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AB Kauno Energija
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
CONSOLIDATED AND COMPANY ANNUAL
FINANCIAL STATEMENT WITH EXPLANATORY
NOTES AND MANAGEMENT REPORT FOR THE
YEAR 2024
2
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2024 Consolidated and Company Financial
Statements
(in thousands euro, unless specified otherwise)
TABLE OF CONTENTS
Page
Management's approval of the financial statements
3
SET OF CONSOLIDATED AND COMPANY'S FINANCIAL STATEMENTS FOR 2024
Statement of financial position
4
Statement of profit (loss) and other comprehensive income
6
Statement of Changes in Equity
8
Cash Flow Statement
9
Notes to financial statements
11
Management Report
42
3
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2024 Consolidated and Company Financial
Statements
(in thousands euro, unless specified otherwise)
Management's approval of the financial statements
In accordance with the provisions of Article 12 of the Law on Securities of the Republic of Lithuania and Disclosure Rules
approved by Resolution of the Board of the Bank of Lithuania No. O3-223 of 13 December 2019, we hereby certify that
the individual and consolidated annual financial statements have been prepared in accordance with International
Financial Reporting Standards as adopted for application in the European Union. In our opinion, the accounting principles
applied are appropriate and the financial statements give a true and fair view in all material respects in accordance with
the International Financial Reporting Standards adopted for application in the European Union. The 2024 consolidated
annual management report accurately presents an overview of business development and operations, the financial
position of the Company and the consolidated entities as a whole, along with a description of the key risks and
uncertainties encountered.
We recommend that the Annual financial statements be approved by the General Meeting of
Shareholders.
Kaunas, 2 April 2025
On behalf of the management:
Tomas Garasimavičius
General Manager
Virgilijus Motiejūnas
CFO (Chief Financial Officer)
Ramunė Petkevičienė
Head of Financial Management and Accounting Department
4
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2024 Consolidated and Company Financial
Statements
(in thousands euro, unless specified otherwise)
STATEMENT OF FINANCIAL POSITION
Group
Company
Notes
2024-12-31
2023-12-31
2024-12-31
2023-12-31
ASSETS
Non-current assets
Intangible fixed assets
4
314
249
304
241
Land and buildings
6 039
6 201
5 963
6 122
Buildings
146 994
134 610
146 994
134 610
Machinery and plant
17 250
13 824
17 221
13 779
Vehicles
804
975
773
975
Plant and tools
5 704
3 263
5 657
3 217
Constructions in progress and
prepayments
18 210
23 483
18 117
23 483
Investment property
1 082
1 114
-
-
Total property, plant and equipment
5
196 083
183 470
194 725
182 186
Assets managed under the right of
use
7
1 171
1 083
854
916
Non-current financial assets
Investments in subsidiaries
1, 6
-
-
2 763
2 763
Investments in associates
1, 8
164
75
75
75
Amounts receivable after one year
58
128
1
-
Non-current financial assets, total
222
203
2 839
2 838
Non-current assets, total
197 790
185 005
198 722
186 181
Current assets
Inventories and prepayments
Inventories
9
1 761
1 777
1 652
1 429
Prepayments
1 507
1 019
1 482
942
Total inventories and prepayments
3 268
2 796
3 134
2 371
Amounts receivable within one year
Trade receivables
10
15 698
14 437
15 482
13 621
Other debtors
10
860
2 755
817
2 757
Amounts receivable within one year,
total
16 558
17 192
16 299
16 378
Term deposits
500
-
-
-
Cash and cash equivalents
11
11 074
8 547
9 600
7 315
Current assets, total
31 400
28 535
29 033
26 064
Assets, total:
229 190
213 540
227 755
212 245
(continued on the next page)
5
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2024 Consolidated and Company Financial
Statements
(in thousands euro, unless specified otherwise)
STATEMENT OF FINANCIAL POSITION (CONTINUED)
Group
Company
Notes
2024-12-31
2023-12-31
2024-12-31
2023-12-31
EQUITY AND LIABILITIES
Equity
Capital
1
74 476
74 476
74 476
74 476
Legal reserve
12
7 504
7 447
7 448
7 447
Other reserves
12
75
50
75
50
Retained profit (loss)
Current year profit
7 753
4 505
7 592
3 881
Previous year retained profit (loss)
15 551
11 128
14 725
10 869
Total retained profit (loss)
23 304
15 633
22 317
14 750
Total equity
105 359
97 606
104 316
96 723
Amounts payable after one year
and liabilities
Long-term financial debts
13
62 658
54 736
62 658
54 736
Lease (finance lease)
14
1 172
1 121
842
950
Deferred profit tax liabilities
22
6 687
6 516
6 695
6 516
Grants and subsidies
15
29 858
30 850
29 854
30 850
Employee benefit liabilities
16
449
385
420
365
Other amounts payable and long-
term liabilities
29
-
29
-
Amounts payable after one year,
and long-term liabilities, total
100 853
93 608
100 498
93 417
Accounts payable within one year
and other liabilities
Financial debts and leasing
13, 14
4 094
3 269
4 090
3 265
Trade payables
12 387
14 105
12 547
14 136
Employee related liabilities
1 024
715
970
701
Received prepayments
1 076
840
1 047
815
Tax payable
1 059
804
972
612
Current year's share of employee
16
242
163
242
162
benefit liabilities
Other provisions
17
2 269
1 573
2 269
1 573
Accrued costs and deferred income
684
519
661
504
Other short-term amounts payable
143
338
143
337
and liabilities
Accounts payable within one year
22 978
22 326
22 941
22 105
of and other liabilities, total
Total accounts payable and
liabilities
123 831
115 934
123 439
115 522
Total equity and liabilities
229 190
213 540
227 755
212 245
(end)
The notes below form an integral part of these financial statements.
6
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2024 Consolidated and Company Financial
Statements
(in thousands euro, unless specified otherwise)
STATEMENT OF PROFIT (LOSS) AND OTHER COMPREHENSIVE INCOME
Group
Notes
2024
2023
Operating income
Sales revenue
18
84 751
85 048
Other operating income
20
3 078
2 860
Total operating income
87 829
87 908
Operating expenses
Fuel and purchased energy
(47 525)
(53 778)
Salaries, social insurance
(10 606)
(8 968)
Depreciation and amortisation
(7 489)
(6 682)
Repair and maintenance
(1 051)
(902)
Change in impairment of receivables
(500)
442
Taxes, other than income tax
(2 840)
(2 441)
Electricity
(1 776)
(1 628)
Raw materials and goods used
(699)
(1 405)
Water
(2 240)
(1 970)
Change in realisable value of inventories and
impairment of fixed assets
(12)
318
Other costs
19
(2 628)
(2 777)
Other operational expenses
20
(1 414)
(486)
Operating expenses, total
(78 780)
(80 277)
Operating profit (loss)
9 049
7 631
Profit share of associates
21
89
-
Other interest and similar income
21
594
694
Interest and other similar expenses
21
(1 839)
(1 348)
Income from financing and investment
21
(1 156)
(654)
activities, net value
Profit before taxation
7 893
6 977
Income tax
22
30
(202)
Deferred income tax income (expense)
22
(170)
(697)
Profit for the reporting period
7 753
6 078
Other provisions that later will/may be reclassified
17
-
(1 573)
subsequently to profit or loss
Other provisions that will not be reclassified to profit
-
-
or loss
Total comprehensive income
7 753
4 505
Profit for the period attributable to the
Company's shareholders
7 753
6 078
Owners of the company
7 753
6 078
Non-controlling interest
-
-
Total comprehensive income attributable to
7 753
4 505
Owners of the company
7 753
4 505
Non-controlling interest
-
-
Earnings per share (EUR)
23
0,18
0,14
7
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2024 Consolidated and Company Financial
Statements
(in thousands euro, unless specified otherwise)
STATEMENT OF PROFIT (LOSS) AND OTHER GROSS INCOME
Company
Notes
2024
2023
Operating income
Sales revenue
18
84 121
85 048
Other operating income
20
1 713
1 044
Total operating income
85 834
86 092
Operating expenses
Fuel and purchased energy
(47 525)
(53 778)
Salaries, social insurance
(9 953)
(8 494)
Depreciation and amortisation
(7 473)
(6 625)
Repair and maintenance
(995)
(872)
Change in impairment of receivables
(271)
442
Taxes, other than income tax
(2 838)
(2 381)
Electricity
(1 770)
(1 628)
Raw materials and goods used
(699)
(843)
Water
(2 240)
(1 970)
Change in realisable value of inventories and impairment of
fixed assets
(12)
318
Other costs
19
(2 536)
(2 872)
Other operational expenses
20
(566)
(492)
Operating expenses, total
(76 878)
(79 195)
Operating profit (loss)
8 956
6 897
Other interest and similar income
21
567
688
Loss on sale of securities
21
-
-
Interest and other similar expenses
21
(1 843)
(1 344)
Income from financing and investment activities, net
value
21
(1 276)
(656)
Profit before taxation
7 680
6 241
Income tax
22
90
(90)
Deferred income tax income (expense)
22
(178)
(697)
Profit for the reporting period
7 592
5 454
Other provisions to be reclassified subsequently to profit or
loss
17
-
(1 573)
Gross income
7 592
3 881
Earnings per share (EUR)
23
0,18
0,13
The notes below form an integral part of these financial statements.
8
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2024 Consolidated and Company Financial
Statements
(in thousands euro, unless specified otherwise)
STATEMENT OF CHANGES IN EQUITY
Group
Other
Retained
Notes
Capital
Legal reserve
reserve
Total
s
profit (loss)
Balance on 31 December 2022
74 476
7 447
3 000
11 178
96 101
Formed reserves
-
-
50
(50)
-
Reversed reserves
-
-
(3 000)
3 000
-
Dividends
-
-
-
(3 000)
(3 000)
Profit for the reporting period
-
-
-
6 078
6 078
Other comprehensive income
-
-
-
(1 573)
(1 573)
Balance on 31 December 2023
74 476
7 447
50
15 633
97 606
Formed reserves
-
57
75
(132)
-
Reversed reserves
-
-
(50)
50
-
Dividends
-
-
-
-
-
Profit for the reporting period
-
-
-
7 753
7 753
Other comprehensive income
-
-
-
-
-
Balance as at 31 December
74 476
7 504
75
23 304
105 359
2024
Company
Notes
Capital
Legal reserve
Other
reserve
s
Retained
profit (loss)
Total
Balance on 31 December 2022
74 476
7 447
3 000
10 919
95 842
Formed reserves
-
-
50
(50)
-
Reversed reserves
-
-
(3 000)
3 000
-
Dividends
-
-
-
(3 000)
(3 000)
Profit for the reporting period
-
-
-
5 454
5 454
Other comprehensive income
-
-
-
(1 573)
(1 573)
Balance on 31 December 2023
74 476
7 447
50
14 750
96 723
Formed reserves
-
1
75
(75)
1
Reversed reserves
-
-
(50)
50
-
Dividends
-
-
-
-
-
Profit for the reporting period
-
-
-
7 592
7 592
Other comprehensive income
-
-
-
-
-
Balance as at 31 December
2024
74 476
7 448
75
22 317
104 316
The notes below form an integral part of these financial statements.
9
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2024 Consolidated and Company Financial
Statements
(in thousands euro, unless specified otherwise)
CASH FLOW STATEMENT
Group
Company
Notes
2024
2023
2024
2023
Cash flows from operating activities
Profit for the reporting period
7 753
6 078
7 592
5 454
Depreciation and amortisation
9 581
8 615
9 516
8 591
Amortization covered by grants/subsidies
(1 551)
(1 361)
(1 551)
(1 361)
Write-offs and changes in impairment of
receivables
305
(442)
281
(442)
Loss (gain) on sale and write-down of fixed
(38)
(16)
(38)
16
assets and value of shares
Change in realisable value of inventories and
impairment of fixed assets
12
(318)
12
(318)
Change in employee benefits liability
143
84
135
75
Adjustment for taxes
140
899
88
787
Changes in other non-cash items
486
58
465
32
Change in accruals
(4)
103
(12)
103
Change in provision liabilities
865
-
865
-
Elimination of results of financing and
investing activities
1 067
507
1 276
509
Decrease (increase) in inventories
16
1 235
(223)
768
Decrease (increase) in prepayments
(488)
1 143
(540)
909
Decrease (increase) in trade receivables
(1 191)
4 027
(1 861)
4 652
Decrease (increase) in other amounts
1 955
2 401
1 940
2 373
receivable
Increase (decrease) in long-term trade debts
29
(89)
-
-
Increase (decrease) in trade debts
(1 718)
(3 205)
(1 589)
(3 115)
Decrease (increase) in liabilities related to
employment relations
309
20
269
15
Paid Income Tax
(125)
(113)
-
-
Increase (decrease) in taxes payable
320
102
360
87
Decrease (increase) in received prepayments
236
67
261
155
Increase (decrease) in other current liabilities
(195)
(31)
(194)
(29)
Net cash flows from operating activities
17 907
19 764
17 052
19 261
(continued on the next page)
10
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2024 Consolidated and Company Financial
Statements
(in thousands euro, unless specified otherwise)
STATEMENT OF CASH FLOWS (CONTINUED)
Group
Company
Notes
2024
2023
2024
2023
Cash flows from investing activities
Acquisition of intangible fixed assets and property,
plant and equipment
(22 362)
(25 457)
(22 222)
(25 439)
Sale of property, plant and equipment
17
97
17
5
Interest and late payment fees received
594
147
567
147
Subsidy received
622
-
618
-
(Acquisition) disposal of investments
(500)
2 000
-
2 000
Net (used) cash flows from investing activities
(21 629)
(23 213)
(21 020)
(23 287)
Cash flows from financing activities
Loans received
12 000
14 000
12 000
14 000
Loans repaid
(3 896)
(2 793)
(3 896)
(2 793)
Interest paid
(1 844)
(1 745)
(1 844)
(1 745)
Lease payments
(16)
(16)
(12)
(12)
Dividend paid
-
(3 000)
-
(3 000)
Subsidy received
5
-
5
-
Net cash flows from (used in) financing
6 249
6 446
6 253
6 450
activities
Net increase (decrease) in cash flows
2 527
2 997
2 285
2 424
Cash and cash equivalents at the beginning of
the period
8 547
5 550
7 315
4 891
Cash and cash equivalents at the end of the
period
11 074
8 547
9 600
7 315
(end)
The notes below form an integral part of these financial statements.
11
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2024 Consolidated and Company Financial
Statements
(in thousands euro, unless specified otherwise)
EXPLANATORY NOTES TO THE FINANCIAL STATEMENTS
1. General information
AB Kauno energija (hereinafter referred to as the Company) is a public limited liability company registered in the
Republic of Lithuania. Its registered office address is Raudondvario pl. 84, Kaunas, Lithuania. Data about the Company
is collected and stored in the Registry of Legal Entities.
The Company is engaged in the supply of heat and hot water, production and sale of electricity and maintenance of
collector-tunnels. The Company also provides heating system maintenance services. The Company was registered on 1
July 1997 following the reorganisation of AB Lietuvos energija. The company code 235014830. The Company's shares
are traded on the Baltic Additional Trading List of the Nasdaq Vilnius Stock Exchange.
As at 31 December 2024 and 31 December 2023 the Company's shareholders were:
2024-12-31
2023-12-31
Number of held
Number of held
shares, units
Ownership (%)
shares, units
Ownership (%)
Kaunas city municipality
39.736.058
92,84
39.736.058
92,84
Kaunas district municipality
1.606.168
3,75
1.606.168
3,75
Jurbarkas district municipality
746.405
1,74
746.405
1,74
Other small shareholders
713.512
1,67
713.512
1,67
42.802.143
100,00
42.802.143
100,00
The Company's authorised capital is equal to EUR 74,475,728.82 and is divided into 42,802,143 ordinary shares with a
nominal value of EUR 1.74 each. As at 31 December 2024 and 31 December 2023 the Company had no treasury shares.
As at 31 December 2024 and 31 December 2023, all shares were fully paid up.
On 31 December 2024 the Company and its subsidiary UAB GO Energy LT form a group (hereinafter the Group):
Capital structure of the subsidiary as of 31 December 2024:
Company,
Part of the
Profit (loss) for
Statutory
registered office
Company-
Cost of
the
reporting
reserve
Equity
Main activities
address
owned
investment
period
formed
shares
UAB GO Energy
Innovative
energy
LT,
100 per
2 763
831
57
3 736
projects,
Raudondvario pl.
cent.
consultations, lease
84, Kaunas
The Company and the Group also hold a 22% stake in UAB Kauno miesto paslaugų centras. Investment at cost is EUR
75 thousand.
The Group's average number of employees during the reporting period was 378, the Company’s average number of
employees was 349 (in 2023: 375 and 338, respectively).
12
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2024 Consolidated and Company Financial
Statements
(in thousands euro, unless specified otherwise)
1. General information (continued)
Legal regulation
Pursuant to the Law of the Republic of Lithuania on the Heat Sector, the Company's activities are licensed and regulated
by the State Energy Regulatory Council (hereinafter referred to as the Council). On 26 February 2004 the Council granted
the Company a heat supply licence. The licence is valid for an unlimited period, but may be revoked by an appropriate
decision of the Council depending on compliance with certain conditions. The Council also sets price caps for heat supply.
On 13 September 2018, the Council, by Resolution No. O3E-283, established the basic heat price components for the
Company, which remained in effect until 31 March 2024. As of 1 April 2024, new heat prices came into effect, calculated
based on the revenue level for heat production and supply of AB Kauno Energija, unilaterally set by the Council’s
resolution of 23 February 2024.
Economic activities
The Company's production capacities consist of the Petrašiūnai power plant, 5 boiler houses in Kaunas integrated
network, 7 regional boiler houses in Kaunas district, 1 in Jurbarkas, 14 isolated network and 26 local (household) boiler
houses in Kaunas city, as well as 8 boiler houses for water heating in Sargėnai district.
The total installed thermal capacity of the Company is approximately 520.6 MW (of which 52.9 MW are condensing
economisers and 3.1 MW are absorption heat pumps), with an electrical capacity of 8.75 MW. Of this, the Petrašiūnai
Power Plant has a thermal capacity of 169.2 MW (including 17.8 MW of condensing economisers and 2.4 MW of
absorption heat pumps) and an electrical capacity of 8 MW. In Jurbarkas – 40.1 MW thermal capacity (including 4.4 MW
of condensing economisers and 0.7 MW of absorption heat pumps). The total power generation capacity of the Company
as a whole is approximately 534.7 MW (of which 52.9 MW are condensing economizers).
The Company makes investments based on an assessment of the economic situation, the competitive environment and
the availability of financing. Investment plans are approved by the shareholders and coordinated by the Board.
2. Basis of preparation of the financial statements
These financial statements are prepared on an historical cost basis, except for financial assets and liabilities for which
changes in fair value are recognised as profit or loss. Historical cost is essentially based on the fair value of the
consideration paid for an asset. These financial statements have been prepared on a going concern basis, on the
assumption that the Company and the Group will be able to continue in business for the foreseeable future.
The Company’s and the Group’s financial statements for the period ended 31 December 2024 have been prepared in
accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU) and their
interpretations. Standards have been issued by the International Accounting Standards Board (IASB) and interpretations
have been issued by the International Financial Reporting Interpretations Committee (IFRIC).
New and/or amended standards and interpretations applicable from 1 January 2024:
The following amended standards issued by the International Accounting Standards Board (IASB) and adopted by the
EU, as well as additions and clarifications to existing standards, are currently in force and have been applied by the
Company and the Group during this year:
• Amendments to 16 IFRS “Lease”: Lease liability on sale and leaseback transactions (effective for annual
periods beginning on or after 1 January 2024).
• Amendments TO IAS 1 “Presentation of Financial Statements”: classification of liabilities into current and
non-current; Classification of liabilities as current and non-current – deferral of the effective date; Long-
term liabilities with financial ratios (effective for annual periods beginning on 1 January 2024);
• Amendments to IAS 7 “Statement of Cash Flows” and IFRS 7 “Financial Instruments”: disclosures:
supplier’s financial arrangements (effective for annual periods beginning on or after 1 January 2024);
The application of the above-mentioned standards, amendments, and interpretations did not have a significant impact
on the Company’s separate or the Group’s consolidated financial statements.
Standards, amendments to existing standards and interpretations issued by the IASB, adopted by the EU but not yet in
force:
As at the date of these separate and consolidated financial statements, the Company and the Group has not early
adopted the following new and revised IFRS standards, amendments and interpretations that have been endorsed but
not yet effective:
• Amendments to IAS 21 “Effects of Changes in Foreign Exchange Rates”: conversion deficiency
(effective for annual periods beginning on or after 1 January 2025).
The management of the Company and the Group does not expect that the adoption of these standards, amendments
and interpretations will have a material impact on the Company's separate and the Group's consolidated financial
statements in the period of initial application.
13
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2024 Consolidated and Company Financial
Statements
(in thousands euro, unless specified otherwise)
Standards, amendments to existing standards and interpretations that have not yet entered into force and have not yet
been endorsed by the EU:
Currently, IFRS adopted in the EU are almost identical to standards adopted by the IASB, with the exception of the
standards, amendments to standards and interpretations currently in force which have not yet been adopted in the EU
(dates of validity apply in full to IFRS). The following standards, amendments and interpretations are set out below:
• IFRS 19 – Disclosures for Subsidiaries without Public Reporting (applicable to annual periods beginning 1
January 2027);
• IFRS 18 – Presentation and Disclosures in Financial Statements (effective for annual periods beginning on
or after 1 January 2027).
• Changes in the classification and measurement of financial instruments (IFRS 9 and IFRS 7 amendments)
(effective for annual periods beginning on or after 1 January 2026);
• Annual IFRS improvements – 11th version (effective for annual periods beginning on or after 1 January
2026);
• Contracts related to power generation from renewable sources: Amendments to IFRS 9 and IFRS 7
(effective for annual periods beginning on 1 January 2026)
The management of the Company and the Group does not expect that the adoption of these standards, amendments
and interpretations will have a material impact on the Company's separate and Group's consolidated financial statements
in the period of initial application.
The currency of the presentation is the euro. These statements are presented in thousands of euros, unless otherwise
stated.
The Company's financial year coincides with the calendar year.
The Company's management has approved these financial statements as at 2 April 2025.
3. Summary of significant accounting policies
3.1. Consolidation principles
The consolidated financial statements of the Group include AB Kauno energija and its subsidiaries. The financial
statements of the subsidiaries are for the same reporting period as those of the Parent Company. The consolidated
financial statements are prepared on the basis of uniform accounting principles for like transactions and other events in
similar circumstances.
Businesses acquired or disposed of during the year are included in the consolidated financial statements from the date
of the transfer of control or until the date on which control is lost. Intercompany transactions, balances and unrealised
gains and losses are eliminated on consolidation. The gross income of subsidiaries is attributable to the owners of the
enterprise and to the non-controlling interest, even if the result of the non-controlling interest is negative.
A subsidiary is an undertaking controlled, directly or indirectly, by its parent undertaking. Typically, a company is
controlled when the Group directly or indirectly owns more than 50 per cent of the company's share capital carrying the
voting rights and/or when it is able to control the financial and operating activities so as to obtain benefits from its activities.
The financial statements of subsidiaries are included in the consolidated financial statements at the beginning and end
of the control dates.
Changes in the Group's equity interest in subsidiaries
Changes in the Group's equity interest in subsidiaries that do not result in a loss of control of the Group by the subsidiaries
are accounted for as equity transactions. The carrying amounts of the Group's interest and non-controlling interest are
adjusted to reflect changes in their respective interests in subsidiaries. Any difference between the adjustment for the
non-controlling interest and the fair value of the consideration paid or received is recognised directly in equity and
attributable to the owners of the entity.
When the Group loses control of a subsidiary, the gain or loss on disposal is calculated as the difference between (i) the
sum of the fair value of the consideration received and the aggregate of the fair value of any retained interest; and (ii) the
previous carrying amounts of the subsidiary's assets (including goodwill) and liabilities and non-controlling interests.
When a subsidiary's assets are accounted for by re-measuring the fair value amount and the related gain or loss has
been included in comprehensive income and accumulated in equity, the amounts previously included in other
comprehensive income and accumulated in equity are accounted for in the same way as the disposal of the related asset
(i.e. reclassified to profit or loss or transferred directly to retained earnings, as specified in the relevant IFRS).
The fair value of the remaining investment in the former subsidiary at the date of the loss of control is treated as the fair
value at initial recognition for subsequent accounting purposes in accordance with IFRS 9 Financial Instruments, or, if
appropriate, as the acquisition cost of the investment in an associate or jointly controlled entity at initial recognition.
3.2. Investments in subsidiaries
14
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2024 Consolidated and Company Financial
Statements
(in thousands euro, unless specified otherwise)
In the statement of financial position of the company, investments in subsidiaries are accounted for using the acquisition
cost method. Dividends received from subsidiaries are recognised in profit or loss and other comprehensive income.
IAS 36 “Impairment of Assets” applies impairment criteria to determine whether it is necessary to recognise impairment
losses in respect of the Company's investment in a subsidiary. When necessary, the full carrying amount of an investment
(including goodwill) is tested for impairment in accordance with IAS 36 as a single asset by comparing its recoverable
amount (the higher of its value in use and its fair value less costs to sell) with its carrying amount. Any impairment losses
recognised shall form part of the carrying amount of the investment. Any reversal of an impairment loss is recognised in
accordance with IAS 36 to the extent that the recoverable amount of the investment subsequently increases.
3.3. Intangible Assets
Intangible assets acquired separately
Intangible assets acquired separately are carried at cost less accumulated amortisation and accumulated impairment
losses. Amortisation is recognised on a straight-line basis over the estimated useful lives. The useful life and depreciation
method are reviewed at each reporting date, prospectively recording any changes in the estimate assessment. The
amortisation calculation shall be discontinued from the first day of the month following the disposal of the asset or when
the total cost of the acquisition of an intangible asset is transferred to cost or to the value of another asset. Intangible
assets with an indefinite useful life acquired separately are carried at cost less impairment losses.
Derecognition of intangible assets
An intangible asset is derecognised when it is sold or when no future economic benefit is expected from the use or sale
of the asset. Gains or losses arising from the derecognition of an intangible asset, calculated as the difference between
the net disposal proceeds and the carrying amount of the asset, are recognised in profit or loss when the asset is
derecognised.
Licenses
Amounts paid for licenses are capitalized and amortized over the term of validity.
(3 to 4 years).
Software
The new software acquisition costs are capitalized and recognized as an intangible fixed asset if these costs are not an
integral part of the hardware. Software is amortized over a period no longer than 3 years. Costs incurred in order to
restore or maintain the future economic benefits that the Company expects from the originally assessed standard of
performance of existing software systems are recognised as an expense when the restoration or maintenance work is
carried out.
3.4. Accounting for emission allowances
Emission allowances received shall be accounted for using the net commitment method. Under this approach, the Group
and the Company account for emission allowances at nominal value.
Commitments to acquire additional emission allowances are recognised when they arise (e.g. commitments are not
accounted for on the basis of expected future emissions) and are accounted for only when the actual emissions of the
Group and the Company exceed the amount of available emission allowances.
Under the net commitment approach, the Group and the Company assess the lack of emission allowances by comparing
the quantity of emission allowances available with the actual annual emissions.
Sales of emission allowances are recorded at the amount of the sales transaction. Any differences between the fair value
of the sale and the carrying amount of the allowances held shall be recognised as profit or loss, regardless of whether
there is an actual or expected shortfall in the allowances at the time of the transaction. Where the sale of emission
allowances results in an actual shortfall of emission allowances, the financial position reports shall recognise additional
liabilities, including profits or losses that affect the relevant costs.
3.5. Property, plant and equipment
Property, plant and equipment is carried at acquisition cost, which does not include routine maintenance costs, less
accumulated depreciation and estimated impairment losses, if any. The cost of acquisition includes the cost of replacing
property, plant and equipment when they are incurred, provided that these costs qualify for the recognition of the asset.
Property classified as construction in progress, under construction for production, supply or administrative purposes, or
for other purposes not yet determined, is carried at acquisition cost less impairment losses. The cost includes professional
fees and capitalised borrowing costs of long run assets in accordance with the accounting policies of the Group and the
Company. Once an asset is ready for use, it is transferred to the item of Property, Plant, and Equipment, put into
operation, and depreciation of this asset is commenced. As long as an asset is recorded under construction in progress,
no depreciation is recognised.
Depreciation is recognised in such a way that, over the useful life of the asset, its cost (excluding land and construction
in progress) less its residual value is written off on a straight-line basis. The estimated useful lives, residual values, and
depreciation methods are reviewed at each year-end, with any changes in the accounting estimate accounted for
prospectively.
15
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2024 Consolidated and Company Financial
Statements
(in thousands euro, unless specified otherwise)
The useful service lives are reviewed every year to ensure that the period of depreciation is consistent with the expected
useful life of the long-term tangible asset.
Depreciation is computed on a straight-line basis over the following estimated useful lives:
Buildings
50
Investment property
50
Buildings
15 – 70
Machinery and plant
5 – 20
Vehicles
4 – 10
Plant and tools
3 – 16
Land is not depreciated.
An asset is recognised as non-current when it has a useful life of more than one year and the acquisition cost exceeds
EUR 144.81.
Property, plant and equipment are derecognised when they are sold or when no future economic benefits are expected
from the use or sale of the asset. Any gain or loss arising on the sale or write-down of an item of property, plant and
equipment is calculated as the difference between the net disposal proceeds and the carrying amount of the asset and
is recognised in profit or loss in the profit (loss) statement and other comprehensive income.
Subsequent repair costs are added to the cost of an asset if it is probable that future economic benefits will flow to the
Group and the Company from the expenditure and the cost of the expenditure can be measured reliably. The carrying
amount of the modified portion is derecognised. All other repair costs are recognised as an expense that affects profit or
loss for the period when they are incurred.
Construction-in-progress is stated at cost. This includes the cost of construction, plant and equipment and other directly
attributable costs. Depreciation is not charged on construction in progress until the asset is placed in service or is ready
for use.
Fixed assets held for sale
Property, plant and equipment, or groups of saleable assets that consist of assets and liabilities that are expected to be
recovered primarily through sale and not through continuing use, are classified as held for sale. Immediately before
classifying an asset as held for sale, the asset (or parts of a pool of available-for-sale assets) is measured in accordance
with the applicable International Financial Reporting Standards as adopted for application in the European Union. (Non-
current assets held for sale are accounted for at the lower of their carrying amount and fair value less the cost of selling
such assets).
Impairment losses on assets held for sale measured at the time of initial classification and subsequent gains and losses
related to the revaluation of assets shall be included in profit or loss. Revenue from the reversal of depreciation is not
recognised at a higher amount than accumulated impairment losses.
When property, plant and equipment is recorded as held for sale, depreciation is no longer charged.
Impairment of property, plant and equipment and intangible assets other than goodwill:
At each date of preparation of the statement of financial position, the Group and the Company shall review the residual
value of property, plant and equipment and intangible assets to determine whether there is any indication that these
assets are impaired. If any such indication exists, the Group and the Company assesses the recoverable amount of the
asset in order to be able to assess the impairment loss (if any). Where it is impossible to assess the recoverable value
of assets, the Group and the Company estimates the recoverable amount in the cash-generating group to which the
asset belongs. When a reasonable and consistent basis of allocation can be identified, the assets of the Group and the
Company are also allocated to separate income-generating groups of assets, or alternatively, they are allocated to the
lowest income-generating group of assets for which a reasonable and consistent basis of allocation can be identified.
The recoverable amount is the higher of fair value less costs to sell and value in use. In assessing the value in use, the
estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
assessments conditions, time value of money and the risks associated with the assets, which was not taken into account
in estimating the future cash flows.
If the estimated recoverable amount of the asset (or cash-generating asset group) is less than its carrying amount of this
asset, the carrying amount of the asset is reduced to the recoverable value of this asset (or cash-generating asset group).
Impairment losses are recognised immediately through profit or loss. The Group and the Company have one group of
income-generating assets for the heat business.
If after the recognition of impairment loss the value of the asset increases, the carrying amount of the asset (cash-
generating asset group) is increased to the newly estimated recoverable amount, but so that the increase does not
exceed the carrying value of the asset (cash-generating asset group) if the losses due to value impairment in previous
years had not been recognized. Reversals of impairment losses are recognised immediately in profit or loss.
3.6. Investment property
Property, plant and equipment are assets that the Company manages and controls in order to generate rental income
and/or increase the value of these assets. Assets that are used for the production of goods, services or for
16
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2024 Consolidated and Company Financial
Statements
(in thousands euro, unless specified otherwise)
administrative purposes, and the sale of which is classified as a typical activity of the Company, not included in
property, plant and equipment. Investment property is initially valued at acquisition cost, including related transaction
costs. Subsequent to initial recognition, buildings are carried at cost less accumulated depreciation and impairment
losses, if any. Depreciation is calculated on a straight-line basis so as to write off the cost of the asset on a straight-line
basis over the asset's useful life of 8-50 years. Depreciation of investment property is recorded in the statement of profit
or loss and other comprehensive income under operating expenses.
3.7. Financial assets
The Group and the Company classify their financial assets in the following groups:
• Financial assets that are measured at fair value in subsequent periods, with the change in fair value recognised
in other comprehensive income or profit or loss; and
• Financial assets measured at amortised cost.
The classification depends on the financial asset management model used and the contractual cash flow terms.
Recognition and initial measurement
Trade receivables are initially recognised when they arise. On initial recognition, all other financial assets and financial
liabilities are recognised when the Group and the Company become a party to the contractual provisions of the
instrument.
Financial assets (other than trade receivables without a significant financing component) or financial liabilities are initially
measured at fair value plus, if the instrument is not measured at fair value through profit or loss, transaction costs directly
attributable to the acquisition or issue. Trade receivables without a significant financing component are initially recognised
at transaction price.
Classification and subsequent assessment
At initial recognition, financial assets are classified and measured as follows:
• amortised cost;
• at fair value through profit or loss.
Financial assets are not reclassified in subsequent periods unless the Group and the Company change their financial
asset management model. In this case, all related financial assets shall be reclassified on the first day of the first reporting
period following the change in business model.
A financial asset is measured at amortised cost if it meets both of the following criteria and is not classified as an asset
measured at fair value through profit or loss:
• The entity intends to hold the asset for contractual cash flows;
• Contractual cash flows on specific dates include only payments of principal and interest on the amount due.
Write-off
The carrying amount of a financial asset is written down, in whole or in part, if there is no realistic prospect of its recovery.
This usually occurs when the Group and the Company determine that the debtor does not have sufficient assets or
sources of income to generate sufficient cash flows to repay the amounts written off. However, financial assets that are
written off may be recovered to meet debt collection requirements imposed by the Group and the Company.
Assessment of significantly increased credit risk
The Group and the Company assess the probability of default at the initial recognition of financial assets and at each
balance sheet date, taking into account whether there has been a significant increase in credit risk since initial recognition.
In order to assess whether there has been a significant increase in credit risk, the Group and the Company compare the
risk of default on assets at the date of preparation of the statements with the risk of default on initial recognition. In
analysing whether credit risk has increased significantly, the following factors shall be assessed:
• Significant changes in the internal credit rating;
• Significant changes in the external credit rating (if any);
• Actual or foreseeable material adverse changes in the business environment, financial or economic situation
which may materially affect the ability of the customer to meet its obligations;
• Actual or anticipated significant changes in the client's performance.
Based on the Group's and the Company's debt recovery statistics, management considers that the credit risk has
increased from the time of initial recognition only if the contractual payments are delayed by more than 30 days.
ECL valuation – trade receivables and other contract assets
The Group and the Company apply a simplified approach to the calculation of lifetime expected credit losses over the
lifetime of a loan, using the provisioning matrix for all trade receivables and other receivables. In order to calculate
expected credit losses using the provisioning matrix, trade receivables and other receivables are classified into separate
groups according to the general characteristics of credit risk. The amounts of each group are analysed on the basis of
17
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2024 Consolidated and Company Financial
Statements
(in thousands euro, unless specified otherwise)
the number of days past due and a loss indicator shall be assigned to each group of amounts past due. Loss ratios are
calculated using management's expert judgement using statistical recovery information for the last 2 years.
For trade receivables that have no significant financing component, an estimated credit loss is recorded over the period
of the debt.
Such information shall be adjusted, if necessary, in the light of forward-looking information. The table below provides
information on the expected credit losses calculated for the Group and the Company for each group of overdue amounts.
As trade receivables and other receivables generally do not include collateral or other credit protection, the expected loss
ratio corresponds to the probability of default:
Debt overdue in days
Not
from 1 to
from 31
from 91
from
from
from
more
Group
181 to
271 to
361 to
overdue
30
to 90
to 180
270
360
720
than 721
Expected credit loss
0
0
20
50
60
80
90
100
rate %
Company
Expected credit loss
0
0
20
50
60
80
90
100
rate %
3.8. Inventories
Inventories are stated at the lower of cost or net realisable value. Net realisable value refers to the estimated selling price
of inventories less any estimated selling costs. The cost of inventories is calculated using the FIFO method.
The cost of inventories is reduced by discounts and write-downs received from suppliers during the reporting period and
applied to inventories held in stock.
Inventories held for more than one year (calculated from the acquisition date), excluding essential reserves, are written
down by 100%.
3.9. Provisions
A provision is recorded when, as a result of a past event, the Company has a present obligation (legal or constructive)
and it is probable that the Group and the Company will be required to settle the obligation, and a reliable estimate of the
amount of the obligation can be made.
The amount recognised as a provision is the best estimate at the end of the reporting period of the consideration that will
be required to settle the present obligation, taking into account the risks and uncertainties arising from the obligation.
When a provision is valued using the estimated cash flows to cover a liability, its carrying value is the present value of
these cash flows.
Where it is expected that part or all of the economic benefits needed to cover the provision will be recovered from a third
party, the amount receivable is covered by the asset if it is certain that the compensation will be received and that the
amount receivable can be measured reliably.
3.10. Cash and cash equivalents
Cash consists of money in bank accounts and in cash, and cash in transit. Cash equivalents are short-term, highly liquid
investments that are readily converted to known amounts of cash. The term of such investments does not exceed three
months, and the risk of value changes is very insignificant.
3.11. Borrowing costs
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset the
preparation of which for the intended use or sale takes a long time are included in the cost of the asset until the asset is
prepared for the intended use or sale.
Investment income earned on a temporary investment of a specific amount borrowed that has not yet been used for a
qualifying asset shall be deducted from the borrowing costs allowed for capitalisation.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
3.12. Financial liabilities and equity instruments
The Group and the Company recognise financial liabilities at cost on initial recognition.
The Group and the Company classify financial liabilities into the following categories:
• measured at amortised cost,
• measured at fair value through profit or loss,
18
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2024 Consolidated and Company Financial
Statements
(in thousands euro, unless specified otherwise)
• hedging financial instruments.
The Group and the Company classify trade debts, financial debts, leasing liabilities, interest liabilities and other payables
as financial liabilities measured at amortised cost.
Derecognition of financial liabilities
The Group and the Company derecognise financial liabilities when, and only when, the obligations of the Group and the
Company are discharged, cancelled or expire.
3.13. Employee benefits
The Group and the Company account for employee benefits in accordance with applicable legal requirements and
accounting standards. Employee benefits are classified into the following main categories:
• Short-term employee benefits
• These include salaries, bonuses, holiday pay, social security contributions, and other benefits related to
employment relationships. These benefits are recognised as expenses in the period in which they are earned and
recorded as liabilities if they remain unpaid as of the reporting date.
• Vacation accruals
• Accumulated unused employee leave is recognised as an expense and a liability in accordance with the accrual
principle. Leave accrual is made for accumulated but unused leave as of the reporting date.
• Accrued bonuses and incentives
• The Group and the Company accrue bonuses and incentives payable after management approval in 2025. These
amounts are recognised on an accrual basis once it is clear that they will be paid.
• Retirement benefit provisions
• The Group and the Company accrue benefits for employees reaching the age of retirement. This obligation is
calculated based on actuarial assessments and discounted to reflect its present value. Accumulated retirement
benefits are recognised as an expense over the employee’s period of service.
• Termination benefits
• If the Group or the Company commits to paying termination benefits, these benefits are recognised as an expense
when it becomes clear that the obligation will be fulfilled.
• Post-employment benefits
• The Group and the Company make mandatory contributions to the state social insurance fund. These
contributions are recognised as an expense when the related wages are earned. The Group and the Company
have no additional voluntary obligations to employee pension funds or other post-employment benefits.
Provisions
All employee benefit provisions are classified as:
• Short-term liabilities – amounts payable within 12 months from the balance sheet date.
• Long-term liabilities – amounts payable after more than one year.
3.14. Lease
The Group and the Company are the lessee
At the commencement date, the lessee shall measure the lease liability at the present value of the lease payments
outstanding at that date, including the following:
• Fixed charges (including those assimilated to fixed charges) less any rental incentives receivable;
• Variable rents that depend on an index or rate initially measured using an index or rate at the start date;
• Amounts that the tenant should pay under the liquidation value guarantees;
• Penalties for terminating the lease if it is assumed that the tenant will exercise its option to terminate the lease
during the lease term.
Rents is discounted using the interest rate provided for in the lease agreement, if that rate can be easily determined. If
that rate cannot be easily determined, the tenant shall use the borrowing rate calculated by the lessee.
The interest rate specified in the lease is the interest rate that results in the present value of the lease payments and the
unguaranteed residual value being equal to the sum of the fair value of the leased asset and any initial direct costs
incurred by the lessor.
The lease liability is measured at amortised cost using an imputed interest rate consistent with the discount rate used to
discount the lease payments. Interest expense relating to a lease liability is allocated over the lease term and recognised
in profit or loss.
The cost of an asset held under right of use at initial recognition comprises:
• The amount of the initial measurement of the lease liability;
• Any lease payments made on or before the commencement date less any lease incentives received;
• Any primary direct costs incurred by the lessee; and
• An estimate of the cost of restoring the asset.
Thereafter, the lessee shall measure the right-of-use asset at cost less any accumulated depreciation and any
accumulated impairment losses. If, before the end of the lease period, the ownership of the leased asset is transferred
19
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2024 Consolidated and Company Financial
Statements
(in thousands euro, unless specified otherwise)
to the tenant , or if the price of the asset managed under the right of use indicates that the tenant will exercise the right
to purchase, the tenant shall calculate the depreciation of the asset managed under the right of use from the beginning
to the end of the useful life of the leased asset. Alternatively, the lessee shall calculate the depreciation of the right-of-
use asset from the commencement date to the earlier of: the end of the useful life of an asset held under a right-of-use
arrangement, or the end of a lease term.
Payments relating to short-term leases or leases of low-value assets are recognised as an expense through profit or loss
on a straight-line basis. Short-term leases are considered to be leases with a term of 12 months or less. Low-value assets
include tools and small items of office furniture.
The Group and the Company are the lessor
In transactions where the Company is a lessor, the assessment of whether the concluded Agreement is a finance or
operating lease are carried out on the date of commencement of the lease. For the purpose of determining the type of
lease assignment, all risks and rewards of ownership of the leased asset are assessed jointly or substantially transferred
from the lease. If substantially all the risks and rewards of ownership of the leased asset are transferred, such leases are
treated as finance leases, otherwise, as operating leases. In transactions in which the Company acts as an intermediate
Lessor, the sublease shall be classified on the basis of the right-of-use assets specified in the main agreement.
3.15. Accounting for grants and subsidies
The Group and the Company account for grants and subsidies in accordance with International Accounting Standard 20
(IAS 20) Accounting for Government Grants and Disclosure of Government Assistance.
• Recognition of government grants
• Grants and subsidies are recognised as income only when there is sufficient assurance that:
o the Group and the Company will meet all conditions related to the grant;
o The grant or subsidy will actually be received.
• Operating grants
o Grants intended to cover operating expenses are recognised systematically over the period in which
they help to offset the related costs.
o They are accounted for as other operating income in the reporting period in which the related expenses
are incurred.
• Grants related to assets
o If a grant is intended for the acquisition or construction of non-current assets, it is recorded as a long-
term liability and recognised over the useful life of the asset, proportionally reducing depreciation
expenses.
o Grants may be presented as deferred income in the balance sheet or deducted from the value of the
grant-funded asset.
• Subsidies for interest or tax compensation
o If the Group and the Company receive a subsidy intended to compensate for interest expenses, it is
recognised by reducing interest expenses in the period when the respective costs are covered.
o If the subsidy is related to taxes, it is recognised by reducing the corresponding tax expenses in the
period in which the related taxes are incurred.
• Refundable grants
o If a grant becomes refundable, it is recognised as a liability from the moment the repayment obligation
arises.
o The refund of asset-related grants adjusts the carrying amount of the asset or the deferred income
balance, while the refund of operating grants is recognised directly in the profit or loss statement.
3.16. Income tax
Income tax expense reflects current year tax and deferred tax.
Current year's tax
Tax of the current year is payable based on taxable profit for the year. Taxable profit differs from the profit reported in the
statement of comprehensive income because of the income or expense that is taxable or deductible in the following year
and the income or expense that is never taxable or deductible. Income tax is calculated using tax rates that have been
enacted or substantively enacted by the balance sheet date. The Group and the Company are subject to a corporate
income tax rate of 15 per cent in 2024 (15 per cent in 2023).
Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally
recognized for all taxable temporary differences and deferred tax assets are recognized to the extent that it is probable
that taxable profits will be available against which deductible temporary differences can be utilized. Such assets and
liabilities are not recognised if the temporary differences relate to goodwill, or to the initial recognition of assets or liabilities
(other than in a business merger) that are not affected by either taxable or financial profit at the time they arise
(transactions).
20
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2024 Consolidated and Company Financial
Statements
(in thousands euro, unless specified otherwise)
Deferred tax liabilities are recognised to offset temporary tax differences. Deferred income tax assets are recognised for
deductible temporary differences only to the extent that it is probable that sufficient taxable profit will be available to
realise the benefit of the temporary differences and is expected to be realised in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each statement of financial position date and reduced to the
extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be
recovered by the Group and the Company.
Deferred tax assets and liabilities are measured using the tax rates that will apply to the Group and the Company in the
year in which those temporary differences are expected to be recovered or settled, based on tax rates (and tax laws) that
have been or will be approved before the end of the reporting period. The measurement of deferred tax liabilities and
assets reflects the tax consequences that would follow from the manner in which the Group and the Company expect, at
the reporting period, to recover or to settle the carrying amount of its assets and liabilities.
Current and deferred tax for the period
Current and deferred tax is recognised as an expense in profit or loss, except when it relates to items recognised outside
profit or loss (in other comprehensive income or directly in equity). In such cases, tax is also recognised outside profit or
loss, or when it arises from the initial recognition of a business combination. In the case of a business merger, the tax
effect is included in the accounting for the business merger.
3.17. Basic and diluted earnings per share
The basic and diluted earnings per share shall be calculated by dividing the profit for the reporting period attributable to
shareholders by the weighted average of the ordinary shares issued. There is no difference between basic and diluted
earnings per share.
3.18. Revenue recognition
Revenue accounting policy
The Group and the Company recognise revenue by reflecting the transfer of goods or services to customers for
consideration expected to be received, net of VAT, discounts, and returns. Revenue is accounted for in five key steps:
• Contract identification – the contract between the Group/Company and the customer is identified, defining the
rights and obligations of both parties.
• Identification of performance obligations – specific goods or services to be transferred to the customer are
determined.
• Determination of transaction price – the total revenue amount the Group/Company expects to receive is
calculated. It may be fixed or variable and may include non-monetary consideration or financing components.
• Allocation of transaction price – revenue is allocated to individual goods or services based on their relative
selling prices.
• Revenue recognition – revenue is recorded when the customer obtains control of the transferred goods or
services. This may occur at a point in time or over a certain period.
Revenue recognition methods
Sales of heat and hot water
Revenue is recognised based on invoices issued to customers, using meter readings as the basis. At the end of the
period, services provided but not yet billed are accounted for on an accrual basis.
Sales of goods
Revenue from the sale of goods is recognised when:
• Ownership is transferred to the buyer;
• The Group/Company no longer retains control or management rights;
• The amount of income can be measured reliably;
• It is probable that economic benefits will be received, and the related costs can be reliably measured.
Financing elements
As the Group/Company does not have contracts with payment periods exceeding one year, no separate accounting for
a financing component is applied.
Other income
• Rental income – recognised on an accrual basis when the amount can be reliably measured and the receipt of
economic benefits is probable.
• Late payment interest – recognised only when received.
• Dividends – recognised when shareholders acquire the right to receive payments and it is probable that they
will be received.
• Interest income – accrued over the period, taking into account the effective interest rate and the probability of
fund collection.
3.19. Expense recognition
21
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2024 Consolidated and Company Financial
Statements
(in thousands euro, unless specified otherwise)
Expense recognition principles:
• Expenses are recognised in accounting based on the accrual and matching principles.
• Expenses are recorded in the reporting period in which the related revenue is earned, regardless of the timing
of cash payments.
• If expenses cannot be directly linked to specific revenue and will not generate future income, they are recognised
as expenses in the period they are incurred.
Expense measurement:
• The amount of expenses is measured as the paid or payable amount, excluding VAT.
• If the settlement period is long and interest is not separately distinguished, the expense amount is measured by
discounting the settlement amount using the market interest rate.
3.20. Foreign currency transactions
The Group and the Company account for foreign currency-denominated transactions in accordance with IAS 21 The
Effects of Changes in Foreign Exchange Rates.
• Initial recognition of foreign currency transactions
o Foreign currency transactions are initially translated into the functional currency of the Group and the
Company at the official exchange rate prevailing on the transaction date.
• Monetary and non-monetary items
o Monetary items (cash, receivables, payables) are recalculated in the balance sheet using the official
exchange rate at the reporting date. The impact of exchange rate changes is recognised in the profit
or loss statement.
o Non-monetary items accounted for at fair value (e.g., revalued non-current assets) are translated at
the exchange rate in effect on the date their fair value was determined.
o Non-monetary items measured at historical cost are not recalculated.
• Recognition of foreign exchange differences
o Foreign exchange differences related to changes in the value of monetary items are recognised in the
profit or loss statement.
o If foreign exchange differences arise from financial liabilities designated as hedges against foreign
currency risk, they may be accounted for under hedge accounting principles.
3.21. Application of assessments in preparation of financial statements
In preparing the financial statements, management makes decisions, estimates, and assumptions that affect the
disclosed amounts of income, expenses, assets, liabilities, and uncertainties as of the reporting date.
Since the uncertainty of these assumptions and estimates may impact results, significant adjustments to the carrying
amounts of assets or liabilities may be required in the future.
3.21.1. Property, plant and equipment – useful life
Key assumptions used to determine the useful life:
• Estimated duration of asset usage.
• Technical and technological obsolescence, including service innovations and changes.
• Legal or other restrictions, such as the validity periods of finance lease agreements.
3.21.2. Investments in subsidiaries – impairment losses
• The return on investments is assessed by discounting the future cash flows of subsidiaries.
• The applied discount rate is the weighted average cost of capital, reflecting current market assumptions
regarding the time value of money.
3.21.3. Impairment of receivables
• A provision for expected credit losses (ECL) is recognised for trade receivables, other receivables, and accrued
income.
• Loss rates are determined based on statistical recovery data from the past two years and management’s expert
assessment.
• Both quantitative and qualitative data, including forward-looking information, are used in ECL assessments.
• Loss provisions are presented in the profit or loss statement as expenses related to impairment.
3.21.4. Deferred profit tax assets
• A deferred tax asset is recognised for unused tax losses if it is probable that sufficient taxable profit will be
available for their utilisation.
• Management determines the amount that can be recognised based on:
o Forecasts of expected future taxable profits.
o Tax planning strategies.
3.21.5. Fair value of financial instruments
• Fair value is the amount at which assets or services can be exchanged or liabilities settled between unrelated
parties.
• Valuation is determined using:
o Market prices (if an active market exists).
o Discounted cash flow models.
22
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2024 Consolidated and Company Financial
Statements
(in thousands euro, unless specified otherwise)
o Option pricing models (depending on circumstances).
Fair value hierarchy
Fair value is classified into one of three levels based on valuation methods:
• Level 1 – Quoted prices in active markets (unadjusted).
• Level 2 – Other observable inputs (e.g., derived from prices).
• Level 3 – Unobservable inputs based on management’s judgment.
If different level inputs are used in a fair value assessment, the classification is based on the lowest significant input level.
The Company transfers amounts between levels at the end of the reporting period when a change occurs.
3.22. Contingencies
Contingent liabilities are not recognised in the financial statements. They are disclosed unless the possibility of an outflow
of resources generating economic benefits is small.
A contingent asset is not recognised in the financial statements but is disclosed when an inflow of economic benefits is
probable.
3.23. Events after the date of the balance sheet
Post-reporting events that provide additional information about the situation of the Group and the Company at the date
of preparation of the statements of financial position (adjusting events) are reflected in the financial statements. Events
after the date of the balance sheet that are not corrective events, are described in the notes when they are significant.
3.24. Mutual settlements and comparative numbers
When preparing the financial statements, assets and liabilities, income and expenses are not offset unless the specific
International Accounting Standards specifically require such offsetting.
3.25. Segment reporting
Segment information shall be reported in the same manner as other internal reporting to the chief operating decision
maker. The chief operational decision maker responsible for allocating resources and assessing the performance of the
segments is the Board, which takes strategic decisions.
The activities of the Group and the Company are carried out in a single segment, therefore, these financial statements
do not provide additional disclosures about the segments.
23
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2024 Consolidated and Company Financial
Statements
(in thousands euro, unless specified otherwise)
4. Intangible fixed assets
Movement of long-term intangible assets (acquired rights and software) during the reporting and previous periods:
Group
Company
Acquisition value:
Balance on 31 December 2022
1 646
1 646
Acquisitions
8
Transfers and write-offs (changes in value).
9
9
Relocation from construction in progress
205
205
Balance on 31 December 2023
1 868
1 860
Acquisitions
3
Transfers and write-offs (changes in value).
(22)
(22)
Relocation from construction in progress
199
199
Balance as at 31 December 2024
2 048
2 037
Amortization:
Balance on 31 December 2022
1 548
1 548
Amortisation per year
71
71
Disposals and write-offs
-
-
Balance on 31 December 2023
1 619
1 619
Amortisation per year
137
136
Disposals and write-offs
(22)
(22)
Balance as at 31 December 2024
1 734
1 733
Balance on 31 December 2023
249
241
Balance as at 31 December 2024
314
304
24
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2024 Consolidated and Company Financial
Statements
(in thousands euro, unless specified otherwise)
5. Property, plant and equipment:
Details of the Group's and Company's property, plant and equipment:
Constructio
Land
Machin
ns
in
Invest
Group
and
Buildin
ery and
Vehicles
Plant and
progress
ment
Total
buildin
gs
plant
tools
and
propert
Acquisition value:
gs
s
prepayment
y
Balance
on
31
17 537
220 367
64 557
1 990
14 663
13 519
1 631
334 264
December 2022
Acquisitions
-
-
115
25
2
25 349
-
25 491
Sold and written off
assets
(3)
(69)
(3 443)
(224)
(1 350)
-
-
(5 089)
Transfer
to
-
-
-
-
-
(205)
-
(205
intangible assets
Reclassifications
94
12 450
717
744
1 175
(15 180)
-
-
Impairment losses (-
)
(20)
(6)
-
-
-
-
-
(26)
Balance
on
31
17 608
232 742
61 946
2 535
14 490
23 483
1 631
354 435
December 2023
Acquisitions
-
-
-
35
9
22 315
-
22 359
Sold and written off
assets
-
(134)
(1 479)
(130)
(770)
-
-
(2 513)
Reclassifications
202
18 394
5 412
2
3 299
(27 309)
-
-
Transfer
to
-
-
-
-
-
(199)
-
(199)
intangible assets
Impairment losses (-
)
11
2
1
-
1
(80)
-
(65)
Balance as at 31
17 821
251 004
65 880
2 442
17 029
18 210
1 631
374 017
December 2024
Accumulated depreciation:
Balance
on
31
11 069
92 846
49 537
1 593
11 900
-
484
167 429
December 2022
Depreciation during
the year
341
5 355
2 028
186
610
-
33
8 553
Reclassifications
-
-
-
-
-
-
-
Sold and written off
assets
(3)
(69)
(3 443)
(219)
(1 283)
-
-
(5 017)
Balance
on
31
11 407
98 132
48 122
1 560
11 227
-
517
170 965
December 2023
Depreciation during
the year
375
5 944
2 020
208
865
-
32
9 444
Reclassifications
-
-
-
-
-
-
-
-
Sold and written off
assets
-
(66)
(1 512)
(130)
(767)
-
-
(2 475)
Balance as at 31
11 782
104 010
48 630
1 638
11 325
-
549
177 934
December 2024
Book value:
Balance
on
31
6 468
127 521
15 020
397
2 763
13 519
1 147
166 835
December 2022
Balance
on
31
6 201
134 610
13 824
975
3 263
23 483
1 114
183 470
December 2023
Balance as at 31
6 039
146 994
17 250
804
5 704
18 210
1 082
196 083
December 2024
25
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2024 Consolidated and Company Financial
Statements
(in thousands euro, unless specified otherwise)
Construct
Machiner
ions
in
Company
Land and
Buildings
y and
Vehicles
Plant and
progress
Total
buildings
plant
tools
and
prepayme
Acquisition value:
nts
Balance
on
31
17 437
220 178
63 908
1 774
14 871
13 477
331 645
December 2022
Acquisitions
-
-
73
20
-
25 346
25 439
Sold
and
written
off
(3)
(69)
(3 443)
(3)
(1 350)
-
(4 868)
assets
Transfer
to
intangible
-
-
-
-
-
(205)
(205)
assets
Reclassifications
68
12 450
743
744
1 130
(15 135)
-
Impairment losses (-)
(9)
(6)
-
-
(1)
-
(16)
Balance
on
31
17 493
232 553
61 281
2 535
14 650
23 483
351 995
December 2023
Acquisitions
-
-
-
-
-
22 222
22 222
Sold
and
written
off
-
(134)
(1 479)
(130)
(770)
-
(2 513)
assets
Reclassifications
202
18 394
5 412
2
3 299
(27 309)
-
Transfer
to
intangible
assets
-
-
-
-
-
(199)
(199)
Impairment losses (-)
11
2
-
-
1
(80)
(66)
Balance
as
at
31
17 706
250 815
65 214
2 407
17 180
18 117
371 439
December 2024
Accumulated
depreciation:
Balance
on
31
11 034
92 657
48 933
1 377
12 110
-
166 111
December 2022
Depreciation during the
year
340
5 355
2 012
186
606
-
8 499
Reclassifications
-
-
-
-
-
-
Sold
and
written
off
assets
(3)
(69)
(3 443)
(3)
(1 283)
-
(4 801)
Balance
on
31
11 371
97 943
47 502
1 560
11 433
-
169 809
December 2023
Depreciation during the
year
372
5 944
2 003
204
857
-
9 380
Reclassifications
-
-
-
-
-
-
-
Sold
and
written
off
-
(66)
(1 512)
(130)
(767)
-
(2 475)
assets
Balance
as
at
31
11 743
103 821
47 993
1 634
11 523
-
176 714
December 2024
Book value:
Balance
on
31
6 403
127 521
14 975
397
2 761
13 477
165 534
December 2022
Balance
on
31
6 122
134 610
13 779
975
3 217
23 483
182 186
December 2023
Balance
as
at
31
5 963
146 994
17 221
773
5 657
18 117
194 725
December 2024
The amounts of the Group's and the Company's depreciation expenses were included in operating expenses in the profit
and loss and other comprehensive income statements (depreciation and amortisation and other expenses).
Part of the Group’s property, plant, and equipment, with an acquisition cost of EUR 33,987 thousand as of 31 December
2024 (EUR 34,694 thousand as of 31 December 2023), and of the Company’s assets, valued at EUR 33,987 thousand
as of 31 December 2024 (EUR 34,694 thousand as of 31 December 2023), was fully depreciated but remains in use.
After assessing internal and external indicators, the management of the Group and the Company did not identify any
significant additional impairment of property, plant, and equipment in 2024.
26
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2024 Consolidated and Company Financial
Statements
(in thousands euro, unless specified otherwise)
On 31 December 2024 and 31 December 2023, the Group's and the Company's construction in progress consists mainly
of the reconstruction and overhaul of boiler plants and heat supply networks.
As of 31 December 2024, under loan agreements with the Ministry of Finance of the Republic of Lithuania, with a final
maturity term in 2034, Heat Supply Pipelines and Collectors were pledged, with a carrying amount of EUR 5,628 thousand
(EUR 5,660 thousand in 2023). As of 31 December 2023, real estate was also mortgaged to SEB Bank under a loan
agreement with a repayment term in 2024, with a carrying amount of EUR 2,888 thousand.
6. Investments in subsidiaries and loans to group companies
2024-12-31
2023-12-31
Investments in
Acquisiti
Impairment
Book value
Acquisiti
Impairment
Book value
subsidiaries
on price
on price
UAB GO Energy LT
2 763
-
2 763
2 763
-
2 763
Total:
2 763
-
2 763
2 763
-
2 763
Loans to entities of the entities group
As of 31 December 2024 and 31 December 2023, the Company had not provided loans to the Group companies.
7. Right-of-use assets
Movements of assets held under usufruct during the reporting period and previous periods:
Group
Company
Assets managed under
Assets
managed
under
the right of use
the right of use
Acquisition value:
Balance on 31 December 2022
1 255
1 041
Recognition of the right to use an asset
-
-
Disposals, write-offs (change in value)
(137)
(25)
Balance on 31 December 2023
1 118
1 016
Acquisitions
267
22
Recognition of the right to use an asset
-
-
Disposals, write-offs (change in value)
(70)
(70)
Balance as at 31 December 2024
1 315
968
Amortization:
Balance on 31 December 2022
114
157
Amortisation per year
23
20
Disposals, write-offs (change in value)
(103)
(77)
Balance on 31 December 2023
34
100
Amortisation per year
115
19
Disposals, write-offs (change in value)
(5)
(5)
Balance as at 31 December 2024
144
114
Book value:
Balance on 31 December 2023
1 083
916
Balance as at 31 December 2024
1 171
854
8. Investments in associates
In the item of other financial assets, the Company records 75 460 units of shares in UAB Kauno miesto paslaugų centras.
From 2024, the shares of the Associate Company are consolidated using the equity method. By 31 December 2024, the
share of profit recognised in investment activity income amounted to EUR 89 thousand.
27
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2024 Consolidated and Company Financial
Statements
(in thousands euro, unless specified otherwise)
Group
Company
2024-12-31
2023-12-31
2024-12-31
2023-12-31
Shares in Associates and Share of Profit
164
75
75
75
164
75
75
75
9. Inventories
Group
Company
2024-12-31
2023-12-31
2024-12-31
2023-12-31
Technological fuels
1 268
1 162
1 268
1 162
Spare parts
435
731
435
383
Materials
329
333
329
333
Goods for resale
109
-
-
-
To be deducted: write-down to net
2 141
2 226
2 032
1 878
realisable value at the end of the
period
(380)
(449)
(380)
(449)
Carrying amount of inventories
1 761
1 777
1 652
1 429
The write-down of the Group's and the Company's inventories to net realisable value as at 31 December 2024 amounted
to EUR 380 thousand (on 31 December 2023: EUR 449 thousand). The change in inventory write-downs to net realisable
value in 2024 and 2023 is included in the inventory impairment expense line item in the Group’s and the Company’s profit
(loss) and other comprehensive income statements.
10. Amounts receivable within one year
10.1. Trade receivables
Group
Company
2024-12-31
2023-12-31
2024-12-31
2023-12-31
Trade receivables
20 409
18 799
20 193
17 943
To be deducted: expected credit
(4 711)
(4 362)
(4 711)
(4 322)
losses
15 698
14 437
15 482
13 621
Change in impairment of doubtful receivables as at 31 December 2024 and 31 December 2023 in the Group's and the
Company's Statements of Profit and Loss and Other Comprehensive Income is included in the item of impairment
charges on receivables. Impairment of doubtful receivables is measured based on expected credit losses.
The Group's and the Company's receivables from customers are interest-free and normally have a maturity of 30 days
or individually agreed.
28
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2024 Consolidated and Company Financial
Statements
(in thousands euro, unless specified otherwise)
Change in the Group's and Company's expected credit losses on trade receivables:
Group
Company
Balance on 31 December 2022
4 826
4 786
Recognised (reversed) expected credit losses
(400)
(400)
Written off
(64)
(64)
Balance on 31 December 2023
4 362
4 322
Recognised (reversed) expected credit losses
472
472
Written off
(123)
(83)
Balance as at 31 December 2024
4 711
4 711
In 2024, the Group wrote off EUR 123 thousand and the Company wrote off EUR 83 thousand as non-recoverable
debts (in 2023: EUR 64 thousand and EUR 64 thousand, respectively).
10.2. Other receivables
Group
Company
2024-12-31
2023-12-31
2024-12-31
2023-12-31
Recoverable taxes
137
817
88
817
Other receivables
808
2 213
814
2 215
Deducted credit losses (-)
(85)
(275)
(85)
(275)
860
2 755
817
2 757
On 31 December 2024 and 31 December 2023 the Group's and the Company's other receivables consisted of taxes
receivable from the State, debt owed by municipalities for compensation to low-income families, receivables for
inventories sold (scrap metal, heating system equipment) and services rendered (collector maintenance services, etc.).
The Group's and the Company's other receivables are interest-free and are generally due within 30 to 45 days.
No impairment is calculated on receivables not overdue as management does not consider that there is any indication
that debtors will be unable to meet their obligations.
Credit risk
The Group and the Company are not exposed to significant concentrations of credit risk as they deal with a large number
of customers.
Movement in impairment in value of other receivables of the Group and the Company:
Group
Company
Balance on 31 December 2022
315
315
Recognition of expected credit losses
(40)
(40)
Balance on 31 December 2023
275
275
Recognised (reversed) probable credit losses
(190)
(190)
Balance as at 31 December 2024
85
85
29
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2024 Consolidated and Company Financial
Statements
(in thousands euro, unless specified otherwise)
11. Cash and cash equivalents
Group
Company
2024-12-31
2023-12-31
2024-12-31
2023-12-31
Cash in transit
330
700
330
700
Cash in the bank
10 744
7 847
9 270
6 615
11 074
8 547
9 600
7 315
As of 31 December 2024, a cash balance of EUR 4,981 thousand (on 31 December 2023 – EUR 1,073 thousand) was
pledged to banks as collateral for loans received.
12. Changes in equity
Legal reserve
The statutory reserve is required under the legislation of the Republic of Lithuania. At least 5% of net profits,
calculated in accordance with International Financial Reporting Standards, must be transferred to the reserve
annually until it reaches 10% of the authorised capital. The statutory reserve may not be distributed as dividends but
can be used to cover future losses.
In 2024, when distributing the profit for 2023, the mandatory reserve was additionally formed only in the Subsidiary,
with EUR 44 thousand allocated. The Company's mandatory reserve is fully formed.
Other reserves
By shareholder decision, the Company allocated EUR 75 thousand from profits to a reserve for donations.
Annual allowances
No annual bonuses were granted in 2023 or 2024.
Dividends
In 2024, no dividends were paid (in 2023, dividends of EUR 3,000 thousand were distributed by shareholder decision
– dividends per share amounted to EUR 0.07 per share).
13. Financial debts
All loans of the Group and the Company are accounted for and repaid in euro. The weighted average interest rate on
outstanding long-term loans (in percentage) as of 31 December 2024 and 31 December 2023 was:
Group
Company
2024-12-31
2023-12-31
2024-12-31
2023-12-31
Long-term
3,61
4,41
3,61
4,41
Repayment terms of long-term loans:
Group
Company
2024-12-31
2023-12-31
2024-12-31
2023-12-31
Long-term financial debts (loans):
62 658
54 736
62 658
54 736
Payable between 1 and 5 years
21 368
22 506
21 368
22 506
Payable after 5 years
41 290
32 230
41 290
32 230
Current portion of long-term loans
4 078
3 231
4 078
3 231
66 736
57 967
66 736
57 967
30
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2024 Consolidated and Company Financial
Statements
(in thousands euro, unless specified otherwise)
Interest payable to financial institutions, amounting to EUR 244 thousand and EUR 244 thousand, is accounted for by
the Group and the Company under the Accrued Expenses section of the balance sheet (31 December 2023 – EUR 227
thousand and EUR 227 thousand, respectively).
In 2024, EUR 688 thousand in interest expenses were capitalised. In 2023, EUR 553 thousand in interest expenses were
capitalised.
Detailed information on the Group’s and the Company’s long-term loans as of 31 December 2024:
Loan
To be
Loan
balance as
refunded in
Credit institution
Date of contract
amount in
Maturity
of 31
2025,
EUR
December
thousand
thousand
2024 in EUR
thousand
EUR
1
EIB***
2020-08-07
15 000
2035-08-24
10 750
1 000
2
EIB***
2020-08-07
12 000
2036-08-18
10 642
906
3
EIB***
2020-08-07
14 000
2037-08-22
13 472
1 056
4
EIB***
2020-08-07
14 000
2038-09-29
14 000
528
5
EIB***
2024-10-30
12 000
2039-10-31
12 000
-
6
LR Ministry of
2010-10-26
807
385
38
Finance*
2034-03-15
7
LR Ministry of
2010-04-09
2 410
936
94
Finance*
2034-03-15
8
LR Ministry of
2014-01-15
793
416
42
Finance*
2034-12-01
9
LR Ministry of
2014-03-31
7 881
4 135
414
Finance*
2034-12-01
10
AB SEB bankas
2024-09-12
4 127
2024-11-30
-
-
66 736
4 078
* Ministry of Finance of the Republic of Lithuania; ** European Investment Bank.
On 12 September 2024, AB Kauno energija signed a EUR 35 million long-term loan agreement with the European
Investment Bank. The loan funds will finance investments in 2024–2026, including the modernisation of existing pipelines,
the construction of new heat supply networks, the reconstruction of biomass boiler plants, and the installation of heat
pumps, heat storage tanks, and solar power plants. The investments will enhance energy efficiency and reduce fossil
fuel consumption. As of the financial statement preparation date, EUR 12 million of the loan amount had been utilised.
The EIB stipulated that the Company must maintain a net financial debt-to-EBITDA ratio not exceeding 5.0 on a semi-
annual basis. Under the loan agreements, the Company's equity ratio (total equity/total assets) must be at least 35%. As
at 31 December 2024, the Company has met its targets.
Loan agreements contain certain restrictions. The Company may not grant dividends, issue and/or obtain new loans,
make grants, sell or lease mortgaged assets without the written consent of the banks.
On 26 March 2024, the Company signed a credit agreement with AB SEB Bank to finance working capital, under which
a EUR 5 million overdraft limit was approved for a 12-month period. As of the financial statement preparation date, the
entire utilised overdraft amount had been repaid.
14. Lease
The Group’s and the Company’s lease obligations:
Group
Company
2024-12-31
2023-12-31
2024-12-31
2023-12-31
Within one year
16
38
12
35
after one year
1 172
1 121
842
950
Total lease liabilities
1 188
1 159
854
985
The Group's and the Company's assets leased under lease agreements consist of land with a lease term of 26 to 99
years.
In accordance with IFRS 16, the Group and the Company recognised depreciation and interest costs associated with the
lease in question, rather than operating lease costs. Over the 12-month period ended 31 December 2024, the Group
31
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2024 Consolidated and Company Financial
Statements
(in thousands euro, unless specified otherwise)
recognised depreciation costs of 26 thousand euro and rental interest of 30 thousand euro, the Company recognised
depreciation costs of 19 thousand euro and rental interest of 22 thousand euro.
15. Grants and subsidies
Breakdown of grants and subsidies for 2024:
Group
Company
2024-12-31
2023-12-31
2024-12-31
2023-12-31
Opening balance at the beginning of the
reporting period
30 850
32 211
30 850
32 211
Received during the period
627
-
623
-
Written off
(63)
-
(63)
-
Transferred to results
(5)
-
(5)
-
Amortization
(1 551)
(1 361)
(1 551)
(1 361)
Balance at the end of the reporting
period
29 858
30 850
29 854
30 850
16. Employee benefit liability
Every worker who leaves their job and reaches retirement age is entitled to receive between 0.5 and 2 months' salary, in
accordance with the laws of the Republic of Lithuania and the Collective Agreement.
The Group's and the Company's employee benefits liability were as follows:
Group
Company
Employee
benefit
liability
at
the
2024-12-31
2023-12-31
2024-12-31
2023-12-31
beginning of the period
548
464
527
452
Paid
(22)
(95)
(22)
(95)
Formed
165
179
157
170
Employee benefit liability at the end of
the period:
691
548
662
527
Long-term portion
449
385
420
365
Short-term portion
242
163
242
162
When calculating long-term employee benefits, the Group and the Company assessed the mortality rate in Lithuania,
discount rate, retirement age, age and turnover of employees, salary growth, inflation rate and other factors. The key
assumptions used to determine the planned benefit obligation of the Group and the Company are set out below:
2024-12-31
2023-12-31
Discount rate, %
2,943
3,407
Employee turnover rate, per cent
9,828
9,803
Planned annual salary increase
7 per cent.
4.9 per cent.
The actuarial gains and losses related to these liabilities are presented under the item of operating expenses,
remuneration and social security and in the Statements of Financial Position under the current portion of the liability for
long-term employee benefits and the liability for employee benefits.
32
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2024 Consolidated and Company Financial
Statements
(in thousands euro, unless specified otherwise)
17. Other provisions
As of 31 December 2024, the Company recognised a provision of EUR 696 thousand (31 December 2023 – EUR 1,573
thousand) to cover differences between the electricity, purchased heat, fuel, and actual production costs included in the
heat sale price and the actual costs incurred, i.e., for future price reduction obligations.
18. Sales revenue
The Group and the Company are engaged in the supply of thermal energy, maintenance of building heating and hot
water supply systems, electricity generation, and other activities. A part of the residents selected the Company as their
hot water supplier. These activities are closely interlinked and, for management purposes, the Group and the Company
are considered to be organised in a single segment – the supply of thermal energy.
The Group's and the Company's activities are seasonal, with the majority of revenue generated during the heating
season, which starts in October and ends in April.
Sales revenues by the Group and the Company activities are presented below:
Group
Company
2024
2023
2024
2023
Heat supply
76 989
78 660
76 989
78 660
Hot water supply
6 759
5 467
6 759
5 467
Maintenance of hot water metering devices
1 311
551
712
551
Maintenance of collectors
379
348
348
348
Maintenance of heating and hot water systems in buildings
9
17
9
17
Cooling supply
-
5
-
5
Future price reduction commitments
(696)
-
(696)
-
84 751
85 048
84 121
85 048
Sales revenues by consumer groups of the Group and the Company are presented below:
Group
Company
2024
2023
2024
2023
Residents
63 079
63 047
63 079
63 047
Other users
10 384
9 561
9 755
9 561
Budgetary organisations financed from the state budget
5 706
5 705
5 706
5 705
Budgetary organisations financed from municipal budgets
3 590
3 856
3 589
3 856
Institutions financed by territorial sickness funds
2 202
2 313
2 202
2 313
Industrial users
486
566
486
566
Future price reduction commitments
(696)
-
(696)
-
84 751
85 048
84 121
85 048
19. Other costs
Other costs include:
Group
Company
2024
2023
2024
2023
Equipment inspection and maintenance
218
205
218
205
Maintenance of collectors
365
362
365
362
Ash recovery costs
123
173
123
173
Information Technologies costs
182
123
182
123
Consulting Services
147
255
126
255
Employee-related costs
198
119
198
119
Invoicing costs
111
111
111
111
Membership fee
42
111
42
111
Maintenance of fixed assets and related services
136
102
136
102
Transport costs
100
91
100
91
33
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2024 Consolidated and Company Financial
Statements
(in thousands euro, unless specified otherwise)
Debt collection costs
122
141
122
141
Insurance
108
107
108
107
Communication costs
77
54
75
54
Costs for advertising
153
93
149
93
Audit costs
40
33
40
33
Rental of equipment and machinery
69
58
57
58
Sponsorship
65
143
65
143
Other costs
372
496
319
591
2 628
2 777
2 536
2 872
20. Other operating income and expense
Other operating income includes:
Group
Company
Other operational incomes
2024
2023
2024
2023
Inventories sold
1 753
1 247
897
238
Miscellaneous services rendered
617
1 075
617
284
Compensation received
19
-
8
-
Profit from the sale of fixed assets
6
14
6
14
Other
683
524
185
508
3 078
2 860
1 713
1 044
Other operating expenses include:
Group
Company
Other operational expenses
2024
2023
2024
2023
Cost of miscellaneous services rendered
(540)
(173)
(292)
(173)
Inventories sold
(615)
(111)
(153)
(111)
Other costs
(78)
(73)
(78)
(73)
Sale of fixed assets, write-off
-
(23)
-
(23)
Other
(181)
(106)
(43)
(112)
(1 414)
(486)
(566)
(492)
The Group and the Company lease real estate, supply technical water, perform maintenance of heating equipment and
provide transport services.
21. Financial activity
Interest and other similar income
Group
Company
2024
2023
2024
2023
Profit share of associates
89
-
-
-
Default
interest
received on
overdue
48
466
48
466
receivables
Interest
546
228
519
222
683
694
567
688
Interest and other similar expenses
Group
Company
2024
2023
2024
2023
Interest
(1 837)
(1 347)
(1 841)
(1 343)
Interest / penalties
(2)
(1)
(2)
(1)
(1 839)
(1 348)
(1 843)
(1 344)
34
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2024 Consolidated and Company Financial
Statements
(in thousands euro, unless specified otherwise)
22. Income tax
22.1. Income tax
Corporate income tax calculation:
Group in 2024
Grupė 2023 m.
Theoreti
Theoreti
cal
cal
corporat
corporat
Corporat
Taxable value,
e
Corporat
Taxable value,
e
e
thousand EUR
income
e income
thousand EUR
income
income
tax
tax %
tax
tax %
value,
value,
thousan
thousan
d EUR
d EUR
Profit before
taxation
7 893
1 184
15,00
6 977
1 047
15,00
Increase in the
corporate income
tax base due to non-
deductible expenses
1 807
272
3,43
(321)
(48)
(0,69)
under the Law on
Profit Tax
Reduction of the
corporate income
tax base due to non-
taxable income
(504)
(76)
(0,96)
(482)
(72)
(1,04)
under the Law on
Profit Tax
Reduction of the
corporate income
(130)
(20)
(0,25)
(283)
(42)
(0,61)
tax base due to the
donation relief
Reduction (-) or
increase (+) of the
corporate income
tax base due to
depreciation
(3 510)
(527)
(6,67)
(3 137)
(471)
(6,74)
differences under
the Law on Profit
Tax
Total calculated
5 556
833
10,56
2 754
413
5,92
taxable profit
Reduction of taxable
profit by
accumulated tax
(3 611)
(542)
(6,86)
(1 407)
(211)
(3,02)
losses (max. 70%)
Reduction of taxable
profit by the applied
(1 548)
(232)
(2,94)
-
-
-
Investment project
relief
Adjustment of
income tax for
previous periods
(603)
(90)
(1,15)
-
-
-
(203)
(30)
(0,39)
1 347
202
2,9
Total taxable profit
Effective corporate
income tax rate for
the period
(0,39)
2,90
35
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2024 Consolidated and Company Financial
Statements
(in thousands euro, unless specified otherwise)
Company in 2024
Company in 2023
Theoretic
Theoretic
al
al
corporat
% of
corporat
% of
Taxable value,
e income
theoretica
Taxable value,
e income
theoretic
thousand EUR
tax
l tax
thousand EUR
tax
al tax
value,
value,
thousand
thousand
Profit before
EUR
EUR
taxation
7 680
1 152
15,00
6241
936
15,00
Increase in the
corporate income tax
base due to non-
deductible expenses
under the Law on
Profit Tax
1 533
230
2,99
(330)
(50)
(0,79)
Reduction of the
corporate income tax
base due to non-
taxable income under
the Law on Profit Tax
(414)
(62)
(0,81)
(481)
(72)
(1,16)
Reduction of the
corporate income tax
(130)
(20)
(0,25)
(283)
(42)
(0,68)
base due to the
donation relief
Reduction (-) or
increase (+) of the
corporate income tax
base due to
depreciation
(3 510)
(527)
(6,86)
(3 137)
(471)
(7,54)
differences under the
Law on Profit Tax
Total calculated
5 159
774
10,08
2 010
302
4,83
taxable profit
Reduction of taxable
profit by accumulated
(3 611)
(542)
(7,05)
(1 407)
(211)
(3,38)
tax losses (max.
70%)
Reduction of taxable
profit by the applied
(1 548)
(232)
(3,02)
-
-
-
Investment project
relief
Adjustment of income
(603)
(90)
(1,18)
-
-
-
tax for previous
periods
Total taxable profit
(603)
(90)
(1,18)
603
90
1,45
Effective corporate
income tax rate for
the period
(1,18)
1,45
22.2. Deferred income tax
Group
Company
Deferred income tax asset
2024
2023
2024
2023
Tax losses
3 324
3 441
3 324
3 441
Accruals
233
160
229
160
Change in value of assets
831
716
827
716
Investment allowance
988
-
988
-
Deferred income tax asset
5 376
4 317
5 368
4 317
Deferred income tax liability
36
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2024 Consolidated and Company Financial
Statements
(in thousands euro, unless specified otherwise)
Depreciation differences
(12 063)
(10 833)
(12 063)
(10 833)
Deferred profit tax liabilities
(12 063)
(10 833)
(12 063)
(10 833)
Deferred income tax, net value
(6 687)
(6 516)
(6 695)
(6 516)
As of 31 December 2024, deferred corporate income tax is recognised at a 16% tax rate due to amendments to the
Republic of Lithuania Law on Corporate Income Tax coming into force in 2025 (as of 31 December 2023 – 15%).
22.3. Total corporate income tax:
Group
Company
2024
2023
2024
2023
Components of income tax expense
Income tax expenses (costs) of the reporting year
30
(202)
90
(90)
Deferred income tax expense (income)
(170)
(697)
(178)
(697)
Income (expense) from income taxes recognised in
the statement of comprehensive income
(140)
(899)
(88)
(787)
Effective corporate income tax rate (%)
(1,77)
(12,89)
(1,15)
(12,61)
23. Basic and diluted earnings per share
The Group's basic and diluted earnings per share calculations are presented below:
Group
Company
2024
2023
2024
2023
Profit for the reporting period
7 753
6 078
7 592
5 454
Number of shares (thousands), beginning of period
42 802
42 802
42 802
42 802
Number of shares (thousands), end of period
42 802
42 802
42 802
42 802
Weighted average number of ordinary shares in issue
42 802
42 802
42 802
42 802
(thousands)
Basic and diluted earnings per share (EUR)
0,18
0,14
0,18
0,13
24. Financial assets, financial liabilities, and risk management
Credit risk
The Group and the Company are not exposed to significant concentrations of credit risk as they deal with a large number
of buyers
Group
Company
Number of unique clients (units)
2024
2023
2024
2023
Natural persons
121 174
120 348
120 976
120 152
Other legal entities
3 972
3 797
3 897
3 704
Legal entities financed from municipal and state
562
561
559
559
budgets
125 708
124 706
125 432
124 415
37
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2024 Consolidated and Company Financial
Statements
(in thousands euro, unless specified otherwise)
Receivables due from customers of the Group and the Company by customer groups:
Group
Company
Customer distribution (thousand EUR)
2024
2023
2024
2023
Natural persons
15 184
13 538
15 176
13 524
Other legal entities
3 152
3 551
2 946
2 710
Legal entities financed from municipal and state
2 073
1 710
2 071
1 709
budgets
Recognition of expected credit losses
(4 711)
(4 362)
(4 711)
(4 322)
15 698
14 437
15 482
13 621
As at the date of the financial statements, for trade and other receivables that are neither past due nor impaired,
management believes that there is no indication that the debtors will not meet their payment obligations as the receivable
balances are under constant control. The Group and the Company consider that the maximum exposure is the amount
of trade and other receivables less any impairment losses recognised at the statement of financial position date (Note
10).
Cash and cash equivalents in banks rated on a long-term basis *:
Group
Company
2024
2023
2024
2023
Aa3
6 455
2 304
4 981
1 072
A3
4 252
5 479
4 252
5 479
Baa1
31
43
31
43
Unrated bank
336
21
336
21
11 074
7 847
9 600
6 615
*- External borrowing ratings determined by the Moody’s international credit rating agency.
The credit risk arising from the Group's and the Company's other financial assets consisting of cash and cash equivalents.
The Group's and the Company's potential credit risk arises from the default of the counterparties, with the maximum
potential exposure being equal to the carrying amount of these instruments. The total maximum credit risk exposure of
the Group and the Company amounts to EUR 26,772 thousand and EUR 25,082 thousand, respectively (as of 31
December 2023 – EUR 22,284 thousand and EUR 20,236 thousand, respectively).
The interest rates on the Group’s and the Company’s long-term financial liabilities are periodically reviewed based on
market conditions. Although part of the liabilities has a fixed margin, the main portion of the interest is variable and
depends on market indicators, meaning the carrying amount remains close to the fair value. The classification of financial
instruments by level within the fair value hierarchy in 2024 and 2023 is presented below:
Group 2024-12-31
Level of the fair value hierarchy
Total book
value:
Assets
Level 1
Level 2
Level 3
Shares in Associates and Share of Profit
-
-
164
164
Amounts receivable after one year
58
58
Trade receivables
-
-
15 698
15 698
Other debtors
-
-
860
860
Term deposits
500
500
Cash and cash equivalents
11 074
-
-
11 074
Total financial assets
11 574
-
16 780
28 354
38
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2024 Consolidated and Company Financial
Statements
(in thousands euro, unless specified otherwise)
Liabilities
Financial debts and leasing
-
(67 924)
-
(67 924)
Trade debts and other current liabilities
-
-
(12 530)
(12 530)
Total financial liabilities
-
(67 924)
(12 530)
(80 454)
Company 2024-12-31
Level of the fair value hierarchy
Total book
value:
Assets
Level 1
Level 2
Level 3
Shares in Associates and Share of Profit
-
-
75
75
Trade receivables
-
-
15 482
15 482
Other debtors
-
-
817
817
Cash and cash equivalents
-
9 600
-
9 600
Total financial assets
-
9 600
16 374
25 974
liabilities
Financial debts and leasing
(67 590)
-
-
(67 590)
Trade debts and other current liabilities
-
-
(12 690)
(12 690)
Total financial liabilities
(67 590)
-
(12 690)
(80 280)
Group 2023-12-31
Level of the fair value hierarchy
Total book
Assets
Level 1
Level 2
Level 3
value:
Other financial assets
-
-
75
75
Amounts receivable after one year
128
128
Trade receivables
-
-
14 437
14 437
Other debtors
-
-
2 755
2 755
Cash and cash equivalents
-
8 547
8 547
Total financial assets
-
8 547
17 395
25 942
liabilities
Financial debts and leasing
(59 126)
-
-
(59 126)
Trade debts and other current liabilities
-
-
(14 443)
(14 443)
Total financial liabilities
(59 126)
-
(14 443)
(73 569)
Company 2023-12-31
Level of the fair value hierarchy
Total book
value:
Assets
Level 1
Level 2
Level 3
Other financial assets
-
-
75
75
Trade receivables
-
-
13 621
13 621
Other debtors
-
-
2 757
2 757
Cash and cash equivalents
7 315
-
7 315
Total financial assets
7 315
-
16 453
23 768
liabilities
Financial debts and leasing
-
(58 951)
-
(58 951)
Trade debts and other current liabilities
-
-
(14 473)
(14 473)
Total financial liabilities
-
(58 951)
(14 473)
(73 424)
39
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2024 Consolidated and Company Financial
Statements
(in thousands euro, unless specified otherwise)
Interest rate risk
The Group's and the Company's long-term loans, other than those with the Ministry of Finance of the Republic of
Lithuania, are at variable interest rates (3 month EURIBOR). The Group and the Company are exposed to interest rate
risk.
The Company's long-term loans, with the exception of loans received from the Ministry of Finance of the Republic of
Lithuania, have a variable interest rate, which depends on EURIBOR fluctuations.
A sensitivity analysis determined how a 1% change in the interest margin would impact the Group’s and the Company’s
results:
EURIBOR +1% would increase interest expenses (reduce accounting profit) by EUR 474 thousand;
EURIBOR -1% would decrease interest expenses (improve accounting profit) by EUR 474 thousand.
Liquidity risk
Liquidity risk is the risk that the Company or the Group will not be able to meet its financial obligations when they fall
due. Liquidity risk is very low as the Group and the Company are both active in state-regulated heat supply activities.
Heat generators have a 30-day settlement period. The contractual maturity of the Group's and the Company's financial
liabilities to banks and suppliers based on undiscounted payments:
2024-12-31
Group
Up to 3
3 months
From 1 to
After 5
Total
On request
month
to 1 year
5 years
m.
Amounts receivable
-
16 616
-
58
-
16 674
Term deposits
500
500
Cash and cash equivalents
-
11 074
-
-
-
11 074
Trade debtors
-
(12 387)
-
-
-
(12 387)
Loans received
-
(988)
(3 090)
(21 368)
(41 290)
(66 736)
Share of long-term loan
-
(624)
(1 717)
(7 579)
(6 256)
(16 176)
interest
Payments of finance leases
(4)
(12)
(64)
(1 108)
(1 188)
-
13 687
(4 319)
(28 953)
(48 654)
(68 239)
2024-12-31
Company
On request
Up to 3
3 months
From 1 to
After 5
Total
month
to 1 year
5 years
m.
Amounts receivable
-
16 299
-
1
-
16 300
Cash and cash equivalents
-
9 600
-
-
-
9 600
Trade debtors
-
(12 547)
-
-
-
(12 547)
Loans received
-
(988)
(3 090)
(21 368)
(41 290)
(66 736)
Share of long-term loan
-
(624)
(1 717)
(7 579)
(6 256)
(16 176)
interest
Finance lease
-
(3)
(9)
(48)
(794)
(854)
-
12 361
(3 099)
(28 994)
(48 340)
(70 413)
Foreign currency risk
All purchases, sales and financial debts of the Group and the Company are denominated in euro, therefore, there is no
significant foreign currency risk.
Capital management
The main objective of capital management is to ensure that the Group and the Company meet the external capital
requirements and that they maintain appropriate capital ratios in order to sustain their business and maximise the benefits
for shareholders.
The Group and the Company manages its capital structure and makes adjustments to it in the light of changes in
economic conditions and in accordance with their operational risk characteristics. In order to maintain or change the
capital structure, the Group and the Company may issue new shares, repay the capital to the shareholders. There were
no changes to the capital management objectives, policy or process as of 31 December 2024 and 31 December 2023.
40
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2024 Consolidated and Company Financial
Statements
(in thousands euro, unless specified otherwise)
The main objective of capital management is to ensure that the Group and the Company meet the external capital
requirements and that they maintain appropriate capital ratios in order to sustain their business and maximise the benefits
for shareholders.
The Group and the Company manages its capital structure and makes adjustments to it in the light of changes in
economic conditions and in accordance with their operational risk characteristics. In order to maintain or change the
capital structure, the Group and the Company may issue new shares, repay the capital to the shareholders. There were
no changes to the capital management objectives, policy or process as of 31 December 2024 and 31 December 2023.
The Law on Joint-Stock Companies of the Republic of Lithuania requires that the Group's and the Company's
shareholders' equity shall not be less than 50% of its share capital. The Group and the Company meet the requirements
of the Law on Companies of the Republic of Lithuania with respect to equity capital. There are no other externally imposed
capital requirements for the Group and the Company.
The Group and the Company measure capital using the ratio of liabilities to equity. Equity consists of ordinary shares,
reserves and retained earnings attributable to equity holders of the parent company. The Group's and the Company's
management have not set a specific target ratio for the ratio of liability to equity, however, the following current indicators
are considered to be sufficiently good performance indicators:
Group
Company
2024
2023
2024
2023
Non-current liabilities (including deferred taxes and
grants and subsidies)
100 853
93 608
100 498
93 417
Current liabilities
22 978
22 326
22 941
22 105
Liabilities, total:
123 831
115 934
123 439
115 522
Equity
105 359
97 606
104 316
96 723
Ratio of liabilities* to equity (%))
117,53
118,78
118,33
119,44
Liabilities include all non-current (including deferred income tax liability and grants (deferred income)) and current
liabilities.
Market risk
External risk factors affecting the Group's and the Company's core business: the economic crisis, rising fuel prices,
unfavourable legislation and regulations from the government and other authorities, local government decisions, pricing
policies for products sold, inflation and the general economic downturn reducing the income of heat consumers, cyclical
nature of operations, environmental requirements.
To mitigate risks, the Company applies a risk management model that includes risk identification, assessment,
management and monitoring. An additional debt administration plan on the management of potential consumer
insolvency risks has been prepared and implemented. The planned plan of additional measures is consistently
implemented on a monthly basis, with good results and above projections.
25. Commitments and contingencies not included in the balance sheet
On 26 February 2024, AB Kauno energija filed a complaint with the Regional Administrative Court regarding the decisions
of the National Energy Regulatory Council (NERC), Decision No. O3E-141 "On the determination of the revenue level
for heat production and/or supply for the first year of validity of the base revenue level for heat production and/or supply
for AB Kauno energija":
Case subject matter: AB Kauno energija (the Claimant) is challenging the decisions of the National Energy Regulatory
Council (NERC) (the Respondent) in court: decision No. O3E-84 dated 26 January 2024, decision No. O3E-141 dated
9 February 2024, and decision No. O3E-213 dated 23 February 2024.
Claim amount: 2,587.50 thousand Eur.
Case status: On 26 February 2024, the claimant filed a complaint with the Regional Administrative Court regarding the
NERC decisions. The first-instance court dismissed the complaint of AB Kauno energija. On 5 January 2025, AB
Kauno energija filed an appeal with the court. The case in the appellate instance has not yet been examined.
The dispute does not impact the financial statements, as the contested tariffs are currently applied in practice.
26. Related party transactions
The parties are considered to be related if one party can control the other party or has significant influence over the other
party in making financial or operational decisions.
41
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2024 Consolidated and Company Financial
Statements
(in thousands euro, unless specified otherwise)
In 2024 and 2023, the Group and the Company did not have any significant transactions with other companies controlled
by Kaunas City Municipality, except for the purchase or provision of utility services. Transactions with Kaunas City
Municipality and companies controlled by Kaunas City Municipality were carried out at market prices.
In 2024 and 2023, the Group's and the Company's transactions with Jurbarkas City Municipality, Kaunas City Municipality
and companies financed and controlled by Kaunas City Municipality, and their debts and liabilities as at the end of the
periods were as follows:
2024
Purchases
Sales
Amounts
Amounts
Kaunas City Municipality, companies
receivable
payable
financed and fully managed by it
2 402
3 892
1 177
534
Jurbarkas district municipality
23
274
31
7
2023
Purchases
Sales
Amounts
Amounts
receivable
payable
Kaunas City Municipality, companies
1 930
4 832
1 141
467
financed and fully managed by it
Jurbarkas district municipality
19
282
1
4
Sales include the amounts of reimbursements for housing heating costs, cold water and sewage costs, and hot water
costs for financially challenged residents.
On 31 December 2024 and 31 December 2023 the Company's transactions with subsidiaries and the balance sheet
balances at the end of the period were as follows:
Amounts
Amounts
UAB GO Energy LT
Purchases
Sales
receivable
payable
2,024 m
2 935
225
27
377
2,023 m
1 963
138
19
225
UAB GO Energy LT provides real estate management services to AB Kauno energija and participates in unregulated
energy development projects together with its parent company.
27. Management's salary and other benefits
On 31 December 2024 the Group's and the Company's management consists of 2 and 1 persons (2 and 1 as at 31
December 2023), respectively. As of 31 December 2024, the Company's Board consists of 3 members, and the
Supervisory Council consists of 3 members (as of 31 December 2023 – 3 and 3, respectively).
.
Group
Company
2024
2023
2024
2023
Wages and salaries charged to the
management
176
103
133
97
The Board
104
78
104
78
The Supervisory Board
90
44
90
44
Reimbursements of employee
benefits calculated for the
management
-
-
-
-
During 2024 and 2023, no loans, guarantees, other payments, accrued amounts, or asset transfers were granted to the
Group’s and the Company’s management.
28. Events after the date of the balance sheet
There have been no other events after the reporting date that could have a material effect on the financial statements
or that should be disclosed in the financial statements.
AB Kauno energija
Code of legal entity 235014830
Raudondvario av. 84
Kaunas, Lithuania
AB KAUNO ENERGIJA CONSOLIDATED
MANAGEMENT REPORT OF THE YEAR 2024
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2024
42
CONTENTS
1. Reporting period of the consolidated management report ...................................................................... 43
2. Companies composing the group of companies and their contact details .............................................. 43
3. Nature of core activities of the companies composing the group of companies ..................................... 44
4. Issuer’s agreements with credit institutions ............................................................................................. 44
5. Trade in securities of companies composing the group of companies in regulated markets .................. 44
6. Overview of the condition, performance, and development of the group of companies ......................... 45
6.1. Overview of the condition, performance, and development of the group of companies ......................... 45
6.2. Description of exposure to key risks and uncertainties the company confront with and their impact on
activity results ................................................................................................................................................... 48
7. Analysis of financial and non-financial performance results, information related to environmental issues
51
8. References and additional explanations .................................................................................................. 55
9. Significant events after the end of the reporting period ........................................................................... 56
10. Plans and forecasts of activities of the group of companies ................................................................... 56
11. Information on research and development activities ............................................................................... 56
12. Information on own shares acquired and held by the issuer ................................................................... 57
13. Information on the aims of financial risk management, hedging instruments in use ............................... 57
14. Information on the issuer’s subsidiary undertakings ............................................................................... 57
15. Structure of authorized capital ................................................................................................................. 58
16. Data on shares issued by the issuer ....................................................................................................... 58
17. Information on the issuer’s shareholders................................................................................................. 60
18. Employees ............................................................................................................................................... 62
19. Procedure for amending the issuer’s statutes ......................................................................................... 64
20. Issuer’s management bodies ................................................................................................................... 65
20.1. Data on the committees in the company ................................................................................................. 66
20.2. Information on the members of the company’s supervisory board: ........................................................ 66
20.3. Information on the members of the company’s management board ....................................................... 67
20.4. Information on the general manager and chief accountant of the company: .......................................... 68
21. Information on significant agreements ..................................................................................................... 68
22. Information on agreements of the issuer and its managerial body members or employees ................... 68
23. Information on major transactions with related parties ............................................................................ 68
24. Information on harmful transactions concluded on behalf of the issuer during the reporting period ...... 68
25. Information on compliance with the governance code of companies and the company’s corporate social
initiatives and policies ....................................................................................................................................... 69
26. Data on publicised information ................................................................................................................ 69
Annex 1 – AB Kauno Energija Remuneration Report for 2024
Annex 2 – Information on Corporate Governance
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2024
43
1. Reporting period of the Consolidated Management Report
Reporting period for which the AB Kauno Energija Consolidated Management Report has been prepared is
January 1, 2024 – December 31, 2024.
2. Companies composing the Group of companies and their contact details
AB Kauno Energija (hereinafter – the Company or the Issuer) prepares both the Company’s and the
Consolidated Financial Statements. The group of companies (hereinafter referred to as the Group) consists
of AB Kauno Energija and its subsidiary – UAB GO Energy LT in which the Issuer directly controls 100 per
cent of the shares.
Main details of the Company:
Name of the Company: AB Kauno Energija
Legal-organizational form: Public Limited Liability Company
Headquarters’ address Raudondvario av. 84, 47179 Kaunas
Code of legal entity: 235014830
Telephone (8 37) 305 650
Fax (8 37) 305 622
E-mail: info@kaunoenergija.lt
Webpage www.kaunoenergija.lt
Registration date and place August 22, 1997, Kaunas, Order No 513
Register manager State Enterprise Centre of Registers Kaunas Branch
VAT payer code LT350148314
Main information about the subsidiaries:
Company name UAB Go Energy LT
Legal-organizational form Limited Liability Company
Headquarters’ address Savanorių pr. 347, 49423 Kaunas
Code of legal entity 303042623
Telephone (8 37) 305 693
E-mail info@goenergy.lt
Registration date and place April 16, 2013, Kaunas
Register manager State Enterprise Centre of Registers Kaunas Branch
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2024
44
3. Nature of core activities of the companies composing the group of companies
The nature of core activities of the Group is manufacture and rendering of services. The Company is the parent
company of the Group. The Company generates and supplies heat to consumers (for the purposes of heating
and hot water production) in the cities of Kaunas and Jurbarkas and in Kaunas district Akademija town, Ežerėlis
town, Domeikava village, Garliava town, Girionys village, Neveronys village, Raudondvaris village, (hereinafter
referred to as Kaunas district).
Also, following provisions of the Law on Heat Sector, the Company supplies hot water (is engaged in hot
domestic water supplier activities) from May 1, 2010 for consumers in the cities of Kaunas and Jurbarkas and
Kaunas district, who chose the Company as a hot water supplier. As of December 31, 2024, the Company
supplied hot water to 1237 residential buildings in Kaunas, Kaunas district and Jurbarkas city.
In addition, the Company maintains engineering structures (collectors – manifolds) and operates heat and
electricity production facilities. The Group and the Company carries out a supervision of indoor heat and hot
water supply systems, maintenance of heat unit equipment, repairs of heat units and other heating equipment,
provides premises rental services under agreements. The Group and the Company are engaged in licensed
activity in accordance with the licenses held. On February 26, 2004 the National Commission for Energy
Control and Prices (hereinafter – the Commission) issued a heat supplier licence to the Company. The licence
is valid indefinitely. Maintenance of indoor heat and hot water supply systems is pursued following the
provisions of Article 20 of The Law on Heat Sector of the Republic of Lithuania.
The vision of the Group and the Company is to be an innovative, competitive, and added value for shareholders
creating Company engaged in heat and cooling generation and their centralized supply, maintenance of indoor
heating and hot water systems.
Values of the Group and the Company:
• More than 50 years of experience in heat production and supply.
• Responsibility towards consumers for reliable heat and hot water supply.
• High qualification of employees allowing to reach the highest efficiency indicators.
• Ability to apply innovative solutions in everyday activities.
Strategic goals of the Group and the Company:
AB Kauno Energija is the most advanced and innovative district heating (hereinafter – DH) company in
Lithuania.
Principled guidelines of Company’s heat economy strategy are as follows:
• Increase of safety and reliability of heat supply – the Company intends to formulate an expert
assessment of safety / vulnerability of heat supply system, to implement update and modernization
of system of parameters data transfer, collection and evaluation, to implement optimization of the
network hydraulic mode and increase of speed of parameters reaction / change, to reconstruct and
optimize sections of termofication pipelines and elements, to implement update and development of
the system of DH network water reserve – emergency replenishment, to implement technical
solutions and / or use a good practice increasing reliability and safety, ensuring stability of
thermofication mode;
• to actively participate in formation of policy of Kaunas city supply with heat and in increase of
Company’s desirability and in expansion of district heating market.
• formation of good practice and its publicizing.
4. Issuer’s agreements with credit institutions
On September 13, 2018 the Issuer Service Agreement was signed with AB SEB Bankas (company code
112021238, Gedimino pr. 12, Vilnius).
5. Trade in securities of companies composing the Group of companies in regulated
markets
20,031,977 (twenty million thirty-one thousand nine hundred seventy-seven) of the Issuer’s ordinary
registered shares (VP ISIN code LT0000123010) with the total nominal value equal to EUR 34,855,639.98
(thirty-four million eight hundred fifty-five thousand six hundred thirty-nine euro and 98 cents) were listed in
the secondary trade list of Nasdaq Vilnius Baltic stock exchange as of December 31, 2024. The beginning of
listing of the Company’s shares is December 28, 1998.
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2024
45
6. Overview of the condition, performance, and development of the Group of companies
6.1. Overview of the condition, performance, and development of the Group of companies
In 2024, the company's focus was on achieving its strategic objectives by providing innovative, efficient, safe,
economical, and sustainable heating solutions.
The company's financial and non-financial objectives are to ensure the safety and reliability of its core
activities; improve production efficiency; enhance the efficiency of the heat transmission system; improve
access to district heating; and utilize modern, innovative tools and methods for organizing and managing
heat supply and operations.
The "Development Strategy of AB Kauno energija for the period of 5 years, covering the years 2022–2026,
by implementing the directions of development of the energy sector" was approved by the Company's
Supervisory Board on 11 July 2022. A summary of the strategy is available on the Company's website at a
specific address: https://www.kaunoenergija.lt/apie-bendrove.
The Company covers a major part of heat production and supply market in the cities of Kaunas and
Jurbarkas and Kaunas district. Company’s generation capacities consist of Petrašiūnai power plant, 5 boiler-
houses in Kaunas integrated network, 7 district boiler-houses in Kaunas district, 1 boiler-house in Jurbarkas
city, 14 boiler-houses of isolated networks and 26 local gas burning boiler-houses in Kaunas city (25 of them
are gas burned and 1 of them – burned with pellets), also 8 local water heating boiler-houses in Sargėnai
catchment. Total Company’s power generation capacity is 534,7 MW (including 52.9 MW of condensational
economizers’ capacities; 3.1 MW of absorption heat pump).
33 per cent of heat supplied to consumers in the year 2024 was produced in Company’s heat production
facilities. The rest of required quantity of heat was purchased from independent heat producers (hereinafter –
IHP) in monthly auctions, according to legal acts. Starting from May 2018 an electronic heat purchasing
auctions are arranged by the Energy Stock Exchange operator UAB Baltpool. Electronic auctions are carried
out in accordance with the Regulations of the Heat Auctions approved by the National Energy Regulatory
Council. The Schedule of the Procedure and Conditions for the Purchase of Heat from Independent Heat
Producers, the Methodology for Determining Heat Prices, the Rules for the Provision of Information on
Energy, Drinking Water Supply and Wastewater Treatment, Sewage and Surface Water Treatment
Companies, a Summary of Conditions of Usage of Heat Transfer Networks, and a schedule of the Procedure
for Publicly Disclosed Information were changed respectively.
Fuel used by the Company for heat production in the year 2024 is presented in Chart 1.
Chart 1
The Company purchased heat during the year 2024 from 10 IHP in Kaunas and Kaunas district as follows:
from UAB Kauno Termofikacijos Elektrinė, UAB Idex Taika, UAB Idex Taika Elektrinė, UAB Lorizon Energy,
UAB Ekoresursai, UAB Aldec General, UAB Idex Biruliškių, UAB “Ekopartneris”, UAB Foksita and UAB
Kauno Kogeneracinė Jėgainė. Total purchases consisted of 939 thousand MWh of heat, i.e., 67 per cent of
heat supplied to the.
21.1
33.4
12.75
14.14
15.35
78.61
64.4
84.33
84.81
81.29
0.29
2.20
2.92
1.05
3.36
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2020 y. 2021 y. 2022 y. 2023 y. 2024 y.
Fuel structure, per cent
Natural gas Solid biofuel Biogas and other fuels
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2024
46
Amounts of heat purchased from IHP and produced with Company’s equipment during the period of the
years 2020–2024 are presented in chart 2, thousand MWh:
Chart 2
The Company supplied this produced and purchased heat with integrated and local heat supply networks to
4,456 businesses and organizations as well as to 120,976 households, in total – to 125,432 consumers
(objects by addresses) as of December 31, 2024.
Chart 3
Investments
Investments are made in accordance with Company’s investment plan for the year 2024, which has been
approved by decision No T-165 of Kaunas City Municipality Council of April 23, 2024 “Regarding investment
plan of AB Kauno Energija for the year 2024 and its financing” (hereinafter – Investment plan). The Company
makes investments based on an assessment of the economic situation, the competitive environment and the
availability of financing. Investment plans are approved by the Board of Directors and coordinated by the
Kaunas City Municipal Council.
The Company implements trunk pipeline replacement projects, optimizes pipeline diameters, connects new
objects to the DH network and modernises heat production facilities according to Investment plan.
442.4
483.8
396.8
417.3
468.3
869.4
1104.7
1017.1
961.3
938.9
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
2020 y. 2021 y. 2022 y. 2023 y. 2024 y.
Heat purchase and production, thous.MWh
Heat productions in own facilities Heat purchsased from IHP
96.45%
3.55%
Repartition of Company's heat consumers by groups
Units of residential households (inhabitants)
Other consumers
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2024
47
In 2024, the Company carried out work projects in the Vilijampolė, Petrašiūnai, and Senamiestis districts,
where 7.5 km of old pipelines have been renovated. Additionally, network expansion is being carried out in the
Kaunas Free Economic Sone (FES), Žemieji Šančiai, Panemunė, Dainava, Šilainiai, and Raudondvaris
districts, with approximately 3.4 km of new pipelines being installed.
Two photovoltaic power plants, with capacities of 350 kW and 880 kW, are being developed. The electricity
generated by these solar photovoltaic plants will be used for heat transfer and production, thereby reducing
the costs associated with heat generation and distribution. The total value of these projects is EUR 1.49 million.
An organic Rankine cycle (ORC) turbine has started operating at the Petrašiūnai power plant. The ORC
technology uses heat from the biofuel boilers at the Petrašiūnai power plant to generate electricity by using
steam from an organic liquid. The installed turbine has a capacity of 450 kW. The planned annual production
of around 2,200,000 kWh of electricity will cover more than 60% of the electricity needs of the Petrašiūnai
power plant complex and save around EUR 0.4 million per year. The project has been implemented with the
support of the Environmental Project Management Agency under the programme "Investments by legal entities
in the replacement or reduction of the use of fossil fuels and/or the use of renewable energy sources". The
project value is EUR 1.65 million, with a grant of EUR 0.54 million from the Environmental Protection Agency.
In 2024, the Company reconstructed one of the most important guarantees of reliable heat supply - the water
pumping station of the Petrašiūnai power plant. Due to the unique terrain of Kaunas, pumping stations are
essential for connecting all districts to a common heat supply network. The EUR 0.6 million project took about
one and a half years to complete, from project preparation to operation.
In 2024, the Petrašiūnai power plant successfully completed a major project by installing modern CHP water
softening facilities. The 450 km long integrated district heating network operated by the company is
continuously replenished with specially treated thermal water, which is why a water softening filter with a
separate salt solution preparation farm was installed. The new filter will not soften the network make-up water,
as is usual, but will soften the CHP water already circulating in the network.
Translated with DeepL.com (free version)A 1.7 MW absorption heat pump is being installed at the Šilkas
boiler house, along with the modernisation of the flue gas cleaning system. The project value is EUR 2.9
million.
The Company successfully implemented an environmental protection investment project titled "Installation of
an Electrostatic Filter at the Nemunas Boiler House." This project was carried out with support from the
Environmental Project Management Agency (APVA), as allocated by Order No. V-203 of the Minister of the
Environment of the Republic of Lithuania of 6 December 2022 "On the Allocation of Funding for Projects
under the 2022 Funding Guidelines of the Lithuanian Environmental Protection Investment Fund
Programme". The electrostatic filter, made from steel sheets, is highly efficient (up to 99%) and capable of
capturing very small (≤1 μm) solid particles in the filtered stream, while consuming minimal electricity. The
unit is equipped with an automated control system capable of real-time monitoring and managing the
processes of the device.
The dynamics of consumers’ heating capacities connections to Company’s DH network and disconnections
from them in 2020–2024 is shown in Chart 4.
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2024
48
Chart 4
Dynamics of consumer’s connections and disconnections
A total capacity of objects disconnected from DH network in 2024 was approx. 1.17 MW. Disconnection of
heat equipment from centralized heat supply networks and the change of heating method is pursued
following the order determined by the Civil Code of the Republic of Lithuania, the Law on Heat Sector of the
Republic of Lithuania, the Law on Construction of the Republic of Lithuania and sub statutory legal acts
implementing these Laws.
Company’s investments by funding sources of the years 2020–2024 are presented in Chart 5.
Chart 5
6.2. Description of exposure to key risks and uncertainties the Company confront with and their
impact on activity results
External risk factors affecting the Company’s core business:
• Competition between heat producers in Kaunas.
• Increase in final (i.e., including all expenditures) price of natural gas and biofuel.
• Ever-changing legal environment.
• Heat production pricing policies.
0.95
0.35
0.26
1.28
1.17
14.14
7.12
25.21
29.60
12.64
0
5
10
15
20
25
30
35
2020 y. 2021 y. 2022 y. 2023 y. 2024 y.
Capacities disconnected, MW Capacities connected, MW
3.88
2.69
10.08
13.46
10.92
10.54
6.83
10.13
12.02
10.64
6.92
4.50
0.11
0.02
0.62
21.34
14.02
20.32
25.50
22.18
0
5
10
15
20
25
30
0
5
10
15
20
25
30
2020 y. 2021 y. 2022 y. 2023 y. 2024 y.
Implementation of investments by funding sources, million
euro
Company funds Loans Different funds Total
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2024
49
Competition environment risk factors.
To operate effectively and reliably in creation the added value for shareholders, the Company is facing
threats specific to the sphere of its activity, but also takes advantage of opportunities to work efficiently and
effectively by exploiting the available potential. One of the biggest threats that the Company may face is a
relatively high price for heat purchased from IHP, who are ranked as private business units committed to
profit generation. Purchase of heat is pursued following valid law and the Description of procedure for
purchase of heat from independent suppliers of heat approved by NERC. In turn, the Company invests
extensively in modernization and construction of its own manufacturing facilities, to reduce the comparative
costs of heat production. Thus, it takes advantage of the regulatory environment and reduces the energy
purchase price.
Together with coming of new IHP the Company faced additional technical, economical, legal and other
issues that need to be solved: management of heat supply network and balancing of power of these
producers in case of emergency stop of them, retaining of optimum working parameters of the network,
regulation, change and applying of heat purchase from IHP order.
Commercial risk factors
The Company is a major supplier of the heat produced centrally to the city of Kaunas, part of Kaunas district
and the city of Jurbarkas. To retain this market, it is necessary to implement modern and efficient heat
production technologies in own production facilities and to focus on production at the lowest cost, benefiting
from private differences of different types of fuel.
Company’s heat sales are directly dependent on heat demand, i.e., heat consumption, which is mostly
affected by the average outdoor air temperature, the amount of investment of consumers in energy-saving
and rational use of heat and the pace of development of the heat sales.
Changes in fuel prices and the price of heat, produced by IHP have an impact on cost of Company’s heat
and electricity production.
Company’s performance is affected by the decrease in sales due to reduced and further decreasing heat
demand (in pursuance of residential buildings renovation and by installing a heat saving equipment), due to
consumer’s disconnections from DH network (due to the various reasons). Risks can be mitigated by
Company’s current and further investments in heat and electricity production facilities, using renewable
energy sources, reducing heat production expenditures as well as the price of heat supplied for consumers,
and continually reasonably informing customers on the benefits of DH network systems (safety, reliability,
correlation with one sort of fuel, fuel conversion, local pollution sources in residential areas, total
environmental pollution, etc.) in comparison with autonomous heating.
Operational risk
During the year 2024 consumers’ debts consisted of EUR 4.7 million (31 December , 2023 – EUR 6.2
million). To recover these debts as soon as possible, the Company actively uses a variety of legal debt
management measures, such as pre-trial actions, judicial recovery, and cooperation with law Companies. In
addition, when a debt becomes big, a restriction of heat supplies is applied as a prevention measure (if there
are technical possibilities and according to the law).
On January 2, 2018 the Kaunas Unified Service Center “Mano Kaunas” started its operations in Statybininkų
str. 3, Kaunas, at the premises of UAB Kauno Švara. Here residents can get immediate information /
consultation about Kaunas city services provided by municipality owned companies – AB Kauno Energija,
UAB Kauno Švara, UAB Kauno Autobusai, UAB Kauno Butų ūkis, UAB Kauno Gatvių Apšvietimas and UAB
Kauno Vandenys, as well as conclude contracts, pay invoices, requests, certificates, etc.
Activities of the Company are cyclical. During the heating season (October – April) a major operating income
is earned. During the non-heating season, the Company’s revenues are at their lowest since only heat for hot
water is used. In addition, during the non-heating season, the Company incurs more costs because it must
prepare for the upcoming heating season, i.e., to carry out the repairs and reconstruction of heat supply
networks and heat production facilities.
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2024
50
Legal compliance risk
Energy activities are governed by the Law on Heat Sector, the Law on Energy, the Law on Electricity, the
Law on Natural Gas, the Law on Drinking Water Supply and Wastewater Management, Government
resolutions, Heat supply and consumption rules, Methodology of heat prices and payments for heat of NCC
and other legislation. Their amendments affect the heating industry.
With new amendments of articles 2, 3, 20, 22, 28, 31, and 32 of the Law on Heat Sector No XI-1608 of the
Republic of Lithuania that came in affect from November 1, 2011 in accordance with Article 7, the heat and
hot water prices may not include any costs related with the indoor building heating (including heat units), and
hot water systems. In implementing the legislation, from November 1, 2011 all these costs directly reduce the
profit of the Company.
Legal compliance risk is a risk of increase in losses and (or) loss of prestige, an (or) decrease in confidence,
which can be determined by the external environment factors (for example, violation of external legal acts,
non-compliance of requirements of supervising institutions, etc.) or internal factors (for example, violation of
internal legal acts and ethical standards, cases of employee’s abuse, etc.).
Technical - technological factors
The biggest process risks are related to the condition of heating systems. Modernization rate of them is
determined by lack of funds – it is necessary to reconstruct more than 15 km of pipelines per year to
condition of age of heat supply system and the minimum investments should consist of approximately 11
million euros. Hydraulic testing identifies their weakest points. Every year, about 200 points where cracks
occur are identified during the tests. Upon discovery of defects, pipes are exposed and promptly repaired.
DH network is reconstructed in the most worn-out sections of district heating. New industrially (polyurethane
foam insulation in polyethylene shell) insulated pipes not requiring concrete channels are mounted in the
reconstructed sections of the heat supply network. Heat loss is very low in reconstructed sections (process
level), while the pipelines no longer pose a threat of rupture and ensure reliable heat supply to consumers.
One of the technical risk factors for heat generation facilities is their age. Some of heat generation facilities
are already renewed now. Every year boiler repairs, and preventive work is carried out during the non-
heating season. They are necessary to ensure secure heat supplies and reliability, i.e., securing of heat
production facilities and fuel reserves.
More detailed information on Company’s production facilities modernization is provided in chapters on
operations and development.
Ecological factors
With respect to the Company, they may be divided into those affecting the Company and affected by the
Company’s operations.
In order not to adversely impact the environment and comply with the pollution limits, vibration and noise
values, the Company is guided by the requirements of the Kyoto Protocol, the Helsinki Commission
(HELCOM) and environmental constraints of Helsinki Convention, as well as the European Parliament and
Council Directive 2001/80/EB of regulating energy emissions and Lithuanian environmental normative
document LAND 43-2013 for the use of natural resources, and releases and emissions of air pollutants to the
environment in its activities. Main sources of pollution of the Company: burning fossil fuel in the Company's
heat sources, production of heat and wastewater used in the industrial processes.
The Company pays taxes for atmospheric and water pollution. If allowable emission rate limits or annual
limits are exceeded, the Company would pay the fines under the applicable laws of the Republic of
Lithuania. The Company was not imposed any penalties in the year 2024.
Main Company’s emission reduction measures: modernization of heat generation facilities, heat transfer loss
reduction by replacing the existing pipes with the pipes with polyurethane foam insulation, installation of new
technology and improvement of existing technological equipment, use of less polluting fuels, and continuous
emission monitoring.
Additional efforts by the company to reduce CO2 emissions:
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2024
51
• Green procurement. We choose suppliers not only on the basis of the price and the quality of goods,
services or works, but also on the basis of the reduced impact they have on the environment.
• The Company is currently implementing an environmental management system (ISO 14001:2015). It
assists in the systematic management of the direct and long-term environmental impact of the activities and
consistently addresses the relevant environmental issues of the Company. With this system in place, we will
be able to increase green procurement.
• We are renewing our fleet of vehicles giving preference to electric and hybrid cars.
• We sort waste generated in production and administrative activities and transfer it to waste managers in
accordance with the established procedure. We have also removed rubbish bins in the offices in the
administration building and dispose rubbish in the sorting bins in the common corridors. This encourages
employees to recycle and has reduced the amount of bins and bags (plastics) used.
• The company is taking the initiative to inform the public about energy-saving measures in order to reduce
air pollution. We regularly raise the awareness of the public by writing informative articles about renewable
energy sources, their benefits for nature and people, informing what modern technologies are used by our
company and how they contribute to climate change mitigation.
• Employees of the Company are also encouraged to come to work with less polluting vehicles, to
cooperate as much as possible and to travel to work with a single vehicle for several colleagues.
Factors affecting intangible resources
The expertise of the Company's employees and the technological innovations undertaken are key intangible
resources that directly affect the Company's performance. They allow for a more efficient heat production and
supply process, reduced costs and increased customer satisfaction. Strategic management of these resources
makes the Company more competitive, sustainable and cost efficient.
Staff competences:
- Highly skilled engineers and operators ensure efficient management of boiler plants and networks, reducing
energy losses and operating costs.
- Professional project managers are able to implement advanced solutions such as remote control systems or
heat storage technologies.
- Well-trained network management staff reduce the number of incidents and their impact on customers, thus
increasing service reliability.
Technological innovation:
- Automated control systems allow real-time optimisation of heat production according to consumption
demand, reducing fuel consumption.
- Data analytics solutions help to forecast heat demand, avoiding overproduction.
- The deployment of smart meters provides customers with transparent information on heat and hot water
consumption, reducing disputes and increasing service satisfaction.
7. Analysis of financial and non-financial performance results, information related to
environmental issues
Company’s sales revenue of the year 2024 was EUR 84,121 thousand and in comparison, with the year
2023 decreased by 1 per cent (in the year 2023 it consisted of EUR 85,048 thousand). Sales revenue of the
Group of the year 2024 was EUR 85,751 thousand (in the year 2023 it consisted of EUR 85,048 thousand).
The average price of heat sold decreased by 2.9 percent (in the year 2024 it was 6.79 ct/kWh, and in the
year 2023 – 6.99 ct/kWh).
Comparison of financial indicators of the Group of the year 2024 with the indicators of the years 2020–2023
is presented in Table 1.
Table 1
No
Indicator of the Group
2020
2021
2022
2023
2024
1
Revenue from sales, thousand euros
42,030
50,963
87,992
85,048
84,751
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2024
52
No
Indicator of the Group
2020
2021
2022
2023
2024
1.1
Including: Heat energy
37,147
47,125
81,338
78,660
76,989
1.2
Cooling supply
0
2
10
5
0
1.3
Maintenance of indoor heating and hot
water supply systems, heating
substation facilities
11
12
17
17
9
1.4
Income from the maintenance of
collectors
268
348
348
348
379
1.5
Hot water supply including cold water
price
2,935
3,014
5,742
5,467
6,759
1.6
Income from maintenance of hot water
meters
433
456
487
551
1,311
1.7
Revenue from the sale of trading
emission allowances
1,236
6
50
0
0
1.8
Future price reduction commitments
0
0
0
0
(696)
2
Comprehensive income, thousand
euros
-152
72
6,356
4,505
7,753
3
EBITDA (earnings before interest,
taxes, depreciation and amortization
and other non-cash expense items),
thousand euros
8,262
6,488
12,350
13,553
17,050
4
Profitability of core business, per cent
(operating profit / operating sales) *
100
-5.7
-0.6
6.6
8.7
8.7
5
Net profitability, per cent (net profit /
operating sales) *100
-0.4
0.1
7.11
5.1
9.2
6
Assets, thousand euros
162,903
179,934
203,886
213,540
229,190
7
Equity, thousand euros
89,673
89,745
96,101
97,606
105,359
8
Return on equity (ROE), per cent
(net profit / average equity) *100
-0.2
0.1
6.9
4.7
7.4
9
Return on assets (ROA), per cent
(net profit / average assets) *100
-0.1
0.0
3.6
2.2
3.4
10
Debt ratio (liabilities /assets)
0.45
0.50
0.37
0.40
0.41
11
Debt-to-equity ratio (liabilities / equity)
0.8
1.0
0.8
0.9
0.9
12
General liquidity ratio (short-term
assets / short-term liabilities)
0.86
1.33
1.47
1.28
1.37
13
Quick ratio ((short-term assets-
inventory) / short-term liabilities)
0.75
1.23
1.36
1.20
1.29
14
Net earnings per share (net profit /
average weighted number of shares in
issue)
0.01
0.01
0.14
0.14
0.18
15
Share price to profit per share ratio
(P/E ratio) (Last share market price of
the year /net profit /number of shares
at year-end) )
-232.31
656.89
7.44
6.5
5.13
16
Share capital, thousand euros
74,476
74,476
74,476
74,476
74,476
17
Share capital-to-assets ratio
0.46
0.41
0.37
0.35
0.32
18
Dividend pay-out ratio (dividend per
share / earnings per share)
0.0
0.0
0.5
Comparison of financial indicators of the Company of the year 2024 with the indicators of the years 2020–
2023 is presented in Table 2.
Table 2
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2024
53
No
Indicator of the Company
2020
2021
2022
2023
2024
1
Revenue from sales, thousand euros
42,036
50,981
87,013
85,048
84,121
1.1
Including: Heat energy
37,153
47,133
81,458
78,660
76,989
1.2
Cooling supply
0
2
10
5
0
1.3
Maintenance of indoor heating and hot
water supply systems, heating
substation facilities
11
12
17
17
9
1.4
Income from the maintenance of
collectors
268
348
348
348
348
1.5
Hot water supply including cold water
price
2,935
3,024
4,643
5,467
6,759
1.6
Income from maintenance of hot water
meters
433
456
487
551
712
1.7
Revenue from the sale of trading
emission allowances
1,236
6
50
0
0
1.8
Future price reduction commitments
0
0
0
0
(696)
2
Profit, thousand euros
57
457
6,299
3,881
7,592
3
EBITDA (earnings before interest,
taxes, depreciation and amortization
and other non-cash expense items),
thousand euros
7,882
6,322
11,797
12,762
16,712
4
Profitability of core business, per cent
(operating profit / operating sales) *
100
-2.8
0.2
6.2
8.0
9.3
5
Net profitability, per cent (net profit /
operating sales) *100
0.1
0.8
7.2
4.5
9.0
6
Assets, thousand euros
161,250
178,654
203,083
212,245
227,755
7
Equity, thousand euros
89,833
90,290
95,842
96,723
104,316
8
Return on equity (ROE), per cent
(net profit / average equity) *100
0.07
0.43
6.61
4.0
7.3
9
Return on assets (ROA), per cent
(net profit / average assets) *100
0.0
0.2
3.0
1.9
3.3
10
Debt ratio (liabilities /assets)
0.44
0.49
0.37
0.40
0.41
11
Debt-to-equity ratio (liabilities / equity)
0.8
1.0
0.8
0.9
0.9
12
General liquidity ratio (short-term
assets / short-term liabilities)
0.91
1.36
1.40
1.18
1.27
13
Quick ratio ((short-term assets-
inventory) / short-term liabilities)
0.80
1.27
1.33
1.11
1.19
14
Net earnings per share (net profit /
average weighted number of shares in
issue)
0.02
0.01
0.14
0.13
0.18
15
Share price to profit per share ratio
(P/E ratio) (Last share market price of
the year /net profit /number of shares at
year-end) )
619.5
103.49
7.51
7.0
5.24
16
Share capital, thousand euros
74,476
74,476
74,476
74,476
74,476
17
Share capital-to-assets ratio
0.46
0.42
0.37
0.35
0.33
18
Dividend pay-out ratio (dividend per
share / earnings per share)
0.0
0.0
0.5
The more detailed analysis of financial indicators of the Group and the Company is provided in the
Consolidated and Company’s financial statements for the year 2024.
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2024
54
Preventing corruption
The purpose of the Company's Corruption Prevention Policy is to set out the key principles and requirements
for the prevention of corruption in the Company and its subsidiaries and guidelines for ensuring compliance
with them.
The Company is committed to the highest standards of business ethics and advocates free and fair trade,
open competition and ethical conditions, in accordance with the legislation of the Republic of Lithuania. The
Company adheres to and follows the Kaunas City Municipality Corruption Prevention Action Plan 2023-2025.
Anti-corruption obligations cover the following areas: compliance with legal provisions and standards of
conduct; disclosure of information, transparent accounting; prohibition of influence peddling and bribery;
conflicts of interest; nepotism and cronyism; gifts and hospitality; donations; donations; purchases and sales;
abuse of office/office; selection/evaluation of staff; confidentiality.
The Company does not engage in international business transactions and therefore the Corruption
Prevention Policy does not address the bribery of foreign officials in international business transactions.
Environmental impact on operations
The Company’s performance can be affected by changes in sales turnovers caused by changed heat
demand, which can be caused by consumer investments in the renovation of buildings, heat saving and
rational consumption, average higher of lower outdoor temperature during the heating season, changes in
fuel prices, heat purchase price from IHP.
Company’s reconstructed heat production facilities changing fossil fuel to biofuel will make a serious
competition with their costs of production to IHP, operating in Kaunas.
The dynamics of heat price of the Company in the years 2020–2024 is provided in Chart 6.
Chart 6
The prices for heat and hot water are calculated and approved according to the Heat Pricing Methodology,
which was approved by the National Energy Regulatory Council on July 8, 2009, by Resolution No. O3-96.
The annual revenue level for heat production and/or supply is determined for a period of 3 to 5 years. In the
case of regulated price services (products), a long-term pricing mechanism is applied in heat pricing, i.e., the
annual revenue level for heat production and/or supply is set for the base period and is adjusted in the
subsequent years by determining the recalculated revenue level for heat production and/or supply.
On 23 February 2024, the National Energy Regulatory Council, by resolution No. O3E-213, unilaterally set
the annual revenue level for heat production and/or supply for AB Kauno Energija for the first year of the
base heat price validity period.
3.55
3.63
7.13
6.99
6.79
0
1
2
3
4
5
6
7
8
2020 y. 2021 y. 2022 y. 2023 y. 2024 y.
Average price of heat, supplied by AB Kauno
energija, ct/kWh
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2024
55
Information related to environmental issues
The Group and the Company strive to use natural resources sparingly, to adopt less polluting technologies, to
comply with the requirements of environmental legislation, and to apply preventive measures to reduce the
negative impact on the environment.
Waste management
The Group and the Company have organized the waste collection, sorting, and disposal of them to waste
managers, i.e., to licensed waste management businesses. In the 2024, the Group and the Company
disposed for recycling 2,761.52 tons of various waste (absorbents, filter materials, packages containing
hazardous chemicals or that are contaminated with them, paper and carton, insulation materials containing
asbestos, used tyres, bituminous mixes, batteries and accumulators, fluorescent lamps, concrete, iron, and
steel. The Company successfully transferred 2,096.62 tonnes of production waste ash from the Ežerelis and
Nemunas boiler house and the Petrašiūnai power plant to be used as a by-product for the installation of the
site base, in accordance with the agreed by-product plans with the Environmental Protection Agency.
Wastewater management
In accordance with the schedule agreed with the Environmental Protection Agency (EPA), the Group and the
Company constantly monitor that the effluent discharges from stationary sources are within the permissible
limits set out in the integrated pollution prevention and control permits.
Air pollution
The measurement laboratory of stationary air pollution sources of the Group and the Company, in
possession with the permit issued by the EPA and following the schedule agreed with EPA, continuously
monitors the emissions to the atmosphere from stationary sources to would not exceed the permissible limits
established in integrated pollution prevention and control permits. Company’s Šilkas, Inkaras, Nemunas,
Jurbarkas, Ežerėlis, Girionys, Garliava, Domeikava, Raudondvaris and Noreikiškės boiler-houses, and
Petrašiūnai power-plant use biofuel, thus reducing atmospheric pollution.
The comparison of the amount of pollutants emitted into the atmosphere in 2024 from the Company’s
stationary facilities with the amount of the years 2020–2023 is presented in table 3 below.
Table 3
Period
Particulates, t
Nitrogen
oxides, t
Carbon
monoxide, t
Sulphur
dioxide, t
Hydrocarbons, t
Other
pollutants, t
2024
30.8070
191.7773
629.7397
14.63
0.4936
0.1765
2023
56.7076
171.0513
839,7873
22.1036
0.5971
1.5198
2022
51.5130
159.8142
796.3571
60.3571
2.0144
0.3117
2021
72.9579
196.5479
781.2462
158.4375
1.2315
0.2966
2020
98.6841
217.8864
884.9974
102.9845
1.1430
0.2801
Cyclones for smoke cleaning from particulates are installed in Šilkas, Ežerėlis, Girionys, Noreikiškės, Inkaras
boiler-houses and Petrašiūnai power-plant. Their working efficiency is checked every year. The Company is
involved in the greenhouse gas emissions trading system.
8. References and additional explanations
Main financial data of the Group and the Company are provided in the Consolidated and Company’s
Financial Statements of AB Kauno Energija of the year 2024.
The financial statements are prepared in accordance with the International Financial Reporting Standards as
adopted by the European Union and their interpretations. Standards have been issued by the International
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2024
56
Accounting Standards Board and interpretations have been issued by the International Financial Reporting
Interpretations Committee.
Internal control over consolidated statements
When preparing its consolidated financial statements, the Company combines the itemised financial
statements of the Company and its subsidiaries, by summing up the items of assets, liabilities, equity,
revenue, and expenses. Afterwards, it eliminates the book value of the Company’s investment in the
subsidiary and Company’s share of equity in the subsidiary; amounts on balance sheets, transactions,
income and expenses inside the Group (for this purpose, it prepares a reconciled report of all transactions,
income and expenses for the period); difference in depreciation of contribution in kind measured at market
value as compared to its book value.
For composing of the consolidated financial statements of the Group, the financial statements of the
Company and subsidiaries are composed for the same date.
It’s controlled if the accounting policy of the Company and its subsidiaries for accounting of similar
transactions is the same. The subsidiaries’ income and expenses are included into the Consolidated
Financial Statements as of the date of acquisition.
9. Significant events after the end of the reporting period
After the end of the reporting period, there were no significant events other than those disclosed in the financial
statements.
10. Plans and forecasts of activities of the group of companies
As investments allow continual business development and profitability, the aims of the Group’s and the
Company’s investment program for the year 2024 is further increase in volumes of heat production and
effectiveness, expansion of heat selling market, through increase of use of biofuel for heat production,
development of heat transmission and distribution increasing safety and reliability, developing services of
maintenance of engineering systems and further improvement of consumers services quality.
In compliance with the provisions of the plan for the facilities on the implementation of the National
Renewable Energy Development Strategy, in order to implement the Company’s key business objectives
and the provisions of the National Energy Independence Strategy related to the assurance of technical
requirements for reliability of heat facilities and heat supply networks, to guarantee the quality keeps apply to
consumers, Kaunas city municipality decided to approve Company’s investment plans with the decision No.
T-165 “Regarding Investment Plans of AB Kauno Energija for the Year 2024 and Their Financing” on April
23, 2024.
In 2024 the implementation of Company’s investment program will involve further modernization of boiler-
houses owned by the Company automating the production process and installing condensational
economizers; reconstruction of heat networks; replacement of heat meters. It’s important to notice, that
implementation of these measures will allow to reduce losses of heat transmission and to perform
optimization of heat supply to the consumers and to ensure heat supplies reliability.
11. Information on research and development activities
Company’s representatives are constantly invited to work in committees of preparation of Energy
Engineering studies programs of Kaunas University of Technology and in groups of external and self-
evaluation. Working in these groups and committees Company’s representatives analyse aims of programs
and goals of studies, composition of training plans, appropriateness of staff, material basis, process, and
evaluation of studies, as well as program management. Performing external and self-evaluation, committees
apply recommendations for improvement of program structures and implementation process, to satisfy the
needs of employers and to meet the requirements of national and European legal acts in the field of higher
education.
The company has set a goal to completely eliminate the use of natural gas in heat production with gas
consumption to be halved in the next three years to only 5% of total energy consumption for heat production.
This will increase the use of green heat from biofuels and reduce CO2 emissions, helping to achieve the
Company's long-term goals of supplying more consumers with cheaper biofuel-based heat, reducing CO2
emissions and enabling new customers to connect to the city's heat network.
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2024
57
Minimising gas consumption will help achieve the Company's long-term goals: to supply more consumers
with cheaper biofuel-based heat through more optimal utilisation of Kaunas Energy's heat production
capacity; reducing emissions of CO2, which contribute to the greenhouse effect; enabling new customers to
connect to the city's heat network.
The Company is reducing its annual electricity costs, which is largely used for heat production and supply, by
consistently investing in its own solar power plants and power plants operating on the organic Rankine cycle
(ORC) principle. ORC turbines installed in biofuel boiler plants will generate electricity using organic liquid
steam.
The Company has implemented another highly efficient air pollution control technology – an electrostatic
filter (ESF). The ESF uses an electrostatic charge to remove solid particles from the gases generated during
combustion. Such filters are used in boiler houses, cement plants, steelworks, and other industrial facilities to
reduce the emission of solid particles harmful to the environment and human health and to neutralise other
harmful pollutants. Upon completing the year-long project at the boiler house, the concentration of solids in
the exhaust will not exceed 20 mg/m3, and the flue gas condensation economiser will not be polluted.
Kaunas is some of the greenest cities in Lithuania, placing a lot of emphasis on seeking and implementing
sustainable solutions. In order to use the green waste generated during the maintenance of city parks,
forests and squares as efficiently as possible, the raw material created after pruning trees and shrubs is
converted into biofuel used to produce city heat. The municipality no longer has to worry about how to collect
that waste, where to transport it and what to do with it. Meanwhile, the company no longer needs to purchase
some of the biofuel; they can produce it themselves. In 2024, while maintaining green areas in Kaunas,
3,586 tons of biofuel were obtained. It was used to produce 3,586 MWh of heat, sufficient to heat and
provide hot water to 10 apartment blocks. This has helped Kaunas residents save EUR 0.3 million a year.
To optimise and enhance the Company’s operations, a new organisational management structure was
approved, and an integrated quality, environmental protection, and occupational health and safety
management system was implemented and certified, meeting the requirements of international standards
ISO 9001:2015, ISO 14001:2015, and ISO 45001:2018. These international standards encourage the
Company to adopt a process-oriented approach, strengthen environmental protection and pollution
prevention, promote good occupational health and safety practices, and maintain a balance with social and
economic needs. The effectiveness of the implemented management systems was evaluated during an audit
by the independent third-party certification body TÜV Thüringen e.V., through its subsidiary in Lithuania, UAB
TUV Uolektis.
In August 2023, the company's festival Transformations took place for the first time, relocating to the historic
Petrašiūnai power station for cultural events. The Company's second festival Transformations took place at
the end of August 2024. The main focus of the festival will be a night-time transformation of a power station
created by Lithuanian artists.
12. Information on own shares acquired and held by the Issuer
The Company does not hold the shares of its own. The Company’s subsidiaries have not purchased any of
the Company’s shares. Neither the Company nor its subsidiaries purchased or sold own shares during the
reporting period.
13. Information on the aims of financial risk management, hedging instruments in use
All information on this issue is provided in the notes to the 2024 set of consolidated and Company financial
statements of AB Kauno energija. The Company did not use any financial hedging instruments in 2023–2024.
14. Information on the Issuer’s subsidiary undertakings
The authorised capital of Company’s subsidiary UAB GO Energy LT registered in the Register of Legal
Entities on December 31, 2024 is 2,762,958 euros and it is divided into 95,406 ordinary registered shares
with par value of 28.96 euros each.
UAB GO Energy LT has no holdings directly or indirectly managed in other companies.
Activities of UAB GO Energy LT include the real estate development, management, leases, purchase, and
sale.
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2024
58
As of December 31, 2024, company UAB GO Energy LT had 31 employees.
Comparison of financial indicators of UAB GO Energy LT for the year 2024 with the indicators of the years
2020–2023 is provided in Chart 7.
Chart 7
15. Structure of authorized capital
The authorised capital of the Company registered in the Register of Legal Entities of the Republic of
Lithuania as of December 31, 2024 is EUR 74,475,728.82 (seventy-four million four hundred seventy-five
thousand seven hundred twenty-eight euros and 82 cents).
Structure of authorized share capital of the Issuer by types of shares is specified in Table 4.
Table 4
Type of shares
Number of
shares, units
Nominal
value,
euros
Total nominal
value, euros
Municipal share
in the authorised
capital, per cent
Share of private
shareholders in
the authorised
capital, per cent
Ordinary nominal
shares
42,802,143
1.74
74,475,728.82
98.33
1.67
16. Data on shares issued by the Issuer
The authorised capital of AB Kauno Energija was registered on May 18, 2015 by the decision of General
Meeting of Shareholders held on April 28, 2015 and amounts to EUR 74,475,728.82 (seventy-four million
four hundred seventy-five thousand seven hundred twenty-eight euros and 82 cents) and it is divided to
42,802,143 (forty-two million eight hundred and two thousand one hundred forty-three) ordinary shares of
par value of 1.74 euros each.
There are no limitations on the transfer of securities.
Main characteristics of shares released into free circulation of securities (as of December 31, 2024).
Securities registration No A01031430
ISON code of securities LT0000123010
Number of shares 20 031 977 ordinary nominal shares
Nominal value EUR 1.74
139
125
13
738
607
111
1,646
983
411
3,932
3,201
620
4,225
4,116
84
0
500
1000
1500
2000
2500
3000
3500
4000
4500
Turnover from sales Sales costs Comprehensive income
Activity results of GO Energy LT, thous. euros
2020 y. 2021 y. 2022 y. 2023 y. 2024 y.
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2024
59
Total nominal value of shares EUR 34,855,639.98
Main characteristics of shares issued and registered for non-public trading (as of December 31, 2024).
ISON code of securities LT0000128407
Number of shares 22,770,166 ordinary nominal shares
Nominal value EUR 1.74
Total nominal value of shares EUR 39,620,088.84
History of trade in Company’s securities in the years 2020–2024 is provided in Table 5.
Table 5
Indicator
2020
2021
2022
2023
2024
Opening price, euro
0.98
0.82
1.11
0.89
0.92
Highest price, euro
1.03
1.19
1.12
1.14
1.1
Lowest price, euro
0.77
0.80
0.76
0.87
0.895
Last price, euro
0.925
1.11
0.89
0.91
0.93
Circulation, units
89,524
147,659
64,193
97,113
83,527
Circulation, million euro
0.07
0.15
0.06
0.09
0.08
Historical data on share prices (in euro) and turnovers in the years 2020–2024 is provided in Chart 8.
Chart 8
Comparison of Company’s share price with the index of own sector (utility services) and OMX Vilnius index is
given in Chart 9.
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2024
60
Chart 9
17. Information on the Issuer’s shareholders
The number of Company’s shareholders as of December 31, 2024 was 751.
Information on Shareholders of the Issuer who owned more than 5 per cent of the authorised capital of the
Company registered on May 18, 2015 (42,802,143 ordinary nominal shares) as of December 31, 2024 is
provided in Table 6 and Chart 10.
Table 6
Full name of shareholder
(company name, type,
headquartered dress, code)
Number of ordinary
nominal shares
owned by the
shareholder, units
Owned
share in
the
authorised
capital, per
cent
Share of votes
carried by
owned shares.
per cent
Share of votes
owned by the
shareholder
together with
acting entities,
per cent
Kaunas City Municipality
Laisvės al. 96, 44251 Kaunas
Code 111106319
39,736,058
92.84
92.84
-
Other shareholders
3,066,085
7.16
7.16
-
Total:
42,802,143
100
100
-
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2024
61
Chart 10
The distribution of the Company’s shareholders by groups at the end of the reporting period is presented in
Table 7.
Table 7
Group
Number of shares
owned by the group,
pcs.
Available share of
the authorized
capital, per cent of
the total number of
shares
Local authorities
42 088 631
98.33
Households
500 720
1.17
Other shareholders
212 792
0.50
Total
42 802 143
100
17.1. The shareholders, who owned more than 5 per cent of the shares (20,031,977 ORS) issued for public
trading (reg. No. A01031430, VP ISIN code – LT0000123010) as of December 31, 2024 are listed in Table 8.
Table 8
Name
Type of shares
Number of
shares,
units
Total
nominal
value of
shares,
euros
Percentage of
shares from
those
released into
the public
circulation
Share of
the
authorise
d capital
(%)
Kaunas City Municipality
Laisvės al. 96, 44251
Kaunas
Ordinary
registered
shares
16,965,892
29,520,652
84.69
39.64
92.84%
3.75%
1.74%
1.67%
Structure of shareholders as of December 31, 2024
Kaunas city municipality Kaunas district municipality
Jurbarkas district municipality Other shareholders
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2024
62
Name
Type of shares
Number of
shares,
units
Total
nominal
value of
shares,
euros
Percentage of
shares from
those
released into
the public
circulation
Share of
the
authorise
d capital
(%)
Code 111106319
Kaunas District Municipality
Savanorių pr. 371, 49500
Kaunas,
Code 111100622
Ordinary
registered
shares
1,606,168
2,794,732
8.02
3.75
Other shareholders
Ordinary
registered
shares
1,459,917
2,540,256
7.29
3.41
Total:
20,031,977
34,855,640
100
46.80
17.2. The shareholders, who owned more than 5 per cent of the shares (22,770,166 ORS) issued for non-
public trading (VP ISIN code – LT0000128407) as of December 31, 2024 are listed in Table 9.
Table 9
Name
Type of
shares
Number of
shares,
units
Total
nominal
value of
shares,
Euro
Percentage of
shares from
those released
into the public
circulation
Share of
the
authorise
d capital
(%)
Kaunas City Municipality
Laisvės al. 96, 44251
Kaunas
Code 111106319
Ordinary
registered
shares
22,770,166
39,620,089
100
53.20
None of the shareholders of the Issuer holds any special rights of control. The rights of all shareholders are
the same; they are specified in article 4 of the Law on Companies of the Republic of Lithuania. The number
of shares carrying votes at the General Meeting of Shareholders of the Company is 42,802,143 units.
The Company has not been notified on the limitations of voting rights or any other mutual agreements of
shareholders which may limit the transfer of securities and / or voting rights.
In 2020, no dividends from the profit of 2019 were allocated and paid to the Issuer’s shareholders.
In 2021, no dividends from the profit of 2020 were allocated and paid to the Issuer’s shareholders.
In 2022, no dividends from the profit of 2021 were allocated and paid to the Issuer’s shareholders.
In 2023, the dividends from the profit of the year 2022 were allocated and paid to the shareholders of the
Issuer. Dividend per share was 0.07009 euro, in total – 3.0 million euro. A total of 0.05 million euros was
allocated for sponsorship.
In 2024, no dividends from the profit of 2023 were allocated and paid to the Issuer’s shareholders.
18. Employees
401 employees were employed in the Group as of December 31, 2024. Changes in the number of
employees of the Group in year 2020–2024 are provided in Table 10.
Table 10
Actual number of
employees
Group
31/12/2020
Group
31/12/2021
Group
31/12/2022
Group
31/12/2023
Group
31/12/2024
Total:
365
379
383
372
401
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2024
63
Actual number of
employees
Group
31/12/2020
Group
31/12/2021
Group
31/12/2022
Group
31/12/2023
Group
31/12/2024
management
3
3
2
2
2
specialists
203
212
203
189
205
workers
159
164
178
181
194
Changes in number of employees of the Company in year 2020–2024 are provided in Table 11.
Table 11
Actual number of
employees
Company
31/12/2020
Company
31/12/2021
Company
31/12/2022
Company
31/12/2023
Company
31/12/2024
Total:
354
350
353
344
370
management
1
1
1
1
1
specialists
200
197
189
178
192
workers
153
152
163
165
177
Education of employees of the Group as at the end of the reporting period.
Table 12
No
Education
Group
31/12/2020
Group
31/12/2021
Group
31/12/2022
Group
31/12/2023
Group
31/12/2024
1
Secondary incomplete
1
1
1
1
1
2
Secondary
124
176
150
140
147
3
College
49
38
34
38
39
4
Higher
191
164
198
193
214
Total:
365
379
383
372
401
Education of employees of the Company as at the end of the reporting period.
Table 13
No
Education
Company
31/12/2020
Company
31/12/2021
Company
31/12/2022
Company
31/12/2023
Company
31/12/2024
1
Secondary incomplete
1
1
1
1
1
2
Secondary
121
156
135
125
137
3
College
47
38
34
37
28
4
Higher
185
155
183
181
204
Total:
354
350
353
344
370
Company’s management pays a lot of attention on increase in work efficiency, working conditions
improvement, supply with latest working tools, professional development, planning of internal activities and
control implementation, also for improvement of consumer service quality. Executive and professional
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2024
64
qualification levels suit their positions, and work experience and practical knowledge of subject of other
employees makes them possible to work in their positions.
To increase work efficiency, the Company conducts an annual work performance evaluation of structural
units’ managers, the main goal of which is to evaluate the employee’s qualifications and abilities of functions
performance assigned in job regulations, to properly evaluate employees' activities, provide feedback on the
goals execution in order to increase employee loyalty, satisfaction with conducted work, encouraging them to
improve. The result of this process is information allowing better coordination of the Company's activities and
for encouraging employees to improve their working activities.
The Company actively cooperates with educational institutions and enables high school students to apply
theoretical knowledge and gain practical skills. When there is a need for new employees, the most active and
best students are given the opportunity to get a job in the Company.
The salary of employees of the Issuer consists of the constant part of salary, variable part of salary, benefits
and allocations paid according to the Labour Code of the Republic of Lithuania and other laws, Collective
agreement of the Company, and bonuses. Bonuses are paid from net profit, if the General Meeting of
Shareholders allocates part of the profit for the bonuses of the Company employees.
The collective agreement provides for special rights and obligations of the issuer's employees or part of
them. In accordance with the Company's new Collective agreement effective from 1 January 2019 and
subsequent amendments there to:
1. For continuous employment within the Company employees are granted additional paid leave.
2. The record of service of employees who worked in Lithuanian energy system companies and who
were redeployed to the Company according to the corporate employer agreement, i.e., when the transfer
was carried out according to the Labour Code or the Law on Employment Contract, is considered
uninterrupted and those employees are granted an additional paid leave for an uninterrupted record of
service within the Company.
3. At the agreement of the employer and employee, the employee may be granted unpaid leave for
family related issues and other important reasons.
4. Company’s employees are entitled to additional paid leave.
The employer obligates:
1. To ensure the conditions of preventive health check and, if necessary, to provide free health services
at the Company’s occupational health unit.
2. In the event of the death of an employee, the Company grants a benefit in the amount of 4 minimum
monthly salaries of the Republic of Lithuania (hereinafter referred to as the MMS), free transport, or covers
transport costs (the benefit is granted to the person burying the deceased);
3. In the event of the death of the employee's close relative (parent (adoptive parent), child (adoptive
child) or spouse), the Company grants the employee an MMS benefit, free transport or covers transport
costs;
4. In the event of the birth of one or more children, the Company grants the employee a gift in the
amount of 50 per cent MMS for each child;
5. Upon registration of the marriage, the employee is granted a gift in the amount of 50 per cent MMS;
6. A cash gift of EUR 50 is granted when an employee reaches the age of 25, 35, 45, 55, 65, and a
cash gift of EUR 100 when the employee reaches the age of 20, 30, 40, 50, 60, 70;
7. In other cases, when the employee needs financial support (in case of losses due to natural disasters
and other reasons beyond the control of the employee), the Company grants a benefit of up to 3 MMS;
8. In the event of a serious illness or accident, a benefit of up to 5 MMS is granted. The sickness benefit
is paid once a year (within 12 months).
19. Procedure for amending the Issuer’s Statutes
The Statutes of the Issuer say that the General Meeting of Shareholders of the Company has the exceptional
right to amend the Statutes other than the exceptions provided in the Law on Companies of the Republic of
Lithuania. The resolution on the amendment of the Company’s Statutes 2/3 qualified majority of votes of the
members participating in the meeting of shareholders is needed.
The Statutes of the Company were amended on August 10, 2023 by the decision of the General Meeting of
Shareholders. The new wording of the Statutes was registered on August 28, 2023 in the Register of Legal
Entities of the Republic of Lithuania. It can be found on Company’s website at www.kaunoenergija.lt.
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2024
65
20. Issuer’s management bodies
According to the Statutes of the Company, the management bodies of the Company include the General
Meeting of Shareholders, a collegial management body – the Supervisory Board, a collegial management
body – the Management Board, and a sole management body – General Director.
Decisions of the General Meeting of Shareholders made on the issues within the competence of the General
Meeting of Shareholders provided for in the Statutes of the Company are binding to its shareholders, the
Supervisory Board, the Management Board, and the General Director, and to other employees of the
Company.
All persons who are the shareholders of the Company on the date of the General Meeting of Shareholders
have the right to attend the Company’s General Meeting of Shareholders personally or by proxy or be
represented by persons with whom they had entered into the agreement on the transfer of the voting right.
The record date of the meeting of the Company is the fifth working day before the General Meeting of
Shareholders or the fifth working day before the repeat General Meeting of Shareholders. A person attending
the General Meeting and entitled to vote shall provide a document which is a proof of his personal identity
and sign the registration list of the Meeting of Shareholders. A person who is not a shareholder shall
additionally provide a document attesting to his right to vote at the General Meeting of Shareholders.
2 (two) General Meeting of Shareholders were convoked in the year 2024. Company’s General Manager and
the Chief Finance Officer attended them. Issuers’ shareholders can ask questions and can get answers or
explanations from Company’s managers and speakers.
The collegial management body – Supervisory Board is elected by the General Meeting of Shareholders
according to the procedure specified in the Law on Companies of the Republic of Lithuania. The Supervisory
Board consists of 3 (three) members. The Supervisory Board is elected for a term of 4 (four) years. The
Supervisory Board elects the chairman of the Supervisory Board from among its members. The General
Meeting of shareholders may remove from office the entire Supervisory Board or its individual members
before the expiry of the term of office of the Supervisory Board. Where individual members of the
Supervisory Board are elected, they shall be elected only until the expiry of the term of office of the current
Supervisory Board.
The Supervisory Board elects and dismisses the Management Board members and supervises the activities
of the Board and the General manager of the Company; submits its comments and proposals to the General
Meeting of Shareholders on the Company’s operating strategy, set of annual financial statements, draft of
profit / loss allocation and the annual report of the Company as well as the activities of the Board and the
General Manager of the Company; submits proposals to the Board and the General Manager of the
Company to revoke their decisions which are in conflict with laws and other legal acts, the statutes of the
Company or decisions of the General Meeting of Shareholders; addresses other issues assigned to the
scope of powers of the Supervisory Board by decisions of the General Meeting of Shareholders regarding
the supervision of the activities of the Company and its management bodies. The Supervisory Board shall
not be entitled to assign or delegate the functions assigned to the scope of its powers by the Law on
Companies of the Republic of Lithuania and the statutes of the Company to other bodies of the Company.
The Supervisory Board, following the resolution No. 1K-18 of August 21, 2008 of the Securities Commission
of the Republic of Lithuania “Regarding The Requirements For Audit Committees”, as well as “Guidelines For
The Application Of Requirements For Audit Committees” which were approved by the decision of the
Securities Commission of November 28, 2008 approves the internal rules of procedure for forming the Audit
Committee and elects the Audit Committee members.
The Supervisory Board of the Company approved on May 21, 2019 a new wording of the internal rules of
procedure of the Audit Committee of the Company.
The Management Board is a collegial management body of the Company. The Management Board is
comprised of 3 (three) members. The Management Board is elected for the period of 4 (four) years by the
General
Meeting of
Shareholders
Supervisory
Board
Management
Board
General
Director
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2024
66
Supervisory Board. The Supervisory Board can remove from office the entire Management Board or its
individual members before the expiry of their term. If individual members of the Management Board are
elected, they shall serve only until the expiry of the term of office of the current Management Board. The
Management Board elects the chairman of the management Board from among its members.
The General Manager is the manager of the Company. The manager of the Company is a sole person
management body of the Company organising its activities. Authority and responsibilities of the
administration members of the Company are established by the order of the General Manager.
20.1. Data on the committees in the Company
The members of Audit Committee appointed by the decision No. 2023-4 of the Supervisory Board of October
13, 2023:
Full name
Position
Beginning of term
End of term*
Mr. Mindaugas Šimkus
Independent member of Audit
Committee
October 13, 2023
April 26, 2027
Ms. Violeta
Kavaliauskienė
Independent member of Audit
Committee
October 13, 2023
April 26, 2027
Ms. Edita Girdvilienė
Member of Audit Committee
October 13, 2023
April 26, 2027
* The term of office of the Audit Committee coincides with the term of office of the Supervisory Board of the
Company.
In carrying out its activities, the Audit Committee follows the internal rules of procedure of the Company’s
Audit Committee approved by decision No 2019-4 of May 21, 2019 of the meeting of the Supervisory Board
of the Company. The Audit Committee performs its functions provided for in article 52 of the Law on Audit of
the Republic of Lithuania.
20.2. Information on the members of the Company’s Supervisory Board:
Members of the Supervisory Board of the Company:
Full name
Position
Beginning of term
End of term
Mr. Antanas Etneris
Chairman of the Supervisory
Board
June 29, 2023
April 26, 2027
Mr. Mindaugas Bičkauskas
Member of the Supervisory Board
June 29, 2023
April 26, 2027
Ms. Jolanta Brazaitienė
Member of the Supervisory Board
April 1, 2024
April 26, 2027
Company’s Supervisory Board comprised of two independent members and of one member of Kaunas City
Municipality administration, as he partially represents the controlling shareholder, i.e., Kaunas City
Municipality, holding 92.84 per cent of the Company’s voting shares.
2 session of the Supervisory Board was held during of the year 2024. More than ½ of the members of the
Supervisory Board attended all sessions.
Mr. Antanas Etneris
Mr Antanas Etneris, main occupation - director of UAB Wisewood (code 302527538, Ringuvos str. 74, LT-
45245 Kaunas), director of UAB Mana Grupė (code 303991865, Kruonio str. 16, Kaunas), director of UAB
Airhotel (code 302598948, Oro Uosto str. 2, Karmėlava, LT-54460 Kaunas distr.), member of the Board of
UAB Stoties Turgus, member of the Board of UAB Kauno Vandenys.
Holds no shares of the company. Holds the shares of the companies UAB Wisewood, UAB Mana Ranga,
UAB Mana Grupė, UAB Airhotel, UAB Dramart, UAB Ukraineičių 4, UAB Vėjo Dukra, UAB Plėtros Fondas,
UAB Aguonų Projektai, LLC My Group.
During the reporting period, the member of the Supervisory Board was remunerated EUR 42.4 thousand.
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2024
67
Mr. Mindaugas Bičkauskas
Main occupation - Director of UAB Urbo bankas Vilnius branch (code 112027077, Pamėnkalnio str. 40, LT-
01114 Vilnius).
Holds no shares of the company. Holds the shares of the companies AB Šiaulių bankas, AB Apranga, AB
Linas Agro, AB Vilkyškių pieninė, AB Litgrid.
During the reporting period, the member of the Supervisory Board was remunerated EUR 31.8 thousand.
Jolanta Brazaitienė
Main occupation Kaunas city municipality administration - Leader (Central Accounting Unit) (company code
111106319, Laisvės av. 96, LT-44251 Kaunas).
During the reporting period, the member of the Supervisory Board was remunerated EUR 15.7 thousand.
20.3. Information on the members of the Company’s Management Board
Members of Company’s Management Board:
Full name
Position
Beginning of term
End of term
Nerijus Mordas
Chairman of the Management Board
July 13, 2023
April 26, 2027
Algimantas Stasys Anužis
Member of the Management Board
July 13, 2023
April 26, 2027
Giedrius Kazlauskas
Member of the Management Board
July 13, 2023
April 26, 2027
20 sessions of Company’s Management Board were held in the year 2024. More than 2/3 members of the
Management Board attended all the sessions.
Mr. Nerijus Mordas
Main occupation Chief finance officer of UAB Vičiūnų Grupė (code 303211678, V. Krėvės av. 97, LT-50369
Kaunas). Member of Company’s Management Board since June 1, 2015 until April 27, 2023 and since July
13, 2023.
Holds no shares of the Company. No interest in the capital of other Lithuanian companies.
Mr. Nerijus Mordas charged EUR 41.7 thousand of remuneration under agreement of activity of member of
the Management Board. No bonuses estimated, nor any assets were transferred or guarantees issued
during the reporting period.
Giedrius Kazlauskas
Main occupation UAB „Laustiga“ director (code 135456025, Ukrainiečių str. 4, LT-45234 Kaunas).
Member of Company’s Management Board since July 13, 2023.
Holds no shares of the Company. No interest in the capital of other Lithuanian companies.
Mr. Giedrius Kazlauskas charged EUR 31.3 thousand of remuneration under agreement of activity of
member of the Management Board. No bonuses estimated, nor any assets were transferred or guarantees
issued during the reporting period.
Mr. Algimantas Stasys Anužis
Member of the Council of Kaunas Chamber of Commerce, Industry and Crafts, president of Lithuanian
Veterans Basketball League. No main place of work.
Member of Company’s Management Board since June 1, 2015 until April 27, 2023 and since July 13, 2023.
Holds no shares of the Company. No interest in the capital of other Lithuanian companies.
Mr. Algimantas Stasys Anužis charged EUR 31.3 thousand of remuneration under agreement of activity of
member of the Management Board. No bonuses estimated, nor any assets were transferred or guarantees
issued during the reporting period.
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2024
68
20.4. Information on the General Manager and Chief accountant of the Company:
Mr. Tomas Garasimavičius
General Director of the Company from March 30, 2020. Education - higher university, Vilnius University in
2003, Bachelor of Political Science, Vilnius University in 2005, Master of Political Science, Creighton
University, USA 2005, Master of Political Science. Workplaces during the last 10 years and positions: Head
of the Sustainable Energy Development Division of Energetikos Agentūra, PI (June 2010 – December 2012),
Adviser to the Prime Minister of the Republic of Lithuania on Energy (December 2012 – December 2016),
Member of the Supervisory Board of UAB Lietuvos Energija (July 2013 – July 2017), Member of the
Nomination and Remuneration Committee of the Supervisory Board of UAB Lietuvos Energija (July 2013 –
July 2017), Member of the Risk Management Supervisory Committee of the Supervisory Board of UAB
Lietuvos Energija (September 2013 – July 2017), Member of the Support Fund Council of UAB Lietuvos
Energija (September 2014 – September 2017), Adviser to the Prime Minister of the Republic of Lithuania on
Energy and the Environment (January 2017 – March 2018), Adviser to the Mayor of Kaunas city on Energy
(June 2018 – March 2020).
Holds no shares of the Company. No interest in the capital of other companies.
Ramunė Petkevičienė
Chief Accountant of the Company from 2 May 2024. Education – higher university degree, Vilnius University,
Master's degree in Accounting, finance and banking. Workplaces in the last 10 years, and job positions:
Hoptrans Holding, UAB Chief Accountant 2013–2024 y.
Company’s General Manager and the Chief Accountant charged 179.8 thousand euros of remuneration in
the year 2024, and the average amount per member is 89.9 thousand euros. No other assets had been
transferred; no guarantees granted.
21. Information on significant agreements
There are no significant agreements that would come into force, change or termination in case of change in
controls of Issuer (their impact as well, except cases when due to the character of agreements the disclosure
of them would make a significant harm).
22. Information on agreements of the Issuer and its managerial body members or
employees
There are no agreements of the Issuer or its managerial body members or employees (which provide for
compensation in case of their resignation or termination of employment on no grounds or in case their
employment is terminated due to changes in controls of the Issuer).
23. Information on major transactions with related parties
There were no larger individual transactions. More detailed information is provided in the Note 25 of the
Explanatory Notes to the Financial Statements.
24. Information on harmful transactions concluded on behalf of the Issuer during the
reporting period
There are no harmful transactions concluded on behalf of the Issuer during the reporting period (not
complying with the Company's objectives, normal market conditions, detrimental to the interests of
shareholders and other interest groups etc.) which were or are likely to have an adverse effect on the
Issuer's activities and (or) performance in the future, as well as information on transactions entered into in a
conflict of interest between the Issuer’s management, controlling shareholders or other related parties'
obligations to the Issuer and their private interests and (or) other duties.
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2024
69
25. Information on compliance with the Governance Code of Companies and the
Company’s corporate social initiatives and policies
Information on compliance with the corporate governance code is provided in Annex 2 to this Management
Report. Management reports on the Company’s corporate social initiatives and policies are announced on
the Company’s website.
26. Data on publicised information
In performing its obligations under the applicable legislation regulating the securities market, the Issuer has
announced the following information starting from January 1, 2024 over the GlobeNewswire news distribution
service, in which notices are disseminated within the European Union. This information was also posted on
the website of the Issuer. All the information is available on website of Nasdaq Vilnius
(http://www.nasdaqbaltic.com/market/?lang=lt) and Issuer’s website (http://www.kaunoenergija.lt).
Title
Announcement
category
Language
Time
AB Kauno energija business activity results of the 12
months of the year 2024
Interim
information
EN, LT
26/02/2025
17:00
AB Kauno energija business activity results of the 9 months
of the year 2024
Interim
information
EN, LT
26/11/2024
08:27
AB Kauno energija has signed a loan agreement with the
European Investment Bank
Notification on
material event
EN, LT
13/09/2024
17:00
Interim consolidated financial statement of Kauno energija
AB covering 6 months of 2024
Half-Yearly
information
EN, LT
26/08/2024
16:00
Activity results of AB Kauno energija of the 1 quarter of the
year 2024
Interim
information
EN, LT
24/05/2024
16:00
Audited annual information of AB Kauno Energija for the
year 2023
Annual
information
EN, LT
30/04/2024
10:11
Resolutions of the General Meeting of Shareholders of AB
Kauno Energija
General
meeting of
shareholders
EN, LT
30/04/2024
10:05
Convocation of General Meeting of Shareholders of AB
Kauno Energija
General
meeting of
shareholders
EN, LT
03/04/2024
16:00
Resolutions of the Extraordinary General Meeting of
Shareholders of “Kauno Energija” AB
General
meeting of
shareholders
EN, LT
30/03/2024
07:55
Update: Convening the Extraordinary General Meeting of
Shareholders of “Kauno Energija” AB
General
meeting of
shareholders
EN, LT
20/03/2024
07:54
Kauno energija, AB. Regarding information published in the
media
Notification on
material event
EN, LT
19/03/2024
10:02
Convening the Extraordinary General Meeting of
Shareholders of “Kauno Energija” AB
General
meeting of
shareholders
EN, LT
08/03/2024
08:22
Activity results of 12 months of the year 2023
Interim
information
EN, LT
26/02/2024
15:50
70
Annex 1
AB KAUNO ENERGIJA
REMUNERATION REPORT FOR 2024
GENERAL INFORMATION ON THE REMUNERATION REPORT
The Remuneration Report of AB Kauno Energija (hereinafter – the Company) has been prepared for the
reporting financial period of 2024, which coincides with the calendar year. The Remuneration Report
(hereinafter - the Report) was prepared in accordance with the Law on Financial Statements of Entities of the
Republic of Lithuania, the Remuneration Policy of AB Kauno Energija (hereinafter - the Remuneration Policy)
and other legal acts.
On April 29, 2024 the General Meeting of Shareholders approved the Remuneration Policy of AB Kauno
Energija and approval of the remuneration report. This Remuneration Policy applies to the General Director
and members of the Management Board and Supervisory Board of the Company insofar as it relates to the
payment of monetary remuneration for activities in the management and / or supervisory bodies of the
Company. The Remuneration Report shall include information on remuneration of each member of the
management and supervisory bodies, information on other (un) received benefits, other data.
INFORMATION ON THE REMUNERATION RECEIVED BY MEMBERS OF THE MANAGEMENT AND
SUPERVISORY BODIES
According to the Remuneration Policy approved by the Company’s General Meeting of Shareholders, the
specific remuneration is paid only to the Company’s General Director, Supervisory Board and members of
the Management Board.
Report on the remuneration of the Company’s General Director in 2024
The remuneration accrued and paid to the Company’s General Director during 2024, determined by the
Management Board, complied with the remuneration forms provided for in the Remuneration Policy (Item
3.1). The amount of remuneration for the General Director of the Company was determined by the decision
of the Management Board No. 2024-5-4 of February 26, 2024. As a reward for excellent performance,
remarkable efforts in carrying out the assigned duties and initiatives, by the decision No 2024-11-6 as of 24
May 2024, the Management Board of the Company granted a bonus equal to his two months fixed part of
salary. The General Director of the Company was paid with EUR 133.4 thousand remuneration during 2024
(a fixed part of the remuneration 107.3 thous. Eur, salary supplement 8.4 thous. Eur, bonus 17.4 thous. Eur),
an increase of 2.8% compared to 2023 (the General Director started working for the Company on March 30,
2020).
The Head of the Company – the General Director - did not receive any remuneration from the companies
referred to the group of companies, as defined in the Law on Consolidated Financial Statements of
Companies of the Republic of Lithuania. The salary of the Head of the Company was paid in accordance
with the procedure, scope and terms provided for in the Employment Contract, the General Director did not
receive other property benefits during 2024, including the award of shares or other transactions in favour of
and in the interests of the Head.
Report on the remuneration of the members of the Supervisory Board of the Company in 2024
The Company has 3 (three) independent members of the Supervisory Board. During 2024 the Company
calculated EUR 89.9 thousand to independent members of the Supervisory Board under activity agreements,
an increase of 102.9% compared to 2023. The average EUR 30.0 thousand per one independent member of
the Supervisory Board per year. The members of the Supervisory Board did not receive payments from the
subsidiaries. Information on the remuneration of each individual member of the Supervisory Board is
provided in the Annual Report.
Report on the remuneration of the members of the Management Board of the Company in 2024
71
The Company has 3 (thre) independent members of the Management Board. During 2024 the Company
calculated EUR 104.2 thousand to independent members of the Management Board under activity
agreements, An increase of 33.2% compared to 2023. The average EUR 34.7 thousand per one
independent member of the Management Board per year. The members of the Management Board did not
receive payments from the subsidiaries. Information on the remuneration of each individual member of the
Management Board is provided in the Annual Report.
No bonuses were paid to the members of the Company’s Supervisory board and Management Board.
During the reporting period, no guarantees or sureties were given to the members of the Supervisory Board,
Management Board and the Head of the Company, no assets or other property rights were transferred, no
other benefits were received from the Company.
Members of the Supervisory Board and Management Board, the General Director of the Company and
members of the Audit Committee have no significant material obligations to the Company (Issuer), just as the
Company (Issuer) has no obligations to these persons.
Guarantees and sureties and / or other measures to secure the fulfilment of the obligations of the Head of
the Company, members of the management bodies and Supervisory Board were not granted on behalf of
the Issuer during 2024, the Issuer did not grant loans and Company shares to these persons.
The remuneration paid to the Head of AB Kauno Energija, members of the Management Board and the
Supervisory Board in 2024 complied with the principles, grounds and conditions approved in the
Remuneration Policy.
INFORMATION ON THE COMPANY'S EMPLOYEE REMUNERATION SYSTEM
The description of the Company's Remuneration Scheme (the "Remuneration Scheme") was adopted on 16
November 2023 and supplemented in 2024 by a supplementary incentive scheme.
The purpose of the Company's Remuneration System is to establish clear principles of remuneration for
work, to reward work and results fairly and transparently, to motivate, encourage and empower employees to
improve the efficiency and quality of their work, to achieve the Company's objectives, and to retain and
attract competent employees.
The principles of the remuneration system are designed to be consistent with the long-term interests of the
Company's business, business strategy, objectives, values and to promote sound and effective risk
management, to avoid conflicts of interest, and to ensure the principles of investor and client protection in the
provision of services to the Company.
The Company's Remuneration Framework is designed according to the following principles:
*Fairness - the reward and performance evaluation system applies to all employees of the Company. Under
the job level matrix, the salary ranges for positions of equal value are the same;
*competitiveness - the remuneration of the Company's employees is determined by taking into account the
situation on the labour market, by comparing the remuneration of certain posts with the remuneration of
similar posts or posts of similar value on the labour market;
* clarity/transparency - the reward and performance evaluation system is aligned with the Company's
strategy. The remuneration of the Company's employees depends on the Company's financial capacity, the
results of the performance evaluation, the economic situation in the country and the Company's budget. It is
possible to set the remuneration of individual employees according to the Company's reasonable need at a
given time for a particular competency held by an employee. Every employee of the Company knows at
which level of the job matrix his/her position is located, what career paths are possible and how his/her
performance is related to his/her remuneration;
*neutrality with regard to gender, age, origin, nationality, religious, political opinions, social status, sexual
orientation - employees are paid equally for equal work or work of equal value, regardless of their gender,
age, origin, nationality, religious, political opinions, social status, sexual orientation.
The average salary of the Company's employees (excluding members of the Supervisory Board and the
Management Board) and the Company's gross revenue:
2020 y.
2021 y.
2022 y.
2023 y.
2024 y.
Gross revenue,
thousand EUR
57
457
6,299
3,881
7,592
72
Average salary,
thousand EUR
1.5
1.6
1.8
1.9
2.2
FINAL PROVISIONS OF THE REMUNERATION REPORT
The Report approved by the Management Board of the Company is submitted to the General Meeting of
Shareholders, which decides whether to approve the Remuneration Report or not. Such (non) approval does
not release the Management Board from the responsibility for the decision taken.
The Remuneration Report for 2024 is an integral part of the Consolidated Annual Report and is published on
the website of the Company http://www.kaunoenergija.lt and www.nasdaqomxbaltic.com in accordance with
the procedure established by legal acts.
73
Annex 2
PLLC KAUNO ENERGIJA, PURSUE THE GOVERNANCE REPORT
PLLC Kauno Energija (hereinafter – the Company), following Article 12 paragraph 3 of the Law on Securities
of the Republic of Lithuania and item 24.5 of the Listing Rules of PLLC NASDAQ Vilnius, discloses its
compliance with the Corporate Governance Code for the Companies, whose securities are traded on the
regulated market, as approved by the NASDAQ Vilnius PLLC, and its specific provisions and
recommendations. If any of the provisions or recommendations of the Codex are not respected due to any
reasons, the explicable information is provided herein.
Summary of the Corporate Governance Report:
Specifics of the Company’s activities:
The Company is listed on the secondary list of the Nasdaq Vilnius Stock Exchange starting from December
28, 1998.
The main activities of the Company are production, rendering of services. The Company is the parent company
of the Group consisting of LLC GO Energy LT. The Company produces and supplies heat to consumers (for
heating and hot water preparation purposes) in the cities of Kaunas and Jurbarkas and in the Kaunas district
(Akademija, Ežerėlis, Domeikava, Garliavos, Girioniai, Neveronys, Raudondvaris).
Company’s governance structure:
- The Company’s managing bodies consist of the Management Board, elected for the 4 years term of office,
and the General Manager, elected by the Management Board (for further information on the Issuer's governing
bodies and the composition of the committees please refer to the Article 20 “Issuer's bodies” of this
Consolidated Annual Report). The Management Board’s and the manager’s activities are concentrated on the
fulfilment of the Company’s strategic objectives taking count of the shareholders’ equity value increase.
- A supervisory body – the Supervisory Board acts in the Company.
The Management Board and the general Manager acts in close cooperation seeking to obtain the maximum
benefit for the Company and its shareholders. The Management Board periodically reviews and assesses
Company’s activity results.
- The Chairman of the Management Board of the Company is not and was not the Head of the Company. The
duties he holds or held in the past shall not prevent independent and impartial supervision.
- The members of the Management Board elected by the General Meeting of Shareholders are independent
and act for the benefit of the Company and its shareholders.
- The Audit Committee acts in the Company. 2 independent members act in this committee. There are no
nomination and remuneration committees in the Company.
Accountability to the Company's shareholders:
- Information on the General Manager, composition of the Supervisory and Management Boards, members
education, work experience, competence and participation in activities of other companies is disclosed and
constantly updated in Company’s periodical reports as well as website.
- The Company discloses all regulated information through PLLC Nasdaq Vilnius news distribution system.
This ensures access to the broadest public in the Republic of Lithuania and other EU countries.
The information shall be provided simultaneously in Lithuanian and English. The company publishes the
information before or after the trading session of PLLC Nasdaq Vilnius. The Company shall not disclose
information that may affect the price of the issued securities in the form of comments, interviews or in any
other manner until such information is made public through the news distribution system of PLLC Nasdaq
Vilnius.
74
- All shareholders of the Company have equal access to and participate in the decision-making process
important for the Company.
The procedures for convening and conducting general meetings of shareholders shall comply with the
provisions of the legal acts and shall provide equal opportunities for shareholders to participate in the meeting,
to acquaint themselves in advance with draft resolutions and decision-making materials, as well as to ask.
INFORMATION ON CORPORATE GOVERNANCE
(prepared in accordance with the version of the Law on Reporting of Enterprises and Groups of Enterprises of
the Republic of Lithuania (XIV-2811), effective from 1 December 2024)
1. Reference to the applicable corporate governance code and where it is publicly available and/or reference
to any relevant publicly available information on corporate governance practices
The Company provides information on its compliance with the applicable Corporate Governance Code in
Annex 2 of the consolidated annual management report for 2024. The Company publishes its annual
management report on its website (on the Company's website under "Investors" → "Financial information and
reports". Link: https://kaunoenergija/investuotojams/finansine-informacija/).
2. Where the provisions of the applicable Corporate Governance Code are deviated from and/or not complied
with, the provisions deviated from and/or not complied with and the reasons for this
The Company publishes this information in Annex 2 "Corporate Governance Report" of the 2024
Consolidated Annual Management Report under the columns "Yes / No / Not Relevant" and "Comment".
3. Information on the extent of risks and risk management - a description of the management of the risks
associated with the financial statements, the risk mitigation measures and the internal control system in place
at the company
The Company discloses information on the extent of risk and risk management in paragraphs 6.2 and 7 of the
2024 consolidated annual management report.
4. Information on significant direct or indirect holdings in the company
The Company discloses information on significant direct or indirect holdings in the 2024 consolidated annual
management report in item 17.
5. Information on the Company's transactions with related parties as set out in Article 37.2 of the Companies
Act (specifying the parties to the transaction (legal form of the legal person, name, code, register where data
on this person are collected and kept, registered office (address); name, surname, mailing address of natural
person) and the value of the transaction)
Pursuant to Article 37.2(10)(3) of the Law on Joint Stock Companies, the provisions of Article 37.2 shall not
apply to transactions concluded with a subsidiary company of which the joint stock company is the owner of
all the shares, or where the aggregate amount of such transactions in the course of a financial year does not
exceed 1/10th of the value of the assets of the latest balance sheet of the joint stock company whose shares are
admitted to trading on a regulated market. As the Company's transactions are all loans with subsidiaries or do
not exceed 1/10th of its assets, the details of such transactions are not detailed.
6. Information on shareholders with special control rights and description of these rights
Information on the Company's shareholders is set out in paragraph 17 of the 2024 Consolidated Annual
Management Report.
7. Information on any existing restrictions on voting rights (such as restrictions on the voting rights of persons
holding a certain percentage or number of votes, time limits for the exercise of voting rights, or systems
whereby the rights attached to the securities are separated from the security holder)
The Company is not subject to any restrictions on voting rights.
75
8. Information on the rules governing the election and replacement of members of the Board of Directors and
amendments to the company's articles of association
Information on amendments to the Company's Articles of Association is set out in item 19 of the 2024
Consolidated Annual Management Report.
Information on the election and replacement of the members of the Company's Board of Directors is set out in
paragraph 20 of the 2024 Consolidated Annual Management Report.
9. Information on the powers of the members of the Board
The members of the Company's Board of Directors act in accordance with the Companies Act, the Company's
Articles of Association, the Rules of Procedure of the Board of Directors and other legal acts and have no
special powers. The members of the Board shall act at all times for the benefit of the Company and its
shareholders.
10. Information on the competence of the General Meeting of Shareholders, the rights of shareholders and
their exercise, if this information is not provided for by law
The Company discloses information on the competence of the General Meeting of Shareholders, the rights of
shareholders and the exercise of those rights, as well as the procedure for organising shareholders' meetings,
in point 20 of the 2024 consolidated annual management report.
11. Information on the composition of the management and supervisory bodies and their committees, and their
and the CEO's areas of responsibility Board functions.
The Company provides information on the members of the Supervisory Board, the Management Board and
the Company's Chief Executive Officer in items 20.1, 20.2, 20.3 and 20.4 of the 2024 Consolidated Annual
Management Report. The members of the Supervisory Board, the members of the Management Board, the
Chief Executive Officer of the Company shall be guided in their activities by the Rules of Procedure of the
Management Board and the Regulations of the Chief Executive Officer. Nevertheless, the members of the
Supervisory Board, the members of the Management Board and the Chief Executive Officer of the Company
shall act at all times for the benefit of the Company and its shareholders.
12. Details of any agreements between shareholders (substance, terms)
The Company does not have any record of any inter-shareholder agreements.
PRINCIPLES/ RECOMMENDATIONS
YES/NO /NOT
APPLICABLE
COMMENTARY
Principle 1: General Meeting of Shareholders, equitable treatment of shareholders, and shareholders’
rights
The corporate governance framework should ensure the equitable treatment of all shareholders. The
corporate governance framework should protect the rights of shareholders.
1.1. All shareholders should be provided with
access to the information and/or documents
established in the legal acts on equal terms.
All shareholders should be furnished with
equal opportunity to participate in the
decision-making process where significant
corporate matters are discussed.
Yes
All shareholders have equal access to the
information and / or documents provided
for in legal acts and participate in making
important decisions for the Company.
The Company provides information
through the Nasdaq Vilnius Stock
Exchange Central Regulated Information
Base in Lithuanian and English
simultaneously. The information is
published immediately at once, thus
ensuring the simultaneous provision of
information to all.
76
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 authorized capital of the Company
consists of ordinary registered shares,
which grant equal voting, ownership,
dividend and other rights to all
shareholders of the Company.
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 enables investors to
familiarize themselves with the rights
granted by the new or already issued
shares well in advance.
1.4. Exclusive transactions that are
particularly important to the Company, such
as transfer of all or almost all assets of the
Company which in principle would mean the
transfer of the Company, should be subject to
approval of the General Meeting of
shareholders.
Yes
According to the Statutes of the
Company, important transactions, such
as decisions on the execution,
assignment, lease, pledge and mortgage
of long-term assets the book value of
which exceeds EUR 3 million, an
approval of General Meeting of
Shareholders or Supervisory Board must
be received
Due to extremely important transactions,
such as the transfer of all or almost all the
Company's assets, the Company would
be guided by the Law on Companies of
the Republic of Lithuania and other legal
acts establishing requirements for the
approval of such transactions.
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 shareholders of the Company are
informed about the date, place and time
of the General Meeting of Shareholders
in accordance with the established
procedure in advance, in accordance with
the terms established by legal acts,
announcing the General Meeting of
Shareholders, agenda, and draft
resolutions in the Central Regulated
Information Base of PLLC Nasdaq
Vilnius Stock Exchange. The Company
specifies the date of the General Meeting
of Shareholders and may propose draft
resolutions in the Notice of the General
Meeting of Shareholders to be convened
on the Company's website
www.kaunoenergija.lt In the notice of
the convention of the General Meeting of
Shareholders, the Company shall indicate
when the shareholders may supplement
the agenda of the General Meeting of
Shareholders and propose draft
resolutions.
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
Yes
The documents prepared for General
Meeting of Shareholders including draft
resolutions of the meeting are available
not later than 21 day prior the date of
General Meeting of shareholders as
required by the Law on Joint stock
companies. The documents placed on the
website of NASDAQ Vilnius security
77
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.
exchange and the Company website are
available in Lithuanian and English
languages. Resolutions accepted by the
General Meeting of Shareholders
including financial reports, the audit
report, annual report, amendments of the
Statutes etc. are announce in Lithuanian
and English languages are announced via
the central base of regulated information
of NASDAQ Vilnius security exchange
and the Company website
www.kaunoenergija.lt
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
The shareholders of the Company have
the right to participate in the General
Meeting of Shareholders both personally
and through a representative, if the
person has the appropriate authorization
or the contract of transfer of voting rights
concluded with him/her in accordance
with the procedure established by legal
acts, as well as the conditions for the
shareholders to vote by filling in the
General voting bulletin as provided by
the Law on Companies of the Republic of
Lithuania.
1.8. With a view to increasing the
shareholders’ opportunities to participate
effectively at General Meetings of
Shareholders, it is recommended that
companies should apply modern
technologies on a wider scale and thus
provide shareholders with the conditions to
participate and vote in General Meetings of
Shareholders via electronic means of
communication. In such cases the security of
transmitted information must be ensured, and
it must be possible to identify the
participating and voting person.
No
The Company does not comply with the
provisions of this recommendation as
there is no possibility to ensure the
security of the information transmitted
and it is not possible to identify the
person who participated and voted.
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
When announcing the General Meeting
of Shareholders, and if the agenda of the
General Meeting of Shareholders
includes the issue of electing new
members of the collegial body or electing
the audit firm, it shall disclose in the draft
resolutions the nominations of the
proposed new members of the collegial
body and the proposed election
Company.
Information about the candidates to the
members of the collegial body shall be
provided in advance by publishing this
information on the Nasdaq Vilnius Stock
Exchange website, on the website of
PLLC Kauno Energija,
www.kaunoenergija.lt, or by publishing
it to the shareholders participating in the
General Meeting during the meeting if
78
the shareholders, whose shares give at
least 1/20 of all votes, propose an
additional candidate during the meeting.
In its annual and six-month interim
report, the Company publicly informs
about the positions held by the collegial
body, work experience and education.
1.10. Members of the company’s collegial
management body, heads of the
administration
1
or other competent persons
related to the company who can provide
information related to the agenda of the
general meeting of shareholders should take
part in the general meeting of shareholders.
Proposed candidates to member of the
collegial body should also participate in the
general meeting of shareholders in case the
election of new members is included into the
agenda of the general meeting of
shareholders.
Yes
Members of the Company's collegial
body and heads of administration
participate in the General Meetings of
Shareholders. Proposed nominees for
members of the collegial body are also
present if possible, if the election of new
members is included on the agenda of the
General Meeting.
Principle 2: Supervisory Board
2.1. Functions and liability of the Supervisory Board
The Supervisory Board of the Company should ensure representation of the interests of the
Company and its shareholders, accountability of this body to the shareholders and objective
monitoring of the Company’s operations and its management bodies as well as constantly provide
recommendations to the management bodies of the Company.
The Supervisory Board should ensure the integrity and transparency of the Company’s financial
accounting and control system.
2.1.1. Members of the Supervisory Board
should act in good faith, with care and
responsibility for the benefit and in the
interests of the Company and its shareholders
and represent their interests, having regard to
the interests of employees and public
welfare.
Yes
According to the knowledge of the
Company all the members of the
Supervisory Board are acting in good
faith in the interests of the Company
following the Company’s but not the own
interests or interests of the third persons.
2.1.2. Where decisions of the Supervisory
Board may have a different effect on the
interests of the Company’s shareholders, the
Supervisory Board should treat all
shareholders impartially and fairly. It should
ensure that shareholders are properly
informed about the Company’s strategy, risk
management and control, and resolution of
conflicts of interest.
Yes
The Company's Supervisory Board in its
work aim to behave honestly and
impartially with all the Company's
shareholders and by the knowledge of the
Company, there was no such kind of the
contrary case. The Chairman of the
Company's Supervisory Board and the
Chairman of the Management Board
harmonizes and coordinates interaction
with Company’s General Manager and in
the name of Supervisory and
Management Boards communicates with
shareholders, informs the shareholders
about the Company’s strategy, activity
and other essential questions.
1
For the purposes of this Code, heads of the administration are the employees of the company who hold top level management
positions.
79
2.1.3. The Supervisory Board should be
impartial in passing decisions that are
significant for the Company’s operations and
strategy. Members of the Supervisory Board
should act and pass decisions without an
external influence from the persons who
elected them.
Yes
The Supervisory Board of the Company
acts impartially when taking decisions
that are significant for the Company's
activities and strategy.
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
2
members of the supervisory
board should: a) maintain independence of
their analysis and decision-making; b) not
seek or accept any unjustified privileges that
might compromise their independence.
Yes
According to the information available to
the Company, all members of the
Supervisory Board act in the best
interests of the Company and
shareholders, are guided by the interests
of the Company and not by themselves or
by third parties, trying to maintain their
independence in decision making.
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 longterm
interests of the Company and its
shareholders, which may give rise to
reputational, legal or other risks.
Yes
In exercising its competence to supervise
the activities of the Company's
management bodies, the Supervisory
Council performs the duties specified in
the recommendation and submits its
opinion on tax planning issues.
2.1.6. The Company should ensure that the
Supervisory Board is provided with
sufficient resources (including financial
ones) to discharge their duties, including the
right to obtain all the necessary information
or to seek independent professional advice
from external legal, accounting or other
experts on matters pertaining to the
competence of the Supervisory Board and its
committees.
Yes
Based on the Company’s opinion, the
Supervisory Board are provided with
sufficient resources, including their right
to get all the necessary information,
especially from the employees of 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.
Yes
Pursuant to the Law on Companies of the
Republic of Lithuania, the Supervisory
Board is elected, and the qualification of
its members is assessed at the General
Meeting of Shareholders.
2.2.2. Members of the Supervisory Board
should be appointed for a specific term,
Yes
The Supervisory Board is elected for the
term of 4 (four) years. The term of office
2
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.
80
subject to individual reelection for a new
term in office in order to ensure necessary
development of professional experience.
of members on the Supervisory Board is
the maximum term of office prescribed
by the Lithuanian Law on Companies.
A General Meeting of Shareholders may
remove from office both the entire
Supervisory Board and individual
members thereof before the end of their
term of office.
2.2.3. Chair of the Supervisory Board should
be a person whose current or past positions
constituted no obstacle to carry out impartial
activities. A former manager or Management
Board member of the Company should not be
immediately appointed as chair of the
Supervisory Board either. Where the
Company
decides to depart from these
recommendations, it should provide
information on the measures taken to ensure
impartiality of the supervision.
Yes
The Chairman of the Company's
Supervisory Board and the CEO of the
Company is not the same person.
The members of the Supervisory Board
and the Chairman have not been
members of the Management Board of
the Company or the CEO of the
Company.
2.2.4. Each member should devote enough
time and attention to perform his duties as a
member of the Supervisory Board. Each
member of the Supervisory Board should
undertake to limit his other professional
obligations (particularly the managing
positions in other companies) so that they
would not interfere with the proper
performance of the duties of a member of the
Supervisory Board. Should a member of the
Supervisory Board attend less than a half of
the meetings of the Supervisory Board
throughout the financial year of the
Company, the shareholders of the Company
should be notified thereof.
Yes
Members of the Supervisory Board are
active participants of the meetings of the
collegial body and devote enough time to
perform their duties as members of the
collegial body. In 2024 there were 2
(two) Supervisory Board’s meetings, and
all of them were attended by more than
2/3 of all the members of the Supervisory
Board. All members of the Supervisory
Board attended more than ½ of the
meetings.
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, even though a particular member
meets all the criteria of independence, he/she
cannot be considered independent due to
special personal or Company related
circumstances.
Yes
Information on the candidates to the
Company's Supervisory Board members
(as well as information on the candidate's
compliance with the independence
requirements) is provided to the General
Meeting of Shareholders in accordance
with the Law on Companies of the
Republic of Lithuania (see commentary
on recommendation 1.9).
2.2.6. The amount of remuneration to
members of the Supervisory Board for their
activity and participation in meetings of the
Supervisory Board should be approved by the
General Meeting of Shareholders.
Yes
Remuneration is paid for the work on the
Supervisory Board to its members, by
decision of the General Meeting of
Shareholders in accordance with the Law
on Companies of the Republic of
Lithuania. The members of the
Supervisory Board are not remunerated
for their performance and participation in
the meetings.
2.2.7. Every year the Supervisory Board
should carry out an assessment of its
activities. It should include evaluation of the
No
There was no practice of assessment of
the activity of Supervisory Board at the
Company and of informing shareholders
81
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.
about that up to now because the
controlling shareholder who proposes
candidates to the Supervisory Board
exhaustively knows the experiences and
competences of each candidate.
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's Management Board
carries out the duty of implementation of
the Company's strategy approved by the
Company's Supervisory Board.
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 Statutes 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 consider the needs of the
Company’s shareholders, employees and
other interest groups by respectively striving
to achieve sustainable business development
Yes
As the Supervisory Board is formed in
the Company, the Management Board
performs the functions of the Company's
collegial management body. The
obligation to consider the Company, the
shareholders, the employees and other
interest groups is established in the
agreement on performance of the
Management Board signed by each
member of the Management 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 Management Board ensures that the
laws and Company internal policies
applicable to the Company and its entire
group are respected. The Company also
operates a risk management and control
program. Risk management is carried out
by the management of the Company.
82
3.1.4. Moreover, the management board
should ensure that the measures included into
the OECD Good Practice Guidance
3
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 has a policy of internal
control and business ethics. The
Company has adopted a Business Ethics
Policy that clearly and publicly declares
a negative attitude towards bribery and
corruption. The provisions of this policy
apply to all employees, agents,
intermediaries, suppliers and
subcontractors of the Company.
3.1.5. When appointing the manager of the
Company, the Management Board should
consider the appropriate balance between the
candidate’s qualifications, experience and
competence.
Yes
When appointing the CEO of the
Company the Management Board
considers the balance of his/her
qualifications, experience and
competence as well as the opinion of the
Company's Supervisory Board.
3.2. Formation of the Management Board
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 members of the Management Board
are elected by the Supervisory Board of
the Company. The members of the
Management Board of the Company are
qualified and competent to perform their
functions, having a long experience in
management.
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. If 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 candidates to the
Company’s Management Board is
provided to the shareholders together
with the documents of the shareholders’
meeting following the requirements of
the Law on Public Limited Liability
Companies of the Republic of Lithuania.
Shareholders may see the documents
prior the meeting. Information about the
members of the Management Board
(names, education, qualifications,
professional experience, participation in
the activities of other companies, other
important professional obligations) is
provided in the periodical reports.
3.2.3. All new members of the Management
Board should be familiarized with their
Yes
All new members of the Management
Board are familiarized with their duties,
Company structure and activities.
3
Link to the OECD Good Practice Guidance on Internal Controls, Ethics and Compliance: https://www.oecd.org/daf/anti-
bribery/44884389.pdf
83
duties and the structure and operations of the
Company.
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 members of the Management Board
are elected for a 4-year term. The number
of terms is unlimited. Members of the
Management Board are elected by the
General Meeting of Shareholders.
Shareholders who nominate and vote for
the Management Board follow their own
approach, which candidates are best to
represent the interests of the
shareholders.
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
The Chairman of the Company’s
Management Board hasn’t been the
General Manager of the Company. His
current or past position is not an obstacle
for independent and impartial
supervision.
3.2.6. Each member should devote enough
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
Each member of the collegial body fulfils
his/her functions properly: actively
participates at the meetings of collegial
body and devotes enough time to perform
his / her duties as a member of the
collegial body. The quorum of each
meeting was regulated so the
Management Board would be enabled to
accept decisions constructively.
In 2024, 20 meeting of the Management
Board had been held. All the meetings
were attended by more, than 2/3
members of the Management Board. All
Board members attended more than ½ of
the meetings.
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
4
, 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
Al the members of the Management
Board are independent.
3.2.8. The General Meeting of Shareholders
of the Company should approve the amount
of remuneration to the members of the
Yes
Remuneration is paid for the work on the
Management Board to its members, by
decision of the General Meeting of
4
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.
84
Management Board for their activity and
participation in the meetings of the
Management Board.
Shareholders in accordance with the Law
on Companies of the Republic of
Lithuania. The members of the
Management Board are not remunerated
for their performance and participation in
the meetings.
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
noncompete 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
By the Company’s information, all
Management Board members should act
in good faith, with care and responsibility
for the benefit and in the interests of the
Company and its shareholders. They are
guided by the Company’s interests but
not their own or any third parties seeking
to maintain their independence in
decision-making, and they do not accept
any unjustified privileges that would
compromise their independence.
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.
No
There was no practice of assessment of
the activity of Management Board at the
Company and of informing shareholders
about that up to now because the
controlling shareholder who proposes
candidates to the Management Board
exhaustively knows the experiences and
competences of each candidate.
Principle 4: Rules of procedure of the Supervisory Board and the Management Board of the
Company
The rules of procedure of the Supervisory Board, if it is formed at the Company, and of the
Management Board should ensure efficient operation and decision-making of these bodies and
promote active cooperation between the Company’s management bodies.
4.1. The Management Board and the
Supervisory Board, if the latter is formed at
the Company, should act in close cooperation
in order to attain benefit for the Company and
its shareholders. Good corporate governance
requires an open discussion between the
Management Board and the Supervisory
Board. The Management Board should
regularly and, where necessary, immediately
inform the Supervisory Board about any
matters significant for the Company that are
related to planning, business development,
risk management and control, and
compliance with the obligations at the
Company. The Management Board should
inform he Supervisory Board about any
derogations in its business development from
Yes
Legal acts, Statutes and rules of
procedure governing activities of the
Company’s Supervisory and
management bodies lay down the
principles and procedure of cooperation
between Supervisory and management
bodies of the Company and ensure that
management and Supervisory bodies
cooperate to attain the greatest possible
benefit to the Company and its
shareholders.
85
the previously formulated plans and
objectives by specifying the reasons for this.
4.2. It is recommended that meetings of the
Company’s collegial bodies should be held at
the respective intervals, according to the pre-
approved schedule. Each Company is free to
decide how often meetings of the collegial
bodies should be convened but it is
recommended that these meetings should be
convened at such intervals that
uninterruptable resolution of essential
corporate governance issues would be
ensured. Meetings of the Company’s
collegial bodies should be convened at least
once per quarter.
Yes
The Company follows the order foreseen
in the work regulations of the
Supervisory Board and the Management
Board and the information about the
convened meeting is presented in
advance together with an agenda and all
the necessary information and documents
related to the meeting agenda.
The Supervisory Board and the
Management Board meeting agenda may
be changed or added during the meeting,
in the presence of all members of the
collegial body, or when there is an urgent
need to deal with Company’s certain key
issues.
4.3. Members of a collegial body should be
notified of the meeting being convened in
advance so that they would have enough time
for proper preparation for the issues to be
considered at the meeting and a fruitful
discussion could be held and appropriate
decisions could be adopted. Along with the
notice of the meeting being convened all
materials relevant to the issues on the agenda
of the meeting should be submitted to the
members of the collegial body. The agenda
of the meeting should not be changed or
supplemented during the meeting, unless all
members of the collegial body present at the
meeting agree with such change or
supplement to the agenda, or certain issues
that are important to the Company require
immediate resolution.
Yes
According to the Company’s Statutes and
the working procedure regulations of the
Supervisory Board and the Management
Board, the members of the collegial body
and persons that are invited to such
meetings, are informed of them in
advance. They are also provided with all
the information and materials, needed to
examine the questions, presented in the
agenda.
4.4. In order to coordinate the activities of the
Company’s collegial bodies and ensure
effective decision-making process, the chairs
of the Company’s collegial supervision and
management bodies should mutually agree
on the dates and agendas of the meetings and
close cooperate in resolving other matters
related to corporate governance. Meetings of
the Company’s Supervisory Board should be
open to members of the Management Board,
particularly in such cases where issues
concerning the removal of the Management
Board members, their responsibility or
remuneration are discussed.
Yes
The chairmen of Company's Supervisory
and management bodies coordinate dates
of the meetings, their agendas and
cooperate in solving other issues of
corporate governance. The Chairman of
the Management Board and members of
the Management Board are invited to the
meetings of the Supervisory Board of the
Company.
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.
86
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
5
.
Yes/No
The Audit Committee is formed by the
Supervisory Board from March 31, 2009
and the term of office of this committee
coincides with the term of office of the
Company's Supervisory Board.
5.1.2. Companies may decide to set up less
than three committees. In such case
companies should explain in detail why they
have chosen the alternative approach, and
how the chosen approach corresponds with
the objectives set for the three different
committees.
Yes/No
The Audit Committee is an independent,
and objective committee carrying out the
functions of supervision, analysing,
evaluation and consultation in order to
improve General organization and create
value added. The main function of the
Committee is systematic and versatile
evaluation, as well as encouragement of
better risk management, and enough
control and maintenance procedures
resulting in submission of
recommendations to the Management
Board and management regarding
implementation of the objectives and
tasks, risk management procedure and
internal control functioning.
The nomination and remuneration
committees are not formed at the
Company. As the Management Board of
the Company is composed of competent
members and they perform their
activities efficiently, the Company does
not currently see the need for other
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.
Not applicable
The Management Board of the Company
does not perform the functions assigned
to the Audit Committee.
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
Yes
The Audit Committee consists of 3
members, two of whom are independent,
with at least 5 years of experience in
accounting, with relevant experience in
5
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).
87
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.
finance and accounting in listed
companies.
The Chairman of the Management Board
is not a member of the Committee.
5.1.5. The authority of each committee
formed should be determined by the collegial
body itself. Committees should perform their
duties according to the authority delegated to
them and regularly inform the collegial body
about their activities and performance on a
regular basis. The authority of each
committee defining its role and specifying its
rights and duties should be made public at
least once a year (as part of the information
disclosed by the Company on its governance
structure and practice on an annual basis). In
compliance with the legal acts regulating the
processing of personal data, companies
should also include in their annual reports the
statements of the existing committees on
their composition, the number of meetings
and attendance over the year as well as the
main directions of their activities and
performance.
Yes
The Audit Committee follows the
regulations of the Committee approved
by the Supervisory Board. These
Regulations establish the rules defining
the rights and duties of the Audit
Committee, the size of the Audit
Committee, the period of membership of
the Audit Committee, the requirements
for the education, professional
experience and independence principles
of the members of the Audit Committee.
The Audit Committee annually submits
an annual activity report to the General
Meeting of Shareholders, announcing the
composition of the Committee, the
number of meetings and the attendance of
the members, describing the work
performed and presenting the results.
5.1.6. With a view to ensure the
independence and impartiality of the
committees, the members of the collegial
body who are not members of the committees
should normally have a right to participate in
the meetings of the committee only if invited
by the committee. A committee may invite or
request that certain employees of the
Company or experts would participate in the
meeting. Chair of each committee should
have the possibility to maintain direct
communication with the shareholders. Cases
where such practice is to be applied should be
specified in the rules regulating the activities
of the committee.
Yes
The members of the collegial body take
decisions at the meetings of their
members, but in certain cases the
committee invites the head of the
Company and the responsible employees
of the Company to attend its meetings,
who are responsible for the areas of
activity of the issues under discussion.
The Chairman of the Audit Committee is
also provided with the opportunity to
communicate with the shareholders.
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;
No
The Nomination Committee is not
formed in the Company.
88
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.
5.2.2. When dealing with issues related to
members of the collegial body who have
employment relationships with the Company
and the heads of the administration, the
manager of the Company should be consulted
by granting him/her the right to submit
proposals to the Nomination Committee.
No
See article 5.2.1
5.3. Remuneration committee
The main functions of the remuneration
committee should be as follows:
1) submit to the collegial body proposals on
the remuneration policy applied to members
of the Supervisory and management bodies
and the heads of the administration for
approval. Such policy should include all
forms of remuneration, including the fixed
rate remuneration, performance-based
remuneration, financial incentive schemes,
pension arrangements and termination
payments as well as conditions which would
allow the Company to recover the amounts or
suspend the payments by specifying the
circumstances under which it would be
expedient to do so;
2) submit to the collegial body proposals
regarding individual remuneration for
members of the collegial bodies and the
heads of the administration in order to ensure
that they would be consistent with the
Company’s remuneration policy and the
evaluation of the performance of the persons
concerned;
3) review, on a regular basis, the
remuneration policy and its implementation.
No
There is no Remuneration Committee in
the Company.
The Company has implemented a
remuneration policy that includes all
forms of remuneration, including fixed
salary, performance-based benefits and
severance payments. The Company is
approved by the Company's management
in coordination with the Trade Union
Committee operating in the Company.
5.4. Audit committee
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5.4.1. The key functions of the audit
committee are defined in the legal acts
regulating the activities of the audit
committee
6
.
Yes
The Audit Committee follows the
regulations of the Audit Committee
approved by the Supervisory Board of the
Company.
The Audit Committee carries out
independent, objective monitoring,
investigation, evaluation and advisory
activities to improve the Company's
performance and create added value.
5.4.2. All members of the committee should
be provided with detailed information on
specific issues of the Company’s accounting
system, finances and operations. The heads
of the Company’s administration should
inform the audit committee about the
methods of accounting for significant and
unusual transactions where the accounting
may be subject to different approaches.
Yes
All members of the Committee are
provided with detailed information on the
specific accounting, financial and
operational characteristics of the
Company and, upon request, information
on the execution of important
transactions.
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
The Audit Committee decides on the
participation of other persons in its
meetings and, if necessary, the Audit
Committee invites the head of the
Company and the responsible employees
of the Company to its meetings, who are
responsible for the areas of activity of the
issues under consideration. The
Chairman of the Audit Committee is also
provided with the opportunity to
communicate with the shareholders.
5.4.4. The audit committee should be
informed about the internal auditor’s work
program and should be furnished with
internal audit reports or periodic summaries.
The audit committee should also be informed
about the work program of external auditors
and should receive from the audit firm a
report describing all relationships between
the independent audit firm and the Company
and its group.
Yes
The Audit Committee is informed about
the work performed by the Internal
Auditor and receives conclusions about
the research performed. Each year, the
Audit Committee receives reports from
external auditors describing all
relationships between the independent
auditor and the Company and its group.
5.4.5. The audit committee should examine
whether the Company complies with the
applicable provisions regulating the
possibility of lodging a complaint or
reporting anonymously his/her suspicions of
potential violations committed at the
Company and should also ensure that there is
a procedure in place for proportionate and
independent investigation of such issues and
appropriate follow-up actions.
Yes
The Company has provided employees
with the opportunity to submit
complaints or anonymous reports about
violations committed in the Company,
however the Company has not received
such complaints or reports during the
reporting period.
5.4.6. The audit committee should submit to
the Supervisory Board or, where the
Supervisory Board is not formed, to the
Yes
The Audit Committee analyses and
evaluates the Company's annual and
semi-annual financial statements, makes
6
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.
90
Management Board its activity report at least
once in every six months, at the time that
annual and half-yearly reports are approved.
recommendations to the Management
Board for their approval, together with its
activity reports for that period.
Principle 6: Prevention and disclosure of conflicts of interest
The corporate governance framework should encourage members of the Company’s supervisory and
management bodies to avoid conflicts of interest and ensure a transparent and effective mechanism
of disclosure of conflicts of interest related to members of the supervisory and management bodies.
Any member of the Company’s Supervisory
and management body should avoid a
situation where his/her personal interests are
or may be in conflict with the Company’s
interests. In case such a situation did occur, a
member of the Company’s Supervisory or
management body should, within a
reasonable period of time, notify other
members of the same body or the body of the
Company which elected him/her or the
Company’s shareholders of such situation of
a conflict of interest, indicate the nature of
interests and, where possible, their value.
Yes
Members of the Company's management
bodies behave in such a way that there is
no conflict of interest with the Company.
During the reporting period, there is no
known conflict of interest between the
Company and the member of its
management body.
Principle 7: Remuneration policy of the Company
The remuneration policy and the procedure for review and disclosure of such policy established at
the Company should prevent potential conflicts of interest and abuse in determining remuneration of
members of the collegial bodies and heads of the administration, in addition it should ensure the
publicity and transparency of the Company’s remuneration policy and its long-term strategy.
7.1. The Company should approve and post
the remuneration policy on the website of the
Company, such policy should be reviewed on
a regular basis and be consistent with the
Company’s long-term strategy.
Yes/no
The Company has implemented and
operates a remuneration policy approved
by the Company's management, but it is
not published on the Company's website.
The Company will follow the
recommendations of Principle 7 when the
respective laws and other legal acts of the
Republic of Lithuania are adopted.
7.2. The remuneration policy should include
all forms of remuneration, including the
fixed-rate remuneration, performance-based
remuneration, financial incentive schemes,
pension arrangements and termination
payments as well as the conditions specifying
the cases where the Company can recover the
disbursed amounts or suspend the payments.
Yes
The Company has implemented a
remuneration policy that includes all
forms of remuneration, including fixed
salary, performance-based benefits and
severance payments. This procedure is
approved by the management of the
Company in agreement with the Trade
Union Committee.
7.3. With a view to avoid potential conflicts
of interest, the remuneration policy should
provide that members of the collegial bodies
which perform the Supervisory functions
should not receive remuneration based on the
Company’s performance.
Yes
See article 3.2.8
7.4. The remuneration policy should provide
enough 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-
Yes
Termination benefits shall be granted in
accordance with the provisions of
Chapter 5 of the Labour Code of the
Republic of Lithuania and the provisions
of the Collective Agreement in the
Company.
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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.
7.5. If the financial incentive scheme is
applied at the Company, the remuneration
policy should contain enough 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.
No
The Company does not apply a system of
financial incentives.
7.6. The Company should publish
information about the implementation of the
remuneration policy on its website, with a
key focus on the remuneration policy in
respect of the collegial bodies and managers
in the next and, where relevant, subsequent
financial years. It should also contain a
review of how the remuneration policy was
implemented during the previous financial
year. The information of such nature should
not include any details having a commercial
value. Particular attention should be paid on
the major changes in the Company’s
remuneration policy, compared to the
previous financial year.
No
See article 7.1.
7.7. It is recommended that the remuneration
policy or any major change of the policy
should be included on the agenda of the
General Meeting of Shareholders. The
schemes under which members and
employees of a collegial body receive
remuneration in shares or share options
should be approved by the General Meeting
of Shareholders.
No
See article 7.1.
Principle 8: Role of stakeholders in corporate governance
The corporate governance framework should recognize the rights of stakeholders entrenched in the
laws or mutual agreements and encourage active cooperation between companies and stakeholders in
creating the Company value, jobs and financial sustainability. In the context of this principle the
concept “stakeholders” includes investors, employees, creditors, suppliers, clients, local community
and other persons having certain interests in the Company concerned.
8.1. The corporate governance framework
should ensure that the rights and lawful
interests of stakeholders are protected.
Yes
The corporate governance framework
assures the rights of stakeholders that are
protected by law are respected. The
Company applies a Corporate Contract
with employees, and the contract is
signed by the CEO and Trade Union.
The Company pursues the maximum
possible transparency in its relations with
8.2. The corporate governance framework
should create conditions for stakeholders to
participate in corporate governance in the
manner prescribed by law. Examples of
participation by stakeholders in corporate
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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.
all stakeholders and the compliance with
the highest ethical requirements and
principles – in its activities, because
honest and open business activities are
one of the key elements of impeccable
business reputation.
The Company takes into account the
changing customer needs, constantly
improving its operational processes,
empowering employees, taking care of
the safety and health of its employees,
seeking to maintain a close relationship
with investors and ensure information
accessible to all, continuously updating
the information and posting it in the
“Investors” section of its website.
8.3. Where stakeholders participate in the
corporate governance process, they should
have access to relevant information.
8.4. Stakeholders should be provided with the
possibility of reporting confidentially any
illegal or unethical practices to the collegial
body performing the Supervisory function.
Principle 9: Disclosure of information
The corporate governance framework should ensure the timely and accurate disclosure of all
material corporate issues, including the financial situation, operations and governance of the
Company.
9.1. In accordance with the Company’s
procedure on confidential information and
commercial secrets and the legal acts
regulating the processing of personal data,
the information publicly disclosed by the
Company should include but not be limited
to the following:
Yes
The information contained in this
recommendation shall be disclosed in the
annual and semi-annual reports of the
Company in accordance with the
requirements of legal acts regulating data
processing and confidential information
procedures. This information is
published on the website of PLLC
Nasdaq Vilnius. Stock Exchange and on
the Company's website.
9.1.1. operating and financial results of the
Company;
9.1.2. objectives and non-financial
information of the Company;
9.1.3. persons holding a stake in the
Company or controlling it directly and/or
indirectly and/or together with related
persons as well as the structure of the group
of companies and their relationships by
specifying the final beneficiary;
9.1.4. members of the Company’s
Supervisory and management bodies who are
deemed independent, the manager of the
Company, the shares or votes held by them at
the Company, participation in corporate
governance of other companies, their
competence and remuneration;
9.1.5. reports of the existing committees on
their composition, number of meetings and
attendance of members during the last year as
well as the main directions and results of their
activities;
9.1.6. potential key risk factors, the
Company’s risk management and
supervision policy;
93
9.1.7. the Company’s transactions with
related parties;
9.1.8. main issues related to employees and
other stakeholders (for instance, human
resource policy, participation of employees
in corporate governance, award of the
Company’s shares or share options as
incentives, relationships with creditors,
suppliers, local community, etc.);
9.1.9. structure and strategy of corporate
governance;
9.1.10. initiatives and measures of social
responsibility policy and anti-corruption
fight, significant current or planned
investment projects.
This list is deemed minimum and companies
are encouraged not to restrict themselves to
the disclosure of information included into
this list. This principle of the Code does not
exempt companies from their obligation to
disclose information as provided for in the
applicable legal acts.
9.2. When disclosing the information
specified in paragraph 9.1.1 of
recommendation 9.1, it is recommended that
the Company which is a parent Company in
respect of other companies should disclose
information about the consolidated results of
the whole group of companies.
Yes
The Company discloses information on
the Company’s and the Group’s
consolidated results. The information is
disclosed in the management report and
consolidated financial statements.
9.3. When disclosing the information
specified in paragraph 9.1.4 of
recommendation 9.1, it is recommended that
the information on the professional
experience and qualifications of members of
the Company’s Supervisory and
management bodies and the manager of the
Company as well as potential conflicts of
interest which could affect their decisions
should be provided. It is further
recommended that the remuneration or other
income of members of the Company’s
Supervisory and management bodies and the
manager of the Company should be
disclosed, as provided for in greater detail in
Principle 7.
Yes
The information specified in the
recommendation is presented in the
Company's annual and semi-annual
reports. The Company will implement
the recommendations of Principle 7 once
the legislation governing is adopted.
9.4. Information should be disclosed in
such manner that no shareholders or investors
are discriminated in terms of the method of
receipt and scope of information. Information
should be disclosed to all parties concerned
at the same time.
Yes
The Company discloses all regulated
information through the news
distribution system of PLLC Nasdaq
Vilnius. This ensures that it is accessible
to the widest possible public. The
information is simultaneously available
in Lithuanian and English. In addition,
the Company publishes information
before or after the Nasdaq Vilnius trading
session so that all shareholders and
investors of the Company have equal
access to information and make
94
appropriate investment decisions. The
Company shall not disclose information
that may affect the price of the securities
issued by it in the comments, interviews
or other ways until such information is
made public through the Central
Regulatory Information base.
Principle 10: Selection of the Company’s audit firm
The Company’s audit firm selection mechanism should ensure the independence of the report and
opinion of the audit firm.
10.1. With a view to obtain an objective
opinion on the Company’s financial
condition and financial results, the
Company’s annual financial statements and
the financial information provided in its
annual report should be audited by an
independent audit firm.
Yes
An independent audit Company performs
auditing of the Company’s and its
subsidiaries individual and consolidated
(the group) annual financial reports in
accordance with International
Accounting Standards applicable in the
EU. An independent auditing Company
also evaluates conformity of
management report to the audited
financial statements.
10.2. It is recommended that the audit firm
would be proposed to the General Meeting of
Shareholders by the Supervisory Board or, if
the Supervisory Board is not formed at the
Company, by the Management Board of the
Company.
Yes
The Management Board proposes an
audit Company to the General Meeting of
Shareholders.
10.3. If 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
Information on remuneration to the audit
Company is made public in the decisions
of the General Meeting of Shareholders.
The audit firm provides non-audit
services only with the approval of the
Audit Committee. In 2024, the audit firm
did not receive any remuneration for the
non-audit services provided.