareholders of the Company are

informed about the date, venue and time

of the General Meeting. Prior to the

General Meeting of Shareholders all the

shareholders have possibility to receive

information related to the agenda of the

General Meeting.

1.1.6. With a view to ensure the right of shareholders living

abroad to access the information, it is recommended,

where possible, that documents prepared for the

general meeting of shareholders in advance should

be announced publicly not only in Lithuanian

language but also in English and/or other foreign

languages in advance. It is recommended that the

minutes of the general meeting of shareholders after

the signing thereof and/or adopted decisions should

be made available publicly not only in Lithuanian

language but also in English and/or other foreign

languages. It is recommended that this information

should be placed on the website of the company.

Such documents may be published to the extent that

their public disclosure is not detrimental to the

company or the company’s commercial secrets are

not revealed.

Yes

The Company discloses the documents

prepared for the General Meeting,

including draft resolutions of the meetings

via the information disclosure system of

AB NASDAQ Vilnius Stock Exchange.

This information is also publicly

accessible on the website of the

Company.

1.1.7. Shareholders who are entitled to vote should be

furnished with the opportunity to vote at the general

meeting of shareholders both in person and in

absentia. Shareholders should not be prevented from

voting in writing in advance by completing the general

voting ballot.

Yes

Shareholders of the Company can

implement the right to participate at the

General Meeting of Shareholders either in

person, or through the representative, if a

person has the duly issued Power of

Attorney. The Company also provides the

possibilities for the shareholders to vote

by completing the general voting ballot.

1.1.8. With a view to increasing the shareholders’

opportunities to participate effectively at general

meetings of shareholders, it is recommended that

companies should apply modern technologies on a

wider scale and thus provide shareholders with the

conditions to participate and vote in general meetings

of shareholders via electronic means of

communication. In such cases the security of

transmitted information must be ensured and it must

be possible to identify the participating and voting

person.

Not

applicable

Until now the Company has not had any

need to implement this recommendation.

Shareholders of the Company can vote

through the authorized person or

completing the general voting ballot.

1.1.9. It is recommended that the notice on the draft

decisions of the general meeting of shareholders

being convened should specify new candidatures of

members of the collegial body, their proposed

remuneration and the proposed audit company if

these issues are included into the agenda of the

general meeting of shareholders. Where it is

proposed to elect a new member of the collegial

body, it is recommended that the information about

his/her educational background, work experience

and other managerial positions held (or proposed)

should be provided.

Yes

The Company follows this

recommendation.

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

1.1.10. Members of the company’s collegial management

body, heads of the administration

or other

competent persons related to the company who can

provide information related to the agenda of the

general meeting of shareholders should take part in

the general meeting of shareholders. Proposed

candidates to member of the collegial body should

also participate in the general meeting of

shareholders in case the election of new members is

included into the agenda of the general meeting of

shareholders.

Yes

The Company follows this

recommendation.

2. Principle 2: Supervisory board

2.1. Functions and liability of the supervisory board.

The supervisory board of the company should ensure representation of the interests of the company and its

shareholders, accountability of this body to the shareholders and objective monitoring of the company’s operations

and its management bodies as well as constantly provide recommendations to the management bodies of the

company.

The supervisory board should ensure the integrity and transparency of the company’s financial accounting and

control system.

2.1.1. Members of the supervisory board should act in good

faith, with care and responsibility for the benefit and

in the interests of the company and its shareholders

and represent their interests, having regard to the

interests of employees and public welfare.

Not

applicable

The Supervisory Board is not formed in

the Company. The functions of the

Supervisory Board are performed by the

Board of the Company.

2.1.2. Where decisions of the supervisory board may have

a different effect on the interests of the company’s

shareholders, the supervisory board should treat all

shareholders impartially and fairly. It should ensure

that shareholders are properly informed about the

company’s strategy, risk management and control,

and resolution of conflicts of interest.

Not

applicable

Members of the Supervisory Board are

not appointed by the Company.

2.1.3. The supervisory board should be impartial in passing

decisions that are significant for the company’s

operations and strategy. Members of the supervisory

board should act and pass decisions without an

external influence from the persons who elected

them.

Not

applicable

Members of the Supervisory Board are

not appointed by the Company.

2.1.4. Members of the supervisory board should clearly

voice their objections in case they believe that a

decision of the supervisory board is against the

interests of the company. Independent

members of

the supervisory board should: a) maintain

independence of their analysis and decision-making;

b) not seek or accept any unjustified privileges that

might compromise their independence.

Not

applicable

Members of the Supervisory Board are

not appointed by the Company.

2.1.5. The supervisory board should oversee that the

company’s tax planning strategies are designed and

implemented in accordance with the legal acts in

order to avoid faulty practice that is not related to the

long-term interests of the company and its

shareholders, which may give rise to reputational,

legal or other risks.

Not

applicable

Members of the Supervisory Board are

not appointed by the Company.

For the purposes of this Code, heads of the administration are the employees of the company who hold top level

management positions.

For the purposes of this Code, the criteria of independence of members of the supervisory board are interpreted as the

criteria of unrelated parties defined in Article 31(7) and (8) of the Law on Companies of the Republic of Lithuania.

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

2.1.6. The company should ensure that the supervisory

board is provided with sufficient resources (including

financial ones) to discharge their duties, including the

right to obtain all the necessary information or to seek

independent professional advice from external legal,

accounting or other experts on matters pertaining to

the competence of the supervisory board and its

committees.

Not

applicable

Members of the Supervisory Board are

not appointed by the Company.

2.2. Formation of the supervisory board.

The procedure of the formation of the supervisory board should ensure proper resolution of conflicts of interest and

effective and fair corporate governance.

2.2.1. The members of the supervisory board elected by the

general meeting of shareholders should collectively

ensure the diversity of qualifications, professional

experience and competences and seek for gender

equality. With a view to maintain a proper balance

between the qualifications of the members of the

supervisory board, it should be ensured that

members of the supervisory board, as a whole,

should have diverse knowledge, opinions and

experience to duly perform their tasks.

Members of the Supervisory Board are

not appointed by the Company.

2.2.2. Members of the supervisory board should be

appointed for a specific term, subject to individual re-

election for a new term in office in order to ensure

necessary development of professional experience.

Members of the Supervisory Board are

not appointed by the Company.

2.2.3. Chair of the supervisory board should be a person

whose current or past positions constituted no

obstacle to carry out impartial activities. A former

manager or management board member of the

company should not be immediately appointed as

chair of the supervisory board either. Where the

company decides to depart from these

recommendations, it should provide information on

the measures taken to ensure impartiality of the

supervision.

Members of the Supervisory Board are

not appointed by the Company.

2.2.4. Each member should devote sufficient time and

attention to perform his duties as a member of the

supervisory board. Each member of the supervisory

board should undertake to limit his other professional

obligations (particularly the managing positions in

other companies) so that they would not interfere with

the proper performance of the duties of a member of

the supervisory board. Should a member of the

supervisory board attend less than a half of the

meetings of the supervisory board throughout the

financial year of the company, the shareholders of the

company should be notified thereof.

Members of the Supervisory Board are

not appointed by the Company.

2.2.5. When it is proposed to appoint a member of the

supervisory board, it should be announced which

members of the supervisory board are deemed to be

independent. The supervisory board may decide that,

despite the fact that a particular member meets all

the criteria of independence, he/she cannot be

considered independent due to special personal or

company-related circumstances.

Members of the Supervisory Board are

not appointed by the Company.

2.2.6. The amount of remuneration to members of the

supervisory board for their activity and participation in

meetings of the supervisory board should be

approved by the general meeting of shareholders.

Members of the Supervisory Board are

not appointed by the Company.

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

2.2.7. Every year the supervisory board should carry out an

assessment of its activities. It should include

evaluation of the structure of the supervisory board,

its work organization and ability to act as a group,

evaluation of the competence and work efficiency of

each member of the supervisory board, and

evaluation whether the supervisory board has

achieved its objectives. The supervisory board

should, at least once a year, make public respective

information about its internal structure and working

procedures.

Members of the Supervisory Board are

not appointed by the Company.

3. Principle 3: Management Board

3.1. Functions and liability of the management board

The management board should ensure the implementation of the company’s strategy and good corporate

governance with due regard to the interests of its shareholders, employees and other interest groups.

3.1.1. The management board should ensure the

implementation of the company’s strategy approved

by the supervisory board if the latter has been formed

at the company. In such cases where the supervisory

board is not formed, the management board is also

responsible for the approval of the company’s

strategy.

Yes

The Company follows this

recommendation.

3.1.2. As a collegial management body of the company, the

management board performs the functions assigned

to it by the Law and in the articles of association of

the company, and in such cases where the

supervisory board is not formed in the company, it

performs inter alia the supervisory functions

established in the Law. By performing the functions

assigned to it, the management board should take

into account the needs of the company’s

shareholders, employees and other interest groups

by respectively striving to achieve sustainable

business development.

Yes

The Company has a collegial

management body – the Board.

3.1.3. The management board should ensure compliance

with the laws and the internal policy of the company

applicable to the company or a group of companies

to which this company belongs. It should also

establish the respective risk management and control

measures aimed at ensuring regular and direct

liability of managers.

Yes

The Company follows this

recommendation.

3.1.4. Moreover, the management board should ensure that

the measures included into the OECD Good Practice

Guidance

on Internal Controls, Ethics and

Compliance are applied at the company in order to

ensure adherence to the applicable laws, rules and

standards.

Yes

The Company follows this

recommendation.

3.1.5. When appointing the manager of the company, the

management board should take into account the

appropriate balance between the candidate’s

qualifications, experience and competence.

Yes

The Company follows this

recommendation.

3.2. Formation of the management board

Link to the OECD Good Practice Guidance on Internal Controls, Ethics and Compliance: https://www.oecd.org/daf/anti-

bribery/44884389.pdf

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

3.2.1. The members of the management board elected by

the supervisory board or, if the supervisory board is

not formed, by the general meeting of shareholders

should collectively ensure the required diversity of

qualifications, professional experience and

competences and seek for gender equality. With a

view to maintain a proper balance in terms of the

current qualifications possessed by the members of

the management board, it should be ensured that the

members of the management board would have, as

a whole, diverse knowledge, opinions and

experience to duly perform their tasks.

Yes

The Board formation mechanism allows

ensuring proper monitoring of the

Company. Only a person, having the

proper qualification can become a Board

member.

3.2.2. Names and surnames of the candidates to become

members of the management board, information on

their educational background, qualifications,

professional experience, current positions, other

important professional obligations and potential

conflicts of interest should be disclosed without

violating the requirements of the legal acts regulating

the handling of personal data at the meeting of the

supervisory board in which the management board or

individual members of the management board are

elected. In the event that the supervisory board is not

formed, the information specified in this paragraph

should be submitted to the general meeting of

shareholders. The management board should, on

yearly basis, collect data provided in this paragraph

on its members and disclose it in the company’s

annual report.

Yes

Information about current Board

members is presented in the Company’s

periodic reports.

3.2.3. All new members of the management board should

be familiarized with their duties and the structure and

operations of the company.

Yes

The Company’s Board members are

acquainted with the Company’s

organisation, its activity and management

specifics.

3.2.4. Members of the management board should be

appointed for a specific term, subject to individual re-

election for a new term in office in order to ensure

necessary development of professional experience

and sufficiently frequent reconfirmation of their

status.

Yes

The Company follows this

recommendation. The Company’s Board

is elected till 2024.

3.2.5. Chair of the management board should be a person

whose current or past positions constitute no

obstacle to carry out impartial activity. Where the

supervisory board is not formed, the former manager

of the company should not be immediately appointed

as chair of the management board. When a company

decides to depart from these recommendations, it

should furnish information on the measures it has

taken to ensure the impartiality of supervision.

Yes

Chairman of the Board of the Company is

not and was not the chief executive officer

of the Company. There are no obstacles

for independent and fair supervision.

3.2.6. Each member should devote sufficient time and

attention to perform his duties as a member of the

management board. Should a member of the

management board attend less than a half of the

meetings of the management board throughout the

financial year of the company, the supervisory board

of the company or, if the supervisory board is not

formed at the company, the general meeting of

shareholders should be notified thereof.

Yes

Board members perform their functions

properly: actively participate in the Board

meetings and devote sufficient time and

attention to perform their duties. Board

meetings are attended by all members.

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

3.2.7. In the event that the management board is elected in

the cases established by the Law where the

supervisory board is not formed at the company, and

some of its members will be independent

, it should

be announced which members of the management

board are deemed as independent. The

management board may decide that, despite the fact

that a particular member meets all the criteria of

independence established by the Law, he/she cannot

be considered independent due to special personal

or company-related circumstances.

Yes

The Company follows this

recommendation.

3.2.8. The general meeting of shareholders of the company

should approve the amount of remuneration to the

members of the management board for their activity

and participation in the meetings of the management

board.

Yes

The general shareholders’ meeting

approves the amount of annual tandems

paid to the members of the Board.

3.2.9. The members of the management board should act

in good faith, with care and responsibility for the

benefit and the interests of the company and its

shareholders with due regard to other stakeholders.

When adopting decisions, they should not act in their

personal interest; they should be subject to no-

compete agreements and they should not use the

business information or opportunities related to the

company’s operations in violation of the company’s

interests.

Yes

The Company follows this

recommendation.

3.2.10. Every year the management board should carry out

an assessment of its activities. It should include

evaluation of the structure of the management board,

its work organization and ability to act as a group,

evaluation of the competence and work efficiency of

each member of the management board, and

evaluation whether the management board has

achieved its objectives. The management board

should, at least once a year, make public respective

information about its internal structure and working

procedures in observance of the legal acts regulating

the processing of personal data.

There was no such practice.

4. Principle 4: Rules of procedure of the supervisory board and the management board of the company

4.1. The rules of procedure of the supervisory board, if it is formed at the company, and of the management board should

ensure efficient operation and decision-making of these bodies and promote active cooperation between the

company’s management bodies.

For the purposes of this Code, the criteria of independence of the members of the board are interpreted as the criteria of

unrelated persons defined in Article 33(7) of the Law on Companies of the Republic of Lithuania.

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

4.1.1. The management board and the supervisory board,

if the latter is formed at the company, should act in

close cooperation in order to attain benefit for the

company and its shareholders. Good corporate

governance requires an open discussion between

the management board and the supervisory board.

The management board should regularly and, where

necessary, immediately inform the supervisory board

about any matters significant for the company that

are related to planning, business development, risk

management and control, and compliance with the

obligations at the company. The management board

should inform he supervisory board about any

derogations in its business development from the

previously formulated plans and objectives by

specifying the reasons for this.

Not

applicable

Members of the Supervisory Board are

not appointed by the Company.

4.1.2. It is recommended that meetings of the company’s

collegial bodies should be held at the respective

intervals, according to the pre-approved schedule.

Each company is free to decide how often meetings

of the collegial bodies should be convened but it is

recommended that these meetings should be

convened at such intervals that uninterruptable

resolution of essential corporate governance issues

would be ensured. Meetings of the company’s

collegial bodies should be convened at least once per

quarter.

Not

applicable

Members of the Supervisory Board are

not appointed by the Company.

4.1.3. Members of a collegial body should be notified of the

meeting being convened in advance so that they

would have sufficient time for proper preparation for

the issues to be considered at the meeting and a

fruitful discussion could be held and appropriate

decisions could be adopted. Along with the notice of

the meeting being convened all materials relevant to

the issues on the agenda of the meeting should be

submitted to the members of the collegial body. The

agenda of the meeting should not be changed or

supplemented during the meeting, unless all

members of the collegial body present at the meeting

agree with such change or supplement to the

agenda, or certain issues that are important to the

company require immediate resolution.

Not

applicable

Members of the Supervisory Board are

not appointed by the Company.

4.1.4. In order to coordinate the activities of the company’s

collegial bodies and ensure effective decision-

making process, the chairs of the company’s collegial

supervision and management bodies should mutually

agree on the dates and agendas of the meetings and

close cooperate in resolving other matters related to

corporate governance. Meetings of the company’s

supervisory board should be open to members of the

management board, particularly in such cases where

issues concerning the removal of the management

board members, their responsibility or remuneration

are discussed.

Not

applicable

Members of the Supervisory Board are

not appointed by the Company.

5. Principle 5: Nomination, remuneration and audit committees

5.1. Purpose and formation of committees

The committees formed at the company should increase the work efficiency of the supervisory board or, where the

supervisory board is not formed, of the management board which performs the supervisory functions by ensuring

that decisions are based on due consideration and help organise its work in such a way that the decisions it takes

would be free of material conflicts of interest.

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

Committees should exercise independent judgment and integrity when performing their functions and provide the

collegial body with recommendations concerning the decisions of the collegial body. However, the final decision

should be adopted by the collegial body.

5.1.1. Taking due account of the company-related

circumstances and the chosen corporate governance

structure, the supervisory board of the company or,

in cases where the supervisory board is not formed,

the management board which performs the

supervisory functions, establishes committees. It is

recommended that the collegial body should form the

nomination, remuneration and audit committees

The Committees of Nomination and

Remuneration are not established

because of the structural simplicity of the

Company’s management.

Question regarding establishment of

nomination and remuneration committees

will be solved in the future after analyzing

situation, evaluating financial expenses

and other factors, implementing best

practices in the market.

Compliance with the requirements for the

preparation of the set of the consolidated

financial statements, internal control and

financial risk management systems, legal

acts regulating the preparation of the set

of the consolidated financial statements is

supervised by the Audit Committee

established on 22 December 2021.

5.1.2. Companies may decide to set up less than three

committees. In such case companies should explain

in detail why they have chosen the alternative

approach, and how the chosen approach

corresponds with the objectives set for the three

different committees.

5.1.3. In the cases established by the legal acts the

functions assigned to the committees formed at

companies may be performed by the collegial body

itself. In such case the provisions of this Code

pertaining to the committees (particularly those

related to their role, operation and transparency)

should apply, where relevant, to the collegial body as

a whole.

The Committees of Nomination and

Remuneration are not established

because of the structural simplicity of the

Company’s management.

Question regarding establishment of

nomination and remuneration committees

will be solved in the future after analyzing

situation, evaluating financial expenses

and other factors, implementing best

practices in the market.

Compliance with the requirements for the

preparation of the set of the consolidated

financial statements, internal control and

financial risk management systems, legal

acts regulating the preparation of the set

of the consolidated financial statements is

supervised by the Audit Committee

established on 22 December 2021.

5.1.4. Committees established by the collegial body should

normally be composed of at least three members.

Subject to the requirements of the legal acts,

committees could be comprised only of two members

as well. Members of each committee should be

selected on the basis of their competences by giving

priority to independent members of the collegial

body. The chair of the management board should not

serve as the chair of committees.

The Committees of Nomination and

Remuneration are not established

because of the structural simplicity of the

Company’s management.

The Audit Committee of Vilniaus baldai

AB consists of 3 members, one of them is

independent.

The legal acts may provide for the obligation to form a respective committee. For example, the Law on the Audit of Financial

Statements of the Republic of Lithuania provides that public-interest entities (including but not limited to public limited liability

companies whose securities are traded on a regulated market of the Republic of Lithuania and/or of any other Member State)

are under the obligation to set up an audit committee (the legal acts provide for the exemptions where the functions of the

audit committee may be carried out by the collegial body performing the supervisory functions).

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

5.1.5. The authority of each committee formed should be

determined by the collegial body itself. Committees

should perform their duties according to the authority

delegated to them and regularly inform the collegial

body about their activities and performance on a

regular basis. The authority of each committee

defining its role and specifying its rights and duties

should be made public at least once a year (as part

of the information disclosed by the company on its

governance structure and practice on an annual

basis). In compliance with the legal acts regulating

the processing of personal data, companies should

also include in their annual reports the statements of

the existing committees on their composition, the

number of meetings and attendance over the year as

well as the main directions of their activities and

performance.

The Committees of Nomination and

Remuneration are not established

because of the structural simplicity of the

Company’s management.

5.1.6. With a view to ensure the independence and

impartiality of the committees, the members of the

collegial body who are not members of the

committees should normally have a right to

participate in the meetings of the committee only if

invited by the committee. A committee may invite or

request that certain employees of the company or

experts would participate in the meeting. Chair of

each committee should have the possibility to

maintain direct communication with the shareholders.

Cases where such practice is to be applied should be

specified in the rules regulating the activities of the

committee.

The Committees of Nomination and

Remuneration are not established

because of the structural simplicity of the

Company’s management.

5.2. Nomination committee

5.2.1. The key functions of the nomination committee

should be the following:

1) to select candidates to fill vacancies in the

membership of supervisory and management bodies

and the administration and recommend the collegial

body to approve them. The nomination committee

should evaluate the balance of skills, knowledge and

experience in the management body, prepare a

description of the functions and capabilities required

to assume a particular position and assess the time

commitment expected;

2) assess, on a regular basis, the structure, size and

composition of the supervisory and management

bodies as well as the skills, knowledge and activity of

its members, and provide the collegial body with

recommendations on how the required changes

should be sought;

3) devote the attention necessary to ensure

succession planning.

The Committees of Nomination and

Remuneration are not established

because of the structural simplicity of the

Company’s management.

5.2.2. When dealing with issues related to members of the

collegial body who have employment relationships

with the company and the heads of the

administration, the manager of the company should

be consulted by granting him/her the right to submit

proposals to the Nomination Committee.

The Committees of Nomination and

Remuneration are not established

because of the structural simplicity of the

Company’s management.

5.3. Remuneration committee

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

5.3.1. The main functions of the remuneration committee

should be as follows:

1) submit to the collegial body proposals on the

remuneration policy applied to members of the

supervisory and management bodies and the heads

of the administration for approval. Such policy should

include all forms of remuneration, including the fixed-

rate remuneration, performance-based

remuneration, financial incentive schemes, pension

arrangements and termination payments as well as

conditions which would allow the company to recover

the amounts or suspend the payments by specifying

the circumstances under which it would be expedient

to do so;

2) submit to the collegial body proposals regarding

individual remuneration for members of the collegial

bodies and the heads of the administration in order to

ensure that they would be consistent with the

company’s remuneration policy and the evaluation of

the performance of the persons concerned;

3) review, on a regular basis, the remuneration policy

and its implementation.

The Committees of Nomination and

Remuneration are not established

because of the structural simplicity of the

Company’s management.

5.4. Audit committee.

5.4.1. The key functions of the audit committee are defined

in the legal acts regulating the activities of the audit

committee

The compliance with the requirements for

the preparation of the set of the

consolidated financial statements,

internal control and financial risk

management systems, legal acts

regulating the preparation of the set of the

consolidated financial statements is

supervised by the Audit Committee

established on 22 December 2021.

The main functions of the Audit

Committee of Vilniaus baldai AB are:

1. to advice for the Board on the selection,

assignment, repeated assignment and

dismissal of the external audit company

and on the conditions of the agreement

with external audit company;

2. to observe the process of external

audit;

3. to observe if external audit company

and its auditors keep the principles of

independency and objectivity;

4. to observe the process of preparation

of financial statements;

5. to observe the efficiency of internal

control and risk management systems

5.4.2. All members of the committee should be provided

with detailed information on specific issues of the

company’s accounting system, finances and

operations. The heads of the company’s

administration should inform the audit committee

about the methods of accounting for significant and

unusual transactions where the accounting may be

subject to different approaches.

Yes

5.4.3. The audit committee should decide whether the

participation of the chair of the management board,

the manager of the company, the chief finance officer

(or senior employees responsible for finance and

accounting), the internal and external auditors in its

meetings is required (and, if required, when). The

committee should be entitled, when needed, to meet

the relevant persons without members of the

management bodies present.

Yes

5.4.4. The audit committee should be informed about the

internal auditor’s work program and should be

furnished with internal audit reports or periodic

summaries. The audit committee should also be

informed about the work program of external auditors

and should receive from the audit firm a report

describing all relationships between the independent

audit firm and the company and its group.

Yes

Issues related to the activities of audit committees are regulated by Regulation No. 537/2014 of the European Parliament

and the Council of 16 April 2014 on specific requirements regarding statutory audit of public-interest entities, the Law on the

Audit of Financial Statements of the Republic of Lithuania, and the Rules Regulating the Activities of Audit Committees

approved by the Bank of Lithuania.

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

5.4.5. The audit committee should examine whether the

company complies with the applicable provisions

regulating the possibility of lodging a complaint or

reporting anonymously his/her suspicions of potential

violations committed at the company and should also

ensure that there is a procedure in place for

proportionate and independent investigation of such

issues and appropriate follow-up actions.

Yes

and to evaluate the need of internal audit

functions once per financial year.

6. Currently, there is no separate internal

auditor position in Vilniaus baldai AB. To

reduce the risk of fraud. The company has

an effective internal control system, which

is implemented through the company's

procedures, procedures and orders, and

internal audits of compliance with

procedures.

5.4.6. The audit committee should submit to the supervisory

board or, where the supervisory board is not formed,

to the management board its activity report at least

once in every six months, at the time that annual and

half-yearly reports are approved.

Yes

6. Principle 6: Prevention and disclosure of conflicts of interest

6.1. The corporate governance framework should encourage members of the company’s supervisory and management

bodies to avoid conflicts of interest and ensure a transparent and effective mechanism of disclosure of conflicts of

interest related to members of the supervisory and management bodies.

6.1.1. Any member of the company’s supervisory and

management body should avoid a situation where

his/her personal interests are or may be in conflict

with the company’s interests. In case such a situation

did occur, a member of the company’s supervisory or

management body should, within a reasonable

period of time, notify other members of the same

body or the body of the company which elected

him/her or the company’s shareholders of such

situation of a conflict of interest, indicate the nature of

interests and, where possible, their value.

Yes

The Company follows this

recommendation.

7. Principle 7: Remuneration policy of the company

7.1. The remuneration policy and the procedure for review and disclosure of such policy established at the company

should prevent potential conflicts of interest and abuse in determining remuneration of members of the collegial

bodies and heads of the administration, in addition it should ensure the publicity and transparency of the company’s

remuneration policy and its long-term strategy.

7.1.1. The company should approve and post the

remuneration policy on the website of the company;

such policy should be reviewed on a regular basis

and be consistent with the company’s long-term

strategy.

Yes

The Company follows this

recommendation.

The Company’s remuneration policy is

posted on the website of the company

www.vilniausbaldai.lt

7.1.2. The remuneration policy should include all forms of

remuneration, including the fixed-rate remuneration,

performance-based remuneration, financial incentive

schemes, pension arrangements and termination

payments as well as the conditions specifying the

cases where the company can recover the disbursed

amounts or suspend the payments.

Yes

The Company follows this

recommendation.

7.1.3. With a view to avoid potential conflicts of interest, the

remuneration policy should provide that members of

the collegial bodies which perform the supervisory

functions should not receive remuneration based on

the company’s performance.

Yes

The Company follows this

recommendation.

7.1.4. The remuneration policy should provide sufficient

information on the policy regarding termination

payments. Termination payments should not exceed

a fixed amount or a fixed number of annual wages

and in general should not be higher than the non-

variable component of remuneration for two years or

the equivalent thereof. Termination payments should

not be paid if the contract is terminated due to

inadequate performance.

Yes

By the decision of the Board, agreements

on the conditions of termination of the

employment contract and payments

related to the termination of the

employment contract may be concluded

with the head of the Company.

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

7.1.5. In the event that the financial incentive scheme is

applied at the company, the remuneration policy

should contain sufficient information about the

retention of shares after the award thereof. Where

remuneration is based on the award of shares,

shares should not be vested at least for three years

after the award thereof. After vesting, members of the

collegial bodies and heads of the administration

should retain a certain number of shares until the end

of their term in office, subject to the need to

compensate for any costs related to the acquisition of

shares.

Not

applicable

Schemes anticipating remuneration of

directors in shares, share options or any

other right to purchase shares or be

remunerated on the basis of share price

movements are not used in the Company.

7.1.6. The company should publish information about the

implementation of the remuneration policy on its

website, with a key focus on the remuneration policy

in respect of the collegial bodies and managers in the

next and, where relevant, subsequent financial years.

It should also contain a review of how the

remuneration policy was implemented during the

previous financial year. The information of such

nature should not include any details having a

commercial value. Particular attention should be paid

on the major changes in the company’s remuneration

policy, compared to the previous financial year.

Yes

The Company follows this

recommendation.

7.1.7. It is recommended that the remuneration policy or

any major change of the policy should be included on

the agenda of the general meeting of shareholders.

The schemes under which members and employees

of a collegial body receive remuneration in shares or

share options should be approved by the general

meeting of shareholders.

Yes

The Company follows this

recommendation.

8. Principle 8: Role of stakeholders in corporate governance

8.1. The corporate governance framework should recognize the rights of stakeholders entrenched in the laws or mutual

agreements and encourage active cooperation between companies and stakeholders in creating the company value,

jobs and financial sustainability. In the context of this principle the concept “stakeholders” includes investors,

employees, creditors, suppliers, clients, local community and other persons having certain interests in the company

concerned.

8.1.1. The corporate governance framework should ensure

that the rights and lawful interests of stakeholders are

protected.

Yes

The information about the Company,

indicated in these recommendations, is

disclosed in the following sources: in the

consolidated management report of the

Company, financial statements, reports

on the purchase/loss of blocks of shares,

the reports on the essential events,

announcing this information in the

information disclosure system of Nasdaq

Vilnius AB Stock Exchange and on the

Company’s website.

8.1.2. The corporate governance framework should create

conditions for stakeholders to participate in corporate

governance in the manner prescribed by law.

Examples of participation by stakeholders in

corporate governance include the participation of

employees or their representatives in the adoption of

decisions that are important for the company,

consultations with employees or their representatives

on corporate governance and other important

matters, participation of employees in the company’s

authorized capital, involvement of creditors in

corporate governance in the cases of the company’s

insolvency, etc.

8.1.3. Where stakeholders participate in the corporate

governance process, they should have access to

relevant information.

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

8.1.4. Stakeholders should be provided with the possibility

of reporting confidentially any illegal or unethical

practices to the collegial body performing the

supervisory function.

9. Principle 9: Disclosure of information

9.1. The corporate governance framework should ensure the timely and accurate disclosure of all material corporate

issues, including the financial situation, operations and governance of the company.

9.1.1. In accordance with the company’s procedure on

confidential information and commercial secrets and

the legal acts regulating the processing of personal

data, the information publicly disclosed by the

company should include but not be limited to the

following:

9.1.1.1. operating and financial results of the company;

Yes

The information about the Company,

indicated in these recommendations, is

disclosed in the following sources: in the

consolidated management report of the

Company, financial statements, social

responsibility report, reports on the

purchase/loss of blocks of shares, the

reports on the essential events,

announcing this information in the

information disclosure system of Nasdaq

Vilnius AB Stock Exchange and on the

Company’s website.

9.1.1.2. objectives and non-financial information of the

company;

9.1.1.3. persons holding a stake in the company or

controlling it directly and/or indirectly and/or together

with related persons as well as the structure of the

group of companies and their relationships by

specifying the final beneficiary;

9.1.1.4. members of the company’s supervisory and

management bodies who are deemed independent,

the manager of the company, the shares or votes

held by them at the company, participation in

corporate governance of other companies, their

competence and remuneration;

9.1.1.5. reports of the existing committees on their

composition, number of meetings and attendance of

members during the last year as well as the main

directions and results of their activities;

9.1.1.6. potential key risk factors, the company’s risk

management and supervision policy;

9.1.1.7. the company’s transactions with related parties;

9.1.1.8. main issues related to employees and other

stakeholders (for instance, human resource policy,

participation of employees in corporate governance,

award of the company’s shares or share options as

incentives, relationships with creditors, suppliers,

local community, etc.);

9.1.1.9. structure and strategy of corporate governance;

9.1.1.10. initiatives and measures of social responsibility

policy and anti-corruption fight, significant current or

planned investment projects.This list is deemed

minimum and companies are encouraged not to

restrict themselves to the disclosure of information

included into this list. This principle of the Code does

not exempt companies from their obligation to

disclose information as provided for in the applicable

legal acts.

9.1.2. When disclosing the information specified in

paragraph 9.1.1.1 of recommendation 9.1.1, it is

recommended that the company which is a parent

company in respect of other companies should

disclose information about the consolidated results of

the whole group of companies.

Yes

The Company follows this

recommendation.

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

9.1.3. When disclosing the information specified in

paragraph 9.1.1.4 of recommendation 9.1.1, it is

recommended that the information on the

professional experience and qualifications of

members of the company’s supervisory and

management bodies and the manager of the

company as well as potential conflicts of interest

which could affect their decisions should be provided.

It is further recommended that the remuneration or

other income of members of the company’s

supervisory and management bodies and the

manager of the company should be disclosed, as

provided for in greater detail in Principle 7.

Yes

The information about the Company,

indicated in these recommendations, is

disclosed in the following sources: in the

consolidated management report of the

Company, financial statements, and on

the Company’s website.

9.1.4. Information should be disclosed in such manner that

no shareholders or investors are discriminated in

terms of the method of receipt and scope of

information. Information should be disclosed to all

parties concerned at the same time.

Yes

The information on the information

disclosure of NASDAQ Vilnius AB Stock

Exchange is presented in the Lithuanian

and English languages simultaneously.

The Stock Exchange announces the

received information on its website and in

the trading system, in this way ensuring

the simultaneous presentation of the

information to everybody. The Company

strives to announce the information

before or after a trading session of Stock

Exchange. The Company does not

disclose the information, which might

have impact on the value of its shares, in

any comments, interviews or other ways

until such information is announced

officially through the information system

of the Stock Exchange.

10. Principle 10: Selection of the company’s audit firm

10.1. The company’s audit firm selection mechanism should ensure the independence of the report and opinion of the

audit firm.

10.1.1. With a view to obtain an objective opinion on the

company’s financial condition and financial results,

the company’s annual financial statements and the

financial information provided in its annual report

should be audited by an independent audit firm.

Yes

The independent firm of auditors

conducts the audit of the annual financial

statements and reviews the management

report to check whether there is no

material inconsistencies between the

financial information included in it and in

the audited financial statements.

10.1.2. It is recommended that the audit firm would be

proposed to the general meeting of shareholders by

the supervisory board or, if the supervisory board is

not formed at the company, by the management

board of the company.

Yes

Company follows this principle. A

candidate firm of auditors to the General

Meeting is proposed by Board of the

Company.

10.1.3. In the event that the audit firm has received

remuneration from the company for the non-audit

services provided, the company should disclose this

publicly. This information should also be available to

the supervisory board or, if the supervisory board is

not formed at the company, by the management

board of the company when considering which audit

firm should be proposed to the general meeting of

shareholders.

Yes

Shareholders are informed about other

fees paid to auditors for non-audit

services, if such fees occur.

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

CONSOLIDATED AND COMPANY‘S FINANCIAL STATEMENTS

CONSOLIDATED AND COMPANY‘S STATEMENT OF FINANCIAL POSITION

		Group			Company
		As of 31	As of 31	As of 31	As of 31
	Notes	August	August	August	August
		2024	2023	2024	2023
ASSETS
Non-current assets
Intangible assets	4	165	109	165	109
Property, plant and equipment	5
Land and buildings		29,328	29,865	29,328	29,865
Machinery and equipment		23,716	27,100	23,716	27,100
Other property, plant and equipment		4,557	4,287	4,551	4,281
Total property, plant and equipment		57,601	61,252	57,595	61,246
Investments in subsidiaries	6	-	-	5	5
Other non-current receivables	8	-	-	-	-
Deferred income tax asset	21	1,023	877	1,023	877
Long term rent (adaptation of IFRS 16)	0	844	990	844	990
Total non-current assets		59,633	63,228	59,632	63,227
Current assets
Inventories	7	9,860	6,351	9,860	6,351
Trade receivables	8	10,467	7,264	10,467	7,264
Prepayments		6	17	6	16
Current income tax prepayment		1	4	-	-
Other receivables and current assets	9	1,051	1,106	11,050	1,063
Cash and cash equivalents	10	3,867	3,481	3,865	3,480
Total current assets		25,252	18,223	25,248	18,174
Total assets		84,885	81,451	84,880	81,401

(Cont’d on the next page)

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

Consolidated and company’s financial statements of financial position (cont’d)

		Group		Company
		As of 31	As of 31	As of 31	As of 31
	Notes	August	August	August	August
		2024	2023	2024	2023
EQUITY AND LIABILITIES
Equity
Share capital	1	4,508	4,508	4,508	4,508
Legal reserve	11	451	451	451	451
Retained earnings		33,201	23,163	33,142	23,024
Total equity		38,160	28,122	38,101	27,983
Liabilities
Non-current liabilities
Non-current borrowings	12	26,129	33,660	26,129	33,660
Provisions for employee benefits	13	635	605	604	571
Long term rent (adaptation of IFRS 16)	0	456	618	456	618
Total non-current liabilities		27,220	34,883	27,189	34,849
Current liabilities
Current portion of non-current borrowings	12	7,140	6,073	7,140	6,073
Trade payables	14	7,506	8,795	7,686	9,065
Payables for property, plant and equipment		91	49	91	49
Other current liabilities and accrued	15	4,322	3,126	4.227	2,979
liabilities
Long term rent (adaptation of IFRS 16)	0	446	403	446	403
Total current liabilities		19,505	18,446	19,590	18,569
Total liabilities		46,725	53,329	46,779	53,418
Total equity and liabilities		84,885	81,451	84,880	81,401
The accompanying notes set out in pages 47 – 84 is an integral part of these financial statements.

General Manager

Jonas Krutinis

28 November 2024

Finance Director

Egidijus Žvaliauskas

28 November 2024

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENT OF PROFIT OR LOSS AND OTHER

COMPREHENSIVE INCOME

		Group		Company
	Notes	2024	2023	2024	2023
Revenue	16	97,272	97,868	97,272	97,868
Cost of sales	17	(78,274)	(90,122)	(78,299)	(90,281)
Gross profit (loss)		18,998	7,746	18,973	7,587
Selling and distribution expenses	18	(1,653)	(1,146)	(1,653)	(1,146)
Administrative expenses	18	(4,517)	(2,612)	(4,418)	(2,536)
Other income	19	1,140	2,375	1,143	2,379
Other expenses	19	(612)	(2,087)	(612)	(2,087)
Operating profit		13,356	4,276	13,433	4,197
Financialincome	20	43	5	43	5
Financial costs	0	(2,735)	(2,497)	(2,735)	(2,497)
Result from financial activities		(2,692)	(2,492)	(2,692)	(2,492)
Profit before income tax		10,664	1,784	10,741	1,705
Income tax expense	21	(647)	(195)	(644)	(189)
Net profit for the reporting period		10,017	1,589	10,097	1,516
Other comprehensive income
not to be re-grouped to profit or loss
Actuarial change of employee- related accruals	13	21	25	21	25
Income tax effect	13	-	(4)		(4)
Total comprehensive income
for the reporting period		10,038	1,610	10,118	1,537
Attributable to owners of the Company:
Net profit		10,017	1,589	10,097	1,516
Other comprehensive income		21	21	21	21
Total comprehensive income		10,038	1,610	10,118	1,537
Basic and diluted earnings per
share (in EUR)	22	2,58	0,41	2,60	0,39

The accompanying notes set out in pages 47 – 84 is an integral part of these financial statements.

General Manager

Jonas Krutinis

28 November 2024

Finance Director

Egidijus Žvaliauskas

28 November 2024

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENT OF CHANGES IN EQUITY

GROUP

Notes

	Share	Legal	Retained
	capital	reserve	earnings	Total
Balance as of 31 August 2022	4,508	451	21,553	26,512
Net profit for the reporting period	-	-	1,589	1,589
Other comprehensive income	-	-	21	21
Total comprehensive income	-	-	1,610	1,610
Transactions with owners	-	-	-	-
Dividends declared	-	-	-	-
Total transactions with owners	-	-	-	-
Balance as of 31 August 2023	4,508	451	23,163	28,122
Net profit for the reporting period	-	-	10,017	10,017
Other comprehensive income	-	-	21	21
Total comprehensive income	-	-	10,038	10,038
Transactions with owners	-	-	-	-
Dividends declared	-	-	-	-
Total transactions with owners	-	-	-	-
Balance as of 31 August 2024	4,508	451	33,201	38,160

(cont’d on the next page)

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

Consolidated and Company’s financial statement of changes in equity (cont’d)

COMPANY

Note

capital

Legal

reserve

Retained

earnings

Total

Balance as of 31 August 2022

4,508

451

21,487

26,446

Net profit for the reporting period

1,516

Other comprehensive income

Total comprehensive income

1,537

Transactions with owners

Dividends declared

Total transactions with owners

Balance as of 31 August 2023

4,508

451

23,024

27,983

Net profit for the reporting period

10,097

Other comprehensive income

Total comprehensive income

10,118

Transactions with owners

Dividends declared

Total transactions with owners

Balance as of 31 August 2024

4,508

451

33,142

38,101

The accompanying notes set out in pages 47 – 84 is an integral part of these financial statements.

General Manager

Jonas Krutinis

28 November 2024

Finance Director

Egidijus Žvaliauskas

28 November 2024

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENT OF CASH FLOWS

	Group		Company
	2024	2023	2024	2023
Cash flows from operating activities
Profit (loss) for the period	10,017	1,589	10,097	1,516
Adjustments for:
Depreciation and amortization	4,472	4,548	4,470	4,546
Change in provisions for employee benefits	46	22	53	21
Result from the disposal of property, plant and equipment	11	(17)	11	(17)
Interest expenses (income)	2,614	1,919	2,614	1,919
Income tax	790	0	790	0
Other	(43)	277	(54)	273
Changes in working capital:	17,907	8,338	17,981	8,258
Decrease (increase) in inventories	(3,557)	5,247	(3,557)	5,247
Decrease (increase) in prepayments	49	42	49	43
Decrease (increase) in trade receivables	(3,192)	(2,599)	(3,192)	(2,599)
Decrease (increase) in other receivables	55	469	14	480
Decrease in other current payables and liabilities	(944)	(3,994)	(981)	(3,885)
Cash flows from operating activities	10,318	7,503	10,314	7,544
Income tax (paid)	0	(2)	0	0
Net cash flows from operating activities	10,318	7,501	10,314	7,544
Cash flows from investing activities
Loans granted to related party	-	-	-	-
Loan repayments received from related party	-	-	-	-
Received interest	-	-	-	-
Purchases of property, plant and equipment and intangible assets	(791)	(1,213)	(789)	(1,212)
Proceeds on sale of property, plant and equipment	43	47	43	47
Other investing activities	-	-	-	-
Net cash flows from (used in) investing	(748)	(1,166)	(746)	(1,165)
activities

(cont’d on the next page)

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

Consolidated and Company’s financial statement of cash flows (cont’d)

Consolidated and Company’s financial statement of

cash flows (cont’d)

	Group		Company
	2024	2023	2024	2023
Cash flows from (used in) financing activities
Proceed from Factoring	-	-	-	-
Proceeds from borrowings	-	-	-	-
Repayments of borrowings	(6,481)	(1,912)	(6,481)	(1,912)
Dividends paid	-	(1)	-	(1)
Other financial income and expenses	(52)	(70)	(52)	(70)
Interest paid	(2,651)	(1,919)	(2,651)	(1,919)
Net cash flows (used in) financing activities	(9,184)	(3,902)	(9,184)	(3,902)
Net (decrease) increase in cash and cash	386	2,433	384	2,477
equivalents
Cash and cash equivalents at the beginning of the period	3,481	1,048	3,481	1,003
Cash and cash equivalents at the end of the period	3,867	3,481	3,865	3,480

The accompanying notes set out in pages 47 – 84 is an integral part of these financial statements.

General Manager

Jonas Krutinis

28 November 2024

Finance Director

Egidijus Žvaliauskas

28 November 2024

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,

Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

NOTES TO THE FINANCIAL STATEMENTS

1. General information

Vilniaus baldai AB (hereinafter “the Company”) is a public limited liability company registered in the Republic of

Lithuania. The address of its registered office is Pramones str. 23, Guopstos village, Trakai region, Lithuania.

The Company is engaged in furniture production and trade. The Company was registered on 9 February 1993; its

shares are traded in the Secondary List of the NASDAQ Vilnius AB.

As of 31 August, 2024 and 2023 the shareholders of the Group and the Company were:

		2024		2023
	Number of	Percentage	Number of	Percentage
	votes held		votes held
Invalda Privatus Kapitalas AB	3,407,135	87.67	3,407,135	87.67
Other shareholders	479,132	12.33	479,132	12.33
Total	3,886,267	100.00	3,886,267	100.00

Main shareholders of Invalda Privatus Kapitalas AB are private persons Vytautas Bučas (39.63%), Irena Ona

Mišeikienė (30.05%) and Nijolė Paulina Bučienė (20.47%).

As of 31 August, 2024, the Company’s share capital amounted to EUR 4,508,069.72 and it was divided into 3,886,267

ordinary registered shares. As of 31 August, 2024 and 31 August 2023 all the shares of the Company are ordinary

shares with the par value of EUR 1.16 each and were fully paid. The share capital did not change in 2024 and 2023.

The Company did not hold its own shares.

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one

vote per share at annual and general meetings of the Company. All shares rank equally with regard to the Company’s

residual assets.

The Group consists of Vilniaus baldai AB and its subsidiaries ARI-LUX UAB (hereinafter “the Group”). ARI-LUX UAB

information as of 31 August 2024:

		Share of		Profit (loss)
		ownership		for the
	Registration	held by the	Share	reporting		Main
Company	address	Company, %	capital	period	Equity	activities
	Pramones str. 23,					Packaging of
ARI-LUX UAB	Guopstos village,	100	3	(78)	67
	Trakai region					accessories

As of 31 August, 2024 the number of employees of the Group and the Company was 507 and 446, respectively (as of

31 August 2023 – 522 and 459, respectively).

These financial statements include the consolidated financial statements of the Group and the separate financial

statements of the Company.

The Company’s management approved these financial statements on 28 November 2024. The shareholders of the

Company have a statutory right to approve these financial statements or not to approve them and to require preparation

of another set of financial statements.

2. Accounting principles

The principal accounting policies adopted in preparing the Group’s and the Company’s financial statements for the year

2024 are as follows:

2.1. Basis of preparation

These financial statements have been prepared in accordance with International Financial Reporting Standards

(hereinafter IFRSs), as adopted by the European Union (hereinafter the EU). The financial statements have been

prepared under the historical cost basis.

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,

Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

The preparation of financial statements in conformity with IFRSs, as adopted by the European Union, requires the use

of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying

the Company’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where

assumptions and estimates are significant to the financial statements are disclosed in Note 2.26. Although these

estimates are based on management’s best knowledge of current events and actions, actual results ultimately may

differ from those estimates.

The Group and the Company have consistently applied the accounting policies set out in Note 2 to all periods presented

in these financial statements.

Due to the rounding of individual amounts to the calculation of the table of thousands of euros, there may be

inconsistencies, such rounding errors are insignificant in these financial statements.

These financial statements for the year ended 31 August 2024 have been prepared under the assumption that the

Group and the Company will continue as a going concern.

ADOPTION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS

In the current year, the Company and the Group has adopted all of the new and revised Standards and Interpretations

that are relevant to its operations and effective for accounting periods beginning on 1 January 2023.

2.1.1 The following standards, amendments and interpretations are mandatory for accounting periods

beginning on or after 1 January 2023

Amendments to IFRS 17 and IFRS 4: The deferral of effective dates for IFRS 17 and IFRS 9 for insurers

(published 25 June 2020, effective from 1 January 2023)

The amendments to IFRS 17 are effective, retrospectively, for annual periods beginning on or after 1 January 2023,

with earlier application permitted. The amendments aim at helping companies implement the Standard. In particular,

the amendments are designed to reduce costs by simplifying some requirements in the Standard, make financial

performance easier to explain and ease transition by deferring the effective date of the Standard to 2023 and by

providing additional relief to reduce the effort required when applying IFRS 17 for the first time.

The amendments to IFRS 4 change the fixed expiry date for the temporary exemption in IFRS 4 Insurance Contracts

from applying IFRS 9 Financial Instruments, so that entities would be required to apply IFRS 9 for annual periods

beginning on or after 1 January 2023.

The management has assessed that these amendments will not have any impact on the Company’s financial

statements.

IFRS 17: Insurance Contracts (published 18 May 2017, effective from 1 January 2023)

The standard is effective for annual periods beginning on or after 1 January 2021 with earlier application permitted if

both IFRS 15 Revenue from Contracts with Customers and IFRS 9 Financial Instruments have also been applied. In

its March 2020 meeting the Board decided to defer the effective date to 2023. IFRS 17 Insurance Contracts establishes

principles for the recognition, measurement, presentation and disclosure of insurance contracts issued. It also requires

similar principles to be applied to reinsurance contracts held and investment contracts with discretionary participation

features issued. The objective is to ensure that entities provide relevant information in a way that faithfully represents

those contracts. This information gives a basis for users of financial statements to assess the effect that contracts within

the scope of IFRS 17 have on the financial position, financial performance and cash flows of an entity. This IFRS will

not have any impact on the financial position or performance of the Company as insurance services are not provided.

Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single

Transaction (issued on 7 May 2021, effective from 1 January 2023)

The amendments require companies to recognise deferred tax on transactions that, on initial recognition, give rise to

equal amounts of taxable and deductible temporary differences. The amendments are effective for annual reporting

periods beginning on or after 1 January 2023.

Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of

Accounting policies (issued on 12 February 2021, effective from 1 January 2023)

The Amendments are effective for annual periods beginning on or after January 1, 2023 with earlier application

permitted. The amendments provide guidance on the application of materiality judgements to accounting policy

disclosures. In particular, the amendments to IAS 1 replace the requirement to disclose ‘significant’ accounting policies

with a requirement to disclose ‘material’ accounting policies. Also, guidance and illustrative examples are added in the

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,

Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

Practice Statement to assist in the application of the materiality concept when making judgements about accounting

policy disclosures.

Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of

Accounting Estimates (issued on 12 February 2021, effective from 1 January 2023)

The amendments introduce a new definition of accounting estimates, defined as monetary amounts in financial

statements that are subject to measurement uncertainty. Also, the amendments clarify what changes in accounting

estimates are and how these differ from changes in accounting policies and corrections of errors. The amendments

become effective for annual reporting periods beginning on or after January 1, 2023 with earlier application permitted

and apply to changes in accounting policies and changes in accounting estimates that occur on or after the start of that

period.

2.1.2 Standards and amendments that have been approved but are not yet effective and have not been applied

in advance

Amendments to IAS 1: Classification of Liabilities as Current or Non-current and Classification of Liabilities as

Current or Non-current (issued on 23 January 2020, effective from 1 January 2024)

The amendments aim to promote consistency in applying the requirements by helping companies determine whether,

in the statement of financial position debt and other liabilities with an uncertain settlement date should be classified as

current or non-current. The amendments affect the presentation of liabilities in the statement of financial position and

do not change existing requirements around measurement or timing of recognition of any asset, liability, income or

expenses, nor the information that entities disclose about those items. Also, the amendments clarify the classification

requirements for debt which may be settled by the company issuing own equity instruments. Management has not yet

assessed the impact of applying these amendments.

The amendments in Non-current Liabilities with Covenants (Amendments to IAS 1) (issued on 31 October 2022,

effective from 1 January 2024): 

Modify the requirements introduced by Classification of Liabilities as Current or Non-current on how an entity classifies

debt and other financial liabilities as current or non-current in particular circumstances: only covenants with which an

entity is required to comply on or before the reporting date affect the classification of a liability as current or non-current.

In addition, an entity has to disclose information in the notes that enables users of financial statements to understand

the risk that non-current liabilities with covenants could become repayable within twelve months. The amendments are

effective for reporting periods beginning on or after 1 January 2024. The amendments are applied retrospectively in

accordance with IAS 8 and earlier application is permitted. Management has not yet assessed the impact of applying

these amendments.

Amendments to IFRS 16 Lease Liability in a Sale and Leaseback with amendments that clarify how a seller-

lessee subsequently measures sale and leaseback transactions that satisfy the requirements in IFRS 15 to be

accounted for as a sale (issued on 22 September 2022, effective from 1 January 2024): 

Lease Liability in a Sale and Leaseback (Amendments to IFRS 16) requires a seller-lessee to subsequently measure

lease liabilities arising from a leaseback in a way that it does not recognise any amount of the gain or loss that relates

to the right of use it retains. The new requirements do not prevent a seller-lessee from recognising in profit or loss any

gain or loss relating to the partial or full termination of a lease. The amendments are effective for annual reporting

periods beginning on or after 1 January 2024. Earlier application is permitted. A seller-lessee applies the amendments

retrospectively in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors to sale and

leaseback transactions entered into after the date of initial application.

Amendments to IAS 7 and IFRS 7 Supplier Finance Arrangements (issued on May 2023, effective from 1 January

2024, early application is possible):

Supplier Finance Arrangements amends IAS 7 Statement of Cash Flows to require an entity to provide additional

disclosures about its supplier finance arrangements. The amendments also add supplier finance arrangements as an

example within the liquidity risk disclosure requirements of IFRS 7 Financial Instruments: Disclosures. The

Amendments have not yet been endorsed by the EU. The Company has not yet evaluated the impact of the

implementation of these amendments. 

Amendments to IAS 21 Lack of Exchangeability (issued on August 2023, effective from 1 January 2025, early

application is possible):

Lack of Exchangeability amends IAS 21 The Effects of Changes in Foreign Exchange Rates to require an entity to

apply a consistent approach to assessing whether a currency is exchangeable into another currency and, when it is

not, to determining the exchange rate to use and the disclosures to provide.

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,

Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

The Amendments have not yet been endorsed by the EU. The Company has not yet evaluated the impact of the

implementation of these amendments. 

There are no other new standards, amendments to the existing standards or their interpretations that are not yet

effective but may have a material impact on the Company or the Group.

2.2. Functional and financial statements currency

The Group’s and the Company’s functional and financial statements currency is euro. Financial statements are

prepared in thousands of euro. In these financial statements, all amounts are expressed in euros and rounded down

to the nearest thousand (EUR ‘000).

2.3. Financial year

Financial year of the Group and the Company starts on 1 September and ends on the 31 August of the next year.

Under decision of the Company`s shareholder of 8 October 2014 the financial year was changed from 31 August 2015.

2.4. Consolidation principles

The consolidated financial statements of the Group include Vilniaus baldai AB and its parent (subsidiary) companies.

The financial statements of the subsidiaries are prepared for the same reporting year and using the same accounting

principles. Subsidiaries are consolidated from the date their control passes to the Group and are no longer consolidated

from the date control is transferred outside the Group. All intra-Group transactions, balances and unrealized profits or

losses from transactions between Group companies are eliminated. Equity and net result attributable to minority

shareholders (non-controlling interests) are presented separately in the statement of financial position and the

statement of comprehensive income. Revenues and expenses of subsidiaries acquired or sold during the year are

included in the consolidated statement of comprehensive income from the date of acquisition of the subsidiary to the

date of sale of the subsidiary, respectively. The gross income of subsidiaries is attributed to the owners of the Company

and the non-controlling interest (even if the result of the non-controlling interest would become negative). Financial

statements of subsidiaries are adjusted so that their accounting policies are consistent with the accounting policies

applied by other Group companies, if necessary. For consolidation purposes, financial statements of subsidiaries are

prepared according to the financial year of the parent company. All intra-Group transactions, balances, income and

expenses are eliminated during consolidation. Acquisitions and disposals of the minority share of the Group are

accounted for as an equity transaction: the difference between the value of the net assets acquired from the minority

share/transferred to the minority in the Group's financial statements and the purchase/sale price of the shares is

accounted for directly in equity.

2.5. Business combinations

The Group accounts for business combinations using the acquisition method when control is transferred to the Group.

The consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets

acquired. Any goodwill that arises is tested annually for impairment. Any gain on a bargain purchase is recognized in

profit or loss immediately. Transaction costs are expensed as incurred, except if related to the issue of debt or equity

securities.

The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such

amounts are generally recognized in profit of loss.

Any contingent consideration is measured at fair value at the date of acquisition. If an obligation to pay contingent

consideration that meets the definition of a financial instrument is classified as equity, then it is not remeasured and

settlement is accounted for within equity. Otherwise, other contingent consideration is remeasured at fair value at each

reporting date and subsequent changes in the fair value of the contingent consideration are recognized in profit or loss.

Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to,

variable returns from its involvement with the entity and has the ability to affect those returns through its power over

the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date

on which control commences until the date on which control ceases.

Non-controlling interest are measured initially at their proportionate share of the acquirer’s identifiable net assets at the

date of acquisition. Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted

for as equity transactions.

When the Group loses control over a subsidiary, it derecognizes the assets and liabilities of the subsidiary, and any

related NCI and other components of equity. Any resulting gain or loss is recognized in profit or loss. Any interest

retained in the former subsidiary is measured at fair value when control is lost.

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,

Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

Intra-group balances and transaction, and any unrealized income and expenses arising from intra-group transactions,

are eliminated. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there

is no evidence of impairment.

2.6. Investments in subsidiaries in the Company's separate financial statements

In the Company's separate financial statements, investments in subsidiaries are stated at cost. The value of the

investment is reduced by recognizing the impairment of the investment.

Impairment is determined by estimating the recoverable amount of the cash-generating unit. When the recoverable

amount of a cash-generating unit is less than its carrying amount in the Company's statement of financial position, an

impairment loss is recognized.

2.7. Intangible assets

Intangible assets are measured initially at cost. Intangible assets are recognized if it is probable that future economic

benefits that are attributable to the asset will flow to the Group and the Company and the cost of asset can be measured

reliably. After initial recognition, intangible assets are measured at cost less accumulated amortization and any

accumulated impairment losses. Intangible assets are amortized on a straight-line basis over the best estimate of their

useful lives.

Software

The costs of acquisition of new software are capitalized and treated as an intangible asset if these costs are not an

integral part of the related hardware. Software is amortized over a period not exceeding 3 years.

Costs incurred in order to restore or maintain the future economic benefits that the Group and the Company expects

from the originally assessed standard of performance of existing software systems are recognized as an expense when

the restoration or maintenance work is carried out.

2.8. Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses.

When assets are sold or retired, their cost and accumulated depreciation are eliminated from the accounts and any

gain or loss resulting from their disposal is included in profit or loss.

The initial cost of property, plant and equipment comprises its purchase price, including non-refundable purchase taxes

and any directly attributable costs of bringing the asset to its working condition and location for its intended use.

Expenditures incurred after the property, plant and equipment have been put into operation, such as repair and

maintenance costs, are normally charged to profit or loss in the period the costs are incurred.

Depreciation is computed on a straight-line basis over the following estimated useful lives:

Buildings

10–66 years

Machinery and equipment

6–20 years

Vehicles

5–10 years

Other property, plant and equipment, critical spare parts

2–6 years

The assets’ residual values and useful lives are reviewed periodically to ensure that the period of depreciation is

consistent with the expected pattern of economic benefits from items in property, plant and equipment.

Construction-in-progress is stated at cost. This includes the cost of construction, plant and equipment and other directly

attributable costs. Construction-in-progress is not depreciated until the relevant assets are completed and available for

use.

Borrowing costs directly attributable to the acquisition, construction or production of assets that are not stated at fair

value and necessarily take a substantial time to get ready for intended use or sale (qualifying assets) are capitalised

as part of the costs of those assets.

Capitalisation of borrowing costs continues up to the date when the assets are substantially ready for their use or sale.

The Group and the Company capitalise borrowing costs that could have been avoided if they had not made capital

expenditure on qualifying assets. Borrowing costs capitalised are calculated at the Group’s and the Company’s average

funding cost (the weighted average interest cost is applied to the expenditures on the qualifying assets), except to the

extent that funds are borrowed specifically for the purpose of obtaining a qualifying asset. Where this occurs, actual

borrowing costs incurred less any investment income on the temporary investment of those borrowings are capitalised.

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,

Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

Spare parts are classified as property, plant and equipment if they meet the definition, including the requirement to be

used over more than one period. Otherwise, they are classified as inventory. For spare parts that are kept to ensure

smooth operation of some machinery without interruptions, the depreciation period starts immediately when those spare

parts are acquired.

2.9. Inventories

Inventories are initially recorded at acquisition cost. After the initial recognition, inventories are valued at the lower

number of cost or net realizable value. Net realizable value is the selling price in the ordinary course of business, less

the costs of completion and applicable variable marketing and distribution costs. Cost is determined by the first-in, first-

out (FIFO) method. The cost of finished goods and work in progress includes the applicable allocation of fixed and

variable overhead costs based on a normal operating capacity. Unrealizable inventory is fully written-off. Inventory

items that have not moved or been used for more than one year are written down based on the following criteria:

Customer commitment to compensate

0 % (0% write-down)

To be used in production

70 % (30% write-down)

To be sold in the secondary market (liquid inventory)

50 % (50% write-down)

Illiquid inventory

100 % (100% write-down)

2.10. Financial instruments

Financial assets

The financial assets of the Group and the Company include cash and cash equivalents, loans granted, trade receivables

and other receivables.

Trade receivables are initially recognized when they arise. Upon initial recognition, all other financial assets are

recognized when the Group and the Company become parties to the contractual provisions of the instrument. Financial

assets (except for trade receivables without a significant financing component), if not measured at fair value through

profit or loss, are initially measured at fair value plus transaction costs directly attributable with acquisition or issue.

Trade receivables without a significant financing component are initially recognized at the transaction price.

Financial assets are classified in three groups according to their measurement:

i. financial assets that are subsequently measured at amortized cost;

ii. financial assets that are subsequently measured at fair value through other comprehensive income;

iii. financial assets that are subsequently measured at fair value through profit or loss.

The classification of a financial asset depends on the financial asset management business model (assessing how the

entity manages the financial assets to generate cash flows) and the characteristics of the contractual cash flows of the

financial asset (whether contractual cash flows include only principal and interest payments).

Financial asset is stated at amortized cost if both of the following conditions are satisfied:

• financial asset is held within a business model whose objective is to hold financial assets in order to collect

contractual cash flows; and

• its contractual terms give rise on specified dates to cash flows that are solely payments of principal and

interests on the principal amount outstanding.

Financial assets that do not meet the above conditions are measured at fair value through profit or loss and through

other comprehensive income.

The Group and the Company have no financial assets, which, in subsequent periods, are measured at fair value through

profit or loss and other comprehensive income.

Financial assets that are subsequently measured at amortized cost are measured using the effective interest method.

Amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses, and impairment

losses are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

The effective interest method is a method of calculating the amortized cost of a financial asset or liability and of

allocating the interest income or expense over a period of time. The effective interest rate is the rate that discounts

estimated future cash payments through the expected life of the financial asset or liability or, where appropriate, a

shorter period.

Financial assets at fair value through profit or loss are initially recognized at fair value through profit or loss.

Subsequently, the fair value gain and loss, including any interest and dividends, is recognized in profit or loss and other

comprehensive income.

Financial assets (or, where applicable, part of a financial asset or part of a group of similar financial assets) are

derecognised when:

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,

Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

• the right to receive cash flows from the financial asset expires;

• the Group and the Company retain the right to receive cash flows from the asset, but have agreed to pay in

full without material delay to a third party under a ‘pass through’ arrangement;

• The Group and the Company transfer their right to receive cash flows from assets and/or:

a) have transferred substantially all the risks and rewards of the financial asset;

b) have neither transferred nor retained substantially all the risks and rewards of the financial assets but

have transferred control of the assets.

When the Group and the Company transfer rights to receive cash flows from an asset but neither transfer nor retain

substantially all the risks and rewards of the asset nor transfer control of the asset, the asset is recognized to the extent

of the Group’s and the Company’s continuing involvement in the asset. The Company's and the Group’s assets that

have been transferred as guarantee are measured at the lower of the carrying amount and the maximum amount of

consideration that the Group and the Company could be required to repay.

The Group and the Company reduce the gross carrying amount of their financial asset if they cannot reasonably expect

to recover all or part of the financial asset. A write-off is an event of derecognition.

Cash and cash equivalents consist of cash in bank accounts. Cash equivalents are short-term, highly liquid investments

that are readily convertible to known amounts of cash. Such investments have a maturity of up to three months and the

risk of changes in value is very insignificant. For the purposes of the cash flow statement, cash and cash equivalents

include cash on hand, deposits in current accounts, and other short-term highly liquid investments.

Trade and other receivables on initial recognition, trade and other receivables are recognized at the transaction price

and subsequently measured at amortized cost.

Financial liabilities

The Group’s and the Company’s financial liabilities comprise borrowings, trade payables and other payables.

At the time of initial recognition, financial liabilities are recognised when the Group and the Company become parties

to the contractual terms of the instrument.

Financial liabilities are divided into two groups according to their measurement:

a) financial liabilities that are subsequently measured at amortised cost;

b) financial liabilities that are subsequently measured at fair value through profit or loss.

A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as

such on initial recognition.

Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are

recognised in profit or loss.

Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest

expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is

also recognised in profit or loss.

The Group and the Company derecognise financial liabilities when their contractual obligations are discharged or

cancelled or expire. The Group and the Company also derecognise a financial liability when its terms are modified and

the cash flows of the modified liability are substantially different. In this case, the new financial liability is recognized at

fair value under the modified terms of the contract.

In the event of derecognition of a financial liability, the difference between the carrying amount written off and the

consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss in

the statement of profit or loss and other comprehensive income.

Trade and other payables. Upon initial recognition, trade and other payables are recognized when the Company

becomes a party to the contractual provisions. Trade and other payables are initially measured at fair value plus directly

attributable transaction costs.

Borrowed funds. Borrowings are initially recognized at fair value less transaction costs and subsequently measured at

amortized cost using the effective interest method.

Financial guarantees. A financial guarantee contract is a contract that obliges the Company to make specific payments

to compensate the contract holder for the holder's default on timely payment of the original or modified terms of a debt

instrument. Financial guarantees are initially recognized at fair value, which is usually the amount receivable.

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,

Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

Offsetting financial assets and financial liabilities

Financial assets and financial liabilities are offset when, and only when, the Group and the Company have a legally

enforceable right to set off the amounts and they intend either to settle them on the net basis or to realise the asset

and settle the liability simultaneously.

2.11. Share capital

Ordinary registered shares are classified as share capital. Ordinary registered shares are stated at their par value.

2.12. Dividends

Dividends are recognised in the Company’s financial statements in the period in which the dividends are approved by

the Company’s shareholders. Dividends paid are classified as cash flows from financing activities in the statement of

cash flows.

2.13. Leases

The Group and the Company are lessees

(a) Finance lease

Leases of property, plant and equipment where the Group and the Company have substantially all the risks and rewards

of ownership are classified as finance leases. Finance leases are capitalised at the lease’s commencement at the lower

of the fair value of the leased property and the estimated present value of the minimum lease payments. Each lease

payment is allocated between the liability and finance charges so as to achieve a constant interest rate on the finance

lease balance outstanding. The corresponding rental obligations, net of finance charges, are included in long-term

payables except for instalments due within 12 months which are included in current liabilities.

The property, plant and equipment acquired under finance leases are depreciated over the shorter of the asset’s useful

life and the lease term.

(b) Operating lease

At the beginning of the contract, the Company and the Group assess whether the contract is a lease or includes a lease.

This means assessing whether the contract confers a right to manage the use of the identified asset for a period of time

in return for remuneration.

The Company and the Group apply a single recognition and measurement method to all leases, except for short-term and

low-value leases. The Company and the Group recognize a lease obligation to pay lease payments and a right-of-use

asset that entitles the holder to use the leased asset.

Assets managed under lease right

The Company and the Group recognize the right-of-use asset at the inception date (ie the date from which the underlying

asset is available for use). Assets held under usable rights are carried at cost less any accumulated depreciation and any

accumulated impairment losses. The cost of an asset held for use includes the amount of the initial measurement of the

lease liability, the initial direct costs, the lease payments at or before the inception date, less any lease incentives received.

Depreciation is calculated on a straight-line basis over the lease term.

If the ownership of the leased property is transferred to the Company and the Group before the end of the lease term or if

the price of the asset managed by the right of use indicates that the lessee will exercise the call option, depreciation is

calculated based on the estimated useful life of the asset.

Assets held for use are also assessed for impairment.

Lease obligations

At the beginning date, the Company / Group recognizes lease liabilities at the present value of the lease payments due

during the lease term. Lease payments include fixed payments (including equivalent payments) less any rental incentives

receivable, variable rents that depend on an index or rate, and amounts that would be payable under residual value

guarantees. Such lease payments also include the exercise price of the call option if it is reasonably known that the

Company / Group will exercise that option, and penalties for terminating the lease if it is assumed that the Company /

Group will exercise the option to terminate the lease during the lease term. Variable lease payments that are independent

of an index or a rate are recognized as an expense (unless they are incurred to produce inventories) in the period in which

the event occurs or the condition that gives rise to the tax arises.

In calculating the present value of the lease payments, the Company / Group applies the borrowing rate accrued at the

beginning of the lease, as the interest rate specified in the lease cannot be readily determined. After the commencement

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,

Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

date, the amount of the lease liability is increased by the estimated interest and the amount of lease payments paid is

reduced. In addition, the carrying amount of a lease is remeasured if certain adjustments are made, the lease term or

lease payments change (for example, changes in future lease payments due to a change in the index or rate used to

determine such lease payments) or a change in the option to purchase the lease. evaluation.

Short-term and low-value property lease

The Company and the Group apply the recognition exemption to their current assets (i.e. leases with a term of less than

12 months at the inception date that do not include an option to purchase the asset). It also observes this exception by

recognizing the lease of low-value assets consisting of office inventory. Lease payments for short-term and low-value

assets are recognized as an expense on a straight-line basis over the lease term.

The Group and the Company are lessors

(a) Operating lease

As a lessor, the Company and the Group determine at the beginning of a lease whether the contract is a finance lease or

an operating lease. If the Company and the Group determine that substantially all the risks and rewards of ownership of

a leased asset are transferred under a lease, it classifies the lease as a finance lease. Leases under which the Company

and the Group do not transfer substantially all the risks and rewards incidental to ownership of a leased asset are classified

as operating leases. Lease income is recognized on a straight-line basis over the term of the lease and is recognized in

the statement of comprehensive income on a straight-line basis over the term of the lease. Initial direct costs incurred in

negotiating and arranging a lease shall be included in the carrying amount of the leased asset and recognized as an

expense over the lease term on the same basis as the lease income. Contingent contributions are recognized as income

in the period in which they are earned.

2.14. Employee benefits

(a) Social security contributions

The Group and the Company pay social security contributions to the state Social Security Fund (the Fund) on behalf

of their employees based on the defined contribution plan in accordance with the local legal requirements. A defined

contribution is a plan under which the Group and the Company pay fixed contributions into the Fund and will have no

legal or constructive obligations to pay further contributions if the Fund does not hold sufficient assets to pay all

employees benefits relating to employee service in the current and prior period. Social security contributions are

recognised as expenses on an accrual basis and are included in payroll expenses.

(b) Termination benefits

Termination benefits are payable whenever an employee’s employment is terminated before the normal retirement date

or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group or the Company

recognise termination benefits when they are demonstrably committed to either: terminating the employment of current

employees according to a detailed formal plan without possibility of withdrawal; or providing termination benefits as a

result of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after the date of

the statement of financial position are discounted to their present value.

The Group and the Company recognise a liability and an expense for bonuses where contractually obliged or where

there is a past practice that has created a constructive obligation.

(d) Provisions for pensions and jubilee payments

According to the terms of the collective employment agreement effective at the Group and the Company, each

employee is entitled to a pension benefit amounting to 2 or 3 months’ salary payment when leaving the Group and the

Company after reaching the pension age and a jubilee benefit. Actuarial calculations are made to determine liability for

such payments. The liability is recognised at present value discounted using market interest rate.

The Group and the Company recognise re-measurements of the pension benefit obligation in ‘Other comprehensive

income that will not be reclassified to profit or loss’. These amounts recognised as other comprehensive income are

accounted for under equity. Jubilee benefits and long-service benefits are accounted for by the Group and the Company

within profit or loss.

2.15. Provisions

Provisions are recognized when the Group and the Company have a present obligation (legal or constructive) as a

result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle

the obligation and a reliable estimate can be made of the amount of the obligation. The provisions are reviewed at each

statement of financial position date and adjusted in order to present the most reasonable current estimate. If the effect

of the time value of money is material, the amount of provision is equal to the present value of the expenses, which are

expected to be incurred to settle the liability. Where discounting is used, the increase in the provision due to the passage

of time is recognized as a borrowing cost.

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,

Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

A provision for warranties is recognized when the underlying products are sold, based on historical warranty data and

weighting of possible outcomes against their associated probabilities.

2.16. Income tax

Income tax charge is based on profit for the year and considers deferred taxation. Income tax is calculated based on

the Lithuanian tax legislation.

The standard income tax rate in the Republic of Lithuania was 15% in 2024 (15% in 2023).

Tax losses can be carried forward for indefinite period, except for the losses incurred as a result of disposal of securities

and/or derivative financial instruments. Such carrying forward is disrupted if the Company change its activities due to

which these losses were incurred except when the Company do not continue its activities due to reasons which do not

depend on the Company itself. Starting from 2014 the amount of utilised tax losses cannot exceed 70% of taxable profit

for the tax period calculated by deducting non-taxable income, allowed tax deductions and allowed limited amount

deductions from income, except for tax losses of the previous periods. Starting from 2010, tax losses can be transferred

at no consideration or in exchange for certain consideration between the Group companies if certain conditions are

met.

The losses from disposal of securities and/or derivative financial instruments can be carried forward for 5 consecutive

years and only be used to reduce the taxable income earned from the transactions of the same nature. The limitation

(up to 70% on profit from transfer of securities) is not applied to losses on transfer of securities from previous tax periods

deductible from profit on transfer of securities from the taxable period.

Deferred taxes are calculated using the liability method. Deferred income taxes reflect the net tax effects of temporary

differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts

used for income tax purposes. Deferred tax assets and liabilities are measured using the tax rates expected to apply

to taxable income in the years in which those temporary differences are expected to reverse based on tax rates enacted

or substantively enacted at the reporting date.

A deferred tax asset is recognized in the statement of financial position to the extent the management believes it will

be realized in the foreseeable future, based on taxable profit forecasts. If it is believed that part of the deferred tax asset

is not going to be realized, this part of the deferred tax asset is not recognized in the financial statements.

Deferred tax assets and liabilities are offset when they are related to taxes levied by the same tax authority and when

there is a legally enforceable right to cover current payable taxes at net value.

Income tax and deferred tax for the accounting period

Income tax and deferred income tax are charged or credited to profit or loss, except when they relate to items included

directly to equity, in which case the deferred income tax is also accounted for in other comprehensive income.

2.17. Revenue recognition

Revenues of the Group and the Company are recognized in accordance with IFRS 15, that is, the Group and the

Company recognize revenue at such time and to such an extent that the transfer of goods or services to customers

represents the consideration that the Group and the Company expect to receive in exchange for those goods or

services. In applying this Standard, the Company takes into account the terms of the contract and all relevant facts and

circumstances.

The Company's revenue is recognized using the 5-step model:

Step 1 - Identify customer agreements.

A contract recognizes an agreement between two or more parties (subject to purchase / sale terms) that creates

enforceable rights and enforceable obligations (not applicable if a joint venture agreement is signed). A contract is

within the scope of IFRS 15 if all of the following criteria are met:

a) the parties have approved the contract (in writing, orally or in accordance with any other normal

commercial practice) and are bound by their obligations under the contract,

b) it is possible to identify the rights of each party with regard to the goods and / or services to be transferred,

c) it is possible to identify the payment terms for the goods and / or services to be transferred,

d) the contract has commercial substance,

e) it is probable that the consideration to which the Group and the Company are entitled to in exchange for

the goods or services will be collected.

Contracts with the customer may be aggregated or disaggregated into several contracts, while retaining the criteria of

former contracts. Such aggregation or disaggregation is considered modification of the contract.

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,

Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

Step 2 - Identify performance obligations in the contract.

Contractual commitment to deliver goods and / or services to a customer. If separate goods and/or services are

identifiable, the liabilities are recognized separately. Each liability is identified in one of two ways:

a) a good and / or service is distinct, or

b) a set of individual goods and / or services that are substantially the same and have the same pattern of

transfer to the customer.

Step 3 - Determine the transaction price.

Under the new IFRS 15, the transaction price may be fixed, variable, or both.

The transactions concluded by the Company apply fixed prices for both continuous services and services performed

at a certain point in time. The transaction price is also adjusted considering the time value of money, if the contract

includes a significant financing arrangement, and considering any consideration payable to the customer and non-cash

consideration received, if any. The Group and the Company apply the following sales price calculation methods:

adjusted market assessment approach, expected cost plus margin approach and residual approach. Similar

transactions are measured equally.

Step 4 - Allocate the transaction price to each performance obligation.

A performance obligation is a contractual promise to deliver to the customer a separate good or service, or a set of

individual goods or services that are substantially the same and have the same pattern of transfer to the customer. The

transaction price is apportioned between each performance obligation based on the relative separate selling prices of

the good or service promised in the contract. If the contracts do not specify separately the price of the service or good

(for example, one price for two products), the Company shall determine it. In measuring the transaction price, the

Company estimates a discount or variable amount of consideration that relates only to a particular portion of the

contract.

Step 5 - Recognise revenue when (or as) the Group and the Company satisfy a performance obligation.

The Group and the Company recognize revenue when they satisfy a performance obligation by transferring promised

goods or services to the customer (i.e. when the customer obtains control of the mentioned goods or services). The

recognized amount of revenue is equal to the amount of satisfied performance obligation. Performance obligation may

be satisfied at a point of time or over time. A period of time is recognised as a calendar month.

The recognition of revenue depends on whether the obligation is satisfied over a period of time (continuous) or at a

point in time. In any event, the transfer of control shall be taken into account.

Revenue is recognized at the fair value of the consideration received or receivable. Revenue is reduced by the

estimated amount of customer returns, discounts, and other similar provisions. Revenue is recognized when it is

probable that the economic benefits associated with the transaction will flow to the enterprise and the amount of the

revenue can be measured reliably. Revenue from sales is recognized net of VAT and discounts, including any

cumulative expected discounts for the current year.

The Group’s and the Company’s revenue types:

a) Revenue from sale of furniture

b) Revenue from sale of raw materials and waste

Revenue from sales of furniture and revenue from the sale of raw materials are recognized at a point of time in the

statement of profit and loss and other comprehensive income.

2.18. Expense recognition

Expenses are recognized on the basis of accrual and revenue and expense matching principles in the reporting period

when the income related to these expenses was earned, irrespective of the time the money was spent. In those cases

when the costs incurred cannot be directly attributed to the specific income and they will not bring income during the

future periods, they are expensed as incurred.

The amount of expenses is usually accounted for as the amount paid or due, excluding VAT. In the cases when a long

period of payment is established and the interest is not distinguished, the amount of expenses shall be estimated by

discounting the amount of payment using the market interest rate.

2.19. Foreign currency transactions

Foreign currency transactions are accounted for at the exchange rates prevailing at the date of the transactions. Gains

and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities

denominated in foreign currencies on the statement of financial position date are recognized in profit or loss. Such

balances are translated at period-end exchange rates. Non-monetary assets and liabilities that are measured in terms

of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non -

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,

Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated to euro at

foreign exchange rates ruling at the dates the fair value was determined.

2.20. Impairment of assets

Non-financial assets

Non-financial assets, other than inventories and deferred tax are reviewed for impairment whenever events or changes

in circumstances indicate that the carrying amount of an asset may not be recoverable. If any such indication exists,

the asset’s recoverable amount is estimated.

The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. Whenever the carrying

amount of an asset exceeds its recoverable amount, an impairment loss is recognized in profit or loss.

Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment

losses recognized for the asset no longer exist or have decreased. Reversal is accounted for in the same caption in

profit or loss as impairment losses. For evaluation of impairment of assets, the entire Group is considered as one cash

generating unit.

Impairment of financial assets

Impairment losses on financial assets measured at amortized cost are measured using the expected credit loss (ECL)

model. Credit losses are measured at the present value of all cash losses (the difference between the cash flows that

the Group and the Company hold under the contract and the cash flows the Group and the Company expect to receive).

ECLs are discounted applying an effective interest rate.

At the end of each reporting period, the Company and the Group recalculate and record the allowance for expected

credit losses, taking into account past events, current market conditions and future prospects. At the end of each

financial period, the Group and the Company assess whether there has been a material change in the credit risk of the

financial instrument since initial recognition.

At the end of each reporting period, the Group and the Company assess whether financial assets carried at amortized

cost are impaired. A financial asset is impaired when one or more events have occurred that have a negative impact

on the estimated future cash flows of the financial asset. The following criteria are used by the Company to determine

whether there is objective evidence that an impairment loss has been incurred:

• the counterparty experiences financial difficulties as evidenced by its financial information;

• in the event of a breach of contract, such as a default or payment delay more than 90 days;

• the counterparty is considering bankruptcy or financial reorganization;

• there is an adverse change in the payment status of the counterparty's as a result of changes in national or

local economic conditions affecting the counterparty; or

• the value of collateral, if any, significantly decreases as a result of deteriorating market conditions.

Losses on financial assets measured at amortized cost are deducted from the gross value of such assets.

The gross carrying amount of a financial asset is written off when the Group and the Company have no reasonable

expectation of recovering all or part of the asset. Non-recoverable assets are written off against recognized related

impairment loss allowance, provided that all necessary steps have been taken to recover the asset and the amount of

the loss has been determined. The amounts previously written off and recovered in subsequent periods are credited to

the impairment loss account within the statement of profit or loss and other comprehensive income.

2.21. Segment information

The operating segment is a part of the Group and the Company participating in economic activities from which it can

earn profit or incur costs. The results of the operating segment are verified by the management of the Group and the

Company on a regular basis by taking a decision regarding resources which have to be allocated to the segment and

evaluating its operating results, and who present separate financial information.

Management of the Company has determined the operating segments based on the reports reviewed by the board of

directors, considered to be the chief operating decision makers that are used to make strategic decisions. Based on

this it was decided that the Group and the Company have a single reportable segment, i.e. furniture production and

trade.

2.22. Related parties

Related parties are defined as shareholders, employees, members of the Board, their close relatives and companies

that directly or indirectly (through the intermediary) control or are controlled by, or are under common control with, the

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,

Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

Group and the Company, provided the listed relationship empowers one of the parties to exercise the control or

significant influence over the other party in making financial and operating decisions.

2.23. Contingencies

Contingent liabilities are not recognized in the financial statements. They are disclosed unless the possibility of an

outflow of resources embodying economic benefits is remote.

A contingent asset is not recognized in the financial statements but disclosed when an inflow of economic benefits is

probable.

2.24. Subsequent events

Events after the reporting date that provide additional information about the Group’s and the Company’s position at the

statement of financial position date (adjusting events) are reflected in the financial statements. Events after the reporting

date that are not adjusting events are disclosed in the notes when material.

2.25. Offsetting and comparative figures

When preparing the financial statements, assets and liabilities, revenue and expenses are not set off, except the cases

when certain IFRS specifically requires such set-off. Financial assets and liabilities are offset and the net amount

reported in the statement of financial position when there is a legally enforceable right to offset the recognised amounts

and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously.

2.26. Use of estimates in the preparation of financial statements

The preparation of financial statements in conformity with IFRSs requires management to make judgements, estimates

and assumptions that affect the reported amounts of assets, liabilities, income and costs and disclosure of

contingencies, at the reporting date and within the next financial year. Estimates and judgements are continually

evaluated and are based on management’s experience and other factors, including expectations of future events that

are believed to be reasonable under the circumstances. Revisions to accounting estimates are recognized in the period

i n which the estimate is revised if the revision affects only that period or in the period of the revision and future periods

if the revision affects both current and future periods.

Management also makes certain judgements, apart from those involving estimations, in the process of applying the

accounting policies. However, uncertainty about these assumptions and estimates could result in outcomes that could

require a material adjustment to the carrying amount of the asset or liability affected in the future.

Estimates and assumptions

The main areas where management is required to make significant and critical judgements and areas where estimates

and assumptions might have significant impact for the preparation of financial statements are described below:

Property, plant and equipment – useful life

The key assumptions concerning determination of the useful life of property, plant and equipment are as follows:

expected usage term of the asset, expected technical, technological or other obsolescence arising from changes or

improvements in the production, legal or similar limits on the use of the asset, such as the expiry dates of related leases.

Tax liabilities

The tax authorities have a right to examine the Group’s and the Company’s books and accounting records at any time

during the 5-years period after the current tax year and account for additional taxes and fines. In the opinion of the

Company’s management currently there are no circumstances which would raise substantial liability in this respect.

Related-party transactions

In the normal course of business the Group and the Company enter into transactions with their related parties. These

transactions are priced at market rates. Judgement is applied in determining if transactions are priced at market or non-

market rates, where there is no active market for such transactions. The basis for judgement is pricing for similar types

of transactions with unrelated parties.

Pension and jubilee benefits

Key assumptions used in determining the provision for pension and jubilee benefits are as follows: employee turnover

rate by age group, discount rate, and wage and salary growth. The Group’s and the Company’s management make

judgements in relation to these assumptions. See Note 13 for more details.

Revenue recognition

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,

Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

The management assesses the moment of revenue recognition, i.e. whether revenue is recognized over time or at a

point of time. The management assessed that customer do not simultaneously receive and consume the benefits

provided by the Company’s performance as the Company performs, the Company’s performance does not create or

enhance an asset that the customer controls as the asset is created or enhanced, the Company’s performance create

an asset with an alternative use to the Company and the Company do not has an enforceable right to payment for

performance completed to date. Based on this assessment management decided that revenues should be recognised

at a point in time. Also, the management estimates expected returns.

The management assesses if the sale of raw materials meets revenue recognition criteria according to IFRS 15. The

Company provides raw materials to several external and related parties in order to obtain service from these parties -

production of component parts used in the further production of furniture. The management has analysed such

contracts based on the requirements of IFRS 15 and determined, that in most of cases there is no actual sale of raw

materials and acquisition of components but transaction is rather a purchase of production service. Vilniaus baldai, AB

controls the process and has full responsibility for the final customer. Raw materials were sold at purchase price to the

production service provider.

Expected credit losses estimation

The management measures expected credit losses (ECL) and estimates allowance for trade receivables and contract

assets. Key assumption is determining the weighted-average loss rate.

Classification of spare part

The management makes judgement if spare parts meet the definition of property, plant and equipment. The basis of

judgement is determining if spare part is kept ensuring smooth operation of some machinery without interruptions or it

not.

Recognition of deferred tax assets from unused investment relief

The management assesses the extent that it is probable that future taxable profits will be available against which

recognized deferred tax assets can be used.

Factoring

A factoring transaction is a financing transaction in which the factoring company finances the Company by purchasing

debt obligations from it. By this transaction, the Company transfers to the Factor the right to its receivables under the

invoices due, which are due in the future. Factoring can be with recourse (the factoring agent has the right to repay the

debt obligations to the Company) and without the right of recourse (the factoring agent has no right to repay the debt

obligations to the Company). Receivables transfer (factoring without recourse, it means, the buyer of the debt has no

right to cancel the transaction) is treated as a sale of debts and is written off immediately if the Company transfers all

risks associated with the debt transfer and no debt repurchase is contemplated, there is no provision for a debt buyer

to foreclose on this transaction.

2020FY factoring contract is without the right of recourse (the factoring agent has no right to cancel the transaction),

for this reason, the trade receivables are reduced after the receipt of the factoring advance payment. In the statements

of cash flows factoring is included in the cash flows from financing activities.

2.27. Fair value measurement

A number of the Group’s and the Company’s accounting policies and disclosures require the determination of fair value,

for both financial and non-financial assets and liabilities.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction

between market participants at the measurement date in the principal, or in its absence, the most advantageous market

to which the Group and the Company have access at that date. The fair value of a liability reflects its non-performance

risk.

When measuring the fair value of an asset or a liability, the Group and the Company use market observable data as

far as possible. Fair values are categorised within different levels in a fair value hierarchy based on the inputs used in

the valuation techniques as follows:

• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;

• Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either

directly (i.e. as prices) or indirectly (i.e. derived from prices);

• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

If the inputs used to measure the fair value of an asset or a liability might be categorised within different levels of the

fair value hierarchy, the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy

as the lowest level input that is significant to the entire measurement.

The Group and the Company recognize transfers between levels of the fair value hierarchy at the end of the reporting

period during which the change has occurred.

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,

Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

Fair values have been determined for measurement and / or disclosure purposes based on the described methods.

Where applicable, further information about the assumptions made in determining fair values is disclosed in the notes

specific to that asset or liability (Note 13 – Provisions for employee benefits).

2.28. Reportable segments

Based on the reports reviewed by the board of directors, considered to be the chief operating decision makers that are

used to make strategic decisions, Management of the Company has decided that the Company and the Group have a

single reportable segment, i.e. furniture segment, including sales of raw materials and finished production. No separate

detailed disclosure of segment reporting is presented.

3. Changes in significant accounting policies

There were no significant changes in accounting policies during the reporting period.

4. Intangible assets

	Software
	Group	Company
Cost:
Balance as of 31 August 2022	523	523
Additions	-	-
Sold and written off asset	(7)	(7)
Balance as of 31 August 2023	516	516
Additions	133	133
Sold and written off asset	-	-
Balance as of 31 August 2024	649	649
Amortisation:
Balance as of 31 August 2022	329	329
Charge for the year	78	78
Sold and written off asset	-	-
Balance as of 31 August 2023	407	407
Charge for the year	77	77
Sold and written off asset	-	-
Balance as of 31 August 2024	484	484
Net book value as of 31 August 2023	109	109
Net book value as of 31 August 2024	165	165

Amortization expenses of intangible assets are included within operating expenses in profit or loss. Intangible assets

of the Group and the Company with an acquisition cost of EUR 286 thousand as of 31 August 2024 (as of 31 August

2023 – EUR 286 thousand) are fully amortized and were still in use.

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,

Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

5. Property, plant and equipment

				Other
Group		Machinery		property,
	Land and	and		plant and
	buildings	equipment	Vehicles	equipment	Total
Cost:
Balance as of 31 August 2022	31,721	51,358	11	5,780	88,870
Additions	39	1,844	-	105	1,988
Sold and written off asset	-	(2,216)	(11)	(67)	(2,294)
Overwriting from one article to another	-	(80)	-	80	-
Balance as of 31 August 2023	31,760	50,906	-	5,898	88,564
Additions	61	860	-	766	1,687
Sold and written off asset	-	(401)	-	(7)	(408)
Overwriting from one article to another	-	-	-	-	-
Balance as of 31 August 2024	31,821	51,365	-	6,657	89,843
Accumulated depreciation:
Balance as of 31 August 2022	1,297	22,609	11	1,184	25,101
Charge for the year	598	3,298	-	480	4,376
Sold and written off asset	-	(2,101)	(11)	(53)	(2,165)
Balance as of 31 August 2023	1,895	23,806	-	1,611	27,312
Charge for the year	599	4,142	-	492	5,233
Sold and written off asset	-	(299)	-	(3)	(302)
Balance as of 31 August 2024	2,494	27,649	-	2,100	32,242
Net book value as of 31 August 2023	29,865	27,100	-	4,287	61,252
Net book value as of 31 August 2024	29,328	23,716	-	4,557	57,601

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,

Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

Property, plant and equipment (cont’d)

				Other
Company		Machinery		property,
	Land and	and		plant and
	buildings	equipment	Vehicles	equipment	Total
Cost:
Balance as of 31 August 2022	31,721	51,358	11	5,767	88,857
Additions	39	1,844	-	104	1,987
Sold and written off asset	-	(2,216)	(11)	(67)	(2,294)
Overwriting from one article to another	-	(80)	-	80	-
Balance as of 31 August 2023	31,760	50,906	-	5,884	88,550
Additions	61	860	-	764	1,685
Sold and written off asset	-	(401)	-	(7)	(408)
Overwriting from one article to another	-	-	-	-	-
Balance as of 31 August 2024	31,821	51,365	-	6,641	89,828
Accumulated depreciation:
Balance as of 31 August 2022	1,297	22,609	11	1,178	25,095
Charge for the year	598	3,298	-	478	4,374
Sold and written off asset	-	(2,101)	(11)	(53)	(2,165)
Balance as of 31 August 2023	1,895	23,806	-	1,603	27,304
Charge for the year	599	4,142	-	490	5,231
Sold and written off asset	-	(299)	-	(-3)	((302)
Balance as of 31 August 2024	2,494	27,649	-	2,090	32,233
Net book value as of 31 August 2023	29,865	27,100	-	4,281	61,246
Net book value as of 31 August 2024	29,328	23,716	-	4,551	57,595

Depreciation charge for the year was recognised as follows:

	Group		Company
	2024	2023	2024	2023
Cost of production	4,540	4,325	4,539	4,324
Operating expenses and inventories cost of production	47	51	46	50
Total depreciation	4,587	4,376	4,585	4,374

Property, plant and equipment of the Group and the Company with an acquisition cost of EUR 1,448 thousand was

fully depreciated as of 31 August 2024 (EUR 1,410 thousand as of 31 August 2023), and was still in active use. The

major part of the fully depreciated property, plant and equipment consists of machinery and equipment.

As at 31 August 2024 the Company had property, plant and equipment acquired under finance leases in the amount

of 343 thousand EUR. (EUR 767 thousand as of 31 August 2023 , ).

The Company’s prepayments for non-current assets amounted to EUR 104 thousand as of 31 August 2024 (EUR 2

thousand as of 31 August 2023). Prepayments are classified as other property, plant and equipment.

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,

Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

Property, plant and equipment (cont’d)

As at 31 August 2024, the Group and the Company have reclassified spare parts amounting to EUR 1,218 thousand

(EUR 1,056 thousand as of 31 August 2023) that meet the Property, plant and equipment criteria from Inventories to

Property, plant and equipment. These spare parts are booked under Other property, plant and equipment.

As of 31 August, 2024, the Company’s property, plant and equipment with the net book value of EUR 41,090 thousand

and inventories which classified as non-current assets amounting to EUR 1,218 thousand was pledged to the bank as

collateral for loans granted (respectively EUR 45,845 thousand and EUR 1,056 thousand as of 31 August 2023) (Note

12).

During 2024 and 2023, there were no capitalized borrowing costs in non-current assets.

6. Investments into subsidiaries

Acquisition cost of investment of the Company in subsidiaries as of 31 August 2024 and 2023 are presented below:

		2024	2023
	Share	Acquisition	Share	Acquisition
	capital	cost	capital	cost
ARI-LUX UAB	100%	5	100%	5

Performance results of the subsidiary ARI-LUX UAB before elimination of related transactions in 2024 and 2023.

Statement of financial position

	As of 31 August	As of 31 August
	2024	2023
Other non-current assets	6	8
Trade receivables	184	272
Other receivables and current assets	1	47
Cash and cash equivalents	2	1
Total assets	193	326
Share capital	3	3
Retained earnings	64	138
Trade liabilities	1	1
Other current payables and accrued liabilities	125	184
Total equity and liabilities	193	326

Statement of profit or loss and other comprehensive income

	2024	2023
Revenue	879	752
Cost of sales	(855)	(593)
Gross profit	24	159
Operating expenses	102)	(80)
Profit (loss) before income tax	(78)	79
Income tax expense	(3)	6
Net profit (loss) for the reporting period	(81)	73

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,

Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

7. Inventories

	Group		Company
	2024	2023	2024	2023
Raw materials	2,678	1,480	2,678	1,480
Work in progress	1,523	2,293	1,523	2,293
Finished goods	5,220	2,078	5,220	2,078
Spare parts for the repair of equipment used in activities	439	450	439	450
Goods for resale	2	50	2	50
Adjustment to net realizable value	(2)	-	(2)	-
	9,860	6,351	9,860	6,351

Raw materials consist of wood, accessories, plastics, chemical materials and other materials used in production.

Inventories in value of EUR 9,859 thousand are pledged to the bank according to loan agreements (Note 12) as of 31

August 2024. Inventories in value of EUR 6,351 thousand were pledged to the bank as of 31 August 2023.

8. Trade receivables

	Group		Company
	2024	2023	2024	2023
Other receivables after one year, gross	-	-	-	-
Less: impairment for doubtful receivables	-	-	-	-
	-	-	-	-
Trade receivables, gross	10,467	7,264	10,467	7,264
Less: impairment for doubtful receivables	-	-	-	-
	10,467	7,264	10,467	7,264

The increase in receivables is largely due to changes in payment terms. At the beginning of the 2024 financial year,

the payment terms of the main client, IKEA, were adjusted back to 30 days from the previous 21 days.

Trade receivables are non-interest bearing and are generally on 30 days payment terms.

During FY2024 no impairment was recorded in relation to any doubtful trade receivables by the Group and the Company

(in FY2023 no impairment was calculated in relation to any doubtful trade receivables).

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,

Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

The aging analysis of the Group’s and the Company’s trade receivables as of 31 August 2024 and 31 August 2023 is

as follows:

						Trade receivables past due, but not impaired	Total
						More
	Trade receivables neither	Less than	30–60	60–90	90–120	than 120
COMPANY	past due nor impaired	30 days	days	days	days	days
2023	6,162	1,079	23	-	-	-	7,264
2024	9,829	638	-	-	-	-	10,467

						Trade receivables past due, but not impaired		Total
	Trade receivables neither	Less than	30–60	60–90	90–120	More	than 120
GROUP	past due nor impaired	30 days	days	days	days	days
2023	6,162	1,079	23	-		-	-	7,264
2024	9,829	638	-	-		-	-	10,467

The company was not granted any new loans during the reporting period.

9. Other receivables

	Group		Company
	2024	2023	2024	2023
Refundable VAT	663	841	663	841
Receivables of Employment Services Under the Ministry
of Social Security and Labour	-	42	-	-
Other receivables	388	223	387	222
	1,051	1,106	1,050	1,063

Other receivables of the Group and the Company were neither past due nor impaired as of 31 August 2024 and

31 August 2023.

10. Cash and cash equivalents

	Group		Company
	2024	2023	2024	2023
Cash at bank	3,867	3,481	3,865	3,480
	3,867	3,481	3,865	3,480

The Company's cash balances in bank accounts denominated in foreign currency and euro, and future inflows to the

accounts at bank were pledged to the bank as collateral for loans granted (Note 12).

11. Reserves

Legal reserve

A legal reserve is a compulsory reserve under Lithuanian legislation. Annual transfers of not less than 5% of net profit

are compulsory until the reserve reaches 10% of the share capital. As of 31 August 2024 the Company’s legal reserve

was fully formed at amount 451 thousand. EUR (31 August 2023 – EUR 451 thousand).

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,

Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

12. Financial liabilities

	Group			Company
	As of 31	As of 31	As of 31	As of 31
	August	August	August	August
	2024	2023	2024	2023
Non-current borrowings
Syndicated loan from commercial banks	15,817	21,547	15,817	21,547
Issue price of VIVA bonds	6,000	6,000	6,000	6,000
Loans from related party	3,000	3,000	3,000	3,000
Interest on loans from related party	572	467	572	467
Loans from Ikea Supply AG	740	2,317	740	2,317
Other loans	-	329	-	329
	26,129	33,660	26,129	33,660

	Group			Company
	As of 31	As of 31	As of 31	As of 31
	August	August	August	August
	2024	2023	2024	2023
Current borrowings
Syndicated loan from commercial banks	5,131	35,82	5,131	3,582
Interest on syndicated loan from commercial banks	-	265	-	265
Interest on issue price of VIVA bonds	21	29	21	29
Loans from Ikea Supply AG	1,511	1,759	1,511	1,759
Interest on loans from Ikea Supply AG	134	-	134	-
Other loans	343	438	343	438
	7,140	6,073	7,140	6,073

The Company’s property, plant and equipment with the total net book value of EUR 41,090 thousand as of 31 August

2024 (EUR 45,845 thousand as of 31 August 2023), all the current cash balances and future inflows to the Company’s

accounts at the bank and inventories in value of EUR 9,859 thousand and other non-current assets EUR 1,218

thousand as at 31 August 2024 (inventories in value of EUR 6,351 thousand and other non-current assets EUR1,056

thousand as at 31 August 2023) were pledged as collateral for the loans granted.

Loan from related party - 3,000,000 EUR, Interest rate 3,5 %. Loan is subordinated against loans received from bank

– it will not be repaid until the liabilities for the loan from the bank will be settled.

Loan from Ikea Supply AG EUR 995 thousand with interest rate 1.7%, repayment term April 25, 2027.

Loan from Ikea Supply AG EUR 1,120 thousand with interest rate 2.4%, repayment term March 25, 2025.

Loans from the bank:

- EUR 10,474 thousand, interest rate 7.6%, maturity 30 April 2027

According to loan agreement the total loan commitment from the bank is EUR 20,948 thousand.

On November 19, 2021, 6,000 thousand EUR value bond signing agreement with the State Investment Management

Agency, which manages the Business Support Fund. The interest rate is 7.9%, the maturity date of the bonds is

September 15, 2027

Actual interest rates are close to the effective interest rates.

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,

Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

Weighted average interest rates of borrowings outstanding at the year-end:

	Group		Company
	2024	2023	2024	2023
Loans	6.85%	6.73%	6.85 %	6.73%

Borrowings at the end of the year in different currencies:

	Group		Company
Borrowings denominated in:	2024	2023	2024	2023
EUR	32,926	38,966	32,926	38,966
SEK	343	767	343	767
	33,269	39,733	33,269	39,733

Reconciliation of movements of liabilities to cash flows arising from financing activities:

	Group	Company
Borrowings as at 31/08/2023	38,770	38,770
Proceeds from borrowings	-	-
Repayments of borrowings	(6,363)	(6,363)
Borrowings as at 31/08/2024	32,407	32,407

12.1. IFRS 16 “Leases”

The Group and the Company apply the new standard using a modified retrospective method, which means that the

comparative figures will not be restated. The overall effect of applying IFRS 16 was recognized on 1 January 2019.

From 1 January 2019 lease liabilities classified as leases that were previously classified in accordance with IAS 17 for

buses are measured at the present value of the remaining discounted lease payments using an additional borrowing

rate. The Group and the Company recognize the assets under their ownership in an amount equal to the lease liabilities,

adjusted for the amount of lease payments prepaid or accrued until 31 August 2019.

		Group		Company
	2024		2023	2024	2023
Assets under management:		990	990	990	990
Premises		129	266	129	266
Vehicles		715	724	715	724
Increase in total liabilities:		902	1,021	902	1,021
Long - term lease obligations		456	618	456	618
Short - term lease obligations		446	403	446	403

In the table, deferred tax assets and liabilities from the right to use the property and lease liabilities are offset when

there is a legally enforceable right to set off current tax assets against current tax liabilities.

The Group and the Company have entered into lease agreements for the operation of vehicles and premises.

Previously, operating lease costs were recognized by the Group and the Company on a straight-line basis over the

lease term, and assets and liabilities were recognized only to the extent of the time difference between the actual lease

payments and the recognized expense.

From 2019 September 1 The Group and the Company includes payments due in the lease as a lease liability.

		Group			Company
	2024		2023	2024		2023
Long time rent according IFRS 16 of which:		456	618		456	618
Premises lease obligation		0	134		0	134
Vehicle rental obligation		456	484		456	484
Long time rent according IFRS 16 current liabilities of which:		446	403		446	403
Premises lease obligation		133	133		133	133
Vehicle rental obligation		313	270		313	270
		902	1,021		902	1,021

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,

Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

13. Provisions for employee benefits

	2024	Group	2023	2024	Company	2023
Provisions for pension benefits		211	195		180	161
Provisions for jubilee and other benefits		424	410		424	410
		635	605		604	571

Provisions for pension and jubilee benefits comprise amounts calculated in line with the collective employment

agreement effective at the Company. Each employee is entitled to a jubilee benefit and a pension benefit amounting

to 2- or 3-months’ salary payments on leaving the Company after reaching the retirement age. Key assumptions used

in determining the provisions for pension and jubilee benefits are as follows: employee turnover rate by age group,

discount rate, and wage and salary growth.

The main actuarial assumptions used for the calculation of provisions for pension and jubilee benefits were as follows:

2024

		2023
Discount rate based on inflation forecast	1.5%	1.5%
Salary growth rate	6%	6%
Rate of employee turnover by age group:
younger than 25 years	80%	80%
from 25 to 45 years	30%	30%
from 45 to 59 years	25%	25%
from 59 to 75 years	20%	20%

Management has reviewed the rate of employee turnover by age group and based on historical data has adjusted them

to bring the data into line with the Company’s data.

The following table demonstrates the sensitivity of the Group’s and the Company’s other comprehensive income to

possible changes in actuarial assumptions with all other variables held constant.

Group

	Increase /decrease,	Impact on other
	%	comprehensive income
2024
Discount rate	+0.5%	11
Salary growth rate	+0.5%	(11)
Discount rate	-0.5%	(11)
Salary growth rate	-0.5%	10

Company

	Increase /decrease,	Impact on other
	%	comprehensive income
2024
Discount rate	+0.5%	10
Salary growth rate	+0.5%	(10)
Discount rate	-0.5%	(10)
Salary growth rate	-0.5%	9

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,

Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

The movement in the provisions for pension benefits is as follows:

Group	2024		2023
At 1 September		195		206
Growth in the current year		5		20
Payments		(13)		(6)
Re-measurements of pension benefits		(24		(25)
At 31 August		211		195
Company	2024		2023
At 1 September		161		173
Growth in the current year		(2)		16
Payments		-		(3)
Re-measurements of pension benefits		21		(25)
At 31 August		180		161

The movement in the provisions for jubilee and other benefits is as follows:

Group	2024		2023
At 1 September		410	377
Growth in the current year		265	153
Payments		(252)	(120)
At 31 August		424	410
Company	2024		2023
At 1 September		410	377
Growth in the current year		265	153
Payments		(252)	(120)
At 31 August		424	410

14. Trade payables

Trade payables are non-interest bearing and are normally settled on 30–90 days terms.

15. Other current and accrued liabilities

	Group		Company
	2024	2023	2024	2023
Payroll liabilities and related taxes	1,099	1,276	1,032	1,179
Accrued vacation	638	664	611	629
Dividends payable	986	986	986	986
Other payables and accrued liabilities	1,599	200	1,598	185
	4,322	3,126	4,227	2,979

Other payables are non-interest bearing and are normally settled on 15–30 day terms. Dividends normally are settled

within one year.

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,

Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

16. Revenue

In 2024 sales of goods comprised sales of furniture, which accounted for approx. 99,7 per cent (in 2023 – 99,6 per

cent) of total sales, while the rest were sales of raw materials and waste. The main customer of the Company is IKEA

Supply AG. Sales to this customer in 2024 amounted to EUR 96,738 thousand, i.e. 99.5 per cent of total sales (in 2023

sales amounted to EUR 97,498 thousand, i.e. 99.6 per cent of total sales). The Company was working with this

customer on the basis of short-term agreements since 1998, from 1 February 2018 long term agreement was signed

about purchases until 2025 year.

	Group		Company
	2024	2023	2024	2023
Primary geographical markets:
European Union countries, excluding	68,933	63,572	68,933	63,572
Lithuania
Non-European Union countries	27,795	33,613	27,795	33,613
Lithuania	545	683	545	683
	97,272	97,868	97,272	97,868
Major products lines:
Furniture	96,954	97,494	96,954	97,494
Raw materials	318	374	318	374
	97,272	97,868	97,272	97,868

The Group and the Company have only non-governmental customers. All revenues are recognized at the point in time.

17. Cost of sales

	Group		Company
	2024	2023	2024	2023
Materials	55,311	64,351	55,312	64,351
Wages, salaries	11,850	12,916	11,025	12,350
Social security	200	217	185	206
Depreciation	4,348	4,419	4,346	4,417
Depreciation according to IFRS 16	291	318	291	318
Other production expenses	6,274	7,901	7,140	8,639
	78,274	90,122	78,299	90,281

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,

Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

18. Selling and distribution expenses and administrative expenses

	Group		Company
	2024	2023	2024	2023
Selling and distribution expenses:
Wages, salaries	357	290	357	285
Social security	6	5	6	5
Transportation and storage services	1,142	750	1,142	750
Other selling expenses	149	101	149	106
	1,653	1,146	1,653	1,146

	Group		Company
	2024	2023	2024	2023
Administrative expenses:
Wages, salaries	2,595	2,345	2,512	2,280
Social security	40	40	39	39
Personnel expenses	180	73	178	72
Environmental expenses	71	103	71	103
Insurance expenses	169	116	168	115
IT, telecommunications and low-value inventory
expenses	368	426	367	424
Audit and consultation expenses	142	265	140	265
Vehicle exploitation and maintenance expenses	86	97	82	94
Operating taxes	152	200	150	200
Depreciation and amortization	124	129	123	128
Depreciation according to IFRS 16	179	37	179	37
Other expenses	411	(1,219)	409	(1,221)
	4,518	2,612	4,419	2,536

The item „Other“ of Administrative expenses includes 1,925 thousand EUR fixed costs compensation from IKEA AG,

which was received in accordance with the provisions of the long-term contract signed in 2018, which provides for the

minimum production and sales volumes required for business continuity. Such compensation was not received in 2024.

19. Other operating income and expenses

	Group		Company
	2024	2023	2024	2023
Other operating income
Rent and utilities income	360	1,328	360	1,328
Gain on disposal of property, plant and equipment	1	36	1	36
Heating revenue	531	958	531	958
Other income	248	53	251	57
	1,140	2,375	1,143	2,379
Other operating expenses
Direct costs of rent income	-	(1,435)	-	(1,435)
Heat generation costs	472	582	472	582
Losses on disposal of property, plant and equipment	(11)	(8)	(11)	(8)
Other expenses	(129)	(62)	(129)	(62)
	(612)	(2,087)	(612)	(2,087)

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,

Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

Rental and utility income and expenses significantly decreased during the 2024 financial year, as both the old factory

lease and sublease agreements were terminated in August 2023.

The decrease in heating revenue was due to reductions in both volume and price. The primary reason for this was the

launch of the Vilnius combined heat and power plant, which increased competition.

20. Finance income and finance costs

	Group		Company
	2024	2023	2024	2023
Finance income	43	6	43	6
Interest income	37	-	37	-
Income due to currency exchange	6	5	6	5
Finance costs	(2,735)	(2,497)	(2,735)	(2,497)
Interest expenses	(2,629)	(2,410)	(2,629)	(2,410)
Expenses due to currency exchange	(55)	(16)	(55)	(16)
Other financial expenses	(51)	(71)	(51)	(71)
	(2,692)	(2,492)	(2,692)	(2,492)

During 2023 and 2024, there were no capitalized borrowing costs in non-current assets.

21. Income tax

	Group		Company
Components of the income tax expense	2024	2023	2024	2023
Income tax expenses for the reporting year	793	6	790	-
Income tax expenses from dividends paid to natural
persons	-	-	-	-
Total current income tax expense	793	6	790	-
Recognition and reversal of temporary differences	(146)	189	(146)	189
Change in deferred tax	(146)	189	(146)	189
Income tax expense carried in profit or loss	647	195	644	189

Deferred income tax asset and liability as of 31 August 2023 and 31 August 2024 was accounted using tax rate of 15%.

In 2024, the Group and the Company implemented the investment project intended for the increase of output and

labour productivity, expansion of the range of goods produced with new products and major change of the

manufacturing process. The investment project covered investments of EUR 0.5 million (EUR 1.1 million at 2023),

related to the acquisition and 5.8 million (EUR 2.4 million at 2023) investment project advantage.

Income tax expense disclosed in the statement of profit or loss and other comprehensive income may be reconciled to

income tax expense that would arise using an enacted income tax rate applicable to profit before income tax.

2024

Group				2023
Profit (loss) before tax		10,664		1,784
Tax calculated at a statutory 15% tax rate	15 %	1,614	15 %	268
Tax effects of:
- Expenses not deductible for tax purposes	0 %	202	0 %	197
- Income not subject to tax	0 %	(78)	0 %	(97)
- Income tax relief due to investment projects	(15 %)	(945)	(15 %)	(362)
Income tax expense carried in profit or loss	15 %	793	15 %	6

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,

Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

Company		2024		2023
Profit (loss) before tax		10,742		1,705
Tax calculated at a statutory 15% tax rate	15 %	1,611	15 %	256
Tax effects of:
- Expenses not deductible for tax purposes	0 %	202	0 %	196
- Income not subject to tax	0 %	78)	0 %	(90)
- Income tax relief due to investment projects	(15 %)	(945	(15 %)	(362)
Income tax expense carried in profit or loss	15 %	790	15 %	-

The analysis of deferred tax assets and deferred tax liabilities is as follows:

	Group		Company
	2024	2023	2024	2023
Deferred tax assets	1,023	877	1,023	877
Deferred tax liability	-	-	-	-
	1,023	877	1,023	877

The movement in the Group’s and Company’s deferred tax assets and liabilities (prior to and after offsetting the

balances) during the year was as follows:

Group

		Credited		Credited
		(debited)		(debited)
		to income		to income
		tax		tax
Deferred tax assets	2022	expenses	2023	expenses	2024
– Accrued charges	78	22	100	60	160
– Unused Investment relief	981	(204)	777	86	863
	1,059	(182)	877	146	1,023
Deferred tax liabilities
– Investment relief	7	(7)	-	-	-
	7	(7)	-	-	-
Deferred tax assets, net	1,066	(189)	877	146	1,023

Company

		Credited		Credited
		(debited)		(debited)
		to income		to income
		tax		tax
Deferred tax assets	2022	expenses	2023	expenses	2024
– Accrued charges	78	22	100	60	160
– Unused Investment relief	981	(204)	777	86	863
	1,059	(182)	877	146	1,023
Deferred tax liabilities	7	(7)	-	-	-
– Investment relief	7	(7)	-	-	-
Deferred tax assets, net	1,066	(189)	877	146	1,023

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,

Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

22. Earnings per share

Basic and diluted earnings per share are calculated by dividing the net profit attributable to shareholders by the

weighted average number of ordinary shares issued and paid during the year. There are no potential ordinary shares

to be issued, therefore basic and diluted earnings per share are equal.

	Group		Company
	2024	2023	2024	2023
Net profit attributable to shareholders	10,017	1,589	10,097	1,516
Weighted average number of shares (thousand)	3,886	3,886	3,886	3,886
Basic earnings per share (in EUR)	2,58	0,41	2,60	0,39

There were no changes in the share capital of the Company during 2024 and 2023; therefore, the weighted average

number of shares equals the total number of shares.

23. Financial risk management

General part

The Group and the Company are exposed to the following financial risks: liquidity risk, credit risk, foreign exchange risk

and interest rate risk. This note provides information on the impact of these risks on the Group and the Company, the

objectives, policies, and processes for assessing and managing these risks.

The Group's and the Company's risk management is performed by the Group's management - it identifies and analyzes

the risks faced by the Group and the Company, implements and maintains appropriate limits and controls. The Group

and the Company strive to create a disciplined and constructive risk management environment in which all employees

are aware of their roles and responsibilities.

Financial instruments by category

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,

Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

The financial risk management has been applied to the line items below:

Category – Loans and receivables	Group		Company
	2024	2023	2024	2023
Financial assets
Loans granted	-	-	-	-
Trade and other receivables, of which:	11,132	8,147	11,132	8,105
Other receivables after one year	-	-	-	-
Receivables from customers	10,467	7,264	10,467	7,264
VAT refundable	665	841	665	841
Receivables from the Employment
Service	-	42	-	-
to the Ministry of Social Security and Labor
Other receivables	-	-	-	-
Cash and cash equivalents	3,867	3,481	3,865	3,480
	14,999	11,628	14,997	11,585

Category – Financial liabilities	Group		Company
measured at amortised cost
	2024	2023	2024	2023
Financial liabilities
Borrowings	33,269	39,733	33,269	39,733
Other financial liabilities	-	-	-	-
Trade and other payables, of which:	9,703	11,143	9,816	11,300
Trade debt	7,506	8,795	7,686	9,065
Amounts payable on fixed assets	91	49	91	49
Wages and related taxes	1,099	1,276	1,032	1,179
Dividends payable	986	986	986	986
Other amounts payable	21	37	21	21
	42,972	50,876	43,085	51,033

Liquidity risk

The Group’s and the Company’s policy is to maintain sufficient cash and cash equivalents or have available funding

through an adequate amount of committed credit facilities to meet their commitments at a given date in accordance

with their strategic plans. The Group’s and the Company’s liquidity (total current assets / total current liabilities) and

quick ratios ((total current assets – inventories) / total current liabilities) as of 31 August 2024 were 1.14 and 0.62

(Group’s), 1.14 and 0.61 (Company’s) respectively (the Group’s liquidity and quick ratio as of 31 August 2023 – 0.80

and 0.45, and the Company’s 0.79 and 0.45 respectively).

The Group and the Company use borrowed capital in their operations. The tables below summarize repayments of

loans and interest coverage to financial institutions by periods. Compared to the Note 23 of Notes to the Financial

Statements for the FY2023 ended 31 August 2023, the Group’s and the Company’s interest payable has been adjusted.

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,

Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

				More
Group	Less than 3	3 to 12		than 5
	months	months	1 to 5 years	years	Total
Loan repayments	549	5,230	32,990	-	38,770
Interest payments	833	1,772	5,885	-	8,490
Balance as of 31 August 2023	1,383	7,002	38,875	-	47,260
Loan repayments	1,837	5,148	25,421	-	32,406
Interest payments	514	1,518	3,624	-	5,657
Balance as of 31 August 2024	2,351	6,666	29,046	-	38,063

				More
Company	Less than 3	3 to 12		than 5
	months	months	1 to 5 years	years	Total
Loan repayments	549	5,230	32,990	-	38,770
Interest payments	833	1,772	5,885	-	8,490
Balance as of 31 August 2023	1,383	7,002	38,875	-	47,260
Loan repayments	1,837	5,148	25,421	-	32,406
Interest payments	514	1,518	3,624	-	5,657
Balance as of 31 August 2024	2,351	6,666	29,046	-	38,063

After the end of the reporting period, the Company refinanced its financial obligations to the European Bank for

Reconstruction and Development (EBRD), AS Citadele Banka Lithuanian branch, KŪB Pagalbos verslui fondas and

Invalda privatus kapitalas AB using newly obtained financing from Šiaulių Bankas AB (Note 28).The tables below

summarize the repayment terms of the Group and the Company’s financial liabilities, considering the aforementioned

post-balance sheet events (planned payments and interest).

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,

Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

				More
Group	Less than 3	3 to 12		than 5
	months	months	1 to 5 years	years	Total
Loan repayments	549	5,230	32,990	-	38,770
Interest payments	833	1,772	5,885	-	8,490
Balance as of 31 August 2023	1,383	7,002	38,875	-	47,260
Loan repayments	502	3.910	20.524	7.470	32.406
Interest payments	1.066	1.460	3.820	38	6.384
Balance as of 31 August 2024	1.569	5.370	24.344	7.508	38.790

				More
Company	Less than 3	3 to 12		than 5
	months	months	1 to 5 years	years	Total
Loan repayments	549	5,230	32,990	-	38,770
Interest payments	833	1,772	5,885	-	8,490
Balance as of 31 August 2023	1,383	7,002	38,875	-	47,260
Loan repayments	502	3.910	20.524	7.470	32.406
Interest payments	1.066	1.460	3.820	38	6.384
Balance as of 31 August 2024	1.569	5.370	24.344	7.508	38.790

The amount of dividends payable by the Company accumulated from previous reporting periods remained unchanged

during the 2024 financial year and amounted to EUR 985 thousand as of August 31, 2024 (EUR 985 thousand as of

August 31, 2023).

Amounts payable to the Company's suppliers on demand as of August 31, 2024, amounted to EUR 153 thousand (EUR

684 thousand as of August 31, 2023). Amounts payable to the Group's suppliers on demand as of August 31, 2024,

amounted to EUR 44 thousand (EUR 447 thousand as of August 31, 2023).

Credit risk

Credit risk is a risk that the Group and the Company will incur financial losses, if a buyer or other party fails to fulfil its

contractual liabilities. This risk is mainly associated with the Group’s and the Company’s trade debtors.

The Group and the Company have significant concentration of trading counterparties. The main customer of the Group

and the Company – IKEA Supply AG – as of 31 August 2024 accounted for approximately 88% of the total Group’s

and Company’s trade receivables (as of 31 August 2023 over 67%). Also, the major part of the Company’s sales is

with this customer (Note 16).

The Group and the Company do not guarantee obligations of other parties. The maximum exposure to credit risk is

represented by the carrying amount of each financial asset. Consequently, the Management of the Group and the

Company considers that its maximum exposure is reflected by the amount of trade receivables recognized at the

statement of financial position date.

With respect to trade and other receivables that are neither impaired nor past due, there are no indications as of the

reporting date that the debtors will not meet their payments obligations since receivables balances are monitored on

an ongoing basis.

On the date of the financial report there are no indications that the counterparts of trade receivables and other

receivables, which are not due and not impaired, will not be able to fulfil any of their payment obligations, because the

outstanding balances of receivables are regularly monitored and controlled.

As of 1 September 2019, the Group and the Company assess the probability of default upon initial recognition of

financial assets and at each reporting date considering whether the credit risk has significantly increased since initial

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,

Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

recognition. To assess whether there has been a significant increase in credit risk, the Group and the Company

compare the risk of default related to assets as at the reporting date to the risk of default on initial recognition.

Credit risk is measured as the maximum credit exposure for each group of financial instruments and is equal to their

carrying amount. The major credit risk relates to the carrying amount of each group of assets.

The Group’s sales and trade receivable amounts from main customers comprised:

Customers:	Sales	Trade receivables
Four or more years "trading history with the Group"	96,968	10,390
Less than four years "trading history with the Group"	304	77
Higher risk	-	-
Total gross carrying amount	97,272	10,467

The maximum exposure to credit risk of the Group’s and the Company’s cash and cash equivalents is equal to the fair

value of cash and cash equivalents classified as cash and cash equivalents at the date of financial position statements

preparation. The management of the Group and the Company considers that the risk arising from placement of cash

and cash equivalents at bank accounts and other short-term financial instruments is not significant, as placements are

made only in commercial banks in Lithuania which have high credit ratings.

For calculation of the expected credit losses, trade receivables are categorised into separate groups according to credit

risk characteristics. The amounts for each group are analysed by the number of days past due. As trade and other

receivables usually do not include deposit or other collaterals, the ratio of expected losses coincides with the probability

of default.

The Group and the Company determine credit risk based on historical data, considering past due payments.

The following table provides information about the Group’s and the Company’s exposure to credit risk and ECLs for

trade receivables as at 31 August 2024:

	Expected credit	Initial value	Impairment	Carrying amount
	losses, %
Not past due		9,829	-	9,829
Past due for 1 to 30 days	0%	638	-	638
Past due for 31 to 60 days	1%	-	-	-
Past due for 61 to 120 days	2%	-	-	-
Past due for over 120 days	3%	-	-	-
Total		10,467	-	10,467

The Management had analyzed trade receivables. As of 2024 August 31 no impairments have been made to the

Group's and the Company's trade receivables. (2023 August 31 no impairments have been made ).

Foreign exchange risk

Major currency risks of the Group and the Company occur due to the fact that the Group and the Company borrow

foreign currency denominated funds and are involved in imports and exports. The Group’s and the Company’s policy

is to match cash flows arising from highly probable future sales and purchases in each foreign currency. The Group

and the Company do not use any financial instruments to manage their exposure to foreign exchange risk other than

aiming to borrow in EUR.

Financial assets and liabilities stated in various currencies as of 31 August 2024 were as follows (stated in EUR):

	Group			Company
	Assets	Liabilities	Assets	Liabilities
EUR	14,999	45,520	14,997	45,594
SEK	-	343	-	343
PLN	-	72	-	72
	14,999	45,935	14,997	46,009

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,

Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

Financial assets and liabilities stated in various currencies as of 31 August 2023 were as follows (stated in EUR):

	Group			Company
	Assets	Liabilities	Assets	Liabilities
EUR	11,628	49,723	11,585	49,880
SEK		767		767
PLN	-	85	-	85
	11,628	50,575	11,585	50,732

Interest rate risk

Part of the Group’s and the Company’s financial debts and financial leases consists of obligations with variable interest

rates (EURIBOR and the policy rate of the Swedish central bank), which creates an interest rate risk. As of August 31,

2024, financial obligations with variable interest rates accounted for 66% of the Group's and the Company's total

financial debts and financial lease values (compared to 67% as of August 31, 2023).

As of August 31, 2024, and August 31, 2023, the Group and the Company did not hold any financial instruments

intended to manage interest rate risk. The table below calculates the impact of a 1 percentage point change in the

variable interest rate on the Group's and the Company’s results, based on the average financial debts and financial

lease obligations for the 2023–2024 financial years.

	Group			Company
	Increase/	Effect on profit	Increase/	Effect on profit
	decrease, %	before tax	decrease, %	before tax
2023
EUR	+1 %	(256)	+1 %	(256)
EUR	-1 %	256	-1 %	256
2024
EUR	+1 %	(241)	+1 %	(241)
EUR	-1 %	241	-1 %	241

Fair value of financial assets and liabilities

The Group and the Company hold cash and make investments only in other short-term investing instruments of

commercial banks in Lithuania with high credit ratings.

Trade and other receivables, trade and other payables and borrowings. In the management’s opinion, the

carrying amounts of trade and other receivables, trade and other payables and borrowings approximate their fair

values, as trade and other receivables, trade and other payables are current, and borrowings are subject to EURIBOR

market based variable interest rates.

24. Capital management

The Group’s and the Company’s capital includes share capital, legal reserve and retained earnings. The primary

objective of the capital management is to ensure that the Group and the Company comply with externally imposed

capital requirements.

The Group and the Company manage their capital structure and make adjustments to it in the light of changes in

economic conditions and the risk characteristics of their activities. To maintain or adjust the capital structure, the

Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No

changes were made in the objectives, policies or processes of capital management during the year ended 31 August

2024.

The Company is obliged to keep its equity at no less than 50% of its share capital, as imposed by the Law on Companies

of the Republic of Lithuania.

The Group and the Company have externally imposed capital requirements from the bank.

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,

Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

At 21 June 2019 was signed the loan agreement between VILNIAUS BALDAI AB and EUROPEAN BANK FOR

RECONSTRUCTION AND DEVELOPMENT and AS CITADELE BANKA, LITHUANIAN BRANCH. According to this

agreement, the following requirements are imposed to secure the repayment of bank borrowings and settlement of

finance lease obligations:

Financial Ratios:

a) Debt Service Coverage Ratio. The Borrower shall, at all times commencing on 31 August 2020 onwards,

maintain a ratio of:

i. Cash Available for Debt Service for the 12 months preceding the date of calculation; to

ii. the sum of the principal repayments (excluding any amounts falling due under any overdraft or

revolving facility that were available for simultaneous redrawing according to the terms of such

facility) and interest payments on all Financial Indebtedness due or accrued during such period, on

a 12-month rolling stock basis, of not less than 1.00:1 (covenant established in the amendment of

the Agreement on 19th February 2024).

b) Net Financial Debt to EBITDA Ratio. The Borrower shall at all times commencing on 31 August 2021 onwards,

maintain a ratio of (x) Net Financial Debt to (y) EBITDA for the 12 months preceding the date of calculation of

not more than:

i. as at 31 August 2021, 5.00:1;

ii. for the period from 1 September 2021 to 31 August 2022, 4.50:1;

iii. for the period from 1 September 2022 to 31 August 2023, 3.50:1; and

iv. for the period from 1 September 2023 onwards, 3.00:1.

c) Equity Ratio. The Borrower shall, at all times commencing on 31 August 2020 onwards, maintain a ratio of

Equity to [Total Assets] of not less than:

i. as at 31 August 2020, 0.3:1;

ii. for the period from 1 September 2020 to 31 August 2021, 0.35:1; and

iii. for the periods from 1 September 2021 onwards, 0.40:1.

d) Minimum EBITDA. The Borrower shall, at all times commencing on the date of this Agreement onwards,

maintain EBITDA of not less than:

i. for the period from the date of this Agreement to 31 August 2019, EUR 5,500,000;

ii. for the period from 1 September 2019 to 31 August 2020, EUR 6,800,000; and

iii. for the periods from 1 September 2020 onwards, EUR 7,200,000, to be calculated on a 12-month

rolling stock basis.

e) Minimum EBITDA ratio. The Borrower shall, at all times commencing on the date of this Agreement onwards,

maintain a percentage of (x) EBITDA divided by (y) sales revenue of not less than:

i. for the period from the date of this Agreement to 31 August 2019, 7%; and

ii. for the period from 1 September 2019 to 28 February 2021, 8%, to be calculated on a 12-month

rolling stock basis.

The management monitors that the Company is in line with both above mentioned capital requirements. No other

capital management instruments are used.

Actual covenants set by EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT and AS CITADELE

BANKA, LITHUANIAN BRANCH and its implementation in FY2024 are presented below:

• Debt coverage ratio is required to be not less than 1.0. As of 31 August 2024 Company’s debt coverage ratio

is 1.04.

• Equity ratio is required to be not less than 0.40. As of 31 August 2024 Company’s equity ratio is 0.45.

• Net financial debt to EBITDA ratio is required to be not less than 3.5. For the financial year 2024 Company’s

net financial debt to EBITDA ratio is 1.61.

• A percentage of (x) EBITDA divided by (y) sales revenue is required to be not less than 8 per cent. For the

financial year 2024 Company’s percentage of (x) EBITDA divided by (y) sales revenue is 18.8 per cent.

• Minimum EBITDA is required to be not less than 7,200 thousand EUR. For the financial year 2024 Company’s

EBITDA is 17,703 thousand EUR.

As of 31 August 2024, the Group and the Company complied all the external requirements established to secure the

repayment of European Bank for Reconstruction and Development (EBRD) and AS Citadele Banka, Lithuanian Branch

borrowings.

On November 19, 2021, 6,000 thousand EUR value bond signing agreement with the State Investment Management

Agency (hereinafter “VIVA”), which manages the Business Support Fund. According to this contract, the following

requirements are imposed:

1. Net financial Debt and EBITDA ratio:

- not applicable until 30/11/2021

- < 14.5x until 28/02/2022

- < 10.5x until 31/05/2022

- < 6.0x until 31/08/2022

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,

Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

- < 5.5x until 30/11/2022

- < 5.0x until 28/02/2023

- < 4.5x until 31/05/2023

- < 4.0x from 01/06/2023

2. Debt Service Coverage Ratio (DSCR)

- not applicable until 31/05/2022

- > 1.2x untill 01/06/2022

3. Equity to assets ratio:

- > 25% untill 31/08/2022

- > 35% from 01/09/2022

FY2024 VIVA’s covenants requirements and actual results are presented below:

• Net financial debt and EBITDA ratio is required to be not more than 4. For the financial year 2024

Company‘s Net financial debt and EBITDA ratio 1.4.

• Equity to assets ratio is required to be not less than 0.35. As of 31 August 2024 Company’s equity to assets

ratio is 0.485.

• DSCR is required to be not less than 1.2. For the financial year 2024 Company’s DSCR 1.93.

As of 31 August 2024, the Group and the Company complied with all VIVA covenants requirements.

25. Related-party transactions

The parties are considered related when one party has the possibility to control the other one or have significant

influence over the other party in making financial and operating decisions. The related parties of the Company as of 31

August 2024 were: ARI-LUX UAB (the subsidiary), Invalda Privatus Kapitalas AB (ultimate shareholder) and all

companies controlled by Invalda Privatus Kapitalas AB (Bordena UAB, Švytėjimas UAB, Inreal UAB, Inreal Geo UAB,

Geruvis UAB, Panerių konversija UAB). (31 August 2023 were: ARI-LUX UAB (the subsidiary), Invalda Privatus

Kapitalas AB (ultimate shareholder) and all companies controlled by Invalda Privatus Kapitalas AB (other related

parties).)

Transactions of the Group and the Company with related parties during 2024 and 2023 and the balances as of 31

August 2024 and 31 August 2023 were as follows:

a) Sales and purchases of goods and services and year-end balances arising from these sales/purchases

2023
Group	Purchases	Sales	Receivables	Payables
UAB “Panerių konversija”	935	224	22	377
UAB „Bordena“	18,934	10,883	2,263	-
UAB „Inreal “	41	-	-	-
UAB „Švytėjimas“	87	3	-	11
UAB “Inreal Geo”	1	-	-	-
	1,998	11,110	2,285	388

2023
Company	Purchases	Sales	Receivables	Payables
UAB „ARI-LUX“	752	3	-	272
UAB “Panerių konversija”	935	224	22	377
UAB „Bordena“	18,934	10,883	2,263	-
UAB „Inreal valdymas“	41	-	-	-
UAB „Švytėjimas“	87	3	-	11
UAB “Inreal Geo”	1	-	-	-
	20,750	11,113	2,285	660

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,

Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

2024
Group	Purchases	Sales	Receivables	Payables
UAB “Panerių konversija”	278	-	-	-
UAB „Bordena“	17,613	8,401	1,143	-
UAB „Švytėjimas“	111	4	-	-
	18,002	8,405	1,143	-

2024
Company	Purchases	Sales	Receivables	Payables
UAB „ARI-LUX“	879	5	1	183
UAB “Panerių konversija”	278	-	-	-
UAB „Bordena“	17,613	8,401	1,143	-
UAB „Švytėjimas“	111	4	-	-
	18,882	8,410	1,144	183

In 2024 sales to related parties comprised sale of raw materials (EUR 8,401 thousand) that in financial statements

reduces cost of sales, other minor sales.

b) Loans from Invalda Privatus Kapitalas AB to Trenduva UAB, transferred to the Company after the merger of UAB

Trenduva:

	2024	2023
At 1 September	-	-
Non-current loans	3,000	3,000
Loan repayments received	-	-
Interest charged	105	105
Interest payable	572	467
At 31 August	3,677	3,572

Remuneration of the management and other payments

The Company’s General Manager, Chief Financial Officer, Head of Technical Services, Chief Operating Officer, Head

of HR, Head of Purchasing, Strategic Projects Manager and Head of Business Development are considered to be the

key management of the Group.

	Group		Company
	2024	2023	2024	2023
Wages, salaries	762	587	745	586
Social security	15	12	14	12
	777	599	759	598

The management of the Group and the Company did not receive any loans, guarantees; no other payments or property

transfers were made or accrued.

26. Contingent liabilities

As of 31 August 2024 the Group and the Company had no significant contingent liabilities.

The tax authorities have a right to examine the Groups and the Company’s books and accounting records at any time

during the 3 years’ period after the current tax year and account for additional taxes and fines. In the opinion of the

Company’s management currently there are no circumstances which would raise substantial liability in this respect.

27. Going concern

Although the new factory project in the Trakai district was formally completed in 2022, it is only in the 2024 financial

year that we managed to realize its opportunities and begin to see its still unrevealed potential.

VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,

Lithuania

CONSOLIDATED ANNUAL REPORT FOR THE FY2024 ENDED 31 AUGUST 2024

(all amounts are in EUR thousand unless otherwise stated)

For the second consecutive year, we have improved the efficiency of both production and energy resource efficiency

by double-digit percentages, allowing us to compete with the most advanced and largest factories in Europe. The

Company’s performance in the main client IKEA's procurement competitions, which took place in the last quarter of this

year, best confirms this. We expanded our product portfolio with three new furniture families, which will contribute to

both revenue growth and portfolio diversification. The sales volume of existing furniture families increased by about

7%. However, the financial year 2025 will be a transitional period, and the full effect of the new portfolio will not be fully

visible yet.

To meet the new demands of the client and to ensure sustainable competitive growth, the Company plans to invest up

to 30 million EUR in the automation of production, quality, and logistics over the next 3-5 years. Special attention and

additional resources will be allocated to employee qualification improvement, particularly in the areas of automation,

technology, and product development.

Sustainability will also be a key focus in the upcoming financial year. Along with the 2025 financial statements, the

Company will present a sustainability report, which will be audited. The Company's goal and strategy is to make

sustainability an accepted and integrated part of the business operations.

28. Events after the end of the reporting period

After the end of the reporting period, the Company signed agreements with Šiaulių bankas AB for a EUR 30 million

financing (of which EUR 24 million is a long-term loan for a 5-year period and EUR 6 million is a 2-year credit line) to

cover existing long-term financial liabilities.

Together with this financing and its own funds, the Company fully covered its obligations to the European Bank for

Reconstruction and Development (EBRD), AS Citadele Banka Lithuanian branch, KŪB Pagalbos verslui fondas, and

Invalda privatus kapitalas AB.

The loan repayment schedule and reduced debt servicing costs agreed with Šiaulių bankas AB will positively impact

the cash flow, allowing for an expansion of investments in production automation, robotics, the implementation of new

technologies, process improvements, and strengthening the team and its competencies. This also serves as a strong

external signal that the Company's recent results are considered sustainable and its growth prospects are believed to

be positive.

General Manager

Jonas Krutinis

28 November 2024

Finance Director

Egidijus Žvaliauskas

28 November 2024

END

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

AB “VILNIAUS BALDAI” CORPORATE

SOCIAL RESPONSIBILITY

(SUSTAINABILITY) REPORT 2024

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

Contents

ON SUSTAINABILITY INSIDE THE GROUP

AB „VILNIAUS BALDAI“

G. GOVERNANCE

SUSTAINABILITY STRATEGY OF

AB „VILNIAUS BALDAI“

G.1. Management Structure and Composition

E. ENVIRONMENTAL PROTECTION G.2. Fair and Transparent Business Practice

S. SOCIAL ENVIRONMENT G.8. Inclusion and Community

E.1. Responsible Use of Resources G.3. The Sustainability of the Supply Chain

E.2. Effective Waste Management

G.6. Quality, Environmental Protection

Management System

E.3. Greenhouse Gas (CO2) Emissions G.7. Cybersecurity and Data Safety

S.1. Ensuring Equal Opportunity

Our Values

G.9. Risk Management

S.2. Inclusion of Sensitive Groups

T. TAXONOMY REGULATION

S.6. Employee Engagement

S.3. Respecting Human Rights

T1. Application of EU Taxonomy Regulation at

Vilniaus Baldai, AB

S.7. Remuneration Policy and Motivation

S.4. Protection of Children Interests

S.5. Occupational Health and Safety

T3. Financial Indicators per EU Taxonomy Regulation

T2. Identification of Taxonomy-Eligible Activities

S.8. Employee Work Assessment and Teaching Platform

E.1.1. Responsible Use of Wood G.4. Prohibition of Substance Abuse

E.1.2. Water Saving and Reducing Pollution G.5. Effectiveness of Operations

3 36

7 39

8 40

5 37

6 38

19 44

7 39

9 42

13 43

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

SUSTAINABILITY WITHIN

AB “VILNIAUS BALDAI”

The sustainability report of AB „Vilniaus Baldai“, has been prepared

in accordance with the Law on Financial Reporting of Enterprises of

the Republic of Lithuania, Commission Delegated Regulation (EU)

2023/2772 of 31 July 2023 supplementing Directive 2013/34/EU

of the European Parliament and of the Council as regards sustain-

ability reporting standards. The report is presented for the period

from 1st of September 2023 to 31st of August 2024. Until FY2024,

AB „Vilniaus Baldai“ used to prepare a social responsibility report.

The sustainability report discloses the significant impact the activ-

ity of AB „Vilniaus Baldai“, has had in the area of environmental is-

sues, social issues and corporate governance. The report contains

the most relevant information in possession of the Company at the

time of preparing the report.

Sustainability is the strategic direction of the business of AB „Vil-

niaus Baldai“. Sustainable organizations not only secure a com-

petitive advantage and meet stakeholders expectations, but also

contribute to a sustainable future based on balancing financial suc-

cess with social and environmental responsibility. The sustainability

goals of the Company follow the 3P strategy (Profit, People, Plan-

et), which states that Company should use energy and raw materi-

als resources responsibly, sort and recycle waste, keep improving

the work environment. The operating framework of AB „Vilniaus

Baldai“is based on environmental protection, social partnership,

responsible governance, and economic progress.

SUSTAINABILITY

Social

Environment

Planet

Environment

Profit

Economy

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

The year 2024 was very intensive for AB „Vilniaus Baldai“. Despite

demand-driven fluctuations in production volumes, increased sea-

sonality and other factors, the Company managed to adapt to the

uncertainty of business circumstances, ensure continuity of oper-

ations and significantly improve profitability. During the past year

the Company changed its product range, diversified the portfolio

by adding three new product families and have increased its effi-

ciency, improved quality and energy savings. The company invests

in advanced technologies that reduce pollution, energy consump-

tion, and have a positive impact on the environment.

One of the key areas of sustainability is social responsibility. In face

of the aforementioned challenges, AB „Vilniaus Baldai“ continued

its long-term commitments to its team to build and improve the

employees’ experience and working conditions, foster favorable

environment for personal development, and build co-operation.

AB „Vilniaus Baldai“, is investing in the physical and mental well-be-

ing of its employees by providing comprehensive training, ensur-

ing equal rights and transparent remuneration practices.

An important area of sustainability is the environmental situation

in relation to climate change. The Company recognizes that irre-

sponsible actions carry significant costs to our environment, and it

believes that only a holistic approach—including economic, legal,

technical, and biological measures—can support the sustainable

and rational use of natural resources now and well into the future.

Every operational development and new equipment or technolo-

gies is subject to environmental impact assessment to guarantee

that our advancements remain within safe environmental limits.

Our dedication to social responsibility and environmental protec-

tion drives us to continually invest in energy-saving initiatives, en-

hance our business management practices, and allocate resources

to sustainability-focused projects wherever possible. In addition,

we put great focus on reducing our carbon footprint. In 2024 we

transitioned from diesel vehicles to hybrid and electric alternatives,

installed charging stations, our production facilities and offices are

powered exclusively with renewable energy. For 2025, the Compa-

ny is planning to build the solar power plant. The solar power plant

would cover approximately 7.5% of the annual energy demand by

entire production processes. With the number of sunny days in-

creasing, the power generated by this solar plant could grow even

further.

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

SUSTAINABILITY STRATEGY OF

AB „VILNIAUS BALDAI“

The main goal of our sustainability strategy is to reduce environmental

impact, build a culture of social responsibility, and ensure that sustaina-

ble practices become an integral and self-evident part of our activities.

Key areas where AB „Vilniaus Baldai“ can make the biggest impact

to sustainability:

Sustainable sourcing, ensured through the use of certified raw

materials that meet responsible forestry standards, as well as the

strict sustainability requirements and goals of our primary custom-

er, with an emphasis on increasing the share of recycled materials.

Improving energy consumption efficiency by using green energy,

investing in energy-efficient equipment, adopting renewable en-

ergy sources, and organizing our internal processes with an eye

toward energy savings.

Waste reduction by increasing and optimizing raw material usage,

reintroducing waste into the production cycle, as well as imple-

menting circular economy principles, by converting waste into

heat energy.

Eco-friendly production by using environmentally safe finishing

materials and adhesives, as well as conserving water resources

throughout our processes.

Social responsibility at the heart of our operations. We are com-

mitted to providing fair and safe working conditions for all em-

ployees, supporting opportunities for professional growth, and

actively participating in community initiatives in Trakai district.

Regularly prepare and improve our sustainability reports to trans-

parently communicate our actions to all our stakeholders: em-

ployees, clients, and investors.

Main focus areas to reach these goals:

Circular

economy

(zero-waste

production)

Social

responsibility

Equal

opportunities

Renewable

resources,

environmental

protection

Carbon

neutrality

Employee self-

realization and

reduction of

segregation

ENVIRONMENT

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

E.1. RESPONSIBLE USE OF RESOURCES

To maintain responsible use of resources, AB „Vilniaus Baldai“ in-

vests in power-saving technologies and implements circular pro-

cesses to save wood and water.

E.1.1 RESPONSIBLE USE OF WOOD

Every furniture item manufactured at AB „Vilniaus Baldai“, must

meet high quality standards, function well, possess a unique shape

and be manufactured in a sustainable environment – this is the aim

set by the primary client. As AB „Vilniaus Baldai“ expands its prod-

uct range and volume, the Company ensures that sourced materi-

als are as lightweight as possible while still meeting all mechanical

requirements. Moreover, Company is searching for the most effi-

cient and safe packaging solutions that would ensure the integri-

ty and highest quality of the delivered products. Following these

steps, AB “Vilniaus Baldai” is able to work towards a common goal:

to manufacture sustainable and high-quality items, available to the

broad public.

More than half of the furniture items are manufactured with hon-

eycomb panel technology, replacing wood for a structure from

recycled paper. It allows to reduce the consumption of wood al-

most fivefold. AB „Vilniaus Baldai“ exclusively uses primary wood

sourced from forests managed according to principles of social

responsibility. The Company implemented a Chain of Custody sys-

tem FSC® (FSC-C104209), which is a product traceability system

from a forest or (in case of secondary raw material) from a recycling

moment to a place where it is sold under a FSC® mark and/or its

production finished and it is labelled with the mark. FSC® certif-

icate of the manufacturing chain is a proof of only certified raw

materials being used in manufacturing. Thus, eliminating the risk

of non-certified raw materials blending in with the certified ones.

The annual FSC® audit was carried out in February, 2024. No

non-conformities or notices were determined or given.

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

E.1.2 WATER SAVING AND REDUCING POLLUTION

AB „Vilniaus Baldai“, puts emphasis on water saving and reducing

its pollution as one of the core aims and tries to minimize water

consumption and the volume of wastewater generation at any cost

as well as to build circular processes for reintroducing water.

AB „Vilniaus Baldai“, holds an emissions permit to manage air pol-

lution, to treat and discharge wastewater. The permit regulates the

levels of nitrogen oxides, particulate matter, and sulfur dioxide

released into the environment, along with the pollution levels of

wastewater that can be discharged into natural environments.

2024

2023

2022*

Water consumption, m3

* calendar year.

21 272

29 424

33 310

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

E.2 EFFECTIVE WASTE MANAGEMENT

The approach of AB „Vilniaus Baldai“, is rooted in a sustainable

business strategy, balancing economic growth, social well-being,

and environmental prosperity. The EU is currently updating its

waste management legislation to encourage a transition to a more

sustainable model, known as the circular economy. In March 2020,

the European Commission introduced a new Circular Economy

Action Plan, which includes proposals for sustainable product de-

sign, waste reduction and empowering citizens. Unlike the “take,

make, and waste” model, the circular economy aims to minimize

waste and resource use as much as possible through advanced

product design, reuse, repair, recycling, sustainable consumption,

and innovative business models. AB „Vilniaus Baldai“ has circular

economic processes in place: the Company and its suppliers use

packaging and transportation materials back-and-forth, the raw

materials come in reusable packaging. All products of AB „Vilniaus

Baldai“ are recyclable (marked with a recycling mark).

Circular

economy

Residual

waste

Production

Consumption

Reuse

Repair

Waste

management

Raw

materials

Collection

Sustainable

design

Distribution

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

AB ‘Vilniaus Baldai’ sorts waste and packaging materials, which are

then transferred to waste management companies or further users.

We aim to increase their reuse, recycling, or utilize them for energy

production if recycling is not possible.

The employees sort the industrial waste on the spot. The waste

sorting containers are provided in the production and administra-

tive facilities. Reusable production waste is separated. Waste unfit

for reuse is transferred to waste management companies. The gen-

erated waste is recorded on the GPAIS (Unified Product, Packaging

and Waste Record Keeping Information System). At the end of the

calendar year, the percentage of sorted waste is calculated.

2024

2023

2022*

* calendar year.

1471,94

948,90

950,702,53

11,42

14,58

Total waste, tonnes of which hazardous waste, tonnes

Waste handed over to recycle:

2024 2023* 2022*

Wood, tonnes 334,38 292,52 776,70

Metals, tonnes 45,75 26,65 65,39

Paper, tonnes 257,24 267,93 303,38

Plastic, tonnes 59,56 60,07 74,42

* calendar year.

The Company approves and supports the European Union’s waste

policy grounded in waste hierarchy: the first priority is waste pre-

vention, the second priority is preparing for reuse, and the third

and final priority is recycling and reuse.

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

Prevention

Preparing for reuse

Recycling

89% is handed over to recycling

Recovery

11% is burned

Disposal

WASTE HIERARCHY

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

We are reducing paper use in our offices. We constantly improve

our business management systems: we approve and archive in-

voices, orders, procedures, contracts, and other documents on our

document management system. We have installed a human re-

source system where our employees can easily fill out and submit

applications, monitor their annual leave days, review their working

schedule, payslip, access other key documentation. The new HR

system was a great help in digitizing a significant amount of relat-

ed paper documents, improving document protection, speeding

up and increasing the efficiency of internal HR processes. We have

begun implementing business management system, digitized our

daily processes: project management, KPI monitoring and report

generation on Microsoft Teams and Qlik Sense platforms. We train

our employees in how to use the modern technologies. By digitiz-

ing many complex processes we have been able to use resources

more efficiently, increase the speed and validity of decision mak-

ing, reduce the likelihood of error and improve safety.

The company contributes to the main client IKEA’s goal of using

materials that are recyclable and made from renewable resources

by 2030. Currently, around 89 per cent of the generated waste is

handed over to secondary recycling, 11 per cent are handed over

to be burned, thus producing energy. 0 per cent of waste ends up

in a landfill.

2024 2023 2022

Percentage of recycled

waste

89 89 82

Percentage of recovery

waste

11 11 18

Percentage of waste that

ends up in a landfill

0 0 0

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

E.3 GREENHOUSE GAS (CO

) EMISSIONS

The EU has an ambitious goal to become a carbon neutral conti-

nent by 2050. AB „Vilniaus Baldai“ aims to manage and systemati-

cally reduce greenhouse gas (GHG) emissions, thereby contribut-

ing to the development of a climate-neutral economy.

When reporting this information, the sources of emissions and

the methods used for calculating them are specified, along with

the scope to which each emission source is assigned. In calculat-

ing GHG emissions, we adhered to the Greenhouse Gas Protocol

(GHG Protocol) and the standards and recommendations of the

Global Reporting Initiative (GRI). In 2024, we assessed Scope 1

and Scope 2 GHG emissions and identified three categories of

Scope 3 emissions.

Energy production from stationary emission sources; mobile sourc-

es related to the production process; and company-operated ve-

hicles.

Stationary sources. In 2024, AB “Vilniaus Baldai” did not use any

fuel for power generation in its own facilities. The production facili-

ties are equipped with backup power generators using diesel fuel.

500 l of diesel have been used during 2024. The estimated CO2

emission equivalent from stationary sources was 15.7 tonnes.

Scope 1 emissions include

Vehicle emissions were calculated by taking an inventory of the

Company’s car fleet and analyzing the amount of fuel purchased.

During the reporting period, AB „Vilniaus Baldai“, renewed its car

fleet. The Company is operating 8 cars: 5 cars are petrol/electric;

1 car is electric; 1 car is petrol; 1 car is diesel. The cars that AB

“Vilniaus Baldai” operates comply with the Euro standards of the

EU which are designed to minimize CO2 emissions. Two of our cars

meet Euro 5 and the other six meet Euro 6 standard. Total calculat-

ed car fleet emissions are 30.2 t of CO2.

Gas leaks/freons emissions. Freons are such substances that boil

and vaporize in low temperatures and are used for heat transfer.

They are used by the Company in ventilation and air conditioning

systems installed in production and administrative facilities. The

company uses 3 chillers in the production process and 15 air con-

ditioners in the rest areas, server room and switchgear room. Both

the chillers and the air conditioners operate in a closed loop cycle

and do not need to be refilled with freon on regular basis. The re-

frigerants had not been refilled in 2023 and 2024. According to

the GHG Protocol guidelines, the emissions from this source are

equivalent to 0 tonnes of CO2.

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

Energy purchased from the market or other companies, buying

power from the network.

Electricity consumption. Emissions reduction and efficient energy

use are vital pillars of the Company’s strategy, aimed at minimiz-

ing the impact on climate change. During the reporting period, a

total of 11,824 MWh of electricity was consumed. The Company

is proud that 100% of the electricity used comes from renewable

energy sources (mainly wind), and is certified as green energy. Ac-

cording to the GHG Protocol guidelines, the emissions from this

source are equivalent to 0 tonnes of CO2.

Scope 2 GHG emissions include

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

The Company does not account for its own consumption. Prelimi-

nary estimates indicate a consumption of around 3,250 MWh. Bio-

mass emissions (CO2 only) amounted to 480,2 tCO2/m.

2024 2023 2022

Heat Sold, MWh 9 711 16 414 16 917

Emissions outside the Scopes 1 and 2

Heat production. Air pollution reduction is essential for ensuring

sustainability and the continuity of operations. AB „Vilniaus Baldai“,

having become an independent heat producer in 2018, produc-

es thermal energy from its by-product (sawdust) and supplies it to

district heating networks of Vilnius city. UNICONFORT 4,5 MW bi-

omass boiler with an economiser and effective fume cleaning sys-

tem is installed in the boiler room. The by-product of manufactur-

ing - sawdust - is the primary fuel. AB „Vilniaus Baldai“, has invested

over EUR 1.5 million in total to this production and supply project

of thermal energy. The decline in sales over the last year was main-

ly due to the launch of the Vilnius Combined Heat and Power Plant

(Vilnius CHP).

Since 2023, the company has phased out gas-powered forklifts

and, from 2024, exclusively uses electric forklifts powered by lithi-

um-ion batteries.

Continuous search for technological innovations and investments

in energy-saving equipment, allows us to manufacture necessary

parts more efficiently and productively, thus consuming much less

electricity. In 2025, the company plans to invest approximately EUR

400,000 in the construction of a 1 MW solar power plant on the

company’s territory located at Pramonės Str. 23, Guopstai Village,

Trakai District. The solar power plant would cover approximately

7.5% of the annual electricity consumption of the entire production

base. As the number of sunny days increases, the amount of elec-

tricity produced could also increase.

To use resources responsibly, AB „Vilniaus Baldai“ keeps investing

into power-efficient equipment, implements power-saving tech-

nologies and educates its workforce.

Energy consumed, thousand kWh

2024 11 824

2023

14 158

2022

23 141

produced

19% more

with 1 kwh

produced

39% more

with 1 kwh

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

Staff travel to/from work. For employees who use a car to carry out

their job functions, a car loan or rental agreement is made, and fuel

compensation is provided based on a set limit. In 2024, the com-

pany compensated for 110 thousand litres of fuel used by its em-

ployees (66% of the total fuel compensated was diesel, 31% was

gasoline, and 3% was gas).

For employees, free bus trip between home and work is provided,

with around 200 employees using this option daily. The routes run

from Vilnius, Eišiškės, Rūdiškės, Grigiškės, Daugai, Varėna, Širvintos

and etc.

The total CO2 emission equivalent of the employees’ journeys to/

from work was estimated at 217.6 tonnes.

Business trips. Throughout the last financial year, the employees

travelled a total of 14.000 kilometers by plane for business trips.

These trips were related to business development, the introduc-

tion of new products, sharing of good practices and the search of

new technological solutions. The estimated CO2 emission equiva-

lent of all journeys was 9.09 tonnes.

Water consumption. According to the water consumption report,

the indirect emissions due to the use of electricity for water treat-

ment and wastewater collection amounted to 20.3t CO2 emission

equivalent.

The Company’s transport and logistics operations go beyond just

the fleet of owned vehicles. A significant portion of transport-re-

lated operations is carried out by third parties, meaning the trans-

portation of goods is organized by the main client. As a result, the

ability to assess all logistics-related emissions is currently limited.

We have not yet assessed how significant climate-related risks might

affect our operations. We plan to conduct such assessment in 2025.

Scope 3 GHG emissions

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

Total emissions

tCO

e/m

1 Scope

tCO

e/m

2 Scope

tCO

e/m

3 Scope

tCO

e/m

292,9 45,9 0,0 247,0

Direct emissions

(Scope 1)

45,9 tCO

e/m 100,0%

Stationary emissions

sources

15,7 tCO

e/m 34,2%

Mobile emissions

sources

30,3 tCO

e/m 66,0%

Freons emissions 0 tCO

e/m 0%

Other emissions

(Scope 3)

247 tCO

e/m 100,0%

Staff travel to/from work 217,6 tCO

e/m 88,1%

Business trips 9,1 tCO

e/m 3,7%

Water consumed 20,3 tCO

e/m 8,2%

Indirect emissions

(Scope 2)

0 tCO

e/m 0,0%

Green energy 0 tCO

e/m 0,0%

Heat 0 tCO

e/m 0,0%

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

Biomass emissions (CO

only) - 480,2 tCO

e/m

EMISSIONS NOT INCLUDED IN SCOPE 1 AND 2

Structure (%)

1 Scope 2 Scope 3 Scope

1 Scope (Direct emissions) distribution (tCO

15,7

Stationary emissions

sources

Mobile emissions

sources

Freons

emissions

30,3

0,0

1, 2 ir 3 Scope emissions (tCO

1 Scope 2 Scope 3 Scope

0,0

247,0

45,9

SOCIAL

ENVIRONMENT

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

AB „Vilniaus Baldai“, is actively contributing to the United

Nations Sustainable Development Goals of human rights and

equal opportunities, as well as fulfilling commitments defined in

national laws to ensure equal opportunities by 2030. AB „Vilniaus

Baldai“, gives great focus on employee well-being, human capital

development and employee engagement. The Company aim is

to develop an effective social dialogue with its employees and to

create progressive working conditions through the introduction of

advanced technological solutions, the provision of the necessary

tools and a market-oriented remuneration and benefits package.

The Company has set clear sustainable operation priorities, which

are privacy and safety, human rights, transparency and anti-

corruption, freedom of expression, employee safety. All of them

are enshrined in different legal acts of the Company:

Collective labor agreement.

IWAY standard.

Business Code of Ethics.

Procedure of Prevention, Recognition, and Response to

Psychological Abuse (incl. Mobbing).

Procedure of Investigating and Recording the Circumstances

and Causes of Workplace Incidents.

Occupational Safety and Health Instructions.

Procedure of Preparation of Occupational Safety and Health

Instructions and Instruction Process.

Procedure of Employee Training and Attestation for Occupational

Safety and Health.

Procedure of Employee Civil Safety Training and Practical Skill

Evaluation.

Procedure of Provision of Employees with Personal Protective

Equipment.

Procedure of Performance of Higher-risk Operations.

Occupational Safety and Health Instructions. Activity of

Occupational Safety Committee. Module of Unsafe Situations.

Procedure of Child Labor Prevention at AB „Vilniaus Baldai“, and

Responding to Identified Instances of Child Labor at Suppliers

or Sub-suppliers.

Procedure of Introducing and Training of New Employees.

Procedure of Manager Training.

Procedure of Production Department Employee Qualification.

S. SOCIAL ENVIRONMENT

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

OUR VALUES

I see a problem – I help solve it.

I have the courage to make a

timely decision.

I work as if I was working for

myself, trying to get it right the

first time.

I honour agreements.

I turn goals into results. I

promote and celebrate good

examples of behaviour.

I am constantly learning and

improving.

I am interested in the best

practices of other companies

and seek to apply them in my

own work.

I share my knowledge and

experience with colleagues.

My work is guided by reasoning

and analysis of available

information, not emotion.

I ensure that any work I do meets

the company’s requirements.

I double-check my work when I

finish.

I listen and hear. I respectfully

listen to different opinions.

I participate and show initiative.

I look for solutions, not blame.

I am committed to being a

leader when needed.

I share information with my

colleagues. I give feedback in

the right form and at the right

time.

I affirm, not deny.

RESPONSIBILITY TEAM COMPETENCE

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

S.1 ENSURING EQUAL OPPORTUNITY

AB „Vilniaus Baldai“, is an employer who offers equal opportunity.

The Company values the unique quality of every employee with

a great focus on their competence and experience. AB “Vilniaus

Baldai” does not discriminate against employees on the basis of

gender or any other grounds, and values each person according

to his/her qualifications and provides equal working and career

opportunities. In 2024, like in previous years, the majority of em-

ployees at AB „Vilniaus Baldai“ are men, which is usual in furniture

industry. This is largely influenced by the nature of the activity and

the specialized technical expertise it requires.

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

Number of employees by type of contract:

2024 2023 2022 2021

Women Men Total

Number of hired employees* 180 273 453 553 778 813

Management* 2 6 8 8 8 9

Administration* 26 25 51 52 63 56

Production employees* 152 242 394 493 707 748

Ari-Lux, UAB, employees 33 25 58 63 72 76

Permanent employees

(Permanent contracts)

180 269 453 n.a. n.a. n.a.

Temporary employees

(Fixed-term contracts)

0 4 4 n.a. n.a. n.a.

Employees working full-time* 180 273 453 n.a. n.a. n.a.

Age of hired employees* 45 41 42 42 41 41

Management* 35 39 38 n.a. n.a. n.a.

Administration* 37 38 37 n.a. n.a. n.a.

Production employees* 46 41 43 n.a. n.a. n.a.

Ari-Lux, UAB, employees, age 47 46 46 n.a. n.a. n.a.

* does not include the employees of subsidiary Ari-Lux, UAB.

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

PICTURE OF A TYPICAL EMPLOYEE AT AB „VILNIAUS BALDAI“

Age -

42 years

Secondary

education

Production

employee

Continuously

improving

Work tenure

- 8 years

Average

salary

2 621 EUR

per month

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

AB “VILNIAUS BALDAI” EMPLOYEES

DISTRIBUTION BY WORK TENURE, %

AB “VILNIAUS BALDAI” EMPLOYEES

DISTRIBUTION BY AGE, %

Less than 1 year

5–10 years

1–3 years

10–15 years

3–5 years

More than

15 years

Younger than

25 years

45–59 years

25–35 years

Older than 59 years

35–45 years

2024

Women Men

All

employees

Average work tenure, years 8,6 8,5 8,5

Employee distribution by

work tenure*

Less than 1 year 20 46 66

1–3 years 28 22 50

3–5 years 41 50 91

5–10 years 37 64 101

10–15 years 8 49 57

More than 15 years 38 43 81

2024

Women Men

All

employees

Average age 45 41 42

Employee distribution by

age

Younger than 25 years 10 18 28

25–35 years 29 74 103

35–45 years 42 95 137

45–59 years 53 71 124

Older than 59 years 38 16 54

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

UAB “ARI-LUX” EMPLOYEES DISTRIBUTION

BY WORK TENURE, %

UAB “ARI-LUX” EMPLOYEES DISTRIBUTION

BY AGE, %

Less than 1 year

5–10 years

10–15 years

3–5 years

More than

15 years

Younger than

25 years

45–59 years

25–35 years

Older than 59 years

35–45 years

2024

Women Men

All

employees

Average work tenure, years 8,4 7,9 8,2

Employee distribution by

work tenure*

Less than 1 year 0 0 0

1–3 years 5 4 9

3–5 years 6 4 10

5–10 years 10 6 16

10–15 years 4 4 8

More than 15 years 6 2 8

2024

Women Men

All

employees

Average age 47 46 46

Employee distribution by

age

Younger than 25 years 0 0 0

25–35 years 6 2 8

35–45 years 7 8 15

45–59 years 9 4 13

Older than 59 years 9 6 15

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

The Company strictly adheres to legal requirements and best prac-

tice examples in organizing both work processes and recruitment

for vacant positions. This way we create a comfortable and safe en-

vironment that stimulates learning. Staff members from Lithuania

and other countries collaborate at AB “Vilniaus Baldai,” fostering a

strong sense of community. We ensure equal opportunity for cur-

rent and potential employees throughout all processes: vacancy

announcements, selection, recruitment, trainings, workplace de-

velopment and every other process within the company. We have

a zero-tolerance policy for any discrimination based on gender,

age, origin, race, nationality, language, religion, beliefs, opinions,

political views, trade union activity, family status, pregnancy, pshys-

ical ability, or sexual orientation. Indirect discrimination is also not

tolerated. The principle of non-discrimination applies throughout

the entire employment relationship, regardless of whether the em-

ployment is indefinite, fixed-term, or part-time. Mobbing, psycho-

logical abuse, bullying, or misuse of authority are not tolerated in

any form. The Company respects and protects the rights of every

employee, treating them with dignity and fairness, providing safe

working conditions that cater to their needs, and fostering both

personal and professional growth.

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

S.2 INCLUSION OF SENSITIVE GROUPS

The subsidiary company of AB “Vilniaus Baldai,” UAB “Ari-Lux,”

employs individuals who have lost their professional and general

work capacity, are economically inactive, and cannot compete on

equal terms in the labour market. In this way, we support individ-

uals’ reintegration into the labor market by helping them develop

the necessary skills, fostering their integration, and contributing to

the reduction of social exclusion by providing conditions to work

according to their abilities. In 2024 financial year, the average num-

ber of employees at Ari-Lux, UAB, was 58.

S.3 RESPECTING HUMAN RIGHTS

We ensure all human rights, respectful behaviour, and the pro-

tection of honor and dignity. Employees are free to participate in

public and political life, express their opinions, ensuring that their

statements are understood and regarded as personal views, rath-

er than the company’s position. Open and good-faith collabora-

tion can create a chain of socially responsible activities. Ensuring

transparency and open, feedback-driven internal organizational

culture, is of great importance. To foster this culture, we are build-

ing work ethic and environment where employees can freely ask

questions, share their ideas, join discussions and solve problems

together with their managers and other teams. AB „Vilniaus Baldai“,

supports a social dialogue and partnership with employee repre-

sentative body – independent trade union AB „Vilniaus Baldai“.

We do not put up with harassment in the company in any form. We

organize annual training sessions on violence and harassment, pre-

senting the issues, discussing them with employees, educating to

recognize and deal with such situations. To better prevent violence

and abuse, an additional communication channel (e-mail, phone,

and a special ticket) to report observed instances or suspicious sit-

uations at AB „Vilniaus Baldai“ was introduced. In 2024 we received

6 such reports, all of which were resolved.

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

S.4 PROTECTION OF CHILDREN INTEREST

S.5 OCCUPATIONAL HEALTH AND SAFETY

We do not use child labour. Only individuals who meet the age

requirements set forth in the applicable national legislation are re-

cruited. Forced labour is prohibited in the Company in any shape

or form.

Employee safety is the highest priority. Occupational health and

safety policy is in force at AB “Vilniaus Baldai”. The Company per-

forms annual risk assessment, organizes occupational health and

safety training, has established preventive measures, and occupa-

tional health and safety plan for employees. The mentioned actions

help to minimize the risk of injury and occupational illness.

We provide employees with the necessary health and safety infor-

mation and training. The company conducts employee health and

safety training, including first aid, manual handling of loadings,

working in noisy environments, working with chemicals, fire safety,

working at heights, operating electric forklifts, electric trolleys, and

platform rollbands, as well as health and safety training for team

leaders. All of these training sessions are free of charge and take

place during working hours. A knowledge check is carried out after

all training sessions (written test or written questions). In addition,

we regularly send specialists to external training programs, help-

ing employees improve their knowledge. This fosters a sense of

responsibility, ensuring that each person protects both themselves

and their teammates, and is prepared to take the necessary actions

in case of danger.

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

To improve the Company’s operations, we implement not only

technical projects but also projects based on LEAN methodolo

gies. During these projects, we invite all employees to get involved

and contribute to the ongoing improvements in various processes

within the company.

In 2024, one of the topics of the LEAN project “IPS Transformation”,

was improvement of work safety. During the project, we imple

mented around 40 improvements based on ideas from employees

at various organizational levels. One of these improvements was

the creation and application of a module for reporting unsafe situa

tions in daily operations. Every employee, upon noticing an unsafe

situation (e.g., if there is a risk of injury) or a non-compliant area or

condition, can register the situation and monitor its resolution by

scanning a QR code with their phone. Progress updates are sent

via SMS. Since the start of the initiative (February 2024), we have

handled and eliminated 199 unsafe zones that were registered by

employees.

Significant effort was given to improve traffic safety. We improved

path markings, installed warehouse mirrors, improved the visibility

of safety signs, changed safety barriers.

Despite all the efforts, we were not able to completely avoid acci

dents, but each of them was thoroughly investigated and relevant

corrective and preventive actions were taken.

The Company provides accident insurance for all employees, both

during working hours and after.

2024 2023 2022

Fatal incidents 0 0 0

Serious injuries 0 0 0

Minor incidents

(injuries)

10 8 0

TRIR* n.a. n.a. 0

Unsafe situations

registered

199 61 208

Health issues - incidents 20 28

Not

applicable

* Total recordable employee injury rate for million hours worked

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

We support our employees’ health by providing medicines and free

vaccination. Last season, 15 per cent of employees received a flu

vaccine, while 19 per cent were vaccinated against tick-borne menin-

goencephalitis. There is also a Health Room inhouse, providing em-

ployees with services aimed at preventing cardiovascular diseases,

such as blood pressure (BP) measurements, cholesterol level tests,

and other examinations. For diabetes prevention, blood glucose

level and other tests are conducted. Additionally, free vision checks

are offered, regular health screenings are organized, consultations

are provided, and various health promotion activities are carried out.

The personal data of employees is stored in accordance with GDPR

requirements.

Physical activity is crucial for maintaining health and emotional

well-being. Volleyball and basketball courts are available in the ter-

ritory of the Company. Employees are encouraged to join leisure

activities such as cycling and walking clubs. These clubs also encour-

age employees to commute to work in a more sustainable way.

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

S.6 EMPLOYEE ENGAGEMENT

Fostering values, a positive work environment, and employee

well-being, the Company places significant emphasis on com-

munication. Employees are regularly provided with information

through various channels, tailored for both their day-to-day tasks,

professional development, and quality leisure time

The internal communication network continues to expand: feed-

back tablets, info screens providing the latest company news were

installed in the factory. This financial year Company also upgraded

its intranet to make important information more accessible to em-

ployees.

Management and team leaders maintain close connections with

their team members, organizing meetings, discussions, and com-

municating both in writing and in person. Last financial year, the

Company launched a project to standardize its internal communi-

cation channels, involving employees from both production and

administrative departments. This initiative helped identify the most

effective channels and define the type of information accessible

through each, ensuring clarity and efficiency.

In line with the commitment to listen and collaborate, AB “Vilniaus

Baldai” conducted an annual employee survey to assess team

members’ needs, attitudes, organizational strengths, and areas for

improvement.

Company strives to meet the needs of all employees and moni-

tor turnover rates, investigating any changes that deviate from the

long-term average to understand underlying causes. Notably, in

2024, the employee turnover rate was one of the lowest in the

Company’s history.

2024

2023

Employee turnover, %

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

S.7 REMUNERATION POLICY

AND MOTIVATION

AB „Vilniaus Baldai“ is a reliable employer who ensures transparent,

fair, and motivating remuneration system. The remuneration system

is clearly defined in the Company’s Collective Labour Agreement,

with transparent, accessible, and consistently applied guidelines

for all employees. This system clearly defines employee categories

and the positions assigned to them. The remuneration system and

its annexes establish compensation policies that are applied in a

manner that prevents any form of discrimination based on gender

or other grounds. Men and women receive equal pay for the same

or equivalent work. Each role’s responsibilities, required qualifica-

tions (where applicable), and mandatory or voluntary training are

outlined in job descriptions and/or employment contracts.

Remuneration includes both a fixed and a variable component.

The fixed component is the monthly base salary stipulated in the

employment contract and paid each month. The variable compo-

nent is based on the Company’s overall performance. Employees

may receive bonuses for acquired qualifications or extra payments

for additional responsibilities and performed tasks. The key criteria

underpinning the remuneration and incentive system are employ-

ee competence, the level of responsibility, job complexity, indi-

vidual achievements, and contribution to the Company’s perfor-

mance. We ensure a balanced work and rest schedule, offer annual

leave and other legally mandated holidays, and provide fair pay

based on qualifications. All employees earn more than the national

minimum wage.

Average salary ratio

AB „Vilniaus

Baldai“

employees

Management

Administration

Production

employees

UAB „Ari-Lux“

employees

2021 20232022 2024

1 881

2 399

1 782 2 135

2 983

2 2792 001

2 647

1 893 2 432

3 247

2 621

6 480 5 592 8 2716 423

1 652

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

In AB “Vilniaus Baldai”, women earned 33% less on average than

men. Female production employees earned 30% less than their

male counterparts. This discrepancy is influenced by the base sala-

ry, which depends on the employees’ qualifications and categories.

In the packaging department, where manual, lower-skilled work is

more common, roles are currently primarily held by women, con-

tributing to overall wage differences. While men and women are

represented almost equally in administrative roles, men tend to oc-

cupy more middle management and managerial roles, while wom-

en are more often employed as specialists.

The Company also provides additional social benefits: assistance

for family members or relatives in the event of an employee death,

gifts to celebrate the birth of a child or milestone birthdays, and

additional paid leave for occasions such as marriage, the birth of a

child, or the death of a family member.

The new factory of AB „Vilniaus Baldai“ boasts the state-of-the-art

machinery, offers employees convenient changing rooms, rest ar-

eas, and subsidized meals, with a significant portion of lunch costs

covered by the company.

Employees are also offered free daily transportation to and from

work by bus. Currently, around 200 employees use this service dai-

ly. In 2024, the company allocated over €593,000 for employee

transportation.

No remuneration was paid to the members of the Company’s

board during the 2023–2024 financial year.

AVERAGE SALARY RATIO

AB „Vilniaus Baldai“

hired employees

1 1,3

1 1,5

Administration

Management

1 1,4

1 1,3

Production employees

UAB „Ari-Lux“

hired employees

1 1,1

Women Men

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

S.8 EMPLOYEE WORK ASSESSMENT

AND TEACHING PLATFORM

AB „Vilniaus Baldai“ supports lifelong learning, encouraging and

assisting employees to continuously enhance their skills and gain

new knowledge. Beyond the mandatory base training required for

all employees, we offer a range of supplementary training oppor-

tunities.

The Company organized several certification programs, allowing

employees to advance their skills and strengthen their profession-

al standing. As a result, 60 employees successfully upgraded their

certification levels last year. Additionally, we have continued to de-

velop our internal training academies, which we consider as a valu-

able competitive advantage. These academies provide employees

with opportunities to build on existing skills, acquire new ones, and

pursue internal career paths, including trying out new positions or

exploring different career directions within the Company. The im-

portance of these academies has grown particularly in recent times

as the demand for engineering specialists has increased signifi-

cantly. To avoid losing these key competences, the Company must

nurture these skills internally.

Employees receive regular feedback on their performance, and

where possible, their preferences in terms of development and

career progression are taken into account. Starting from 3rd quar-

ter of the 2024 financial year, we implemented quarterly review

meetings for administrative staff. During these meetings, progress

towards previously set goals is evaluated, new objectives are es-

tablished, areas for improvement are discussed, and other relevant

information is shared. This ensures that every employee has the

opportunity to voice their thoughts and expectations, allowing the

Company to develop the most suitable training plan.

To motivate employees and to meet both individual and Company

needs, we develop annual training and development plans and or-

ganize training programs. We conduct regular skills-enhancement

courses and hold assessments to certify knowledge and compe-

tencies. To enhance employee engagement and satisfaction, we

conduct regular employee opinion surveys. These surveys identify

areas for improvement within the Company, and we create, pres-

ent, and implement an action plan based on the survey feedback

to drive continuous improvement.

* The number of employees is calculated according to certification protocols.

2024 2023

Production employees who have

upgraded their categories

60 63

Production employees training hours* 122 37

Amount allocated to training Amount expected

2023

35,3

thousand

EUR

2024

78,8

thousand

EUR

2025

161,0

thousand EUR

GOVERNANCE

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

G.1 MANAGEMENT STRUCTURE

AND COMPOSITION

As stipulated in the Articles of Association of AB “Vilniaus Baldai”,

the Company’s governing bodies are the General Meeting of

Shareholders, the Board, Audit Committee and the Chief Executive

Officer (CEO).

The Board, currently consisting of 3 members, performs oversight and

control functions. It is appointed by the General Meeting of Share-

holders for a four-year term. The Company also has an Audit Commit-

tee, which is elected for a four-year term. The functions of the Appoint-

ment and Compensation Committee are performed by the Board.

The Board elects and dismisses the Company’s CEO, sets his/her

salary, approves job descriptions, provides incentives, and imposes

penalties. The competence of the Company’s CEO and the Board,

the procedure of their appointment and dismissal is identical to

the one described in the Republic of Lithuania Law on Companies.

The Board is made up of members of different expertise and com-

petence. There are no criteria in place for board membership that

could lead to gender-based discrimination. In 2024, the Board was

composed of 3 men.

The Audit Committee assists the Board in carrying out its supervi-

sory functions. This committee oversees the Company’s financial

reporting process, internal control systems, financial risk manage-

ment, and the audit process. It also ensures compliance with legal

regulations, internal procedures, and statutory requirements. In

2024, the Audit Committee was composed of 2 men and 1 woman.

More information on the composition of the Board and the Audit

Committee and their obligations is provided in the Annual State-

ment chapter of Company Management Report.

General Meeting

of Shareholders

Implementation of

shareholder rights

Activity organization

function

CEO

Supervisory and

control functions

Advisory and

supervisory functions

Board Audit Commitee

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

G.2 FAIR AND TRANSPARENT

BUSINESS PRACTICE

To guarantee fair and transparent business practice, we adhere to

the Ethics Code of AB „Vilniaus Baldai“ which is based on the val-

ues fostered in the company, including trust, honour and fairness.

The code defines the adherence to certain principles of behaviour:

how should we work, how to establish and build relations with col-

leagues, clients, business partners, and other members of society.

All employees shall adhere to the provisions set out therein.

We have a zero-tolerance policy against any instance of corruption.

The Company strives for open competition, ethical business condi-

tions, and ensures transparency and public access to its operations.

The Company has zero tolerance for fraud, extortion, unrecorded

transactions, improperly documented transactions, fictitious ex-

penses, document falsification, or any other forms of corruption.

Employees are prohibited from accepting monetary gifts or their

equivalents (such as gift vouchers that can be transferred or ex-

changed for money), financial transfers, tradable securities, loans,

shares, or giving or receiving gifts to gain benefits aimed at influ-

encing business transactions or obtaining business or personal ad-

vantages.

Board members, employees, suppliers, and Company represent-

atives are required to disclose any situation that might lead to a

conflict of interest, particularly if personal or family interests could

conflict with the Company’s best interests. Employees are expect-

ed to avoid situations where personal, family, or financial interests

could interfere with those of the Company.

ZERO TOLERANCE FOR

Fraud

Improperly

documented

transactions

Extortion

Corruption

Fictitious

expenses

Fraudulent

accounting

Document

falsification

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

G.3 THE SUSTAINABILITY OF

THE SUPPLY CHAIN

G.4 PROHIBITION OF SUBSTANCE ABUSE

AB „Vilniaus Baldai“ selects its suppliers and partners whose ap-

proach to sustainable and responsible business aligns with the

Company’s values and perspective. In selecting suppliers, the

Company conducts a thorough and detailed vetting process, eval-

uating their reliability, their ability to meet commitments, and their

performance in quality assurance and sustainability. We strive to

ensure that our business partners, suppliers of goods, services, or

raw materials, as well as any subcontractors working on our prem-

ises, adhere to the principles outlined in our Code of Ethics. We

also care that the employees would be aware and would agree

with our stance on the prevention of corruption and bribery.

Work in the company requires clear thinking and quick reactions—

this can impact work quality and the safety of employees and other

team members. The use of alcohol, narcotics, or other psychotrop-

ic substances is strictly prohibited for employees, partners, and/or

suppliers. Entering the Company’s premises under the influence

of these substances is forbidden, and all employees must under-

go an alcohol test upon both entering and exiting the Company

premises.

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

G.5 EFFECTIVENESS OF OPERATIONS

Operational decisions made during financial year 2024, including

investments in modern equipment, optimal inventory and cash flow

management, production flow planning, and increased production

efficiency, have contributed to the achievement of very strong finan-

cial results. EBITDA margin doubled, while sales remained stable.

AB “Vilniaus Baldai” has implemented an efficient raw material and

services procurement system. The company maintains strategic

relationships with suppliers and constantly seeks new opportuni-

ties in the services and raw materials markets. The procurement

process at AB “Vilniaus Baldai” is divided into strategic and opera-

tional purchases. The company aims to manage supply risk, which

is why primary and alternative suppliers have been selected for

key raw materials. The Company has long-term contracts with key

suppliers. AB “Vilniaus Baldai” has implemented and continuously

improves Supplier scoring system and suppliers’ audits.

Production 2024 2023 2022

Sales, thousand EUR 97 272 97 868 100 738

Production,

thousand EUR

100 288 97 169 96 447

Quantity of produced

furniture, units

2 626 930 2 366 857 3 250 000

Production Hour 660 163 737 868 1 161 811

The growing profitability was significantly influenced by increased

labor efficiency. The company strives to avoid production down-

times by performing preventive maintenance on equipment and

machinery. The Alldevice program is used for the planning of peri-

odic and preventive tasks, which helps to schedule regular equip-

ment maintenance. Based on the IKEA IPS methodology, equip-

ment maintenance is continuously and systematically improved,

with the aim of reducing the number of failures and increasing the

availability of equipment by involving both technicians and line

operators in this process. Analysis of production line failures allows

us to estimate weak points of the equipment and proactively man-

age failure risk.

During the financial year 2024, the Company started implementing

a new ERP system tailored to manufacturing companies’. The new

system will provide improved functionality, allowing better control

of processes and workflows, while its “sustainability” module will

help to better assess environmental impact. The launch of the new

enterprise management system is scheduled for the second half of

the 2025 financial year.

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

Submitted

138 Kaizen

ideas /year

Brought to life

63 Kaizen

ideas /year

Saved

800 000

EUR / year

The company has been applying the KAIZEN methodology for sev-

eral years, inviting all employees to engage. Employees can sub-

mit ideas on paper forms or use their personal devices to scan QR

codes located in high-traffic areas of the Company’s premises.

In 2024, to improve operations, 138 ideas were submitted, out of

which 63 were brought to life. Employees have suggested ideas

for improving workplace safety, enhancing ergonomics, increas-

ing operational efficiency, and designing new tools. With KAIZEN

methodology in place, the Company not only involves employees

in the process of improving their workplace but also saved approx.

EUR 800 000 in 2024.

To encourage the implementation of each proposed idea, we use a

new system in which KAIZEN points are awarded not only to those

who submit ideas but also to employees who contribute to bring-

ing these ideas to life. Each month, we select the best KAIZEN idea,

with the winner receiving a recognition prize.

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

G.6 QUALITY, ENVIRONMENTAL

PROTECTION MANAGEMENT SYSTEM

The Company faces fierce competition, which requires our produc-

tion to be high-quality and competitive. Quality and environmen-

tal management system as per the requirements of ISO 9001, ISO

14001 standards have been put in place.

The Quality Management System, with clearly defined procedures

and actions, enables the organization to improve daily operations,

ensure product quality, reduce costs, save time, boost productivity,

and maintain positive client relationships. Each year, procedures

are reviewed, operational efficiency is analysed, and improvement

actions are planned.

Regular internal and external audits are conducted, and certifica-

tion renewal ensures compliance with the standard’s requirements.

Significant environmental aspects have been identified, with pre-

ventive measures in place, responsible personnel designated, and

a monitoring program implemented. Existing employees receive

relevant training and certification. Compliance with this standard

not only meets legal requirements but also significantly reduces

ecological and environmental risks.

In July 2024, an ISO 9001 and ISO 14001 audit was conducted.

During the audit, no major non-conformities or observations were

identified.

Quality management system ISO 9001

Environmental Management System ISO 14001

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

G.7 CYBERSECURITY AND DATA SAFETY

We organize employee training on data security and privacy topics

and implement active preventive measures, including continuous

monitoring for data loss and privacy breaches, as well as regular

updates on emerging cybersecurity threats. During financial year

2024 the Company simulated three phishing attacks, in which all

employees with Company email accounts received false phishing

emails. The data collected during these attempts was analysed and,

along with preventive training, presented to employees. These ex-

ercises and trainings aim to raise awareness of online security risks

and encourage vigilance in both work and personal environments.

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

G.8 INCLUSION AND COMMUNITY

The Company also organizes tours for schoolchildren of various

age groups, giving them insights into production processes, tech-

nologies, and professions. This initiative supports youth career ed-

ucation, increases awareness of manufacturing technologies and

processes, and promotes industrial knowledge. The Company col-

laborates with Trakai District Municipality, supporting and partici-

pating in community and business events organized by the munici-

pality, as well as contributing to various local social initiatives.

The Company helps address social and labour market challeng-

es by working with other industrial companies, offering temporary

employment to their staff during downtime.

The Company actively contributes to reducing unemployment

in the region, hiring workers from nearby and distant areas and

providing free, convenient, and regular transportation for em-

ployees. The transport system caters to residents of different

surrounding areas, making AB „Vilniaus Baldai“ an attractive job

location for the residents of the capital and its surrounding re-

gions.

We actively collaborate with vocational schools and higher ed-

ucation institutions, organize career planning presentations,

factory tours (Open Days). We also participate in career fairs or-

ganized by universities.

We are proud that our employees become the Company am-

bassadors. They recommend their friends and relatives to join

our Company and, if the new hires pass a probationary period

successfully, they can receive a bonus.

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

Tree planting has become our tradition. This financial year we

have organized a tree planting where we afforested an area of

Rūdiškės forest by planting 14 100 trees. Each year, the number

of trees we plant increases, symbolizing the Company’s age.

The company encourages and supports employees’ profes-

sional development initiatives – team members participated in

a forklift driving competition, where one of them became the

best forklift driver in Lithuania and also set one of the forklift

driving records.

In 2024, AB „Vilniaus Baldai“ provided support to 6 organiza-

tions and events, also assisted by providing furniture. Over EUR

27 000 was donated.

We collaborate with the National Blood Center and together

with neighbouring companies organize blood donation events.

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

G.9 RISK MANAGEMENT

AB „Vilniaus Baldai“ faces both internal and external risks in the

course of its operations. To prevent these risks from affecting its

performance, the Company has implemented key components of

a risk management process across all operations. These compo-

nents include identifying and assessing risks, developing risk mit-

igation plans, measuring critical processes, and ensuring compre-

hensive communication and accountability. Risk management is

integrated into the Company’s long-term, short-term, operational,

and project planning processes. Depending on the level of risk,

various indicators are monitored daily, weekly, monthly, or annu-

ally. The Company has a clearly defined system of mandates and

critical point controls as outlined in its internal procedures, which

are regularly updated and audited annually by internal audit.

Ecological

risk factors

Technical and

technological

risk factors

Social risk

factors

Political risk

factors

Loan

repayment

Economic risk

factors

Supply

chain

The Company has identified the following primary risk factors

TAXONOMY

REGULATION

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

The EU Taxonomy Regulation (EU) 2020/852 and its delegated

acts (hereinafter - Taxonomy) provides a classification system for

sustainable economic activities, with standardized terminology

for activities that contribute to ecological sustainability objectives.

Under the EU Taxonomy Regulation (EU) 2020/852, criteria are

set to determine whether an economic activity is environmentally

sustainable, with the goal of assessing the environmental

sustainability of investments.

THE FOLLOWING ENVIRONMENTAL OBJECTIVES ARE RECOGNIZED IN THE REGULATION

Climate

change

adaptation

Transition

to a circular

economy

Protection and

restoration of

biodiversity

and ecosystems

Climate

change

mitigation

Sustainable

use of water

and marine

resources

Pollution

prevention

and control

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

Article 3 of this regulation sets out the criteria for business activity

to be sustainable. The business is considered environmentally sus-

tainable when it:

contributes substantially to one or more of the environmental ob-

jectives set out in Article 9 in accordance with Articles 10 to 16;

does not significantly harm any of the environmental objectives

set out in Article 9 in accordance with Article 17;

is carried out in compliance with the minimum safeguards laid

down in Article 18;

complies with technical screening criteria that have been estab-

lished by the Commission in accordance with Article 10(3), 11(3),

12(2), 13(2), 14(2) or 15(2).

Taxonomy-eligible economic activity means an economic activity

that is described in the delegated EU acts irrespective of whether

that economic activity meets any or all of the technical screening

criteria laid down in those delegated acts Therefore, Taxonomy-el-

igibility alone does not imply environmental performance or sus-

tainability.

Figure 1. Environmental protection objectives

Taxonomy-eligible activities means an economic activity that com-

plies with the requirements laid down in Article 16 and Article 10(2)

of the Taxonomy Regulation, which are the conditions constituting

the economic activities and the transitional activities.

Transitional economic activity is defined as the activity with no

low-carbon alternatives, but whose greenhouse gas emissions

meet the best-performing standards within a given sector or in-

dustry. Such activity must:

a) not impede the development and deployment of low carbon

alternatives;

b) avoid creating long-term carbon-intensive assets.

Enabling economic activity means an economic activity that direct-

ly facilitates substantial contributions under which an economic ac-

tivity qualifies as contributing substantially to climate change miti-

gation or climate change adaptation and for determining whether

that economic activity causes no significant harm to any of the

other environmental objectives. Taxonomy-aligned activity means

economic activity that contributes substantially to one or more of

the environmental objectives, does no significant harm to others,

complies with minimum safeguards, and meets technical screen-

ing criteria.

Taxonomy-non-aligned activity is defined as the activity that is not

listed or described within the EC delegated acts under the EU Tax-

onomy.

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

T1 APPLICATION OF EU TAXONOMY

REGULATION AT VILNIAUS BALDAI, AB

In line with the European Commission’s delegated regulation of

July 6, 2021 (EU) 2021/2178, AB „Vilniaus Baldai“ as a non-financial

company, is required to disclose the KPI of the percentage of turn-

over, Capital expenditure (CapEx), and operating expenditures

derived from Taxonomy-eligible activities.

AB „Vilniaus Baldai“ as a large public-interest entity employing

over 500 staff falls within the scope of EU Taxonomy. AB „Vilniaus

Baldai“ specializes in the production of lightweight ready-to-as-

semble furniture. The primary activity of AB „Vilniaus Baldai“ is not

regulated as taxonomy-eligible activity. However, the Company

conducted an analysis to assess the compliance of its other activi-

ties with Taxonomy-eligible requirements, following the evaluation

process outlined below:

1. Identification of Taxonomy-eligible Economic Activities In ac-

cordance with Article 1(5) of the Delegated Regulation (EU)

2021/2178, a taxonomy-eligible economic activity is defined as

an activity described in the delegated acts, regardless of wheth-

er it meets any or all of the specified technical screening criteria.

The Company conducts a detailed review of descriptions for tax-

onomy-eligible activities as outlined in Delegated Regulations

(EU) 2021/2139 and (EU) 2023/2178, using these descriptions to

identify the Company’s own taxonomy-eligible activities.

2. Evaluation of Compliance with Technical Screening Criteria. The

technical screening criteria for identified taxonomy-eligible ac-

tivities are analyzed, and the Company reviews its ongoing pro-

cesses to determine their compliance with Taxonomy require-

ments.

3. Verification of Essential Safeguards. The Company assesses its

implemented procedures aimed at ensuring adherence to the

UN Guiding Principles on Business and Human Rights and the

OECD Guidelines for Multinational Enterprises.

4. Determination of Compliance Status Based on the analysis of

technical screening criteria and essential safeguards, the Com-

pany determines whether a taxonomy-eligible activity is fully

compliant with these criteria. If an activity does not meet any

substantial contribution or “do no significant harm” criterion, it is

classified as a taxonomy-eligible activity that does not meet the

required criteria.

5. Calculation of Key Performance Indicators (KPIs) KPIs are calcu-

lated according to the requirements for non-financial compa-

nies as outlined in Annexes I and II of Delegated Regulation (EU)

2021/2178. Determination Of Taxonomy-eligible Activities And

Compliance Assessment. After analyzing Delegated Regulations,

a conclusion is made that AB „Vilniaus Baldai“ is conducting the

following taxonomy-eligible activities and the compliance with

technical screening criteria is submitted.

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

T2 IDENTIFICATION OF TAXONOMY-

ELIGIBLE ACTIVITIES

AB „Vilniaus Baldai“ has assessed its activities (including the activ-

ities of Ari-Lux, UAB) following the descriptions of taxonomy-eligi-

ble activities provided in the EU Taxonomy Regulations. Identified

taxonomy-eligible activities are presented in Table 1, “List and As-

sessment of the Company’s Taxonomy-Eligible Activities.”

It is important to note that identifying EU Taxonomy activities is be-

ing conducted for the first time and certain activities for the year

2024 could not be assessed due to an incompatible accounting

system and high administrative costs. However, we are committed

to completing this assessment next year.

In evaluating its activities according to the provisions of the EU Tax-

onomy Regulation, AB „Vilniaus Baldai“ identified the impact of its

activities on the environment, the sustainability aspects already in-

tegrated, and the areas for further improvement.

After determining taxonomy-eligible activities, a technical screen-

ing of these activities was performed to assess whether the current

processes meet the criteria. The compliance was also evaluated by

verifying essential safeguards, including a review not only of the

technical criteria but also of whether the activity violates funda-

mental principles of the UN Guiding Principles on Business and

Human Rights and OECD Guidelines for Multinational Enterprises.

If, after evaluating all these aspects, an activity does not meet any

substantial contribution or “do no significant harm” criterion, it is

classified as a taxonomy-eligible activity that does not meet the re-

quired criteria.

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

Table 1 List and Assessment of the Company’s Taxonomy-Eligible Activities

Activity

Taxonomy

Indicator

Compliance

4.16. Installation and operation

of electric heat pumps

OpEx

The company have 15 air conditioners and 3 chillers.

For air-to-air heat pumps with a rated output of 12 kW or less, the indoor and outdoor sound

power levels are below the limit value set in Regulation (EU) N0. 206/2012.

4.24. Production of heat or

cool from bioenergy

Turnover

OpEx

AB „Vilniaus Baldai“ burns sawdust which is the by-product of its operations.

According to the Directive: Woodchips from industry residues, transported 1–500 km. Green-

house gas emission reductions - representative value 94%, Greenhouse gas emission reducti-

ons - default value 93%.

5.1. Construction, extension

and operation of water

collection, treatment and

supply systems

OpEx

AB „Vilniaus Baldai“ has water supply Water well pump consumes ~0,37kWh for 1m3

The average amount of energy consumed for extraction and treatment does not exceed 0.5

kWh per cubic meter of produced and supplied water. In determining the total amount of

energy consumed, consideration may be given to energy-saving measures, such as source ma-

nagement (pollutant load sources) and, where appropriate, the production of energy (e.g.,

hydraulic, solar, and wind).

5.3. Construction, extension

and operation of wastewater

collection and treatment

OpEx

The Company operates a combined system. The treatment plant is small, serving less than

10,000 people.

The total energy consumption of a wastewater treatment plant does not exceed: (a) 35 kWh per

equivalent inhabitant (EH) per year for a treatment plant with a capacity of less than 10,000 EH.

6.5. Transport by motorbikes,

passenger cars and

commercial vehicles

OpEx

Vehicles leased by AB „Vilniaus Baldai“ for employee transportation.

(a) For M1 and N1 category vehicles subject to Regulation (EC) No. 715/2007:

i) by December 31, 2025, the specific CO2 emissions, as defined in Article 3, Paragraph 1, Point

(h) of Regulation (EU) 2019/631, are less than 50 g CO2/km (low-emission and zero-emission

passenger vehicles);

(b) For L category vehicles, the engine‘s CO2 emissions, calculated according to the pollutant

emission testing procedure set out in Regulation (EU) No. 168/2013, are equal to 0 g CO2e/km

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

Activity

Taxonomy

Indicator

Compliance

6.6.Freight transport services

by road

Turnover

AB „Vilniaus Baldai“ offers product transportation services, which we were unable to assess for

2024 due to incompatible accounting system and high administrative costs.

The activity complies with one of the following criteria:

(a) N1 category vehicles emit no CO2 directly (from the engine);

(b) vehicles of category N2 and N3 with a technically permissible maximum laden mass not

exceeding 7,5 tonnes are ‘zero-emission heavy-duty vehicles’ as defined in Article 3, point (11),

of Regulation (EU) 2019/1242;

ding 7,5 tonnes are one of the following:

i) zero-emission heavy-duty vehicles, as defined in Article 3, Paragraph 11 of Regulation (EU)

2019/1242,

ii) where technologically and economically not feasible to comply with the criterion in point (i),

‘low-emission heavy-duty vehicles’ as defined in Article 3, point (12), of that Regulation

7.4 Installation, maintenance

and repair of energy efficiency

equipment

CapEx, OpEx Installation of electric vehicle charging stations.

7.5. Installation, maintenance

and repair of instruments

and devices for measuring,

regulation and controlling

energy performance of

buildings

OpEx

We use a Meteron.

The activity is one of the following:

(a)installation, maintenance and repair of zoned thermostats, smart thermostat systems and

sensing equipment, including. motion and day light control;

7.7 Acquisition and ownership

of buildings

OpEx

We own a land plot where the factory stands. We also rent a land plot. The building is certified

A++ for energy efficiency.

For buildings constructed before December 31, 2020, the building must have at least an A-class

energy performance certificate. Alternatively, the building belongs to the top 15% of the na-

tional or regional building stock with the best functional primary energy demand indicator,

supported by appropriate evidence, where the energy performance of the respective asset

is at least comparable to the energy performance of the national or regional building stock

constructed by December 31, 2020, with a distinction made between residential and non-resi-

dential buildings.

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

T 3. FINANCIAL INDICATORS PER EU

TAXONOMY REGULATION

In compliance with the provisions of Delegated Regulation (EU)

2021/2178, the accounting policy disclosure must explain how

Turnover, CapEx, and OpEx were determined and attributed to the

indicator numerator and the basis on which the calculations were

made.

The KPI of the activities were calculated using the methodology

provided in Annex I to the Delegated Regulation (EU) 2021/2178

on “Non-Financial Undertakings’ KPI” and the guidelines from Eu-

ropean Commission and Q&A documents. Given that these guide-

lines are not exhaustive, internal assumptions have been used to

assign operating expenses to specific Taxonomy-eligible activities.

The operating expenses presented in the financial statements dif-

fer from the expenses calculated for the Taxonomy-eligible activi-

ties indicator.

All disclosed KPIs associated with taxonomy-eligible and/or crite-

ria-compliant taxonomy-eligible activities avoid double counting,

as each KPI is assigned to separate, independent activities to attrib-

ute financial indicators to corresponding taxonomy-eligible and/or

criteria-compliant taxonomy-eligible activities.

The Company’s main activity is furniture manufacturing, was not

classified as Taxonomy-eligible. However, indirect activities such

as heat or cool production from bioenergy were classified as tax-

onomy-eligible. Taxonomy-aligned activities accounted for 0.54%

of the Company’s total revenue for the reporting period. As men-

tioned above, the identification of EU Taxonomy activities this year

was conducted for the first time ever. We have not been able to as-

sess the activity of the road freight service for 2024 due to incom-

patible accounting system and high administrative costs. However,

we are committed to completing this assessment in Y2025.

Accounting policy

Calculation of Taxonomy eligible/ aligned revenue

The information covers the fiscal year 2024, which begins on Sep-

tember 1 of the calendar year and ends on August 31 of the follow-

ing calendar year. Revenues, expenses, and transactions between

the Group companies (Air-Lux, UAB) are eliminated from the Tax-

onomy evaluation to avoid double counting. All Taxonomy-eligible

economic activities contribute to climate change mitigation and

are disclosed solely under this objective.

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

Capital expenditures were assessed based on specific acquisitions

attributable to taxonomy-eligible activities.

Under Delegated Regulation (EU) 2021/2178, the calculation of the

taxonomy-eligible CapEx criteria include the additions to tangible

and intangible assets before depreciation, amortization, and any

revaluation, excluding fair value changes. The performance indica-

tor relating to CapEx was calculated in accordance with the provi-

sions of point 1.1.2 of Annex I to the above-mentioned Delegated

Regulation. In 2024, there were two activities with environmentally

sustainable Taxonomic (qualifying) CapEx: In 2024, AB „Vilniaus

Baldai“ installed electric vehicle charging stations. Environmentally

sustainable activities (taxonomy-aligned activities) accounted for

11.3% of the capital expenditures. Capital Investments Attributed

to Annexes I and II of the EU Taxonomy Regulation (EU) 2021/2178

Investments directed toward the renovation of existing buildings,

including boiler houses, are classified under the Taxonomy but

attributed to environmentally non-sustainable activities (activities

that do not comply with Taxonomy criteria). These investments

constituted 0.1% of all Capital Expenditures Attributed to Annexes

I and II of the EU Taxonomy Regulation (EU) 2021/2178.

The Taxonomy-eligible operating expenditure indicator is calculat-

ed as the ratio of costs related to assets and processes associated

with taxonomy-eligible activities to the total operating expenses

calculated under the Taxonomy Regulation (EU) 2021/2178. Pur-

suant to Article 1.1.3 of Annex I of the European Commission Del-

egated Regulation, only direct non-capitalized costs are included

in the denominator of operational expenditures. These include ex-

penditures related to research and development, building renova-

Calculation of Taxonomy eligible/ aligned Capital

Expenditure (CapEx)

Calculation of Taxonomy eligible/ aligned

Operating Expenditure (OpEx)

tion measures, short-term leases, technical maintenance and repair,

and all other direct costs associated with the maintenance of real

estate, equipment, and installations carried out either by the Com-

pany or a contracted third party. These costs are essential to ensure

the continuous and efficient operation of these assets. Therefore,

in calculating the OpEx indicator under the provisions of Delegat-

ed Regulation (EU) 2021/2178, the denominator does not encom-

pass all OpEx recognized in the company’s financial accounting.

In 2024, environmentally sustainable activities (taxonomy-aligned

activities) accounted for 0.01% of all OpEx calculated according

to the requirements of Delegated Regulation (EU) 2021/2178,

specifically for the installation, maintenance, and repair of electric

vehicle charging stations in buildings (and adjacent parking spac-

es). Turnover from taxonomy-eligible but non-compliant activities

accounted for 18.71%. Since no clear Taxonomy criteria (special di-

mensions) were established in the 2024 accounting system to dis-

tinguish between necessary direct non-capitalized costs according

to separate Taxonomy activities, we were unable to disclose all

potentially eligible operational expenditures. In 2025, we plan to

adapt our accounting system and anticipate that in the future, we

will be able to include all related operational expenditures across

all Taxonomy-eligible activities, both for taxonomy-aligned activi-

ties and non-compliant ones.

In the context of individual projects of AB „Vilniaus Baldai“ climate

risk and operational vulnerability assessments have not been con-

ducted, and thus, the activities do not meet one of the “do no sig-

nificant harm” criteria (for climate adaptation) applicable to all Tax-

onomy activities.

We aim to contribute to the EU Green Deal, and, to the extent feasi-

ble within our business activities, we plan to consider the Taxonomy

Regulation in future investments in long-term assets to maximize

the share of investments attributed to taxonomy-aligned activities.

The evaluation results are presented below using the standardized

tables set out in the Taxonomy.

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

The percentage of Turnover derived from products or services related to a qualifying taxonomic economic activityfor 2024

Substantial Contribution Criteria DNSH criteria ('Does Not Significantly Harm')

Economic Activities (1) Code (2)

Absolute

turnover (3)

Proportion

of Turnover

(4)

Climate

Change

Mitigation

(5)*

Climate

Change

Adaptation

(6)

"Water

(7)"

"Pollution

(8)"

"Circular

Economy

(9)"

Biodiver-

sity and

ecosys-

tems (10)

Climate Chan-

ge Mitigation

(11)

Climate Chan-

ge Adaptation

(12)

"Water

(13)"

"Pollution

(14)"

"Circular

Economy

(15)"

"Biodiver-

sity

(16)"

"Minimum

Safeguards

(17)"

"Taxonomy

aligned

proportion

of total turnover,

year N (18)**"

"Category

(enabling

activity)

(20)"

"Category

(transitional

activity)

(21)"

% % % % % % % Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T

A. TAXONOMY-ELIGIBLE ACTIVITIES 1%

A.1. Environmentally sustainable activities (Taxonomy-aligned)

4.24. Production of

heat or cooling from

bioenergy

D35.30

531.432

1% Y N NTA NTA T NTA Y Y Y Y Y Y

Turnover of environmentally sustaina-

ble activities (Taxonomy-aligned) (A.1)

531.432

1% 1% 0% 0% 0% 0% 0% Y Y Y Y Y Y Y

A.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)

6.5. Transport by

motorbikes, passenger

cars and commercial

vehicles

N77.1;

H49.32

4 825 0,0% YA YA NTA NTA NTA NTA NTA NTA NTA NTA NTA NTA

6.6. Freight transport

services by road*

H.49.41 - 0,0% YA YA NTA NTA NTA NTA NTA NTA NTA NTA NTA NTA

Turnover of Taxonomy-eligible but not

environmentally sustainable activities

(not Taxonomy-aligned activities) (A.2)

4 825 0,0%

Total (A.1+A.2)

536.257

0,5%

B. TAXONOMY-NON-ELIGIBLE ACTIVITIES

Turnover of Taxonomy-non-eligible

activities

97.878.490

99%

Total (A+B)

98.414.747

100%

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

The percentage of capital expenditure received for products or services related to a qualifying taxonomic economic activity for 2024

Substantial Contribution Criteria DNSH criteria ('Does Not Significantly Harm')

Economic Activities (1) Code (2)

Absolute

CapEx (3)

Proportion

of CapEx

(4)

Climate

Change

Mitigation

(5)*

Climate

Change

Adaptation

(6)

Water

(7)

Pollution

(8)

Circular

Economy

(9)

Biodiver-

sity and

ecosys-

tems (10)

Climate Chan-

ge Mitigation

(11)

Climate Chan-

ge Adaptation

(12)

Water

(13)

Pollution

(14)

Circular

Economy

(15)

Biodiver-

sity

(16)

Minimum

Safeguards

(17)

Taxonomy

aligned

proportion

of total CapEx,

year N (18)**

Category

(enabling

activity)

(20)

Category

(transitional

activity)

(21)

Y/N Y/N Y/N Y/N Y/N Y/N Y/N Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T

A. TAXONOMY-ELIGIBLE ACTIVITIES 17%

A.1. CapEx of environmentally sustainable activities (Taxonomy-aligned)

7.4 Installation,

maintenance and repair

of energy efficiency

equipment

"F43.2,

M71.1,

C16"

24 884 11% Y N NTA NTA NTA NTA Y Y Y Y Y Y Y

CapEx of environmentally sustainable

activities (Taxonomy-aligned) (A.1)

24 884 11% 11% 0% 0% 0% 0% 0% Y Y Y Y Y Y Y

A.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned)

7.7 Acquisition and ow-

nership of buildings

L.68.1;

F41;F43

12 811 6% YA YA NTA NTA NTA NTA

CapEx of Taxonomy-eligible but not

environmentally sustainable activities

(not Taxonomy-aligned activities) (A.2)

12 811 6%

Total (A.1+A.2) 37 696 17%

B. TAXONOMY-NON-ELIGIBLE ACTIVITIES

Capex of Taxonomy-non-eligible

activities

181 720 83%

Total (A+B) 219 416 100%

AB “VILNIAUS BALDAI” CORPORATE SOCIAL

RESPONSIBILITY (SUSTAINABILITY) REPORT 2024

The percentage of operating expenditure that is earned on products or services related to a qualifying taxonomic economic activity for 2024

Substantial Contribution Criteria DNSH criteria ('Does Not Significantly Harm')

Economic Activities (1) Code (2)

Absolute

OpEx (3)

Proportion

of OpEx (4)

Climate

Change

Mitigation

(5)*

Climate

Change

Adaptation

(6)

Water

(7)

Pollution

(8)

Circular

Economy

(9)

Biodiver-

sity and

ecosys-

tems (10)

Climate Chan-

ge Mitigation

(11)

Climate Chan-

ge Adaptation

(12)

Water

(13)

Pollution

(14)

Circular

Economy

(15)

Biodiver-

sity

(16)

Minimum

Safeguards

(17)

Taxonomy aligned

proportion

of total OpEx,

year N (18)**

Category

(enabling

activity)

(20)

Category

(transitional

activity)

(21)

% % % % % % % Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T

A. TAXONOMY-ELIGIBLE ACTIVITIES 19%

A.1. Environmentally sustainable activities (Taxonomy-aligned)

7.4 Installation, maintenance and repair of

energy efficiency equipment.

"F43.2,

M71.1,

C16"

612 0,0%

OpEx of environmentally sustainable activities

(Taxonomy-aligned) (A.1)

612 0,0%

A.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)

4.16. Installation and operation of electric heat

pumps

11 604 0,3%

4.24. Production of heat or cooling from

bioenergy

D35.30 119 764 2,8%

5.1. Construction, extension and operation of

water collection, treatment and supply systems

E36.0

11 369 0,3%

5.3. Construction, extension and operation of

waste water collection

E37.0;

E38.1

6.5. Transport by motorbikes, passenger cars

and commercial vehicles

H49.32 593 217 13,9%

7.5. Installation, maintenance and repair of

instruments and devices for measuring, regu-

lation and controlling energy performance of

buildingsInstallation

43.42 4 873 0,1%

7.7 Acquisition and ownership of buildings

L.68.1;

F41;F43

60 322 1,4%

OpEx of Taxonomy-eligible but not environmentally sustai-

nable activities (not Taxonomy-aligned activities) (A.2)

801 148 18,7%

Total (A.1+A.2) 801 760 18,7%

B. TAXONOMY-NON-ELIGIBLE ACTIVITIES

OpEx of Taxonomy-non-eligible activities 3 479 444 81,3%

Total (A+B) 4 281 204 100,0%