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Consolidated Management Report, Consolidated and the Company’s Financial Statements
for the year ended 31 December 2024 prepared in accordance with the International
Financial Reporting Standards as adopted by the European Union
Management Report
2024
TOC
Chairman’s Foreword .................................................................................................................................................. 4
CEO’s Foreword ............................................................................................................................................................ 5
1. EPSO-G Group of Companies: Who We Are .................................................................................................... 8
1.1 Structure of the EPSO-G Group Companies ......................................................................................................................................................................................... 8
1.2. Activities of the EPSO-G Group Companies ........................................................................................................................................................................................ 9
1.3. Infrastructure managed by the EPSO-G Group ............................................................................................................................................................................... 10
1.4. Services of the EPSO-G Group Companies ....................................................................................................................................................................................... 11
1.5. EPSO-G Group Companies Across the Value Chain of the business activities ..................................................................................................................... 12
2. Operating and Regulatory Environment .......................................................................................................... 14
2.1. Operating Environment ............................................................................................................................................................................................................................ 14
2.2. Regulatory Environment: Pricing of Regulated and Other Services ......................................................................................................................................... 15
2.3. Key Regulatory and Other Legal Changes ........................................................................................................................................................................................ 17
2.4. Significant events of the reporting period .......................................................................................................................................................................................... 19
2.5. Significant Events After the End of The Financial Period ............................................................................................................................................................. 22
3. Business Strategy and Planned Investments ................................................................................................. 25
3.1. EPSO-G Group Strategy .......................................................................................................................................................................................................................... 25
3.2. Major Projects of the EPSO-G Group to 2035 and the Value they Create ............................................................................................................................. 28
3.3. Planned Investments by 2035 ............................................................................................................................................................................................................... 30
3.4. EPSO-G Goals in 2025 ............................................................................................................................................................................................................................ 31
3.5. 10-Year Network Development Plan .................................................................................................................................................................................................. 31
3.6. Process for Updating the Strategy and Other Planning Documents ........................................................................................................................................ 32
4. Annual Performance Report ............................................................................................................................... 34
4.1. Report on Achievement of Strategic Indicators ............................................................................................................................................................................... 34
4.2. Results by Relevant Energy Sectors .................................................................................................................................................................................................... 37
4.3. Company’s Annual Goal Progress ....................................................................................................................................................................................................... 39
4.4. Key projects implemented ....................................................................................................................................................................................................................... 39
4.5. Research and Development Activities ................................................................................................................................................................................................ 40
4.6. Finance Report ............................................................................................................................................................................................................................................ 43
4.7. Related-party transactions ..................................................................................................................................................................................................................... 52
5. Governance Report ................................................................................................................................................ 54
5.1. EPSO-G’s Operational Documents ...................................................................................................................................................................................................... 54
5.2. Supervisory and organisational system and functions of EPSO-G ........................................................................................................................................... 56
5.3. General Meeting of Shareholders of EPSO-G .................................................................................................................................................................................. 57
5.4. EPSO-G’s Board and Committees ........................................................................................................................................................................................................ 57
5.5. Performance self-assessment and results of the activities of the collegial bodies ............................................................................................................. 68
5.6. Company’s CEO and Management ...................................................................................................................................................................................................... 69
5.7. Additional information on the Chairman of the Board, the Chief Financial Officer and the Head of the Internal Audit: ........................................ 70
5.8. Membership in organisations ................................................................................................................................................................................................................. 72
5.9. Risk Management Framework ............................................................................................................................................................................................................... 73
5.10. Compliance, Anti-Corruption Activities and Conflict of Interest Management .................................................................................................................. 81
5.11. Information on the Audit ....................................................................................................................................................................................................................... 84
5.12. Information on the Shareholders and Dividends .......................................................................................................................................................................... 85
5.13. Legal disputes and uncertainties ....................................................................................................................................................................................................... 86
6. Information on Employees and Remuneration Policy ................................................................................... 88
6.1. Employees and Workforce Composition ............................................................................................................................................................................................ 88
6.2. Formation and Monitoring of the Remuneration and Nomination Policy ................................................................................................................................ 91
6.3. Information on Employee Remuneration ............................................................................................................................................................................................ 93
6.4. Information on Remuneration of Members of Collegial Bodies ................................................................................................................................................. 93
7. Information on Special Obligations ................................................................................................................... 98
7.1. PSO Funds Administration Activities .................................................................................................................................................................................................. 98
7.2. Implementation of the Functions of the Project Executor for the Installation of a Physical Barrier at the Border with Belarus .......................... 99
8. Sustainability Report .......................................................................................................................................... 102
8.1. ESRS 2 General disclosures ................................................................................................................................................................................................................. 102
8.2. Environmental area ................................................................................................................................................................................................................................. 117
8.3. Social area .................................................................................................................................................................................................................................................. 159
8.4. Governance ................................................................................................................................................................................................................................................ 173
8.5. Annexes ...................................................................................................................................................................................................................................................... 179
8.6. Independent auditor's report ................................................................................................................................................................................................................ 190
9. Additional Information ....................................................................................................................................... 195
9.1. Information on Compliance with the Transparency Guidelines ................................................................................................................................................ 195
9.2. Notification by EPSO-G UAB on compliance with the Code of Corporate Governance for companies listed on NASDAQ Vilnius ................. 197
9.3. Details an Other General Information About EPSO-G UAB ...................................................................................................................................................... 218
9.4. Details on the EPSO-G Group companies ....................................................................................................................................................................................... 220
10. Confirmation of responsible persons ........................................................................................................... 222
11. Independent Auditor‘s Report ........................................................................................................................ 223
12. Consolidated and the Company’s Financial Statements ......................................................................... 232
4
Chairman’s Foreword
Dear readers,
The year 2024 was marked by striking global events which we hope will lead to
peaceful and sustainable solutions. The energy sector is particularly affected by
regional environmental factors and geopolitics. The situation has therefore in
2024 called for a focus on the primary objectives of strengthening Lithuania’s
energy security, including national security.
All Baltics now are brought together for the synchronisation with continental
European networks. The synchronisation of the power grids, where the EPSO-G
Group companies play a crucial role, is a decisive step towards securing energy
independence for Lithuania, Latvia and Estonia.
Last year, we adopted a new energy strategy 2035 of the EPSO-G Group which
outlines the directions shaping future energy. At this stage, a common vision for
energy development in the Baltic States is a must. The synchronisation of power
grids with Western Europe, integration into the European Green Hydrogen
Network are the examples of our successful cooperation with the fellow TSO’s from Nordic and Baltic countries in addressing
regional energy issues.
Since Lithuania’s security concerns all of us, the Group joined a project of national security in 2024. EPSO-G Invest, an EPSO-G
Group company, signed the share purchase and shareholders’ agreements with Rheinmetall, German defence technology
company, and Giraitės ginkluotės gamykla. This regulates the acquisition of shares in the company Rheinmetall Defence Lietuva,
which will build the 155-mm artillery shell manufacturing plant. EPSO-G Invest co-invests in the project with the state-owned
enterprise Valstybinis Investicinis Kapitalas. The Group is certainly not a newcomer to the national security topic. Hitherto, EPSO-
G has been responsible for the installation of a physical barrier at the border with Belarus, a project important to the security of
Lithuania.
The EPSO-G Group companies are in charge for energy infrastructure of strategic importance. With hostile states posing threats
and launching hybrid attacks in the Baltic Sea, the Group’s priority is to ensure reliable and uninterrupted energy transmission
while further strengthening both physical and cybersecurity of infrastructure. The EPSO-G Group companies invest in
strengthening the security of infrastructure, together with the responsible bodies reinforce the security of infrastructure, and
attend specialised exercises.
I am proud that the EPSO-G Group companies, while strengthening Lithuania’s energy independence, find ways to help Ukrainian
colleagues. In 2024, we handed over the much needed infrastructure to the energy companies in the war-torn country, and more
than fifty vehicles were delivered to Ukraine.
I extend sincere thanks to all the employees of the EPSO-G Group companies who put daily efforts in strengthening Lithuania’s
energy independence and ensuring energy security.
Robertas Vyšniauskas,
Chairman of the Board of EPSO-G
5
CEO’s Foreword
Dear readers,
2024 was an eventful year for both Lithuanian and regional energy sector. One of
the essential changes was the increase in local electricity generation, which
accelerated to 60% and was ahead of imports, reversing the previous predominant
proportion of the system’s demand coverage. The EPSO-G Group, particularly
Litgrid, further boosted its mobilisation to complete final preparations, and
focused its efforts ahead of synchronisation with the continental European grid, a
project of historic importance. We have also made another important step by
adopting new long-term energy strategy 2035, which will be our roadmap
towards a sustainable and secure future. Furthermore, we were actively engaged
in new activities, such as national security and defence industry projects,
strengthening the national resilience and independence.
9
th
February 2025 will go down in history as one of the most significant energy
events – the synchronization of the electricity systems of the Baltic states with
Continental European Network. In addition to being a historic milestone for
Lithuania, it marks a special stage for the entire region, where the Baltics liberated
themselves from their last chains to finally establish energy independence. Last year, the Group and other companies across the
region were actively engaged in the preparations for this step, with the final follow-ups during 2025 to secure a stable and
reliable continuity.
The involvement in a project that is fundamental to both national and European security was another important step for the Group.
By teaming up with the German defence giant Rheinmetall and Giraitės ginkluotės gamykla, and leveraging on the investments
of the state-owned enterprise Valstybinis Investicinis Kapitalas, the Group will develop a project of the 155-mm artillery shell
manufacturing plant in Baisogala.
Currently, the Baltic Sea Region leads Europe in terms of the growth in renewable energy capacity per capita. This leadership is
reflected through record levels of local green energy generation capacity, i.e. 41% of annual consumption, with 60% of total
national energy generated annually. Early in 2025, the capacity of solar and wind power plants connected to the power grid was
3.7 GW, or 60% more than last year. As renewable electricity generation grows, the plans for battery energy storage systems
are being made in the market. The capacity of 2.7 GW and almost 5.5 GWh is currently reserved for developers planning to
connect to the transmission network. We hope that the market will rush to take the advantage of emerging opportunities for
batteries, with the first commercial batteries connected to Litgrid’s network in a year’s time. The increasing capacity and
opportunities of flexible energy generation facilities will boost the RES growth rate further.
Natural gas continues to be a vital resource for the stability of the country’s energy system and industry. In addition to the rising
consumption of gas in Lithuania during 2024, the volume of biogas being fed into the transmission network also increased. With
the Baltics’ electricity system synchronisation targets being met, and with the growth of local green electricity generation, reliable
gas transport capacity remains important for system adequacy. Further growth in the biogas segment is also expected in 2025.
Group-owned biofuel exchange Baltpool was successful, contributing to competitive biofuel and heat prices. Despite high
competition, the Company had a stable performance in foreign markets. In Lithuania, trading volumes grew by almost one tenth,
mainly due to the higher activity of Vilnius Combined Heat and Power Plant. Attention should also be drawn to the Group
company Energy Cells, providing Litgrid with the isolated operating reserve service and, prior to the synchronisation, the
functionality to optimise the technological losses. In 2025, after the synchronisation, the Europe’s largest battery system will be
used to provide a balancing service, thereby contributing to maintaining an attractive electricity price for the end users. The Group
company Tetas, a developer of infrastructure ensuring energy independence, also delivered positive results in 2024.
In 2024, we introduced a new energy strategy 2035 of the Group. We will also enhance energy security through projects
unprecedented for both the Baltic Sea region and Europe. We are already actively contributing to the Nordic-Baltic Hydrogen
Corridor project, engaging in the development of a CO2 network, and launching preparations for the infrastructure of a long-term
energy storage system and energy hub. Over the next decade, we will make investments aimed at strengthening, modernising
existing energy transmission networks and extending interconnections. The special focus will also remain on the competences of
the Group’s employees and the development of new talent, with the aim of becoming the centre of energy of the future.
6
The Group plays a key role not only in ensuring energy security, but also in creating value for the state and society. The Group’s
key operating and financial indicators show stable returns that ensure financial sustainability. After a periodic review for EPSO-
G, the rating agency Moody’s Investors Service affirmed its Baa1 credit rating with a stable outlook. As one of the regional leaders,
the Group has strong financials, moderate and balanced debt levels and steady, diversified income flows.
The EPSO-G Group invested EUR 236,1 million in projects to strengthen Lithuania’s energy independence. The largest part of the
investments amounting to EUR 229,1 million was allocated to projects for the modernisation of the electricity transmission
network, and synchronisation programme. In 2025, the EPSO-G Group plans to invest around EUR 270 million, approximately a
quarter more than in 2024. The most significant investments will be allocated to ensuring the reliability and development of the
electricity transmission system.
The Group’s priority is to reduce the climate impact of its activities. In 2024, we reached a major milestone by joining the Science
Based Targets initiative (SBTi) and committing to have science-based greenhouse gas (GHG) emission reduction targets set by
2030. The target to reduce greenhouse (GHG) emissions that companies create in their operations by 30% by 2026, compared to
the 2019 baseline, is also included in the terms of the sustainability-related bond issued by EPSO-G in 2022.
I extend sincere thanks to the colleagues in the EPSO-G Group companies for their daily commitment to meaningful work, and
for taking on the responsibility to commit to tasks that have never been done before. I am also grateful to the Board, the
shareholder and its representatives, and partners for their support, stimulus, and smooth and efficient cooperation. May 2025
give us all determination and unity in overcoming challenges that will further strengthen Lithuania’s energy independence!
Mindaugas Keizeris,
CEO of EPSO-G
7
01
EPSO-G Group of Companies: Who We Are
1.1. Structure of the EPSO-G Group Companies
1.2. Activities of the EPSO-G Group Companies
1.3. Infrastructure managed by the EPSO-G Group
1.4. Services of the EPSO-G Group Companies
1.5. EPSO-G Group Companies Across the Value Chain of the business activities
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
8
1. EPSO-G Group of Companies: Who We Are
1.1 Structure of the EPSO-G Group Companies
EPSO-G is a 100 % state-owned Group of energy transmission and exchange companies (hereinafter – EPSO-G Group, Group).
The rights and obligations of EPSO-G UAB (hereinafter - EPSO-G, Company) holding shareholder are implemented by the
Ministry of Energy of the Republic of Lithuania. EPSO-G performs the function of management, supervision and control of the
Group companies, implements and ensures the implementation of the activities of the Group outlined in the Letter of Expectation
of the Shareholder, coordinates the application of corporate governance in the Group and adopts common operating policies
governing important areas; implements functional mentoring of activities of the companies of the Group, and carries out other
management activities.
.
¹GET Baltic UAB is gas exchange operating in the Baltic States and Finland. Amber Grid holds 34% and EEX AG 66% of shares in the company. GET Baltic is a part of the EEX AG
group.
²Baltic RCC OÜ is a company established by Baltic electricity transmission system operators in 2022 to provide services ensuring safety and reliability of the electricity system and
to coordinate between the transmission network operators of the Baltic region.
³TSO HOLDING AS is the minority shareholder of Norwegian company Nord Pool Holding that holds 34% of shares in the company. Nord Pool Holding holds 100% of shares in
the Nord Pool electricity exchange, which provides the electricity exchange services in Central and Western Europe, the United Kingdom, Nordic and Baltic countries. The exchange
provides electricity trading services, as well as clearing and settlement services.
⁴Rheinmetall Defence Lietuva, UAB develops project of the 155-mm artillery shell manufacturing plant in Baisogala. 51% of shares are held by Rheinmetall Waffe Munition
GmbH, 48% by EPSO-G Invest UAB and 1% by Giraitės ginkluotės gamykla.
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
9
1.2. Activities of the EPSO-G Group Companies
Our core business – to ensure energy transition and security of supply
.
Customer groups of Group business activities:
System operation:
Ensuring effective operations and the
integration of renewable energy sources
Exchange services:
Well-established in Lithuania with ongoing
international expansion
Electricity producers and distributors responsible for
network balancing/imbalance, major electricity and
centralized heating production companies in
Lithuania, as well as industrial enterprises and
medium-sized businesses in Lithuania, energy and
natural gas transmission service companies from the
Baltic States and third countries.
Buyers of biofuel (district heating companies,
independent heat producers, and other companies
using biofuel) and biofuel sellers (wood pellet and
chip manufacturers and distributors); also wood
buyers/sellers, fuel suppliers, electricity consumers,
heat suppliers.
Transmission infrastructure:
the largest transmission network in the Baltic
States
Engineering & consulting services:
A reliable and strategically important business
ensuring long-term market growth
Distribution system operators; electricity/gas
consumers directly connected to the transmission
system; electricity producers directly connected to
the transmission system; landowners and managers;
renewable energy sources (biomethane, hydrogen,
etc.) developers; battery park developers.
Electricity transmission system operator, electricity
distribution system operator, renewable energy park
developers.
Planned expansion into international markets and the development of new services, such as CO₂ and H₂ transportation. This
should expand service and customer groups in the future (over the next 10 years).
Transmission
infrastructure
We deliver and manage critical
infrastructure to enable secure
and sustainable energy
System operation
We ensure safe and reliable
operation of an integrated
energy system
Engineering &
consulting services
We provide engineering and advisory
services to enable delivery of low carbon
assets and infrastructure
Exchange services
We facilitate the exchange of low carbon
fuels to support energy security and
decarbonisation goals
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
10
1.3. Infrastructure managed by the EPSO-G Group
Key energy infrastructure in Lithuania managed by the EPSO-G Group (as of 31 December 2024)
7,410 km
High-voltage power transmission lines
and cables, of which:
103 km 400 kV
2222 km 330 kV
5086 km 110 kV
2,288 km
High-pressure pipelines
4 locations
Battery parks
68
Gas distribution stations and
gas metering stations
200 MW
Total installed capacity of
battery parks.
246
Transformer substations and
switchyards, including:
2 at 400 kV
18 at 330 kV
226 at 110 kV
Battery parks
Gas pipelines
330 kV power lines
400 kV power lines
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
11
1.4. Services of the EPSO-G Group Companies
Core services of the EPSO-G Group companies
73
M EUR
Adjusted EPSO-G Group
EBITDA 2024
Lithuanian electricity transmission system
operator.
More information on the Litgrid website.
Operation and maintenance of
electrical equipment up to 400 kV
voltage.
More information on the Tetas website
.
Electricity storage system operator
More information on the Energy cells website.
Energy resources exchange operator and wood exchange
administrator.
More information on the Baltpool website.
Lithuanian gas transmission
system operator. More information
on the Amber Grid website
.
Natural gas exchange operator
Baltic regional coordination centre
Holding, minority
shareholder of the "Nord
Pool" exchange.
TSO Holding
Project management and
investment company
Rheinmetall Defence Lietuva
155 mm Artillery ammunition factory
Lithuanian gas
transmission system
operator
• Maintenance and
technical supervision of
gas transmission
infrastructure
• Gas transmission
• Balancing of gas flows
in the transmission
system
• Administration of the
renewable gas (RE)
guarantees of origin
registry
• Administration of
compensation funds for
LNG terminal
maintenance costs
Energy storage system
operator
• Isolated electricity
system reserve service
• Function for reducing
technological losses
costs in the electricity
PSO (Public Service
Obligation)
• Energy consulting
services
Electricity network
construction and
maintenance
• Construction and
operation of electrical
equipment up to 400 kV
voltage
• Installation of
electricity supply and
distribution equipment
• Electricity network
installation
• Technical maintenance
and reconstruction
• Equipment testing and
diagnostics
Project management
and investments
• Project management
• Investments in the
artillery factory
Biomass and wood
exchange
• Operation of the
biomass exchange
• Administration of
wood auctions
• Organization of heat
auctions
• Administration of
VIAP funds
• Administration of
DAEI accounting units
• Administration of
emergency intervention
funds
Lithuanian electricity
transmission system
operator
• Maintenance and
technical supervision of
electricity transmission
infrastructure
• Electricity transmission
• Additional services to
support system
operations
• Trading of balancing
and regulating electricity
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
12
1.5. EPSO-G Group Companies Across the Value Chain of the business activities
The national energy policy is shaped by
National regulatory authority
Transmission Distribution
Supply to retail
consumers
Production / energy
storage / import
•
Electricity producers
• Imports from other countries
•
LNG terminal operator
•
Storage facility operators
•
Transmission system
operators
•
Distribution system
operator
•
Electricity and gas
suppliers
Corporate holding, coordinating
the activities of the Group companies
Operates in the following segments
Material supply and
electricity network
construction
•
Material suppliers
•
Electricity network
construction works
• Energy exchange operators
•
Companies engaged in
various investments
Exchange services
Non energy
investments
Exercises the shareholder's rights and duties
EPSO-G companies operate in this field
EPSO-G companies do not operate in this field
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
13
02
Operating and Regulatory Environment
2.1. Operating Environment
2.2. Regulatory Environment: Pricing of Regulated and Other Services
2.3. Key Regulatory and Other Legal Changes
2.4. Significant events of the reporting period
2.5. Significant Events After the End of The Financial Period
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
14
2. Operating and Regulatory Environment
2.1. Operating Environment
Stability in energy markets
In 2024, the prices of major energy resources remained stable, similar to
2023. On the GET Baltic exchange, the natural gas price was €39.53/MWh
(19% lower compared to 2023, when the price was €48.97/MWh). The
wholesale electricity price in the Nord Pool exchange for the Lithuanian
trading zone was €87.34/MWh (7.5% lower than in 2023, when the price was
€94.44/MWh). These trends indicate stability after the energy crisis and the
ability in recent years to cope with short-term energy resource price shocks.
However, in recent years, resource prices have not returned to the levels seen
before 2021. At the same time, in 2024, compared to 2023, there is a trend
of greater price fluctuations at different hours in the wholesale electricity day-
ahead market.
Implication: more stable energy resource
prices ensure more predictable revenues;
however, larger hourly electricity price
differences encourage the market to seek
solutions that ensure price stability
throughout the day
1
Security challenges and new business opportunities
During Russia's invasion of Ukraine, constant attacks have been
carried out against the critically important energy infrastructure of
the war-torn country, especially electricity generation and
transmission. This raises concerns and the need to strengthen the
protection of energy companies' managed infrastructure from
potential hostile actions. At the end of 2024, disruptions in internet
and power cables (Estlink 2), along with recorded signs of anchor
dragging near the Nordbalt interconnection in the Baltic Sea, draw
the entire region's attention to the protection of underwater
infrastructure during peacetime. At the same time, in the EU, NATO
countries, and Lithuania, increasing attention is being given to
national defense, creating opportunities to develop new business
types that contribute to strengthening the country's national security
Implication: For the group managing crucial gas and
electricity transmission facilities and operating the
Nordbalt underwater electricity interconnection with
Sweden, security trends create a need to invest in
protection and collaborate more actively with
institutions to implement security measures. The
state's focus on national defense creates
opportunities for investments in new business types.
2
Accelerated RES growth
In 2024, Lithuania saw a record increase in the allowable capacity of
renewable energy sources (RES) to generate power – 1404 MW of solar
and wind farms were connected to the electricity transmission and
distribution networks (compared to 803 MW in 2023). The largest share
of this growth came from wind capacity in the transmission network
(459 MW connected) and solar capacity in the distribution network (735
MW connected). This is also reflected in the increasingly frequent hours
when more electricity is generated in Lithuania than consumed. In 2024,
the share of Lithuania's electricity demand covered by RES reached 41%
(compared to 30% in 2023).
Implication: The rapid expansion of RES
increases local electricity generation, but from
less predictable sources than traditional
generation. This ultimately means a greater
need for balancing capacity to ensure the
stability of the electricity system.
3
Declining inflation and steady economic growth
According to the State Data Agency, in 2024, a 2.4% GDP growth was recorded.
According to the macroeconomic forecasts of the Bank of Lithuania for December
2024, a 3.1% growth is expected in 2025 and 2026. This indicates a more positive
and stable economic situation in Lithuania compared to 2023, when inflation was
still rising due to the energy crisis. On the other hand, GDP growth was driven
more by the services sector than by the recovery of manufacturing. Inflation in
2024 is expected to be around 0.8% – low, lower than the 2% inflation target set
by central banks. This was influenced by the high base formed by the significant
price increase during 2022-2023, which was controlled by the rising (and recently
decreasing) loan interest rates set by the European Central Bank. A significant
uncertainty for the forecasts is created by the potential effects of U.S. economic
actions
Implication: Stable growth and low
inflation allow for more accurate
forecasting of economic changes and the
price movements of materials and
services, affecting financial stability,
cost, and investment plans. Existing
global uncertainties and their effects
remain.
4
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
15
2.2. Regulatory Environment: Pricing of Regulated and Other Services
The electricity and natural gas transmission and electricity storage activities of the EPSO-G Group companies, as well as the
activities of energy resources operator, are licensed and/or authorised to operate. The licences grant exclusive rights to provide
transmission and market operator services in the territory of the Republic of Lithuania.
The operators of electricity and natural gas transmission systems, as well as the designated storage system operator, which are
part of the EPSO-G Group companies, are the only ones in Lithuania able to provide these services. They operate under a natural
monopoly, so the prices of their activities are regulated by the State. The activities of energy resources operator belonging to the
EPSO-G Group set its exchange trading fees in coordination with the regulator. The regulatory function and supervision of licensed
activities in Lithuania is carried out by the National Energy Regulatory Council (NERC).
The decisions taken by the regulator determine the financial performance of the regulated companies in the EPSO-G Group, the
allocation of funds for necessary operating costs, investments to ensure the reliability of the electricity and gas transmission
systems, and the availability of own or borrowed funds to fund strategic projects.
Amber Grid regulated activities prices
The average price of gas transmission services charged by Amber Grid for the needs of Lithuanian consumers in 2024 increased
by 7% and amounted to 1.49 Eur/MWh, compared to the average price of 1.39 Eur/MWh charged in 2023. The change in the
2024 price is due to a 4.4% increase in the natural gas transmission revenue cap approved by NERC for 2024, which was driven
by an increase in all operating cost categories. The revenue cap was lowered by market refunds (repayment of collected excess
revenues for 2021 and 2022, in line with the regulatory principles) and the share of the previously established compensation to
Poland for the GIPL project of common interest, which is significantly lower in 2024 than in 2023. The 2024 prices were also
influenced by the fact that in 2024, 66.2 TWh of natural gas was planned to be transported through the Lithuanian natural gas
transmission system, which is 1% less than estimated for the 2023 prices.
On 30 May 2024, NERC approved the natural gas transmission service prices approved by the CEO of Amber Grid's on 23 May
2024, effective from 1 January 2025.
It has been confirmed that the average price of gas transmission services for the needs of Lithuanian consumers in 2025 will
increase by 7.4% to EUR 1.60/MWh, compared to the average price of EUR 1.49/MWh in 2024. In 2025, the change in the price
for 2025 was due to the declining demand for transmitted gas in Lithuania, which is projected to decrease more in 2025 (i.e. by
19.6 % - from 21 TWh evaluated in 2024 prices to 16.9 TWh evaluated in 2025 prices) than the 4.75% lower Amber Grid’s
revenue cap for 2025, as approved by NERC on 10 May 2024 (compared to Amber Grid’s revenue cap for 2024). The decrease of
the revenue cap in 2025 was mainly due to the 41.7% lower technology costs (mainly due to the decreasing natural gas prices in
the market).
In November 2024, considering the request of Amber Grid, NERC adjusted the natural gas transmission service prices for 2025.
To enhance the integration of the Baltic-Finnish gas markets into the Western and Central European markets, NERC approved
the gas transmission service prices for 2025 to be applied at the entry and exit points of Kiemenai for daily and within-day capacity,
rounded up to the nearest price in line with the regulations of the European Energy Exchange (the prices shall correspond to the
price change unit of EUR 0.025/MWh). For more details, please refer to NERC website.
1.49
1.6
2024 2025
NERC approved average price of Amber Grid’s gas
transmission services for Lithuanian consumers, EUR/MWh
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
16
Litgrid regulated activity prices
Litgrid’s average non-differentiated electricity transmission service price of 1.329 ct/kWh applicable in 2024 compared to the
2023 price (0.654 ct/kWh) was 103% higher and was in line with the adjusted price cap approved by NERC on 29 September
2023 for 2024. The main contributor to this change was the use of accumulated congestion management revenues to amortise
the 2023 transmission price increase. Excluding the impact of the use of congestion management revenues, the price cap for 2024
is 32% lower than that for 2023. The volume of electricity transmitted to Lithuanian consumers in 2024, which is projected to be
around 15% lower than projected for 2023 prices (a factor contributing to the increase of the price cap), was also affected.
The undifferentiated ancillary services acquisition component to the transmission service price approved by NERC in October
2023 applied for 2024 at 1.3091 ct/kWh. The 2024 price increases by a factor of around 5.5 compared to the 2023 price (0.239
ct/kWh) and decreases by a factor of around 1.3 compared to the price for the second half of 2022 (1.723 ct/kWh). The main
reason for the change in the 2024 price (compared to 2023) is an overly conservative price forecast for 2023, as the cost of the
Generating Facility Availability Service in 2023 has increased (as compared to the projected cost of the generating facility
availability service in the ancillary services price for 2023) by a factor of around 3.
On 1 October 2024, NERC approved the adjusted price cap of 1.046 ct/kWh for Litgrid’s electricity transmission service for 2025.
This represents a 21.3% decrease compared to the cap set for 2024 (1.329 ct/kWh). The main contributor to this change was the
decrease in costs for technological needs (mainly due to a reduction of approx. 12% in electricity acquisition price due to falling
wholesale electricity prices on the market), the use of accumulated congestion management revenues to amortise the 2025
transmission price changes and the correction of the mismatch in the return on investments for H1 2024 (factors reducing the
price cap). The volume of electricity transmitted to Lithuanian consumers in 2025, which was projected to be around 5.8% higher
than projected for 2024 prices (a factor reducing the price cap) also played a role.
In October 2024, the undifferentiated ancillary services acquisition component (price) of 1.6816 ct/kWh approved by NERC for
2025 was approx. 28% higher than in 2024 (1.3091 ct/kWh). The main reasons for the change (compared to 2024): the price
estimates for 2025 include the costs actually incurred and not recovered by Litgrid in 2023 in providing such services, the cost of
the Baltic power system isolated operation test (to ensure smooth synchronisation of the Baltic power system with CEN in
February 2025), the deregulation of prices of ancillary services acquired by Litgrid. After the synchronization of the Baltic power
system with the Continental Europe Network (CEN) in February 2025 and the launch of the common Baltic balancing capacity
market, the prices of the frequency restoration reserve, i.e. an automatic frequency restoration reserve (aFRR), a manual frequency
restoration reserve (mFRR), a frequency containment reserve (FCR), will no longer be regulated after the synchronisation of the
Baltic power system with CEN, and the capacities of these ancillary services will increase.
Baltpool regulated and licensed activities
In 2024, the following Baltpool tariffs (excluding VAT), which had been in force and applied in the prior years, were maintained:
In 2024, the biofuel exchange trading fee for transactions where biofuel is supplied in Lithuania is EUR 41.27/1,000 MWh (applies
to both parties to an exchange transaction: a buyer and a seller). The latter was set by a decision of NERC on 31 August 2020
and applied as from 1 September 2020, corresponding to the tariff of EUR 0.48/tonne applied until 1 September 2020. This
means that the application of the tariff set by the decision of NERC of 18 October 2019 was extended with effect from 1
September 2020, by converting it from the ton of oil equivalent (toe) o other units of energy value, i.e. megawatt hours (MWh).
The timber exchange trading fee set in 2018 continued to apply in 2024: 0.12% of the value of the timber purchase-sell contract
concluded in the ETTS (Electronic Timber Trade System) (the fee applies to both parties to ETTS transaction: buyers and sellers).
1.329
1.046
2024 2025
NERC’s approved adjusted price cap for Litgrid’s electricity
transmission service, ct/kWh
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
17
In 2024, the heat auction segment trading fee set on 1 December 2021 was EUR 15.65/1,000 MWh for the heat volume specified
in the Sale (including Production) Order. Baltpool, having assessed the need for an adjustment of this tariff, approached NERC in
2024 for a revision and recalculation of this tariff. The said adjustments was not finalised in 2024 and will continue in 2025.
In 2024, the participants of the settlement system for fuel from renewable energy sources (FRES) were subject to the fee of EUR
0.017/1,000 FRES settlement units, which was set on 15 January 2022.
Unregulated activities of Baltpool
In 2024, the biofuel exchange trading fee for biofuel supplied outside Lithuania is 0.5% of the transaction value (applies to both
parties to an exchange transaction: a buyer and a seller).
In 2024, the fees and charges set on 10 July 2023 for the additional services of Baltpool were as follows: a fee for the execution
of a directly concluded agreement of 0.5% of the value of the biofuel actually delivered under the directly concluded (applicable
only to one party to the transaction, i.e. the buyers) agreement, as well as a of EUR 2,500 per calendar year for the use of the e-
trading system for informational purposes
Detailed information on the fees for Baltpool services, including data reporting, is available on Baltpool website.
Energy cells
Energy cells – the designated energy storage system operator (SSO) - is regulated by the State during the period of appointment
until the completion of the project of synchronisation of the electricity system of the Republic of Lithuania with the electricity
networks of continental Europe, including the prices of services.
The price of the Energy cells isolated working reserve service in 2024 was 4.19 Eur/MW/hour. (excluding VAT) which was approx.
12% lower than the 2023 level. The 2024 price was in line with the price cap for the Energy Cells isolated operation reserve
service of EUR 4.19/MW/hour approved by NERC for 2024 in November 2023 (excluding VAT). The price decrease in 2024 was
due to a 12% lower allowed revenue level (EUR 7.37 million) set by NERC in 2024 for Energy cells compared to 2023 (EUR 8.37
million). The main reason for the decrease in the price of the isolated operation reserve service in 2024 was that Energy Cells’
costs related to the purchase of electricity were projected to be lower in 2024 compared to the costs used for the pricing of the
service in 2023 (2024 - EUR 1.03 million, 2023 - EUR 3.03 million)
The price of EUR 4.17/MW/hour (excluding VAT) for isolated operation reserve service is applied from 1 January 2025, which is
in line with the adjusted price cap for the Energy Cells’s isolated operation reserve service approved by NERC in November 2024,
which is EUR 4.17/MW/hour (excluding VAT), i.e. about 0.5% below the price cap set in 2024, and with the permitted revenue
level (EUR 7.31 million) set for Energy Cells by NERC for 2025, which is, respectively, slightly lower than in 2024 (EUR 7.37
million). The decrease in the permitted revenue level was influenced by the slightly lower Energy Cells’ operating expenses and
lower capital costs set by NERC due to the depreciation of SSO-operated BESS in the regulatory accounting, which directly affects
the value of Energy Cell’s regulatory asset base (RAB) and the permitted revenue level.
The prices (price forecasts) of the isolated operation reserve services for 2023-2025 were and are included in the acquisition
component of Litgrid’s ancillary services to the Transmission Service Price approved by NERC for 2023-2025.
2.3. Key Regulatory and Other Legal Changes
The following legislative initiatives in 2024 at national and EU level, changes in the regulation of energy markets and strategic
planning documents had a significant impact on the EPSO-G Group’s activities and strategic choices:
• In March 2024, NERC approved all the ground rules for the operation of the Baltic balancing markets: a proposal
(methodology) for the Baltic balancing capacity market in accordance with Articles 33(1) and 38(1) of the Commission
Regulation (EU) 2017/2195 of 23 November 2017 establishing a balancing guidelines (hereinafter the “Balancing Guidelines”,
EBGL), translated into Lithuanian; rules on the exemption that prevents balancing service providers from transferring their
obligations to provide manual frequency restoration reserve (mFRR) and automatic frequency restoration reserve (aFRR)
balancing capacity between the trading zones of the Baltic States, in accordance with Article 34(1) of the EBGL; the
methodology for calculating the inter-zonal balancing period inter-zonal capacity of TSOs in the Baltic Capacity Calculation
Region (CCR) in accordance with Article 37(3) of the EBGL.
• In April 2024, the Guidelines for Hydrogen Development in Lithuania 2024-2050 were approved by Order of the Minister of
Energy of the Republic of Lithuania It is the first document regulating the development of the hydrogen sector in Lithuania and
provides strategic directions for the development of the hydrogen sector in Lithuania.
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
18
• As of 1 May 2024, new electricity transmission service contracts concluded by market participants with Litgrid entered into
force. One of the most important changes is that electricity production and consumption will be calculated in 15-minute
periods instead of one hour. The transition to a 15-minute interval stems from the provisions of the Balancing guidelines
(EBGL).
• In June 2024, NERC approved updated description of the procedures for using Litgrid’s transmission networks. The main
objective of the update is to help RES developers to smoothly and successfully implement their projects and to simplify the
necessary procedures for new entrants. This has led to a refinement of the most relevant provisions of the inventory, reducing
risks for developers and financiers by detailing the processes of plant management, removing intermediate steps or
requirements, and simplifying the process of RES development.
• In line with ACER’s 2019 decision on the application of a single EU-wide methodology for pricing of intraday cross-zonal
electricity capacity, and in order to enhance electricity trading and the further development of the EU’s internal electricity
market, separate auctions of intraday electricity products started to be organised from 13 June 2024, with three additional
auctions to be traded after the day-ahead auctions each day, namely at 4 pm, at 11 pm, and at 11 am (Lithuanian time).
• In June 2024, the EU legislative package to decarbonise the EU gas market by facilitating the uptake of renewable and low
carbon gases, including hydrogen, while ensuring security of supply and affordability of energy for all citizens in the EU, was
formally adopted. Regulation (EU) 2024/1789 of the European Parliament and of the Council of 13 June 2024 on the internal
markets for renewable gas, natural gas and hydrogen; Directive (EU) 2024/1788 of the European Parliament and of the Council
of 13 June 2024 on common rules for the internal markets for renewable gas, natural gas and hydrogen; Regulation (EU)
2024/1787 of the European Parliament and of the Council of 13 June 2024 on the reduction of methane emissions in the
energy sector. The Regulation on methane emission reduction in the energy sector lays down rules on the accurate
measurement, quantification, monitoring, data reporting and verification of methane emissions in the EU energy sector, as well
as on the reduction of methane emissions, including leak detection and repair surveys, repair obligations and restrictions on
venting and flaring, and on the means to ensure transparency of methane emission reporting. These changes will affect activity
and decisions of the Group and Amber Grid.
• To avoid significant variations in electricity prices in the future, the EU’s Electricity Market Design (EMD) reform was launched
in 2023. The adopted EMD package (Regulation (EU) 2024/1747 of the European Parliament and of the Council of 13 June
2024 on the improvement of the Union's electricity market design and Directive (EU) 2024/1711 of the European Parliament
and of the Council of 13 June 2024 as regards improving the Union's electricity market design) was published in the EU Official
Journal on 26 June 2024. These changes affect the Group’s activity and the decisions of Litgrid and Energy Cells.
• The National Energy Independence Strategy (NEIS), one of the most important document for the long-term energy sector
planning, was adopted in June 2024. NEIS is publicly available here.
• The updated National Energy and Climate Action Plan 2021-2030 (NECP), approved by Resolution No 1069 of the
Government of the Republic of Lithuania of 11 December 2024, was submitted to the European Commission on 2 October
2024. NECP is publicly available here.
• On 9 October 2024, Litgrid, together with the Baltic TSOs (Augstprieguma Tikls in Latvia, and Elering in Estonia) connected
to MARI, a single European platform for the exchange of balancing energy from frequency restoration reserves with manual
activation (mFRR). As a result, as from 9 October 2024, mFRR balancing energy is booked on the single European electricity
balancing market, within the Baltic bidding zones. Due to technical reasons (beyond the control of Litgrid and the Baltic
electricity transmission system operators), Litgrid’s connection to PICASSO, the European platform for the exchange of
balancing energy from frequency restoration reserves with automatic activation (aFRR), has been delayed (the connection to
PICASSO is estimated to take place in Q1 2025).
• By the Resolution No XV-54 of 12 December 2024, the Parliament (Seimas) of the Republic of Lithuania approved the
Programme of the 19th Government of the Republic of Lithuania, and the Plan for the Implementation of the Programme
regarding main priorities and priority actions in the energy sector was published for public consultation in January 2025. This
will affect the EPSO-G Group activities at the national level.
• Taking into account Article 26(1) of the European Commission Regulation (EU) 2017/460 of 16 March 2017 establishing a
network code on harmonised transmission tariff structures for gas (TAR NC), in December 2024, NERC published for public
consultation (until 14 February 2025) a draft on the harmonisation of the tariff methodology for the services provided by
Amber Grid, the Lithuanian transmission system operator, and indicative 2026-2028 tariffs. For more details, please refer to
NERC website.
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
19
Key regulatory and other legal changes after the end of the reporting period:
• On 1 January 2025, amendments to the Law on Corporate Income Tax of the Republic of Lithuania came into force,
introducing a standard 16% corporate income tax rate in Lithuania (previously 15%). These amendments may potentially
affect NERC’s decisions determining the rate of return on investment of Amber Grid, Energy Cells and Litgrid. In
accordance with the NERC’s Methodology on Rate of Return on Investments, the rate of return on investment is subject
to an income tax rate applicable in Lithuania (the application of a 16% income tax rate is expected to have a positive
effect on the rate of return on investments (pre-tax), by increasing it).
• On 9 January 2025, NERC approved the standard terms and conditions of the electricity imbalance settlement contract,
effective as of 1 January 2026. The terms and conditions were approved in line with EU regulations and the growing
demand for balancing capacity. The amendments aim to promote better quality in the planning of electricity production
and consumption by Balance Responsible Parties (BRPs). Under the new regime, the costs of procuring balancing
capacity, which depends on the forecasting quality, will be passed to BRPs at the component of reserve service. The
costs will be calculated in accordance with the following principle: 50% of the costs will be allocated based on the
imbalance, where the remaining 50% – based on the BRP consumption portfolio. Such a model will encourage BRPs to
adopt effective planning and reduce imbalances. The costs of balancing capacities will be passed on to BRPs
progressively: 30% from 1 January 2026, 60% from 1 January 2027, and 100% from 1 January 2028.
• On 17 January 2025, amendments to the Law on Electricity of the Republic of Lithuania and the Law on Interconnection
of the Electricity System of the Republic of Lithuania with the continental European networks for Operation in
Synchronous Mode of the Republic of Lithuania, adopted by the Seimas on 19 December 2024, came into force, which
will allow Litgrid, after the synchronization with the Continental European networks (after 9 February 2025), to purchase
a part of the balancing services necessary for the management of the electricity transmission system from the energy
storage system operator Energy Cells for a limited period. Accordingly, on 30 January 2025, the European Commission
adopted a decision, enabling Energy Cells to provide balancing services for a limited period of time, and, on 30 January
2025, NERC adopted a decision on coordination of the isolated electricity system operation reserve service purchase/sale
agreement (its terms and conditions) between Litgrid and Energy cells. These decisions enable Litgrid to purchase a part
of the balancing services from Energy Cells on a temporary basis, until the market is able to offer a sufficient supply of
balancing services. The agreement provides that Energy Cells will provide 40 MW of aFRR balancing capacity in 2025
and will participate in the balancing energy (aFRR) market, where its bid will be placed at the end of the auction, i.e.
Energy Cell’s batteries are only activated when these services cannot be provided by other market participants.
• On 30 January 2025, NERC also adopted other important decisions for the synchronisation with the CEN: it approved
the proposal of the Baltic TSOs (Estonia, Latvia, Poland, Lithuania, Finland, Sweden) to change the Day-Ahead and
Intraday Capacity Calculation Methodology within the Baltic Capacity Calculation Region (the new methodology will
come into effect as of the beginning of the synchronisation of the Baltics with the CEN), and agreed on the date for
launching the Baltic balancing capacity market, i.e. 5 February 2025 (more detailed information on balancing capacity
market is available on Litgrid’s website).
2.4. Significant events of the reporting period
On 3
rd
of January, the European gas transmission system operators Gasgrid Finland (Finland), Elering (Estonia),
Conexus Baltic Grid (Latvia), Amber Grid (Lithuania), GAZ-SYSTEM (Poland) and ONTRAS (Germany), which are
involved in the Nordic-Baltic Hydrogen Corridor international project, signed an agreement on a feasibility study for
a green hydrogen corridor.
On 12
th
of January, Litgrid and KTU completed innovative battery and thermal accumulator tests.
On 15
th
of January. Litgrid signed a cooperation agreement to prepare the electricity transmission network for the
electrification of Rail Baltica.
On 26th of January, the ELLI gas interconnection capacity expansion project between Latvia and Lithuania, jointly
implemented by Amber Grid and the Latvian gas operator Conexus Baltic Grid, was officially completed.
01
JANUARY
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
20
On 1
st
of February, a new electronic system for the registry of guarantees of origin of green gas, administered by
Amber Grid, was launched.
On 8
th
of February, Litgrid completed 8
th
synchronisation project: the electricity transmission network has been
reinforced with a new Automatic Generation Management System.
On 12
th
of March, the independent member of the Board of EPSO-G, Asta Sungailienė, declared her resignation
from the position of the member of the Board and of the Chairperson of the Nomination and Remuneration
Committee of EPSO-G due to personal reasons, starting from 27 March 2024.
On 15
th
of March, a new version of the Articles of Association of EPSO-G was registered in the Register of Legal
Entities.
On 9
th
of April, Litgrid connected to the grid a solar park under construction in Molėtai district, with an authorised
generation capacity of 80 MW and installed capacity of 100 MW.
On 25
th
of April. Litgrid completed the reconstruction of the 330 kV Klaipėda-Šyša line.
As of 30 April 2024, members have been elected to the Boards of the companies within EPSO-G Group Amber
Grid, Baltpool and Litgrid for a term of 4 (four) years.
On 30
th
April, EPSO-G’s General Meeting of Shareholders decided on the distributable profit. Dividend payments
amounted to EUR 196 thousand.
On 9
th
of May. Litgrid’s planned expansion of the north-western electricity transmission network has been granted
the status of key national significance.
On 10
th
of May, the Board of Amber Grid elected Paulius Butkus, a member of Amber Grid's Board of Directors and
Head of Development and Innovation at EPSO-G Group, as Chairman of the Board.
On 22
th
of May, Tomas Varneckas, the Head of Infrastructure and Project Management at EPSO-G Group, was
elected Chairman of the Board of Litgrid for a second term of office.
On 23
th
of May, Simona Grinevičienė, the Head of Organisation Development and Culture of the EPSO-G Group,
was elected as the new Chair of the Board of Baltpool.
On 28
th
of May, EPSO-G joined the Science Based Targets initiative (SBTi). By joining, the Group has committed
itself to setting science-based greenhouse gas (GHG) emission reduction targets by 2030.
On 6
th
of June, Tetas became the Baltic representatives of Maschinenfabrik Reinhausen GmbH, a world leader in
transformer solutions.
On 20
th
of June, Amber Grid and Litgrid, companies of the EPSO-G Group, handed over humanitarian aid packages
to Ukraine’s energy sector. Litgrid sent a third support package consisting of an autotransformer and transmission
network equipment. The second Amber Grid contribution consisted of five generators and ten pipeline
reinforcement couplings. The total value is more than EUR 4.1 million.
On 4
th
of July, Litgrid switched on a new 330 kV switchyard in Tytuvėnai, which will allow wind farms to be
connected to the transmission grid. The switchyard will transmit the largest amount of electricity generated from
renewable energy sources in Lithuania - over 600 MW.
On 11
th
of July, the EPSO-G group companies provided EUR 156 thousand for scholarships for engineering
students. The long-term incentive scholarships established by Amber Grid and Litgrid for bright and motivated
engineering students.
On 15
th
of July in Vilnius, four Lithuanian companies - Amber Grid, Elektros skirstymo operatorius (ESO), Ignitis
Gamyba and Tetas - signed agreements for the provision of humanitarian aid to Ukraine, as well as for measures
to help rebuild the country's energy infrastructure, which was destroyed by the war.
02
FEBRUARY
03
MARCH
04
APRIL
05
MAY
06
JUNE
07
JULY
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
21
On 16
th
of July, the Baltic electricity transmission system operators sent a notice to representatives of Russia and
Belarus regarding the withdrawal from the Russian-controlled electricity system in February 2025 and the non-
renewal of the BRELL contract.
On 18th of July, EPSO-G set up a new company, EPSO-G Invest engaged in project management and investments.
On 25
th
of July, Moody's Ratings affirmed the Baa1 credit rating with a stable outlook for the EPSO-G Group
following the periodic review of its credit rating. The rating reflects the Group's strong financial position, moderate
and balanced debt levels and stable and diversified income stream.
On 29
th
of July, NERC published data on the allowable rate of return on investments for Amber Grid, Energy cells
and Litgrid in 2025. Taking into account the provisions of the NERC Methodology for Determination of the Rate of
Return on Investments and the situation on the financial markets, NERC announced on its website that the
applicable rate of return on investments (on the value of regulated assets, RAB) for the calculation of the regulated
prices of Amber Grid, Energy Cells and Litgrid in 2025 will be respectively 5.63%, 5.69% and 5.72% (in 2024 it
was 5.04%, 4.97% and 5.00% respectively).
On 14
th
of August, after the reconstruction, Litgrid switched on the 110 / 27.5 kV Lentvaris traction transformer
substation - the first of 6 substations that will be connected to the Litgrid transmission network and will supply
electricity to the LTG Infra contact network on the railway section Vilnius-Klaipėda.
On 23
th
of August, Litgrid connected to the grid a solar park under construction in Kaišiadorys district, with an
authorised generation capacity of 50 MW and installed capacity of 60 MW. It is one of the largest solar power parks
in the country, connected to the electricity transmission grid.
On 9
th
of September, operators of the Ontras gas transmission system of Lithuania, Finland, Estonia, Latvia, Poland
and Germany successfully completed the preliminary feasibility study of the Nordic Baltic Hydrogen Corridor
(NBHC). The significant study, that was started in January 2024, examines the main conditions for the development
of the NBHC project. The project aims to create opportunities for the transportation of green hydrogen between the
six countries.
On 19
th
of September, Rasa Balevičienė was appointed as an independent member of the board of EPSO-G. She is
responsible for finances and investments. Mrs. Balevičienė replaced Asta Sungailienė, who worked on the
Company’s board until 27
th
March.
On 23
rd
of September, Litgrid connected to the country's transmission grid a 105.4 MW wind park in Kelmė district,
that is developed by Ignitis Renewables.
On 27
th
of September, by decision of the EPSO-G Board, Robertas Vyšniauskas was appointed a member of the
EPSO-G Remuneration and Nomination Committee.
On 7
th
of October, the second biomethane injection point launched operations in Lithuania - in Radviliškis district,
the Amber Grid transmission system has been supplemented with a new biomethane injection point, to which the
biomethane power plant of Agrokoncernas group of companies was connected.
On 10
th
of October, the Baltic transmission system operators Litgrid, Augstsprieguma tīkls and Elering were
connected to MARI, a single European platform for the exchange of balancing energy from frequency restoration
reserves.
On 18
rd
of October, Litgrid connected to the country’s transmission grid the 85 MW wind park in Jurbarkas district,
that is being developed by renewable energy company Green Genius. This is one of the largest wind parks in
Lithuania.
On 23
rd
of October, the members of the EPSO-G Audit Committee started a new four-year term: Vytenis Lazauskas
as independent member; Rasa Balevičienė as independent member of the committee and independent member of
the EPSO-G Board; Dainius Bražiūnas as committee member, member of the EPSO-G board nominated by the sole
shareholder.
On 24
th
of October, the EPSO-G group’s New Energy Strategy 2035 was publicly presented.
On 25
th
of October, the first of the three synchronous condensers, installed by the Lithuanian electricity transmission
system operator Litgrid, started operating in Telšiai transformer substation. The commissioning of the synchronous
08
AUGUST
09
SEPTEMBER
10
OCTOBER
CONSOLIDATED MANAGEMENT REPORT FOR 2024
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22
condensers is the most important step in Lithuania’s efforts to consolidate its energy independence in February next
year by disconnecting from the Russian electricity system and synchronising with the Continental European
Network.
On 7
th
of November, the second biomethane injection point already operates in Lithuania - in Radviliškis district, the
Amber Grid transmission system has been supplemented with a new biomethane injection point, to which the
biomethane power plant of Agrokoncernas Group of companies was connected.
On 3
rd
of December, the report of the study on the virtual grid as an electricity market product, carried out by Litgrid
and Energy cells together with the Lithuanian Energy Institute (LEI), was received, and the study completion act
was signed on 19
th
of December.
On 12
th
of December, the Extraordinary General Meeting of Shareholders of EPSO-G Invest adopted the decision
to revoke the pre-emptive right of EPSO-G to acquire all newly issued shares of EPSO-G Invest and to grant EPSO-
G the right to acquire 1,812,500 newly issued shares of EPSO-G Invest, and Valstybės Investicinis Kapitalas the
right to acquire 1,837,500 newly issued shares of EPSO-G Invest.
On 20
th
of December, the Ministry of Energy of the Republic of Lithuania, the institution exercising the rights and
obligations of the sole shareholder of EPSO-G, dismissed Tomas Daukantas from the Board of EPSO-G.
On 20
th
of December, the representatives of Rheinmetall, German defence technology company, the EPSO-G
company EPSO-G Invest and Giraitės ginkluotės gamykla officially signed the share purchase and shareholders’
agreements for the acquisition of the shares in Rheinmetall Defence Lietuva UAB, which will build the 155-mm
artillery shell manufacturing plant.
On 23
rd
of December, EPSO-G announced audited Sustainability Performance Report for 2023 and revised the
baseline for the KPI1 under the terms of the Bond Prospectus.
On 23
rd
of December, Poland’s transmission system operator PSE approved a financial investment decision for the
construction of the Harmony Link onshore interconnection. According to the cooperation agreement signed by the
operators, the financial investment decision adopted by Litgrid in September has also become effective. This marks
a joint commitment to fund and execute the interconnection project.
2.5. Significant Events After the End of The Financial Period
On 13
th
of January, the Lithuanian Navy and Lithuanian electricity transmission operator Litgrid have signed a long-
term cooperation agreement. The two organisations will cooperate more closely to ensure the safety of the
NordBalt high-voltage direct current cable to Sweden.
On January 13, Amber Grid announced a public selection for the position of CEO.
On 17
th
of January, in implementing NERC obligation to inspect safety of the GIPL gas interconnection, the experts
confirmed that the GIPL gas pipeline is safe to operate. GIPL’s security check was carried out in November -
December, 2024 by JSC Inspecta Latvia, which won the public tender. The company didn’t participate in the
construction of GIPL.
On 31
th
of January, Litgrid connected the last sections of 330 kV Darbėnai-Bitėnai electricity transmission line. Once
all the construction works on the line were completed, one of the two links was launched and electricity
transmission between Latvia and Lithuania was restored via Gruobinia-Klaipėda line.
On January 31, at the extraordinary general meeting of shareholders of Rheinmetall Defence Lietuva, UAB, it was
decided to increase the company's share capital, establishing that UAB EPSO-G Invest has the right to acquire
36,500,000 shares of the company, with a total value of €36,500,000.
11
NOVEMBER
12
DECEMBER
01
JANUARY
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23
On 4
rd
of February, Litgrid connected to the country’s transmission grid the 80 MW wind park in Kelmė district, that
is being developed by renewable energy company Enefit Green.
On 5
th
of February, the Baltic balancing capacity market has become operational.
On 8
th
of February, the power systems of the Baltic States were successfully disconnected from the Russia’s power
systems.
On 9
th
of February, the power systems of the Baltic States were successfully synchronised with Continental Europe.
On February 10, Energy Cells began providing balancing services to Litgrid.
On February 25, Litgrid constructed a new transformer substation and connected a company from the VMG group.
On February 26, Litgrid completed two synchronization program projects: the installation of the frequency stability
assessment system and the construction of the 330 kV power line from Darbėnai to Bitėnai.
On March 4, EPSO-G announced the selection of a board member nominated by the shareholder of the Group
company Tetas.
On March 4, the institution exercising shareholder rights – the Ministry of Energy of the Republic of Lithuania –
started the selection procedure for the board member nominated by the shareholder for UAB EPSO-G – a civil
servant position.
On March 4, Litgrid joined the European balancing energy exchange platform PICASSO.
02
FEBRUARY
03
MARCH
CONSOLIDATED MANAGEMENT REPORT FOR 2024
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24
03
Business Strategy and Planned Investments
3.1. EPSO-G Group Strategy
3.2. Major Projects of the EPSO-G Group to 2035 and the Value they Create
3.3. Planned Investments by 2035
3.4. EPSO-G Goals in 2025
3.5. 10-Year Network Development Plan
3.6. Process for Updating the Strategy and Other Planning Documents
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TOC ↑
25
3. Business Strategy and Planned Investments
3.1. EPSO-G Group Strategy
Vision, mission and purpose
In 2024, aiming to contribute to the development of a reliable and climate-neutral energy system, to foster the growth of high
value-added industries and to support the development of exports of green energy and its products, the EPSO-G Group updated
its Strategy 2035. More details on the new Energy Strategy by 2035 of the EPSO-G are available on website.
Values
Implementation of the mission, pursuit of the vision and all activities of the EPSO-G Group are based on the fundamental human
and professional values: openness, responsibility and reliability. The EPSO-G Group team's behaviour is reflected in values.
Open
Reliable
Responsible
1. I respect others' time, efforts,
and the results they have
created.
2. I take initiative, acting with
consideration for its impact on
people and the environment.
3. I do what I commit to and
more, acting efficiently.
1. I accept people's differences,
listen to others' opinions, and
express my own. I treat
everyone with respect.
2. I strive to improve, stay curious,
learn, and help others grow.
3. I share knowledge and
experience, collaborate, and
seek mutual understanding.
1. I act professionally, work safely,
and follow best practices.
2. I create value for clients,
colleagues, and partners by
proposing and implementing
solutions.
3. I care about our clients and
partners, colleagues, and
society.
We exist
We seek
Our action
now
OUR PURPOSE
To power a confident and
green future in an ever-
changing world
OUR VISION
To enable the transformation of the
energy industry while simultaneously
safeguarding national security
interests
OUR MISSION
To accelerate
energy independence
and enhance system security
CONSOLIDATED MANAGEMENT REPORT FOR 2024
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26
Three fundamental commitments and strategy structure
The EPSO-G Group Strategy 2035 is based on three fundamental commitments, which will serve further business developments
of the Group.
In its strategy, the Group is committed to expand existing main activities and to build new ones. Their interconnections are
reflected in the strategy structure.
Sustainability commitments are integral to the Strategy. The EPSO-G Group Strategy and plans are presented in the Sustainability
Report section 8.1 “ESRS 2 General disclosures”.
Reliable and skilled
strategic partner
Energy transition requires a close
cooperation of various industry peers,
investors and governments. Our goal is
to be reliable partners in developing
environmentally friendly infrastructure
and markets.
3
Driver of tomorrow‘s
infrastructure
We see the transformation of the
energy sector as a fundamental
change. Our goal is to provide the
infrastructure upon which the net-
zero energy system will be based.
1
We aim to enhance resilience and
reliability within and beyond the energy
sector, strengthening system flexibility
and national security. Our work is
essential for a reliable future.
2
Provider of security
and reliability
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27
Value created by the Group
The EPSO-G Group Strategy is based on the value created for the key stakeholders. The Group has defined the value it creates
through strategic indicators (financial, sustainability and performance (operational)), which are grouped according to their benefits
to stakeholders. They represent EPSO-G’s main objectives to 2035 that will be used as a benchmark in assessing the Strategy
success.
Describing 2035 Success: Value Proposition for Our Stakeholders
Society
thrives in a sustainable economy
-50%
GHG gas emission (Scope 1 and 2) reduction
by 2030, reaching net-zero by 2050
≥ 12,2 GW
capacity of flexible resources
Partners
collaborate for success
≥ 12 GW
onshore renewables capacity connected to electricity
network
~2,4 TWh
of RES gases injected into the gas grid
≥ 26 TWh/year H
2
International transmission capacity
Founders and investors
unlock new possibilities and reap the rewards
≥ 270 M EUR
Group adjusted EBITDA grown to by 2035
High single – low double digit
Average adjusted ROE
Financial status ≥ Baa3
Credit rating (or equivalent)
CAPEX 90-110%
≥ 70%
employee engagement rate maintained
Top Employer certificate
Our people
are empowered
Safe, positive, and accident free workspace and
culture
0 severe and fatal accidents for employees and
contractors
≥ 80 points
Global Customer Satisfaction Index (GCSI) as a
leading companies rating scores
Clients
experience seamless and high quality services
AIT ≤ 0,93 min ENS ≤ 27,25 MWh
Maintain electricity transmission reliability
0 unplanned gas interruptions
Uninterrupted gas transmission
and fast fault recovery
≥ 1,4 GW
Installed capacity of
offshore wind
≥ 1.6 Mt CO
2
International transmission capacity for CO
2
captured by cement producers
1
4
2
3
5
≥ 3,5 GW
capacity of interconnectors with EU countries
CONSOLIDATED MANAGEMENT REPORT FOR 2024
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28
3.2. Major Projects of the EPSO-G Group to 2035 and the Value they Create
The implementation of the Group’s new strategy envisages numerous ambitious projects to deliver strategic objectives. Below
are the most important projects to be developed.
While the synchronization with the Continental European networks took place on 9 February 2025, the projects to complete the
synchronisation programme are underway. They will allow to strengthen the integration of electricity markets and increase the
stability of the electricity system. Plans for 2025 include the connection of a third, the Neris synchronous condenser, completion
of the construction of the 330 kV overhead transmission lines Vilnius–Neris and Kruonis PSHP-Bitėnai, and completion of the
reconstructions of the 330kV Neris transformer substations and 330 kV Darbėnai and Mūša switchyards.
After project changes in 2024, the construction of Harmony Link interconnector continues, and will increase electricity trade with
Western Europe. The design works of the Link are scheduled to be launched already in 2025, and to have it developed in 2031.
Following the decision of the participating countries for the onshore construction of the line, the options for early completion of
the project by 2030 are being explored.
The EPSO-G group aims to develop a transmission network for hydrogen, a new energy vector, in Lithuania and connect it to
neighbouring EU countries. The Nordic-Baltic Hydrogen Corridor was granted the status of the Project of Common Interest (PCI)
by the EU. It is aimed at creating a hydrogen corridor for transporting renewable hydrogen from Finland and the Baltic States to
the EU’s central and north-western markets, facilitating development of a renewable hydrogen market in the Baltic Sea region.
Efforts are also made to accelerate the green transformation by building hydrogen infrastructure and enabling a competitive
European-wide low-carbon hydrogen market. The development of the Lithuanian hydrogen network is key to enabling the
hydrogen transit via the Nordic-Baltic corridor and the use of these resources for national needs. The network is scheduled to
start operating after 2030.
CCS Baltic Consorcium is the first project in the Baltic States to capture carbon dioxide (CO₂) during cement production. The
project aims to create a carbon capture and storage value chain in Lithuania and Latvia, allowing to transport CO
2
to ports, and
subsequently to permanent storage sites. As a first step, a feasibility study will be carried out to identify the most efficient way
to transport CO₂. One of the solution is transportation of captured CO
2
via pipelines, where the EPSO-G Group sees its role as
developer and operator. Fossil CO₂ and biogenic CO₂ capture is critical to achieving a climate-neutral economy and reaching the
EU’s zero-emission targets for industry, transport, energy production and other sectors in both Europe and Lithuania by 2050. The
CCS Baltic Consorcium was granted the status of the Project of Common Interest (PCI) by the EU. The network could be
operational after 2030.
Hydrogen
Network
3 units
Synchronous condensers installed
in Lithuania, in total
700 MW
Planned installed capacity of the
Harmony Link
≥26 TWh / yr
Hydrogen transport capacity in Lithuania by
2035, reaching 100 TWh by 2050
≥1.6 Mt CO₂
Planned CO
2
transmission
network capacity needs
2030 +
A first cement producer connected to the
CO
2
network
~500 km
Planned total length of the
hydrogen network in Lithuania
Synchronisation
projects for market
integration
Carbon
dioxide
network
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29
The Energy Hub is a longer-term project, extending beyond 2035, but the first groundworks for the Centre kick-start already now.
Regional cooperation is essential to unlocking the full potential of renewable energy and to achieve the goals of energy
transformation. Coordinated planning and development of energy transmission infrastructure and offshore wind generation
enables optimisation of potential solutions and maximisation of the resulting socio-economic benefits. Regional cooperation paves
the way for building the Baltic Sea’s offshore wind potential, developing interconnectors and integrating the electricity and
hydrogen sectors. To reach specific regional agreements, the Group is exploring technical and economical feasibility and looking
for an optimal solution for a regional Energy Hub.
Energy storage technologies are fundamental to ensuring the development of RES in future energy systems. Solutions to store
surplus energy or offset periods of low generation are being sought to ensure the network stability, security, sufficiency and
resilience of the supply and to reduce electricity price volatility. Long-term energy storage solutions allow to extend the energy
store time (from a few days), balancing fluctuations in energy production and prices. The EPSO-G Group is assessing the
potential of installing a compressed air energy storage system using geological structures in Lithuania. The project aims to
increase system resilience and security of supply whilst ensuring a smooth transition to a RES-based energy system in Lithuania
and the Baltic region.
The first phase of the pilot project is projected to include a feasibility study and modelling of long-term compressed air energy
storage to determine the potential capacity and to explore the opportunities to use the geological structure.
The EPSO-G Group is engaged in national security and defence industry projects, strengthening the national resilience and
independence. In December 2024, the representatives of Rheinmetall, EPSO-G Invest and Giraitės ginkluotės gamykla officially
signed the share purchase and shareholders’ agreements for the acquisition of the shares in Rheinmetall Defence Lietuva UAB,
which will build the 155-mm artillery shell manufacturing plant. At the moment, Rheinmetall holds 51%, EPSO-G Invest 48%
and Giraitės Ginkluotės Gamykla 1% of the shares in Rheinmetall Defence Lietuva. EPSO-G Group co-invests in the project with
the state-owned enterprise Valstybinis Investicinis Kapitalas.
2027
Planned commercial operations
date of artillery plant
EUR 260 million
Total planned investment in the
artillery plant
≥4.5 GW
Installed capacity of offshore
wind farms by 2050
≥2 GW
Planned capacity of a new
connection with Western
Europe
by 2029
Evaluation of the pilot long-term energy system
storage project results
Energy Hub
Long-duration
energy storage
EPSO-G Invest
and Rheinmetall
partnership
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
30
In the context of Russia’s large-scale invasion of Ukraine from February 2022, the scale of the destruction of strategic energy
infrastructure and the geopolitical circumstances in the region, called for the decision to strengthen the resilience of energy
infrastructure of strategic and major importance to Lithuania against hybrid threats. The programme is designed to ensure the
protection of the critical electricity, gas and energy storage system infrastructure operated by the Group’s companies from
destruction or disruption, and to put in place the necessary measures to ensure the resilience of the energy systems, to prevent
threats and to prepare for potential crises.
3.3. Planned Investments by 2035
Major investments in new infrastructure development are planned as part of the implementation of key projects and the Group’s
Strategy by 2035. The potential major sources to fund new investments are EU support and other external funding; attracting
partners for investment; and optimising the debt and equity structure.
Tomorrow’s
infrastructure
Security and
reliability
Vital and
skilled partner
• Hydrogen network
•
CO
2
network and ecosystem
• Energy hub
• Transmission system
development and
optimisation
• Long-duration energy storage
• Critical infrastructure
resilience
and national security
• System flexibility
development and
optimisation
• RES connection and
integration
•
Heavy-duty vehicle charging
• Biomass trading and
ecosystem
•
Construction & maintenance
services
• Energy advisory services
Low capital intensive
Medium capital intensive
High capital intensive
7–9 B
EUR CAPEX
by 2035
Strengthening
resilience of energy
infrastructure
Strengthened
physical and cybersecurity in
the EPSO-G Group
Significant investments to achieve
Lithuania’s energy independence
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31
Planned 2024-2035 investments by project, B EUR
3.4. EPSO-G Goals in 2025
The EPSO-G Board has set 2025 targets for the Company, based on the updated operational goals and planned initiatives set
out in the Group’s Strategy. They include projects rolled over from 2024 and new unique initiatives.
Nr.
Annual target
Annual target delivery
Weight of the target,
percent
1.
Future infrastructure
Synchronisation programme
45
Development and optimization
Development of Energy hub
Development of the hydrogen and
CO2 ecosystem
2.
Reliable strategic partners
RES development and integration
15
Service development
3.
Ensuring security and reliability
Creating flexibility and adequacy
17,5
Compressed air energy storage
development in Lithuania
Reinforcing resilience of strategic
infrastructure
4.
Enabling sustainable and effective
progress
Financial sustainability
22,5
Sustainable business development
Building a common identity
3.5. 10-Year Network Development Plan
3.5.1. Natural Gas Transmission System Operator’s Ten-Year Network Development Plan
In accordance with the provisions of the Law on Natural Gas of the Republic of Lithuania, every two years, but not later than by 1
1
Base case scenario of EPSO-G financial projections includes deployment of
Energy Hub investments post-2035 due to high uncertainty of the timing,
requirement for regional agreement and cost-sharing arrangements. Other
alternative scenarios for financial projections assume Energy Hub investment
project starting year in 2028.
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32
July of the current year, Amber Grid, the gas transmission system operator, shall prepare and submit to NERC a ten-year network
development plan based on existing and forecast supply and demand after having consulted the relevant stakeholders. The
network development plan shall contain efficient measures in order to guarantee the adequacy of the system and the security of
supply.
Amber Grid’s ten-year Network Development Plan (2024-2033) includes planned investments of around EUR 214 million, of
which, the investments over the next five years will amount to around EUR 150 million. They are planned to channelled into the
projects to adapt the transmission system to transport hydrogen and gas mixtures, and to rehabilitate and modernise existing
transmission infrastructure.
NERC approved the Amber Grid’s Ten-Year Network Development Plan in October 2024.
NERC consultation paper
3.5.2 Electricity Transmission System Operator’s Ten-Year Network Development Plan
In accordance with the provisions of the Law on Electricity of the Republic of Lithuania, Litgrid, the transmission system operator,
shall, every two years, but not later than by 1 July of the current year, shall submit to NERC a ten-year plan for the development
of transmission grids based on existing and planned energy supply and demand in the electricity system. The grid development
plan shall include an assessment of current and future electricity supply and demand, findings of the probabilistic adequacy
assessment of the electric power system, efficient measures for ensuring the adequacy of the system capacities and security of
supply.
Litgrid’s ten-year 400-110 kV Transmission Network Development Plan of Lithuanian electricity system (2024-2033) estimates
that around EUR 2.7 billion may be needed over the next 10 years for the rehabilitation and development of the transmission
network (excluding network user projects, the investment would be around EUR 2.3 billion). These indicative investments are
planned to be used for the implementation of strategic state projects, for the efficient use and systematic renewal of the electricity
transmission network managed by the Company, taking into account the needs of generators and consumers, and for ensuring
the system reliability indicators (END and AIT).
NERC approved the 10-year the 400-110 kV Transmission Network Development Plan in October 2024.
3.6. Process for Updating the Strategy and Other Planning Documents
The substantially updated EPSO-G Group’s new energy Strategy 2035 was publicly presented in October 2024. The strategy,
operational plan, annual objectives and other planning documents are reviewed annually within the time frame set by the Group’s
Integrated Planning and Monitoring Policy. The process of updating plans is guided by the letter of expectations of the Ministry
of Energy exercising EPSO-G’s shareholder rights (the latest letter of expectations of 18 July 2023); National Energy
Independence Strategy (NEIS, updated on 28 June 2024); other European Union and national legislation, and changes in
strategies; changes in the business environment. At the end of each quarter, the Group assesses and monitors the strategy’s
progress to ensure proper implementation of the objectives of each strategic direction.
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TOC ↑
33
04
Annual Performance Report
4.1. Report on Achievement of Strategic Indicators
4.2. Results by Relevant Energy Sectors
4.3. Company’s Annual Goal Progress
4.4. Key projects implemented
4.5. Research and Development Activities
4.6. Finance Report
4.7. Related-party transactions
34
CONSOLIDATED MANAGEMENT REPORT FOR 2024
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34
4. Annual Performance Report
4.1. Report on Achievement of Strategic Indicators
The Report presents strategic, financial and operational indicators in line with the EPSO-G Group’s strategic package approved
in January 2024, which includes information relevant for reporting on activities in 2024. A new EPSO-G Group Strategy to 2035
was approved in October 2024. This Strategy sets the EPSO-G Group’s targets for 2025.
4.1.1. Strategic Financial Performance Indicators
For more information on adjusted financial indicators for
2024, see section 4.6.5.
73.0
Eur million
Adjusted EBITDA
2024
2023
59.2
2022
63.6
After a periodic review for EPSO-G, on 24 July 2024, the
rating agency Moody‘s Ratings affirmed its Baa1 credit
rating with a stable outlook.
Baa1
Rating
Credit rating
2024
2023
Baa1
2022
Baa1
For more information on adjusted financial indicators for
2024, see section 4.6.5.
12.5
%
Adjusted ROE
2024
2023
10 %
2022
9.9 %
In 2022 and 2024, the EPSO-G Group’s net debt was
negative. i.e. the cash balance was slightly above the
Group’s outstanding financial liabilities. Therefore no net
debt-to-adjusted EBITDA ratio was calculated (there was
no debt for which the coverage with adj. EBITDA should
be calculated). For the observations on the results of
financial indicators and debt in 2024, see sections 4.6.5
and 4.6.7.
-
Times
Net debt-to-adjusted
EBITDA
2024
2023
1.4
2022
-
35
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35
4.1.2. Strategic performance indicators
Average Interruption time (AIT) in the electricity network.
Only for the causes falling within the scope of
responsibility of the operator, AIT was 0.51 minute in
2024. NERC has set total AIT per year should not exceed
0.934 minutes.
1.04
Minutes
AIT
2024
2023
0.84
2022
1.29
Total energy not supplied (ENS). Only for the causes
falling within the scope of responsibility of the operator,
ENS was 14.37 MWh in 2024. NERC has set total ENS
per year should not exceed ENS of 27.251 MWh. In
2024, the electricity TSO experienced eight incidents
resulting energy not supplied events.
29.64
MWh
ENS
2024
2023
23.23
2022
38.69
There were no any unplanned gas transmission
interruptions due to the operator’s responsibility in 2024.
0
Units
Unplanned gas
transmission interruptions
due to the operator's
responsibility in 2024
2023
0
2022
0
There were no any unplanned gas transmission
interruptions due to the operator’s responsibility in 2024,
therefore, no elimination time was recorded.
0
Hours and minutes
Duration of unplanned gas
transmission interruptions
due to the operator's
responsibility in 2024
2023
0
2022
0
Currently, biomethane is the only RES gas entering the
gas transmission system, which is both imported and
produced in Lithuania. At the end of 2024, there were
two biomethane producers in Lithuania.
0.18
TWh
RES gas entering the gas
system 2024
2023
0.05
2022
0
Wind and solar energy generation capacity connected to
the electricity transmission and distribution network
amounted to 3.7 GW at the end of 2024, of which 1.7
GW was connected to the transmission network.
3.7
GW
RES connected to the
electricity system 2024
2023
2.3
2022
1.5
36
CONSOLIDATED MANAGEMENT REPORT FOR 2024
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36
4.1.3. Strategic Sustainability Indicators
Once a year, the EPSO-G Group conducts the Customer
Satisfaction Survey based on the GCSI methodology by
interviewing Litgrid, Amber Grid, Baltpool and Tetas’
customers. The average score for the Group companies
was 81, with individual companies’ customer satisfaction
scores ranging from 74 to 90.
81
Scores
Customer satisfaction
(GCSI)
2024 m.
2023
79
2022
78
The Group measures the change in GHG emissions
compared to 2019 on annual basis. For more information
on the change in GHG emissions, see section “E1 Climate
change” of the Sustainability Report.
6.1
%
Change in GHG emissions
2024
2023
26.1%
2022
-0.9%
Each year, EPSO-G conducts the engagement survey that
shows the number of employees who are motivated at
work. The Group’s target employee engagement rate is
no less than 70%.
71
%
Employee Engagement
2024
2023
74%
2022 m.
71%
In 2024, one serious accident, involving Tetas’ employee,
was recorded. There were no fatal accidents recorded in
2024.
1
Units
Number of fatal and serious
accidents involving the
Group’s employees in
2024
2023
0
2022
0
In 2024, there were no serious or fatal accidents
involving contractors’ employees working on the Group’s
sites.
0
Units
Number of fatal and serious
accidents involving the
contractors’ employees in
2024
2023
0
2022
0
37
CONSOLIDATED MANAGEMENT REPORT FOR 2024
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37
4.2. Results by Relevant Energy Sectors
4.2.1. Transmission of electricity
Electricity consumption remained stable. The volume of electricity transmitted via high voltage transmission networks to
households and businesses during the period was 9.5 terawatt hours (TWh), which was 0.2% less compared to the same period
in 2023. Although electricity consumption in Lithuania raised by 5% to 11.5 TWh, the amount of energy transmitted by Litgrid
was lower due to the growing number of prosumers connected to the distribution network.
In 2024, the overall availability of the interconnectors with Sweden NordBalt and Poland LitPol Link was 97.6% and 98.0%,
respectively. The most significant impact on the availability of the links was due to annual planned works: the maintenance of
LitPol Link (110.8 hours) and NordBalt (156 ). NordBalt availability was reduced by unplanned fault repairs on the Swedish side
(49.9 hours). LitPol Link availability was reduced by routine disconnections on the Poland’s TSO side (56 hours).
2024 was highlighted with accelerated development of battery energy storage facilities. Total developer commitments to the
batteries at the end of the year reached the capacity of 1,740 MW and 3,586 MWh. Additional state support for the transmission-
connected batteries is planned in the near future, which will further increase the number of projects under development. The
successful development of batteries will create preconditions for the continued rapid development of solar and wind farms in
Lithuania.
Changes in key electricity transmission performance indicators over the last 5 years:
2024
2023
Change (2024 vs 2023)
2022
2021
2020
+/-
%
Volume of electricity
transmitted, GWh
9,510
9,525
-15
-0.2
10,234
10,936
10,089
ENS (energy not
supplied), MWh*
14.37
2.67
11.7
438.6
10.62
3.36
6.21
AIT (average interruption
time), min. *
0.51
0.10
0.41
410
0.36
0.11
0.21
ENS (energy not
supplied), MWh**
29.64
23.23
6.41
27.6
38.69
20.51
31.85
AIT (average interruption
time), min. **
1.04
0.84
0.2
23.8
1.29
0.69
1.07
NordBalt availability,
%***
97.6
92.8
4.8 pp
98.3
97.3
95.6
LitPol Link availability,
%***
98.0
98.2
-0.2 pp
98.3
87.5
92.4
* Only for the causes falling within the scope of responsibility of the operator. In total, 8 incidents affecting the ENS indicator were attributed to the operator's
responsibility in 2024. The two most significant incidents impacting the ENS indicator were conductor failures (10.31 MWh ENS on 2024-01-08 and 1.45 MWh ENS
on 2024-12-16). The investigation findings for both incidents linked them to damages caused during the construction of the lines.
** For all reasons (including force majeure and external factors). In January and February 2025, NERC, by decisions/letters to the electricity transmission system
operators (TSO) Litgrid, established the final ENS indicators for 2024, 2023 and 2022, after eliminating part of the disconnections due to causes not attributable to
the TSO’s responsibility (not exceeding the minimum power transmission reliability level of 27,251 MWh/year set by NERC for 2022-2026). The ENS indicators were
set for 2024, 2023 and 2022 as follows: 24,275 MWh, 7,301 MWh and 26,980 MWh, respectively; AIT – 0,855 min., 0,280 min., 0,893 min. respectively.
*** Overall availability of LPL/NB interconnection – availability of interconnection at both sides, Lithuania and the other country.
4.2.2 Gas Transmission
Lithuania is an important gas transmission hub for neighbouring countries. In total, 29.2 TWh of natural gas was transported
through the Lithuanian gas transmission system during 2024, excluding transit to the Königsberg region. This was almost 22%
less than in the prior year’s corresponding period, when 37.3 TWh of gas was transported to Lithuania.
In 2024, the gas transmission operator transferred 17 TWh of gas to Lithuanian gas consumers, or 14% more than in 2023 (15
TWh). Demand for gas increased due to slightly colder winter weather than last year and lower gas prices on the market. The
latter has led to higher gas consumption in electricity and fertiliser production.
38
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
38
Last year, as a result of growing gas consumption and infrastructure constraints, Lithuania’s gas imports from Latvia reached an
all-time high of 4.2 TWh. This is 66.7% more than at the same time last year, when imports through the Kiemėnai entry point
amounted to just under 2.5 TWh.
While domestic consumption grew, the amount of gas transported to Lithuania declined. Most notably, the Balticconector gas
pipeline linking Estonia and Finland was not operational until the end of April 2024. As a result, the gas supply to Finland was
not organised through the Lithuanian gas transmission system, but through the LNG terminal in Finland. In addition, the LNG
terminal in Klaipėda was closed for more than a month as a result of the inspection.
The Klaipėda LNG terminal, the main source of gas imports for Lithuania and the other Baltic countries, supplied 81% or 23.9
TWh of the total gas transported into the system in 2024, compared to 85% or 31.9 TWh in 2023. Flows from Latvia accounted
for 14% or 4.2 TWh, flows from Poland to Lithuania accounted for 5% or 1.5 TWh, and 130 GWh of biomethane was injected
into the system from biogas producers (2023: 47 GWh).
When Lithuania stops importing Russian gas in 2022, only gas destined for Königsberg will be transported via the Lithuanian-
Belarusian interconnector. Gas transit to the Königsberg region amounted to 26.1 TWh in 2024 (23.9 TWh in 2023)
Changes in key gas transmission performance indicators over the last 5 years:
2024
2023
Change (2024 vs 2023)
2022
2021
2020
+/-
%
Volume of natural gas
transported to the
domestic exit point, GWh
16,947
14,913
2,034
13.6
15,576
24,136
25,144
Volume of natural gas
transported to the
adjacent transmission
systems, GWh*
38,361
46,326
-7,965
-17.2
48,213
28,595
32,861
Number of unplanned gas
transmission outages due
to operator’s responsibility
0
0
0
0
0
0
0
Total duration of
unplanned gas
transmission interruptions
due to the operator's
responsibility, h and min.
0
0
0
0
0
0
0
* Transmission systems in Latvia, Poland and the Kaliningrad Region of the Russian Federation.
4.2.3 Biomass exchange
In 2024, the volume of transactions on Baltpool’s biomass exchange increased by almost 6% to 8.5 TWh, compared to 8.1 TWh
traded in 2023. The total value of transactions was EUR 173 million, a decrease of 15% compared to the previous year. The
change was driven by a decrease in the average transaction price from around EUR 25/MWh (2023) to EUR 20/MWh (2024), or
around 18%.
The trading volume in Lithuania grew by around 9%, mainly due to the increased activity of Vilniaus kogeneracinė jėgainė UAB.
Meanwhile, foreign trade fell by almost 8%. Despite the active presence of foreign participants, the biomass trading platform
launched in Latvia has taken over part of the turnover of SIA Rīgas Siltums.
The volume of transactions on the heat auction amounted to 6 TWh of energy value, with the average price dropping to 2.77
ct/kWh. Compared to 2023, the energy value increased by 7%, but the weighted average purchase price by 18.3%. In 2024, the
State Forest Enterprise sold 4.1 million/solid m
3
of timber in the Electronic Timber Trade System for EUR 244 million, or about
40% more than in 2023. The weighted average timber price remained stable at approx. EUR 59/solid m
3
.
39
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TOC ↑
39
Changes in key biomass exchange performance indicators over the last 5 years:
2024
2023
Change (2024 vs 2023)
2022
2021
2020
+/-
%
Biomass sold on energy
exchange to Lithuanian
market, GWh
7,001
6,426
575
8.9
6,359
5,630
5,375
Biomass sold on energy
exchange to foreign
markets, GWh
1,528
1,653
-125
-7.6
397
72
108
4.3. Company’s Annual Goal Progress
Based on the operational goals stated in the Letter of Expectations of the Shareholder and approved in the strategy of EPSO-G,
the Board set the following operational goals for the Company for 2024:
No
Annual target
Annual target delivery
Weight of the target, percent
1.
Synchronisation with CEN
programme
Implemented synchronisation actions
25
Finalised preparations for synchronisation with CEN on February 9
th
,
2025
2.
Enabling energy transformation
Development of the offshore wind farm integration
30
Implementation of flexibility measures
Hydrogen programme implementation
RES development
Development of the Group’s long-term strategy
3.
Growth and development
Increasing profitability of contracting activities
20
Development of new unregulated activities
4.
Sustainable finance and
operations
Sustainable finance management
15
Ensuring sustainable development of activities
5.
Enabling and effective
organisational strutucture
Development of future competencies
10
Development of functional management
Implemented cultural change in EPSO-G
The Chief Executive Officer of EPSO-G is accountable to the Board for the achievement of the goals set. The Company’s financial
and non-financial goals are identical to those of EPSO-G’s CEO. The Board annually assesses the progress achieved in respect of
the implementation of the objectives.
The goals set for EPSO-G, according to the Board, were met by 93.58% in 2024. In the Board’s view, there were no goals in 2024
that were not achieved at all. The underachievement of some of the goals was caused by objective external reasons (changes in
shareholder priorities and the Board expectations, delays in the implementation of certain projects due to contractors’ actions) as
well as internal reasons (revision of priority works or emergence of unforeseen works). The financial goals for achieving the credit
rating and adjusted ROE were met, while the adjusted EBITDA result was below the target threshold. For more details on the
achievement of all the Group’s financial goals, see paragraphs 4.1.1 and 4.6 of this Report.
The Company’s goals for 2025 approved by the Board are described in section 3.4 of this Report.
4.4. Key projects implemented
• Synchronisation of Lithuania’s electricity system with CEN
The completion rate of the synchronisation project programme at the end of 2024 was sufficient for the implementation of
synchronisation with CEN, i.e. 85% of the programme as a whole, which continues beyond 2025. At the end of the reporting
period, the installation of synchronous condensers in Telšiai and Alytus was completed, connecting equipment to the transmission
network. The synchronous condenser in Telšiai was commissioned, and final tests of the equipment took place in Alytus at the
end of the year. The Neris synchronous condenser equipment was delivered to Lithuania, and the installation of the building was
40
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
40
completed in June 2024. In 2024, the construction of the 330 kV power transmission lines Kruonio HAE-Bitėnai and Darbėnai-
Bitėnai Phase II, as well as for the construction of the 330 kV power transmission line Vilnius-Neris, and the 330 kV switchyards
Darbėnai and Mūša continued. In April 2024, Phase I of the 330/110/10 kV Neris transformer substation reconstruction project
was completed and the substation was put into operation. The approval for a new project concept for the construction of the
Harmony Link was obtained, the project plan is updated, spatial planning was launched, and the procurement for design services
was announced.
• NordBalt interconnector control system
Procurement of the NordBalt interconnector control system modernisation project is completed. The Frequency Stability
Assessment System (FSAS) was put into operation. The processes of the New Energy Balance Information System are tested and
commissioned. In November, the Regional Group Continental Europe (RG CE) of the European Association of Transmission System
Operators for Electricity (ENTSO-E) confirmed readiness of the Baltic States for synchronous connection to CEN.
• Synchronisation and desynchronisation (after the end of the reporting period)
In July 2024, the electricity transmission system operators of the Baltic states, have notified Russian and Belarusian operators on
the non-extension of the BRELL agreement and the planned desynchronisation from the IPS/UPS frequency area.
On 8 February 2025, the electricity systems of all three Baltic countries have successfully disconnected from the Russian-
controlled synchronous zone and started an isolated operation test. The test ended the following day, 9 February, and was
immediately followed by a connection to continental European networks.
The synchronisation with CEN has been a long-standing goal for the Baltic countries, allowing them to move away from the
Russia’s centrally controlled frequency area and the risks of operating the electricity system that this entails. By connecting with
CEN, Lithuania’s electricity system has become more secure, and frequency management is now the responsibility of the Baltic
TSOs.
• Development of offshore wind farm in the Baltic Sea
In 2024, the cross-border consultation on the Strategic Environmental Assessment for the Engineering Infrastructure
Development Plan was finalised and the concept document for development plan was approved. The seabed surveys were
commissioned by the government, the results of which were published.
At the beginning of the year, the second offshore wind farm tender was launched. After the deadline for the registration of tenders
had expired and only one request to participate had been received, NERC took a decision to declare the call for tenders
unsuccessful. Following a change in the tender conditions, the tender was reopened for the second park in November, which was
suspended in January 2025 by the decision of the Government of the Republic of Lithuania. After the amendments to the
legislation were made and approved by the Seimas, the procedures for the second park, which were previously suspended, could
be resumed starting from April 2025.
• Strengthening resilience of energy infrastructure
In the context of Russia’s invasion of Ukraine from 2022, the scale of the destruction of the Ukrainian strategic energy
infrastructure and the geopolitical circumstances in the region, called for the decision to strengthen the resilience of energy
infrastructure of strategic and major importance to Lithuania against hybrid threats. The programme is designed to ensure the
protection of the critical electricity, gas and energy storage system infrastructure operated by the Group’s companies from
destruction or disruption, and to put in place the necessary measures to ensure the resilience of the energy systems, to prevent
threats and to prepare for potential crises.
4.5. Research and Development Activities
The transformation of the energy sector is driving the EPSO-G Group’s companies to respond to emerging challenges, improve
existing processes, discover new technologies and methods and develop competences in a constantly changing environment. The
Group places greater emphasis on research, development and innovation (R&D&I) activities to develop a net-zero energy
infrastructure and to ensure the reliable and safe operation of an integrated system.
41
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
41
In accordance with the EPSO-G Group’s R&D&I Guidelines, innovation projects help to implement the most innovative energy
solutions and pilot projects. By teaming up with European and Lithuanian research institutions and business, we conduct research,
studies and testing and support a culture of innovation within the Group to drive efficiency and improvements in our operations.
In 2024, 17 innovation projects were implemented in the Group, 6 were rejected and 19 new initiatives were submitted. Currently,
the Group’s innovation portfolio consists of 36 ongoing projects.
Overview of innovation portfolio
Key R&D&I performance results in 2024
Nordic-Baltic Hydrogen Corridor (NBHC)
In April 2024, the project was granted the status of the project of common interest (PCI), confirming its important
role in Europe’s energy strategy. In June, the gas transmission system operators of Lithuania, Finland, Estonia, Latvia,
Poland and Germany completed a pre-feasibility study which confirmed that the corridor could become an essential
green hydrogen transport chain in the region. To ensure the project’s implementation, a detailed feasibility study
covering technical, economic and regulatory aspects is being launched in 2025. For more on the EPSO-G Group’s
plans on the hydrogen development, see section 3.2 of this Report.
Development of OneNet flexible services
The project aims at creating a single platform for transmission and distribution system operators to offer flexibility
services. During the Lithuanian demonstration, the testing of a real-time congestion management involved Litgrid’s
1 MW Battery Energy Storage System (BESS) and Kaunas University of Technology’s (KTU) P2H facilities. The
results showed that the most effective overload reduction occurs by activating nearby resources, but to maintain
grid balance, it is necessary to activate resources in the opposite direction at distant points.
36
ongoing
projects
Implemented by
the Innovation
team
17
8
6
5
Innovations by direction
2
4
1
Advanced and efficient
asset management
Advanced and efficient system
management and monitoring
Business organization
and new services
CT and digitalization
42
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
42
Safe environment: “green” transformer substation
The Rėkyva and Baltupiai substations have SF
6
-free circuit breakers using an environmentally friendly N₂ + O₂ gas
mixture. This is to avoid the use of SF
6
gas, related taxes, accounting and recycling costs. The project reduced SF
6
emissions in the transmission network by 52 kg (1,192 t CO₂eq.) and insulating oil by 2.5 t, thus minimising the risk
of fire and explosion. The technology has proved its worth and is planned to be rolled out more widely and to update
the standard requirements for low-emission equipment (GWP <1).
Pilot project on lightweight structural supports
Reusable towers have been tested for swift restoration of power supply in case of emergencies and for temporary
connections during reconstruction. They offer flexible solutions for the renewal of network facilities and for work
over roads and railways. The tests confirmed the effectiveness of the technology, therefore it will continue to be
used for its intended purpose.
Analysis of the feasibility of deploying a virtual network
The study evaluated the prospects for the introduction of virtual power lines (VPLs) in Lithuania as a solution to
reduce grid congestion by using battery energy storage systems. The results show that VPLs increase grid flexibility,
promote the integration of renewable energies and help to balance the load. The study compares VPLs and grid
boosters, and provides a deployment roadmap with technical, regulatory and market considerations. It is
recommended to adapt the regulatory framework and develop cost-sharing mechanisms to ensure effective
implementation.
Creating a value chain for CO
2
capture, utilisation, and storage
In April 2024, Amber Grid and CCS Baltic Consortium signed a Memorandum of Cooperation to strengthen
partnerships for CO₂ transport solutions. In September, an application for CEF funding was submitted for
commercial and technical studies, and the update of PCI status was initiated to include CO₂ transport via pipelines.
Amber Grid provided data on the feasibility of transporting CO₂ via pipelines, which will form the basis for a
feasibility study planned for 2025 to assess the optimal pipeline route and technical parameters. For more on the
EPSO-G Group’s pans on the CO₂ network development, see section 3.2 of this Report.
Synthetic fuel analysis
In 2024, the analysis of the potential for the production, export and storage of synthetic gases and fuels in Lithuania
was carried out and submitted to the Ministry of Energy of the Republic of Lithuania. The study assesses the EU’s
legal environment, market potential, technological progress and Lithuania’s infrastructure capacity. This study helps
the Company prepare for the energy transformation by highlighting the prospects for the development of hydrogen
and CO₂ networks, enhancing the country’s energy independence and contributing to decarbonisation goals.
43
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
43
4.6. Finance Report
4.6.1. Five-year Consolidated Financial Performance
Financial performance indicators, EUR
million
2024
2023
Change (2024 vs 2023)
2022
2021
2020
+/-
%
Revenue
480.9
478.9
2.0
0.4
589.9
362.9
270.5
Operating costs
9
436.8
442.0
-5.2
-1.2
636.6
318.1
230.1
EBITDA
1
85.2
101.3
-16.1
-15.9
-11.4
79.6
74.5
Adjusted EBITDA
2
73.0
59.2
13.8
23.4
63.6
65.2
N/A
EBIT
44.6
45.3
-0.7
-1.5
-46.7
44.8
40.4
Net profit
54.9
53.8
1.1
2.0
-42.5
39.8
40.1
Adjusted net profit
2
41.9
26.8
15.1
56.4
24.7
27.8
N/A
Cash flows from operations (FFO)
3
89.9
102.3
-12.3
-12.0
-27.7
65.0
66.4
Investments
4
236.1
243.1
-7.0
-2.9
175.2
112.2
147.4
Financial ratios
EBITDA margin, %
5
17.7
21.2
-1.9
21.9
27.5
EBIT margin, %
13
9.3
9.5
-7.9
12.3
14.9
Net profit margin, %
14
11.4
11.2
-7.2
11.0
14.8
ROE (LTM), %
16.4
20.1
-17.0
15.8
18.8
Adjusted ROE (LTM), %
12.5
10.0
9.9
11.0
N/A
ROE (LTM), %
4.5
5.0
-3.0
4.1
5.1
Balance sheet KPIs, EUR million
As of 31
December
2024
As of 31
December
2023
As of 31
December
2022
As of 31
December
2021
As of 31
December
2020
Assets
1,207.8
1,078.5
129.3
12.0
1,425.7
962.6
787.5
Non-current assets
802.7
756.2
46.5
6.1
709.5
651.8
635.3
Current assets
405.1
322.3
82.8
25.7
515.5
310.8
152.2
Equity
361.2
307.9
53.3
17.3
227.8
271.6
233.1
Liabilities
846.6
770.6
76.0
9.9
1,198.0
691.0
554.4
Net debt
6
-64.9
83.5
-148.4
N/A
-28.3
220.8
366.9
Working capital
12
-86.1
-25.7
-58.6
N/A
-21.5
-72.8
-43.3
Financial ratios
Assets turnover ratio
7
39.8
44.4
45.2
36.8
34.3
Net debt-to-equity ratio, %
-
27.1
-
81.3
157.4
FFO to net debt ratio, %
10
-
120.5
-
29.4
18.1
Net debt-to-EBITDA ratio
11
-
0.8
-
2.8
4.9
Net debt-to-adjusted EBITDA
-
1.4
-
3.4
0.0
Equity-to-assets ratio, %
29.9
28.5
16.0
28.2
29.6
Current liquidity ratio
8
1.1
1.0
0.7
0.7
0.8
Explanations:
(1) EBITDA = profit (loss) before tax + finance costs – finance income + depreciation and amortization charges + impairment charges (including a negative revaluation
of non-current tangible assets) + asset write-offs
(2) Regulated revenue, expenses and profitability indicators are recalculated due to temporary regulatory deviations from the regulated profitability indicator approved
by NERC, revaluation of non-current assets and other gain/loss from non-ordinary activities.
(3) Cash flows from operations (FFO) = EBITDA + interest received - interest paid - income tax paid + result of associates
44
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
44
(4) Investments = additions in PP&E + additions in non-current intangible assets, before consideration of offsets with grants received/receivable intended for acquisition
of the related assets + movement in the balance of prepayments during the year
(5) EBITDA margin = EBITDA/Revenue
(6) Net debt = non-current borrowings + current borrowings + lease liabilities - short-term investments - term deposits - cash and cash equivalents. Net debt also
includes deposits and bonds with a redemption period longer than 3 months.
(7) Asset turnover = Revenue (LTM)/Assets
(8) Total liquidity ratio = Current assets/Current liabilities
(9) Depreciation of assets is included in operating expenses
(10) FFO-to-net debt ratio = FFO (LTM)/net debt
(11) Net debt-to-EBITDA ratio = Net debt/EBITDA (LTM)
(12) Working capital = inventories + prepayments and contract assets + trade receivables + other receivables + prepaid income tax - PSO funds receivable - (trade
debts + prepayments received + provisions + other current payables and liabilities - PSO payables - accrued PSO and EIF funds)
(13) EBIT margin = EBIT/Revenue
(14) Net profit margin = Net profit (loss)/Revenue
4.6.2 Revenue
Consolidated revenues of the EPSO-G Group in 2024 increased from EUR 478.9 million to EUR 480.9 million, i.e. by EUR 2.0
million, or 0.4%, compared to 2023. Revenues from regulated activities remained at a similar level, accounting for around 96% of
the Group’s total revenues.
Revenue by segment, EUR million
2024
2023
Change (2024 vs 2023)
+/-
%
Group’s revenue:
480.9
478.9
2.0
0.4
Litgrid
378.3
369.8
8.5
2.3
Amber Grid
74.6
81.3
-6.8
-8.3
Elimination of other and reciprocal transactions
28.0
27.7
0.3
0.9
Litgrid revenue from electricity transmission and related services in 2024 was 2.3% or EUR 8.5 million higher than in 2023,
amounting to EUR 378.3 million and accounting for 79% of the total revenue of the EPSO-G Group.
Despite the stable transmission of electricity in 2024, transmission revenues declined by 37.5% to EUR 129.1 million, due to EUR
142.3 million of congestion management revenues used during the year to reduce the 2023 electricity tariff. Despite the decrease
45
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
45
in transmission revenues, the overall increase in revenues was driven by revenues from ancillary services, which increased from
EUR 28.0 million to EUR 139.2 million (almost 5 times), due to the higher ancillary services acquisition component set by the
NERC. The revenue from balancing and imbalance energy sale by 5.0% or EUR 5.4 million (due to decrease in the electricity sale
price by 44%, although the volume of electricity sold increased by 69%) to EUR 102.8 million. The change in these revenues has
no impact on the Company’s profitability as, under regulated imbalance pricing, the current year’s revenues compensate for the
costs, including the Company’s internal costs, attributable to these activities in accordance with the Regulatory Accounting
Description. During the reporting period, the income generated under ENTSO-E ITC mechanism were EUR 15.3 million lower than
in the previous period.
In 2024, the EPSO-G Group generated EUR 74.6 million or EUR 6.8 million less revenue from natural gas transportation and
related services, which represents 15% of the EPSO-G Group’s total revenue. Natural gas transmission revenues for the reporting
period decreased by EUR 5.8 million or 10.8% to EUR 48.4 million compared to 2023. This was due to a 17% decrease in the
volumes of natural gas transferred to the transmission systems of neighbouring countries, which was not offset by an increase in
the volume of natural gas transported at the internal network. The decrease in other revenue was caused by the sales of scrap
metal of EUR 0.9 million in 2023. No similar income was generated during the reporting period.
Other Group’s income after elimination of the intercompany transactions remained at the same level, amounting to EUR 28.0
million or 6% of the EPSO-G Group’s total revenue.
4.6.3 Operating Expenses
The Group's operating expenses in 2024 amounted to EUR 436.8 million, a decrease of EUR 5.2 million, or 1.2%, compared to
2023 (EUR 442.0 million). The decrease in 2024 was most significantly determined by the absence of the loss on impairment of
property, plant and equipment.
The largest part of operating expenses consisted of purchase of energy resources and related services for technological needs –
281.5 million EUR or 64% of total expenses. Wages and salaries and related expenses amounted to 55.7 million EUR,
depreciation and amortization charge – 40.4 million EUR, contract and subcontract works and materials – 13.2 million EUR,
network maintenance and repair – 9.7 million EUR, and the remaining expenses amounted to 36.3 million EUR.
Operating expenses by segment, EUR million
2024
2023
Change (2024 vs 2023)
+/-
%
Group’s operating expenses:
436.8
442.0
-5.2
-1.2
Litgrid
340.4
333.2
7.2
2.1
Expenses for electricity and related services
271.0
251.3
19.7
7.8
Wages and salaries
20.6
17.6
2.9
16.7
Depreciation and amortisation
22.6
19.7
2.8
14.3
46
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
46
PP&E impairment loss
0.5
21.7
-21.3
-97.8
Other
25.8
22.8
2.9
12.9
Amber Grid
63.0
76.4
-13.3
-17.5
Natural gas purchase expenses
16.5
25.4
-8.8
-34.9
Wages and salaries
15.5
13.8
1.7
12.0
Depreciation and amortisation
14.9
12.6
2.3
18.6
PP&E impairment loss
0.0
8.0
-8.0
-100.0
Other
16.1
16.6
-0.5
-3.0
Other segments and elimination of intercompany
transactions
33.4
32.4
0.9
2.9
incl. (sub)construct works and materials of
Tetas
27.0
17.6
9.4
53.4
The operating expenses of Litgrid increased by EUR 7.2 million or 2.1%, and amounted to EUR 340.4 million or 78% of the Group’s
operating expenses. The increase was most significantly caused by the costs of purchasing electricity and related services due to
overcapacity (due to the cold start of the year)..
The operating expenses of Amber Grid decreased by EUR 13.3 million or 17.5%, and amounted to EUR 63.0 million or 14% of
the Group’s operating expenses. Mainly due to lower costs of purchasing natural gas for technological purposes, which were
caused by both lower gas prices on the market and lower gas consumption for the technology due to lower flows to Poland. The
weighted average price of natural gas in the market of intraday transactions entered into on the GET Baltic exchange in 2024 was
around 40 EUR/MWh and was approx. 19% below the average price in to 2023 (49 EUR/MWh).
The expenses in the other segments of the EPSO-G Group remained at a similar level and amounted EUR 33.4 million or 8% of
the Group’s operating expenses.
4.6.4 Results of operations
The Group’s earnings before interest, taxes, depreciation and amortisation (EBITDA) in 2024 amounted to EUR 85.2 million, a
decrease of EUR 16.1 million, or 15.9%, compared to 2023 (EUR 101.3 million).
In 2024, the EBITDA margin stood at 17.7% (in 2023, this indicator stood at 21.2%).
Financial results by segment, EUR million
2024
2023
Change (2024 vs 2023)
+/-
%
Group’s EBITDA:
85.2
101.3
-16.1
-15.9
Litgrid
60.6
78.3
-17.7
-22.6
Amber Grid
26.5
25.7
0.8
3.1
Other segments and elimination of intercompany
transactions
-1.9
-2.7
0.8
-30.7
Group’s net profit/(loss):
54.9
53.8
1.1
2.0
Litgrid
49.0
48.4
0.6
1.3
Amber Grid
8.3
13.4
-5.1
-38.1
Other segments and elimination of intercompany
transactions
-2.4
-8.0
5.6
-69.5
Litgrid’s EBITDA decreased by EUR 17.7 million, or almost 23%, to EUR 60.6 million compared to 2023, and accounted for 71%
of the EPSO-G Group’s EBITDA. This is explained by a EUR 14.6 million underperformance of the ENTSO-e ITC mechanism.
Amber Grid’s EBITDA increased by EUR 0.8 million or 3.1% to EUR 26.5 million and accounted for 31% of the Group’s EBITDA.
This improvement mainly resulted from a lower loss from balancing activities, which is directly impacted by the decrease in natural
gas market prices.
4.6.5 Adjusted results of operations
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47
Regulated revenue, expenses and profitability indicators are recalculated due to temporary regulatory deviations from the
regulated profitability indicator approved by NERC Calculation of adjusted indicators involves estimation of adjustment for
previous period revenue, which has already been approved by the decision of NERC when determining regulated transmission
prices for the reporting period, and estimation of deviation of the actual profitability from the regulated profitability approved by
NERC, which will be considered when determining the transmission prices by NERC for future period, with the asset revaluation
results and other profit/loss from non-ordering activities being eliminated.
• Adjusted EBITDA in 2024 was EUR 73.0 million (2023: EUR 59.2 million).
• Adjusted net profit in 2024 was EUR 41.9 million (2023: EUR 26.8 million).
• Adjusted average return on equity (ROE) for the last twelve months was 12.5% (2023: 10.0%).
The Group’s adjusted EBITDA increased due to a higher return on investment approved by the regulator (the WACC for both the
natural gas transmission operator and the electricity transmission operator increased by approximately 1 pp), grants related to
income of Energy Cells, and a positive EBITDA of Tetas (2023: was EUR -6.7 million). In addition, the Group’s adjusted net profit
was boosted by the operating result of associates (TSO Holding and GET Baltic), positive financial result and investment
incentives applied to Litgrid.
Adjusted financial results by segment, EUR
million
2024
2023
Change (2024 vs 2023)
+/-
%
Group’s adjusted EBITDA:
73.0
59.2
13.8
23.4
Litgrid
47.6
37.2
10.4
27.8
Amber Grid
27.4
24.7
2.7
10.9
Elimination of other and reciprocal transactions
-2.0
-2.7
0.7
N/A
Group’s adjusted net profit/loss:
41.9
26.8
15.1
56.4
Litgrid
34.3
25.5
8.8
34.6
Amber Grid
10.1
9.2
0.9
9.8
Elimination of other and reciprocal transactions
-2.5
-7.9
5.4
N/A
Detailed adjustments to calculate adjusted EBITDA and adjusted net profit/loss are disclosed below.
Adjusted EBITDA, EUR million
2024
2023
Group’s EBITDA
85.2
101.3
Amber Grid
Refunding of ROI deviation in relation to previous periods
7.5
10.9
Payment to Poland for GIPL was included in 2022 revenue
-5.5
-13.8
Current year difference between actual revenue and revenue set by NERC
5.7
-1.5
Current year actual balancing result
0.2
5.7
Current year difference between actual technological losses and those set in
the pricing
-9.4
-3.1
Other adjustments for difference between current year actual rates and those
set in the pricing
2.3
0.8
Litgrid
Refunding of ROI deviation from transmission activities in relation to previous
periods
13.1
-4.1
Current year difference between actual technological losses and those set in
the pricing
-6.1
-103.1*
Other ROI deviations from transmission activities
-2.5
-4.2
Refunding of ROI deviations from additional services in relation to previous
periods
0.0
27.1
Current year difference in regulatory rate of return from additional services
-17.5
43.2
Group’s adjusted EBITDA
73.0
59.2**
* The actual price of energy resources was significantly lower than the price included in the tariff.
**The results for 2023 were restated.
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48
Adjusted net profit/loss, EUR million
2024
2023
Group’s net profit/(loss)
54.9
53.8
Amber Grid
Adjusted EBITDA
0.8
-1.1
Current year difference between regulatory and financial depreciation of PP&E
0.8
-0.1
Current year difference between actual taxes and those set in the pricing
0.0
0.1
Effect of PP&E assessment and non-ordinary events
0.1
-3.0
Litgrid
Adjusted EBITDA
-13.0
-41.1
Current year difference between actual taxes and those set in the pricing
-1.7
-3.5
Effect of PP&E assessment and non-ordinary events
0.0
21.7
Group’s adjusted net profit/loss
41.9
26.8*
* Litgrid assessed the effect of application of income tax incentive for investments.
4.6.6 Return on equity
The return on equity was 16.4% in 2024, a decrease of 3.7 pp compared to 2023 due to a decrease in net profit and the increase
in the average equity used to calculate the indicator.
The adjusted return on equity in 2024 increased by 2.5 percentage points compared to 2023 due to higher regulatory returns.
The increase in regulatory return is due to an increase in the rate of return on investment set by NERC for 2024 compared to that
for 2023, as well as a higher result booked by TSO Holding and GET Baltic, and improved result from financing activities
(temporary investment of funds), and income tax incentive for investments applied to Litgrid.
Key performance indicators of regulated activity
2024
2023
Change (2024 vs 2023)
+/-
%
RAB (at the beginning of the year), EUR million
Litgrid
348.0
351.7
-3.7
-1.1
Amber Grid
271.6
273.0
-1.4
-0.5
Energy cells
16.2
10.7
5.5
51.8
Regulatory depreciation, EUR million
Litgrid
18.8
19.3
-0.5
-2.5
Amber Grid
13.5
12.5
1.0
7.9
Energy cells
1.0
0.3
0.7
247.2
WACC (rate of return on investments)*, %
Litgrid
5.00
4.1
0.91 pp
Amber Grid
5.04
4.0
1.08 pp
Energy cells
4.97
4.0
0.98 pp
4.6.7 Statement of financial position
As at 31 December 2024, the Group’s assets totalled EUR 1,207.8 million, and, compared to the end of 2023, the increase was
12.0% or EUR 129.3 million. This was mainly due to an increase in cash and cash equivalents (EUR +119.1 million), driven by
profitable operations and congestion management funds (EUR ++135.7 million).
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49
The Group’s non-current assets amounted to EUR 802.7 million and accounted for 66.5% of the Group’s total assets. Non-current
assets increased by 6.1% or EUR 46.5 million compared to 2023, due to significant investments made in the electricity
transmission system.
As at 31 December 2024, non-current liabilities amounted to EUR 489.7 million, an increase of 10.5% or EUR 46.4 million
compared to 31 December 2023. The increase was due to the non-current congestion management fund liabilities of the
electricity transmission system operator (EUR +44.6 million), which is a result of the congestion management funds received in
2024 (EUR 135.7 million).
Shareholders’ equity increased by 17.3% or EUR 53.3 million to EUR 361.2 million compared to the end of 2023 due to the net
profit generated during the reporting period, and the share of equity in the Group’s assets at the end of December 2024 was
29.9% (2023: 28.5%).
During 2024, the decrease in working capital investment was mainly due to an increase in the electricity transmission operator's
trade debts by implementing investments under the project for synchronisation with the Continental European Network and
increase in debt for electricity due to a 1.8-fold increase in ancillary services and balancing costs in December.
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50
At the end of December 2024, the Group’s net financial liabilities to creditors, including lease liabilities, amounted to EUR 177.5
million. Mainly due to Litgrid’s cumulative congestion funds, cash and cash equivalents and term deposits and short-term
investments at the end of the period amounted to EUR 242.4 million, while net financial debt was negative and amounted to EUR
-64.9 million, i.e. the balance of cash and cash equivalents exceeded financial liabilities.
Net debt, EUR million
As of 31 December 2024
As of 31 December 2023
Change (2024 vs 2023)
+/-
%
Group’s net debt:
-64.9
83.5
N/A
N/A
Non-current and current borrowings
165.6
195.9
-30.3
-15.4
Lease liabilities
11.9
10.9
1.0
9.2
Cash and cash equivalents, deposits, bonds
242.4
123.2
119.1
96.7
For the purpose of analysing the level of net debt for management assessment purposes, the formula for calculating the indicator
reduces financial debt not only by cash and cash equivalents balances, but also by the share of financial assets consisting of
highly liquid and low-risk instruments, i.e. deposits of more than 3 months or government securities of high credit rating countries
with a maturity of up to 360 days. The composition of the components used in the calculation of the indicator has been chosen on
the basis that the conversion of these financial instruments into cash can be realised in a very short time and with no or negligible
financial loss.
4.6.8 Financing
In June 2022, EPSO-G issued sustainability-related bonds, which are listed on Nasdaq’s Baltic Debt Securities List. As of 31
December 2024, there were 32 bondholders.
ISIN code
LT0000406530
Currency
Eur
Nominal amount
75,000,000
Coupon
3.117%
Maturity
8 June 2027
Objectives and Indicators in the Prospectus for Sustainability-Linked Bonds
Indicators (KPIs)
KPI baseline
Sustainability Performance Targets (SPT)
KPI 1: Market-based Scope 1 and 2
emissions (tCO2e)
2019
SPT1: Market-based Scope 1 and 2 emissions (tCO2e)
reduction by 30% by 2026, compared to the 2019 base
year
KPI 2: Energy not supplied (ENS), MWh
Baseline is not available
SPT2: Amount of electricity not transmitted through the
transmission grid, which shall not exceed 136.255 MWh
in 2022-2026
The information on the compliance with covenants of the Prospectus for Sustainability-Linked Bonds, is disclosed in sections
4.1 and 4.2 of this Report and section “E1 Climate change” of the Sustainability Report.
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51
As at 31 December 2024, all financial liabilities were denominated in euros. As at 31 December 2024, 87.6% of all financial
liabilities were subject to a fixed interest rate, and the remainder to a variable interest rate. As at 31 December 2024, the weighted
average interest rate on financial liabilities was 2.2% (31 December 2023: 2.2%). As at 31 December 2024, the average maturity
of financial liabilities was 7.1 years.
4.6.9 Cash flows
37%
16%
17%
30%
Structure of bond holders, % (as at 31 December 2024)
Lithuania
Latvia
Estonia
United Kingdom
75.0
11.8
9.6
9.6
9.6 9.6 9.6
5.5
3.5
3.5
16.6
2025 2026 2027 2028 2029 2030 2031 2032 2033 2034+
Group’s borrowings by maturity, EUR million
Obligacijos Paskolos
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52
In 2024, the EPSO-G Group’s net cash flows from operating activities amounted to EUR 89.3 million (2023: EUR 111.8 million).
The Group allocated EUR 188.2 million to investments in non-current assets (2023: EUR 241.9 million). During the reporting
period, the EU financial support obtained to finance the investment projects amounted to EUR 86.1 million (2023: EUR 71.5
million).
In 2024, Litgrid collected the EUR 135.7 million congestion management funds, a 25% or EUR 27.6 million increase due to a
greater difference between regional electricity prices compared to 2023. These funds are not recognised as revenue and have no
direct impact on the Company’s result of operations, and their use is regulated under the European Parliament and Council
Regulation No 2019/943 and the methodology approved by the ES Agency for the Cooperation of Energy Regulators (ACER).
Congestion management funds are used mostly to finance in part Litgrid’s investments aimed at capacity enhancement of
interconnections. The use of congestion management funds for investments in the reporting period amounted to EUR 43.5 million
(2023: EUR 142.3 million was used to reduce the tariff, and EUR 15.2 million for investments).
In 2024, the Group repaid loans in the amount of EUR 12.1 million (2023: EUR 30.9 million), and did not receive new long-term
loans. At the beginning of 2024, the Group repaid EUR 18 million of the overdraft which was temporarily used at the end of 2023.
The Group’s efficient cash balance management led to an increase in current financial instruments (deposits and bonds) of EUR
141.2 million during the year.
4.6.10 Investments
In 2024, the EPSO-G Group’s investments (non-current assets carried at cost, before consideration of offsets with grants
received/receivable for acquisition of the related assets) amounted to EUR 236.1 million, i.e. EUR 7.0 million or 2.9% less
compared to 2023 (EUR 243.1 million).
Litgrid’s investments amounted to EUR 229.1 million (64% was spent on strategic and nationally important electricity projects
and 36% on the reconstruction and development of the transmission network and operational support), and accounted for 96%
of the Group’s investments.
Amber Grid’s investments in the reconstruction and modernisation of the main network amounted to EUR 6.4 million (of which
EUR 1.2 million for the installation of the gas pipeline shutoff devices and the installation of the Scada, EUR 1.2 million for
reconstruction of the dispatcher building, EUR 0.6 million for renovation of cathodic protection systems, EUR 0.7 million for inserts
in the main gas pipeline in view of the technical condition and diagnostics results of the gas pipelines, etc.).
4.7. Related-party transactions
After considering the amendments to the Law on Companies of the Republic of Lithuania, the EPSO-G Board abolished the Policy
of Transactions with Related Parties on 29 June 2023. To ensure compliance with the requirements of the Law and proper
oversight and disclosure procedures of the transactions carried out by EPSO-G Group companies with related parties, the Group’s
boards (of Litgrid and Amber Grid) are obliged to seek the opinion of EPSO-G’s Audit Committee prior to entering into any related
party transactions that meet the criteria of the Law on Companies of the Republic of Lithuania, and ensure publication of such
transactions in accordance with a procedure prescribed by the Law.
Information on transactions with related parties is disclosed in the annual financial statements of this report.
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53
05
Governance Report
5.1. EPSO-G’s Operational Documents
5.2. Supervisory and organisational system and functions of EPSO-G
5.3. General Meeting of Shareholders of EPSO-G
5.4. EPSO-G’s Board and Committees
5.5. Performance self-assessment and results of the activities of the collegial bodies
5.6. Company’s CEO and Management
5.7. Additional information on the Chairman of the Board, the Chief Financial Officer
and the Head of the Internal Audit
5.8. Membership in organisations
5.9. Risk Management Framework
5.10. Compliance, Anti-Corruption Activities and Conflict of Interest Management
5.11. Information on the Audit
5.12. Information on the Shareholders and Dividends
5.13. Legal disputes and uncertainties
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54
5. Governance Report
In 2024, the EPSO-G Group’s corporate governance was carried out in accordance with the updated version of the Guidelines on
Corporate Governance of the EPSO-G Group, approved by the Ministry of Energy of the Republic of Lithuania, exercising the rights
and obligations of the sole shareholder of EPSO-G, on 29 December 2022. The guidelines establish corporate governance
principles uniformly applied to all companies of the EPSO-G Group, regulate the management organization model, management
structure, the system of management and control and accountability assurance.
The updated Guidelines on Corporate Governance established 7 main principles of the corporate governance:
• The principle of establishing assumptions for effective corporate management, which aims to ensure that the management of
the Group and the necessary decisions are made efficiently;
• The principle of proportionality, which aims to ensure that management methods applied by EPSO-G are proportionate, i.e.
do not create an unnecessary administrative burden;
• The principle of realization of shareholders' rights, which aims to create conditions for the proper realization of rights and
legitimate interests of all shareholders;
• The principle of inclusiveness of all interested parties, which recognizes the rights and expectations of interested parties;
• The principle of transparency, which aims to ensure that the Group's activities are organized transparently, with proper
disclosure of essential information;
• The principle of responsibility and accountability of management bodies, which aims to ensure that management bodies
perform their functions in a proper and timely manner, actively exercise their rights and properly fulfil their duties;
• The principle of integrity, which aims to ensure both vertical and horizontal integrity.
EPSO-G draws on good governance practices set out in the Good Governance Recommendations published by the Organisation
for Economic Co-operation and Development (OECD), the United Nations and Nasdaq Vilnius Recommendations, and other
internationally recognised standards and good governance recommendations, with the overarching aim of ensuring that state-
owned companies are governed in a transparent and effective manner.
In an effort to purposefully build trust in ongoing strategic projects and to focus on transparency and accountability, the joint
governance quality of the EPSO-G Group companies has been rated A+ under the GCC’s Good Governance Index 2023/2024.
5.1. EPSO-G’s Operational Documents
5.1.1 Articles of Association of EPSO-G
In 2024, EPSO-G’s Articles of Association were revised one time.
On 27 February 2024, a new version of the Articles of Association of EPSO-G was approved by the Ministry of Energy of the
Republic of Lithuania and registered in the Register of Legal Entities on 15 March 2024. The following substantive changes were
made to the new version of the Articles of Association:
A+
z
The EPSO-G Group was
awarded the highest A+
good governance rating in
the large companies
category.
The Group received the highest ratings across all
areas:
• transparency (A+);
• strategic planning and implementation (A+);
• collegiate bodies (A).
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55
• revision of competences of EPSO-G’s General Meeting of Shareholders, the Board, CEO and the committees.
The existing corporate management model ensures the efficiency of the organizational and management structure of the EPSO-
G Group companies and compliance with the highest governance standards.
The EPSO-G’s Articles of Association of are available at the website: www.epsog.lt in the menu item ‘Corporate Governance’.
5.1.2 Operating Policies
Good governance practices in the EPSO-G Group were implemented during the reporting period through the application and
continuous targeted improvement of the operating policies that also guide the Group companies. The operating policies of the
EPSO-G Group are intended to implement a consistent and effective organizational management system helping the employees
in successful implementation of important strategic projects and transparent and effective benefit creation for both the people of
the country and the business.
In order to meet the objectives set out in the Shareholder’s Letter of Expectations, the holding company EPSO-G has established
guiding principles and, where appropriate, specific rules, applicable across the Group in the following areas of activity:
During the reporting period new Policy on Material Terms and Conditions of Transactions was approved
Policies or their summaries are available on the EPSO-G website at www.epsog.lt, in the menu item Operating Policies.
EMPLOYEES
Selection
Equal opportunities
Ethics
Occupational safety
Remuneration,
Performance Appraisal
& Development
ASSETS
Accounting
Dividends
Treasury
Technological assets
Transport
IT
Information security
Data security
Sale of shares
SUSTAINABILITY &
TRANSPARENCY
Sustainability
Environmental
Anti-corruption
activities
Transparency &
communication
Purchases
Management of
interests
Financial support
GOVERNANCE &
OPERATIONS
Essential terms of
transactions
Corporate governance
Planning and
monitoring
Compliance
Risk control
Internal audit
Project management
Research and
innovations
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56
5.2. Supervisory and organisational system and functions of EPSO-G
5.2.1 Supervisory and organisational system
EPSO-G’s management, supervisory and organisational structure ensures optimal organisation, accountability, process efficiency
and responsibility.
Organisational structure of EPSO-G
The EPSO-G Group’s corporate governance documentation system consists of the following:
• Guidelines on Corporate Governance of the EPSO-G Group companies.
• Articles of Association of the holding company and the Group companies.
• Corporate Governance Policy.
• Rules of Procedures of the Board.
• Regulations of the Audit Committee.
• Regulations of the Remuneration and Nomination Committee.
• Other corporate governance documents of the Group companies.
All the above documents are available at the website of the holding company at www.epsog.lt.
GENERAL MEETING OF SHAREHOLDERS
Renumeration & Nomination
Committee
(RNC)
BOARD
Audit Committee
(AC)
Organisation
Development and
Culture Unit
Infrastruktūros ir
projektų valdymo
padalinys
Development and
Innovation Unit
Finance Unit
Legal and
Corporate
Governance Unit
Business
Resilience Unit
Comminication
Unit
Office and
Transport Team
People and
Culture Team
Sustainability
Team
Project Manager
ePMO Team
Technology Team
Project
Implementation
Team
IT Team
Data Analytics
and Management
Team
Innovation Team
Planning and
Strategy Team
Finance
Accounting Team
Finance Control
Team
Public
Procurement
Team
Head of Group
Regulatory Affairs
Public
Procurement
Legal Team
Corporate Legal
Team
Head of Energy
Project Legal
Risk Management
Team
Compliance
Management
Team
Infrmation
Security Unit
BOARD
Internal Audit Unit
CEO
Head of Group
Contract Business
Development
Treasury Team
Syderiai Program
Team
Head of Energy
Legal
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5.2.2 Function and Functional Area Governance
In 2024, the holding company EPSO-G applied a functional governance model, based on Group-wide operation of functions and
functional areas, which, according to international practice, creates the most value for the Group companies. In application of this
governance model, the holding company EPSO-G:
• Mostly focuses on operational efficiency, shared resources, and centralized services;
• Allocates resources and enhances competence for key, long-term value creation activities - strategy development, investment
management, and innovation;
• Defines the policies of the Group companies, standardizes the core processes of the Group;
• Promotes the sharing of good practices among the patronized companies and supports initiatives to improve performance.
5.3. General Meeting of Shareholders of EPSO-G
The rights and obligations of the sole shareholder of the holding company EPSO-G are implemented by the Ministry of Energy of
the Republic of Lithuania which adopts decisions on strategic issues of operational activities, approves key operational guidelines
(guidelines on corporate governance, collegial body members’ remuneration, etc.).
In 2024, EPSO-G’s sole shareholder took the following key decisions:
Date
Key decisions
27 February 2024
Approved a new version of the Articles of Association of EPSO-G.
26 April 2024
Approved the new version of the guidelines for setting the remuneration for activities in the collegial
bodies of EPSO-G and the EPSO-G Group companies.
30 April 2024
Approved the set of EPSO-G’s consolidated and company’s financial statements for 2023. Approved the
decision on profit distribution.
4 July 2024
Endorsed the decision of the Board of EPSO-G of 28 June 2024 to establish a new company, EPSO-G
Invest UAB, for the purpose of carrying out the new activities.
6 September 2024
Amended the decision of the Ministry of Energy of the Republic of Lithuania, exercising the rights and
obligations of the sole shareholder of EPSO-G, of 30 August 2023 by fixing the remuneration of the
auditing firm PricewaterhouseCoopers, a private limited liability company, for the audit of the financial
statements for the period 2023-2025 at a maximum fee of EUR 310,000.00 (excl. VAT).
18 September 2024
Elected an independent member Rasa Balevičienė to the EPSO-G’s Board until the end of the current
term of office.
4 October 2024
Elected Vytenis Lazauskas, Rasa Balevičienė and Dainius Bražiūnas to the Audit Committee of EPSO-G
for a new term of 4 (four) years as of 23 October 2024.
18 October 2024
Approved the updated standard terms of the Audit Committee member contract regarding the activity in
the Company’s Audit Committee and set the remuneration for the newly elected members of the Audit
Committee.
12 December 2024
Endorsed the decision of the EPSO-G Board of 11 December 2024 to increase the number of shares of
EPSO-G Invest UAB held by EPSO-G and to transfer part of the shares of EPSO-G Invest UAB to the
sole shareholder of EPSO-G upon the adoption of the sole shareholder’s decision to increase the issued
capital of EPSO-G Invest UAB, and to grant the right to Valstybės investicinis kapitalas UAB to acquire
newly issued shares of EPSO-G Invest UAB.
20 December 2024
Dismissed Tomas Daukantas from the Board and Renumeration and nomination committee as of 20
December 2024.
5.4. EPSO-G’s Board and Committees
All EPSO-G’s employees, including management and members of the collegial bodies, are subject to the Company’s Selection
Policy. For each position, candidates are given a set of requirements corresponding to their responsibilities:
• in establishing the collegial bodies, the EPSO-G Group seeks to ensure a combination of knowledge, skills and experience
among its members that will enable the collegial bodies to carry out their functions properly.
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• We apply high standards of values, professionalism, and good repute to all levels of employees and standards of excellent
leadership skills to executives.
• The combination of competences, leadership and professional knowledge of employees and executives creates the
preconditions for building the organisational culture of the Group of companies that is creative, progressive, open to innovation
and change.
The detailed EPSO-G’s Selection Policy is available on the Company’s website.
Ensuring diversity
The EPSO-G Group’s Diversity Policy is applicable to all employees, their selection process, including the selection of the
Company’s CEO, members of the management and supervisory bodies. The Company has Equal Opportunities Policy which
defines the key principles that are applied in the Group’s companies to ensure that the principles of equal opportunities and non-
discrimination are respected in all areas of the employment relationship. The selection procedures shall respect the principle of
equal opportunities and the prohibition to restrict or favour the rights of employees on grounds unrelated to their functional
characteristics in all areas of the employment relationship, including in respect of recruitment, the validity of the employment
relationship and its termination. The detailed EPSO-G’s Equal Opportunities Policy is available on the Company’s website.
Information on the current gender composition of the Company’s collegial bodies is provided in the table below
Board (4 members in total)
Independent board members
3 (75%)
Board members nominated by the shareholder
1 (25%)
Gender composition
1 female (25%)
3 male (75%)
Employee representatives are not part of this collegial body
EPSO-G top management is not part of this collegial body
Renumeration and nomination committee
Independent committee members
2 (100%)
Committee member (nominated by the shareholder)
0 (0%)
Gender composition
2 male (100%)
Employee representatives are not part of this collegial body
EPSO-G top management is not part of this collegial body
Audit committee
Independent committee members
2 (67%)
Committee member (nominated by the shareholder)
1 (33%)
Gender composition
1 female (33%)
2 male (67%)
Employee representatives are not part of this collegial body
EPSO-G top management is not part of this collegial body
5.4.1 The Board of EPSO-G
According to the current version of the Articles of Association of EPSO-G, the Board consists of five members. The members of
the Board are elected for a four-year term of office by the General Meeting of Shareholders, to which the Board is accountable.
At the request of General Meeting of Shareholders, the Remuneration and Nomination Committee makes a recommendation on
the nomination of members of the Board.
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59
The continuous term of office of a member of the Board shall not exceed two full consecutive terms, i.e. in any event no more than
10 consecutive years. Members of the Board are elected in accordance with the Resolution No 631 of the Government of the
Republic of Lithuania of 17 June 2015 on the Approval of the Description of the Procedure for the Selection of Candidates to the
Collegial Supervisory Body or Management Body of Municipal Enterprise, State or Municipal Company or Subsidiary.
On 24 March 2023, the Board of EPSO-G was elected for a new term of office, consisting of three independent members: Robertas
Vyšniauskas, Asta Sungailienė and Liudas Liutkevičius, and members of the Board delegated by the Ministry of Energy of the
Republic of Lithuania: Dainius Bražiūnas and Tomas Daukantas. In April 2023, Robertas Vyšniauskas, an independent member of
the EPSO-G Board, was elected the Chairman of the Board, who served as chair of the Board in the previous term of office since
February 2022.
An independent member Asta Sungailienė resigned from the position of the member of the Board as of 27 March 2024. Rasa
Balevičienė was elected to the Board by a decision of the sole shareholder of 18 September 2024, following selection procedures
until the end of the term of the current Board’s office.
Tomas Daukantas, delegated by the Ministry of Energy, was dismissed from the Board as of 20 December 2024.
EPSO-G’s Board responsibilities:
• Forms a common Corporate Governance Policy of the Group of companies;
• Is responsible for the organizational and systematic development and management of the Group within the scope of its
competence;
• Approves the Group’s strategy and monitors the implementation;
• Carries out the supervision and control of the management of the strategic projects carried out by the Group companies that
are included in the national energy strategy, the projects of particular national interest, the economic projects of great state
importance;
• Approves key Group-level documents: guidelines, policies, etc.
• Performs supervisory functions as provided for in the Law on Companies of the Republic of Lithuania.
The Board, having carried out performance assessment for 2024 and identified areas for improvement of the Board’s activities
regarding the joint work, expectations and objectives of the Board and the CEO, reviewing the Company’s strategy and structure
and their renewal in the context of the Letter of Expectations of the Shareholder, prepared the Company Board’s activity plan for
2025.
Matrix of the EPSO-G’ Board competences
For the purpose of electing a new Board in December 2022, a matrix of required competences for the Board members was built.
Below is a short version of the matrix of competencies highlighting the key roles of the Board members.
Composition of the
Board
Competencies of the Board members
nominated by the shareholder
Competencies of independent Board members
Board member No 1
Board member No 2
Board member No
3
Board member No 4
Board member No 5
Areas of
competencies
Oversight of NEIS
implementation and
the country’s
strategic energy
projects
Oversight of energy
market, regulatory
and transmission
activities
Finance and
investments
Strategy and
business
development
Infrastructure and
technology
transformations
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60
EPSO-G’s Board composition (31 December 2024)
Robertas
Vyšniauskas
Chair of the Board from February 2022 to 20 March 2023, re-elected from April 2023,
an independent member of the Board from 24 March 2023, as well as from 20 March
2019 to 20 March 2023.
Education: Mykolas Romeris University, Master’s of Law
Other positions:
• Chair of the Board at Vilniaus Vystymo Kompanija UAB
• Audit committee member at Vilniaus Vystymo Kompanija UAB
• Associate professor at Vilnius University Business school
• Chair of the Supervisory Council at KN Energies
• Member of the Audit Committee at KN Energies
• Member of the Nomination and Remuneration Committee at KN Energies
Experience:
R. Vyšniauskas has gained experience in strategy and business development as a
member of the collegial bodies of various state-owned enterprises, including EPSO-G
and KN Energies. Until December 2024, he headed the company Valstybės investicinis
kapitalas. R. Vyšniauskas is also a corporate governance, legal, and tax consultant, as
well as an associate professor at Vilnius University Business School.
Mr Vyšniauskas does not hold shares of the EPSO-G Group companies.
Liudas
Liutkevičius
Independent member of the Board from 24 March 2023
Education: Vilnius University, Master in International Finances.
Other positions: Managing Partner at INVL Renewable Energy Fund I
Experience:
L. Liutkevičius has experience in leadership and work in the energy sector as an expert
in infrastructure and technology transformation. L. Liutkevičius has been CEO of
Energijos Skirstymo Operatorius (ESO) and the former Lietuvos Dujos, and has worked
in executive teams, boards, and supervisory boards of other energy supply,
transmission, and distribution companies. Currently, L. Liutkevičius is an executive
partner at "INVL Renewable Energy Fund I."
Mr Liutkevičius does not hold shares of the EPSO-G Group companies.
Rasa
Balevičienė
Independent member of the Board from 18 September 2024
Education:
• Vilnius University’s Vilnius International School, Master in Management and
Business Administration
• Baltic Institute of Corporate Governance, studies of a professional council and board
members
Other positions: independent member of the Board at a financial start-up Nium
Experience:
R. Balevičienė has experience in the fields of finance and investment. Previously, R.
Balevičienė held the positions of CEO and Chair of the Board at two life and non-life
insurance companies, Swedbank P&C Insurance AS and Swedbank Life Insurance SE,
operating in Lithuania, Latvia, and Estonia. She also served as Chief Financial Officer at
AB Hansabankas and was the Director of the Financial Reporting and Accounting
Department and Chief Accountant at AB Swedbank.
Mrs Balevičienė does not hold shares of the EPSO-G Group companies.
Dainius
Bražiūnas
Member of the Board from 24 March 2023, as well as from 20 March 2019 to 20
March 2023
Education: Vilnius Gediminas Technical University, Bachelor in Energy Sciences
Other positions:
• Head of Energy Security Group at the Ministry of Energy of the Republic of Lithuania
• President of the association Koturnos
Experience:
D. Bražiūnas has extensive experience in the implementation of strategic energy
projects and national energy security policy at the Ministry of Energy, as well as serving
on the collegial bodies of strategic energy companies under the Ministry’s supervision.
Currently, D. Braž iū nas is the Head of the Energy Security Group at the Ministry of
Energy.
Mrs Bražiūnas does not hold shares of the EPSO-G Group companies.
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61
Attendance at the Board meetings during 2024
During the reporting period, 23 meetings of the Board were held in which 5 decisions were adopted by a written vote.
No
Member of the Board
Meeting attendance
1.
Dainius Bražiūnas
23/23
2.
Tomas Daukantas*
23/23
3.
Robertas Vyšniauskas**
21/23
4.
Liudas Liutkevičius
23/23
5.
Asta Sungailienė*
5/5
6.
Rasa Balevičienė*
9/9
* Term of office of the Board member Mrs Sungailienė ended on 26 March 2024, and Mr Daukantas on 20 December 2024. Mrs
Balevičienė was elected to the Board on 18 September 2024. ** A member of the Board was not present in 2 meetings because
he withdrew from the matters under discussion.
Board decisions taken in 2024
On 11
th
of January, the updated strategy of the EPSO-G Group to 2030 was approved. EPSO-G’s performance
targets for 2024 were approved, which are identical to those of EPSO-G CEO. The budget of EPSO-G for 2024 was
approved. Decision regarding the initiation of selection of the Board of Baltpool was made. Determination of EPSO-
G’s risk appetite and approval of the plan of risk management measures for 2024. The terms and conditions of
employment of the CEO of EPSO-G were updated.
On 2
nd
of February, the report on the implementation of the 2023 performance targets was approved. It was agreed
that EPSO-G, as the sole shareholder of Tetas, should make transactional decision. The Extraordinary General
Meeting of Shareholders of EPSO-G is convened to approve the new version of EPSO-G’s Articles of Association.
The decision to vote at Litgrid’s Extraordinary General Meeting of Shareholders on 12
th
of February 2024 was
adopted on 7
th
of February. The policy on material terms and conditions for the EPSO-G Group transactions was
adopted.
A decision was taken on 14
th
of February to change the term of the lending and borrowing agreement between
Litgrid and EPSO-G.
On 15
th
of February, the report on the implementation of the EPSO-G Group’s strategy for the period up to 2030
was approved for 2023. The Board’s performance improvement plan for 2024 was developed. A new version of
the list of compliance priorities for EPSO-G was approved.
The Audit Committee activity report was approved on 23
rd
of April. The annual report of the Company and the
Consolidated Annual Report for 2023 was approved, the Company’s and Consolidate Financial Statements for
2023 were approved, the draft distribution of profits for 2023 was approved, and the Ordinary General Meeting of
Shareholders was convened. A decision was taken to conclude an overdraft facility agreement and to approve the
material terms of the agreement.
On 26
th
of April, a decision was taken on the review of the performance appraisal, financial incentives and
remuneration of the EPSO-G CEO for 2023. A decision was taken on voting at the ordinary general meetings of
shareholders of Litgrid, Amber Grid, Tetas, Energy Cells and Baltpool. A decision was taken to approve the updated
internal audit plan for the centralised internal audit of the EPSO-G Group for the period 2024-2026. A decision is
taken to launch a public selection procedure for an independent member of the EPSO-G Audit Committee.
01
JANUARY
02
FEBRUARY
03
MARCH
04
APRIL
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62
On 21
st
of May, a decision was taken to change the term of the lending and borrowing agreement between Litgrid
and EPSO-G.
On 31
st
of May, a decision was taken on voting at the Ordinary General Meeting of Shareholders of TSO Holding
on 7 June 2024. A decision was taken to vote at the Extraordinary General Meeting of Shareholders of Amber Grid
to approve the decision of the Board of Directors of Amber Grid to enter into a humanitarian aid agreement.
On 6
th
of June, a decision was taken to launch a new activity to set up a counselling service centre. A decision was
taken to launch a new activity to provide project coordination, investment and related services. Establish a new
legal entity, EPSO-G Invest, to carry out the new activities and convene an Extraordinary General Meeting of
Shareholders. A decision was taken to adopt EPSO-G’s organisational structure and list of posts from 1 July 2024.
A decision is taken to enter into inter-group lending and borrowing agreements.
On 30
th
of August. The decision to vote at Litgrid’s Extraordinary General Meeting of Shareholders was taken on
30 August. A decision was taken on the adoption of the decision of Tetas’s sole shareholder. A decision was taken
for EPSO-G to become a member of the Baltic Institute of Corporate Governance. The General Meeting of
Shareholders of EPSO-G was convened to amend the terms of remuneration for the audit services provided to
EPSO-G and to determine the remuneration to be paid to the audit firm PricewaterhouseCoopers for 2023-2025.
A decision was taken to cooperate with the Innovation Agency, a public enterprise, under the joint
arrangement/partnership.
On 27
th
of September , the General Meeting of Shareholders of EPSO-G was convened to elect member of the
EPSO-G’s Audit Committee. The decision was taken to appoint Robertas Vyšniauskas as the member of the
Remuneration and Nomination Committee of EPSO-G for the remaining term of office of the Board. The Audit
Committee activity report for H1 2024 was approved.
On 8
th
of October, the decision to vote at Amber Grid’s Extraordinary General Meeting of Shareholders was taken
on 8 October. The Board’s performance improvement plan for 2024 was developed.
On 23
rd
of October, the decision was taken to approve the EPSO-G Group Strategy 2035.
On 28
th
of October, the decision of the Remuneration and Nomination Committee of 7
th
of January 2024 to elect
Robertas Vyšniauskas as a chair was endorsed. The material terms of the cashpool agreements made between
EPSO-G and Litgrid, and between EPSO-G and Baltpool and were amended.
On November 29
th
of, EPSO-G’s monthly remunerations bands were approved for 2025. The updated
organisational structure and a maximum number of posts. The decision to vote at Baltpool’s Extraordinary General
Meeting of Shareholders on 2 December 2024 was adopted. The calendar for the meetings and activity plan of the
EPSO-G Board for 2025 were approved.
On 9
th
of December, a decision was taken on voting at the Extraordinary General Meeting of Shareholders of TSO
Holding on 10 December 2024.
On 11
th
of December, the decision was taken to adopt the decision of the sole shareholder of EPSO-G Invest to
endorse the decision of EPSO-G Invest CEO to become a shareholder of Rheinmetall Defence Lietuva by concluding
share purchase and sale agreements; to increase the number of shares of EPSO-G Invest held by EPSO-G and to
transfer part of the shares of EPSO-G Invest to the sole shareholder of EPSO-G upon the adoption of the sole
shareholder’s decision; to convene the Extraordinary General Meeting of Shareholders of EPSO-G.
On 13
th
of December, the decision was taken to adopt the decision of the sole shareholder of Tetas to approve the
05
MAY
06
JUNE
08
AUGUST
09
SEPTEMBER
10
OCTOBER
11
NOVEMBER
12
GRUODIS
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63
Board’s decision to conclude the holding management services agreement between Tetas and EPSO-G. The
decision to vote at Litgrid’s Extraordinary General Meeting of Shareholders on 30
th
of December 2024 was adopted.
EPSO-G internal audit unit’s budget for 2025 was approved. Determination of EPSO-G’s risk appetite and approval
of the plan of risk management measures for 2025. The activity plans of the Remuneration and Nomination
Committee for 2025 were approved.
5.4.2 The Remuneration and Nomination Committee of EPSO-G
Under the current Articles of Association of EPSO-G, the Remuneration and Nomination Committee shall be composed of at least
three members appointed by the Board for a period of up to four years by a reasoned decision. The nomination of members of the
Remuneration and Nomination Committee ensures that this Committee has at least one independent member. The continuous
term of office of a member of the Remuneration and Nomination Committee shall not exceed two consecutive terms of office. The
term of office of the Committee coincides with the term of office of the Board.
During the reporting period, the Remuneration and Nomination Committee had the following members: Asta Sungailienė (until
March 26
th
, 2024, Tomas Daukantas until December 20
th
, 202), Robertas Vyšniauskas from September 27
th
, 2024 and Ramū nas
Bagdonas.
EPSO-G’s Remuneration and Nomination Committee’s responsibilities:
• Assists in carrying out the selections of candidates to the members of the bodies in all companies of the Group;
• Provides the companies of the Group with recommendations regarding the nomination of the members of the management
bodies, entry into contracts with them and setting remuneration;
• makes recommendations on the Group’s corporate governance documents relating to the selection, appointment and
determination of independence criteria for the governing bodies, senior management;
• makes recommendations on the system for succession of the Group’s managers and critical positions;
• makes recommendations on the system of equal opportunities, inclusion and diversity promotion within the Group;
• and etc.
Remuneration and Nomination Committee's composition (31 December 2024)
Robertas
Vyšniauskas
Chair of the Remuneration and Nomination Committee and independent member
from 27 September 2024. For more details on Mr Vyšniauskas, see section 5.4.1.
Ramūnas
Bagdonas
Independent member of the Remuneration and Nomination Committee from 6 June
2023
Education:
• Vytautas Magnus University, Master degree in Business Administration and
Management
• Baltic Management Institute, EMBA
Other positions:
• Head of HR at Telia Lietuva
• Founder of the Association of Personnel Management Professionals and chair of the
Board
Experience:
R. Bagdonas has over 20 years of experience in various companies in the fields of human
resources, personnel management, and organizational culture. R. Bagdonas also has
experience serving on collegial bodies of companies. Currently, he holds the position of
Head of Human Resources at Telia Lietuva.
Mr Bagdonas does not hold shares of the EPSO-G Group companies.
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64
Attendance of the Remuneration and Nomination Committee in 2024:
In 2024, 11 meetings of the Remuneration and Nomination Committee were held.
No
Member of the Board
Meeting attendance
1.
Asta Sungailienė*
5/5
2.
Tomas Daukantas*
11/11
3.
Robertas Vyšniauskas*
2/2
4.
Ramūnas Bagdonas
11/11
* Term of office of the Committee member Mrs Sungailienė ended on 26 March 2024, the Committee member Mr Daukantas on 20 December 2024. Mr. Vyšniauskas
was elected to the Committee on 27 September 2024.
Substantive decisions taken by the Remuneration and Nomination Committee in 2024, substantive issues discussed
18
th
of January. Recommendations on candidates for the positions of members of the Boards of Amber Grid and
Litgrid.
6
th
of February. Approval of the activity report of the Remuneration and Nomination Committee for 2023.
Consideration of thee remuneration of the Boards of the Group companies. Recommendations on candidates for the
positions of members of the Boards of Amber Grid and Baltpool. Self-assessment of the Remuneration and
Nomination Committee’s performance for 2023.
7
th
of March. Recommendation on the remuneration policy of the CEO and the Board members of Amber Grid and
Litgrid. Revision of EPSO-G’s annual report, as far as the competence of the Remuneration and Nomination
Committee is concerned.
13rd of March. Recommendation on the review of the remuneration of the Group’s CEOs.
21
st
of March. A recommendation for a review of the remuneration of the CEO of EPSO-G. Consideration of the
remuneration of the Group’s collegial bodies. Discussion of the self-assessment process of the Group’s collegial
bodies, approval of the general areas of improvement of the Group’s activities.
11
th
of April. Recommendation on a candidate for the position of member of the Board of Baltpool.
17
th
of June. Recommendation on the appointment of a candidate for the position as the CEO of EPSO-G’s newly
established company, and the definition of his/her working conditions.
26
th
and 27
th
of June. Recommendation on the candidates for the position of independent member of the EPSO-G
Audit Committee.
8
th
of August. Periodic assessment of the independence of the Remuneration and Nomination Committee member.
Consideration of the report on the Employee Remuneration, Performance Review and Training Policy and the Policy
on Management of Interests of Employees and Members of Collegial Bodies (to the extent it is related to the
independence criteria of the collegial bodies and their assessment). Monitoring of the new remuneration system’s
implementation. Obtaining understanding of the situation of equal opportunities, inclusion and diversity within the
EPSO-G Group.
01
JANUARY
02
FEBRUARY
03
MARCH
04
APRIL
06
JUNE
08
AUGUST
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CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
65
On 7
th
of October, Robertas Vyšniauskas was elected a chair of the Remuneration and Nomination Committee.
Assessment of the independence of the Committee member. Recommendation on the Group’s remuneration bands
from 2025. Discussion on the structure and resources of the People and Culture function. Approval of the schedule
of ordinary meetings of the Committee for 2025 and the activity plan for 2025.
3
rd
of December. Consideration of the succession of LITGRID and Amber Grid CEO’s. Revision of the self-
assessment questionnaire for the Group’s collegiate bodies.
5.4.3 EPSO-G’s Audit Committee
According to the current version of the Articles of Association of EPSO-G, the Audit Committee shall be composed of at least
three members appointed by the sole shareholder of EPSO-G for a maximum period of four years, subject to the recommendations
(if any) of the Remuneration and Nomination Committee. The continuous term of office of a member of the Audit Committee shall
not exceed two consecutive terms. Only an independent member may be elected to chair the Audit Committee.
During the reporting period, until 23 October 2024, the Audit Committee had two independent members: Gediminas Šiušas and
Robertas Vyšniauskas. Dainius Bražiūnas was nominated by the Ministry of Energy y as a member of the Audit Committee.
As of 23 October 2024, a new Audit Committee was set up for a four-year term: Vytenis Lazauskas, independent member; Rasa
Balevičienė, independent member; Dainius Bražiūnas, member, member of the EPSO-G board nominated by the Ministry of Energy
of the Republic of Lithuania Rasa Balevičienė, an independent member, was elected Chair of the Audit Committee at the first
meeting of the new Audit Committee.
EPSO-G’s Audit Committee’s responsibilities:
• Carries out the monitoring of the preparation and auditing of the financial statements of the Group companies;
• Is responsible for the ensuring of the observance of the independence and objectivity principles by the auditors of the Group
companies and of audit firms;
• Is responsible for the monitoring of effectiveness of the internal control of the Group companies, compliance and risk
management, and internal audit, activity processes;
• Is responsible for the control of provision of non-audit services by the auditor of the Group companies and / or audit firm;
• Evaluates the transactions concluded by the Group companies, the shares of which are admitted to trading on a regulated
market, with the parties concerned.
10
OCTOBER
12
DECEMBER
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66
EPSO-G’ Audit Committee composition (31 December 2024)
Rasa
Balevičienė
Chair of the Audit Committee and independent member from 23 October 2024. For
more details on Mrs Balevičienė, see section 5.4.1 of the Report.
Vytenis
Lazauskas
Independent member of the Audit Committee from 23 October 2024
Education: Vilnius University, Master Degree in Finances
Other positions: Head of group risk management at INVL Asset Management
Experience:
V. Lazauskas has extensive experience in financial auditing and consulting gained at the
international audit firm PwC. Since 2018, he has been working at the INVL Group: until
July 2024, he held the position of Group Chief Financial Officer and currently serves as
the Group Head of Risk Management.
Mr Lazauskas does not hold shares of the EPSO-G Group companies.
Dainius
Bražiūnas
Member of the Audit Committee from 23 October 2024. For more details on Mr
Bražiūnas, see section 5.4.1 of the Report.
Attendance of the Audit Committee members at meetings in 2024
In 2024, 15 meetings of the Audit Committee were held in which 5 decisions were adopted by a written vote.
No
Member of the Board
Meeting attendance
1.
Gediminas Šiušas*
13/13
2.
Robertas Vyšniauskas*
13/13
3.
Dainius Bražiūnas
15/15
4.
Rasa Balevičienė*
2/2
5.
Vytenis Lazauskas*
2/2
* Term of offices of the Committee members Mr Šiušas and Mr Vyšniauskas ended in 23 October 2024. The Committee members Mrs Balevičienė and Mr
Lazauskas were elected to the Committee on 23 October 2024.
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67
Decisions taken by the Audit Committee in 2024
15
th
of January. Recommendation to the Boards of Group companies to strengthen internal control.
Recommendation to the EPSO-G Board on the maturity level of information systems management.
26
th
of February. Approval of the new version of the list of compliance priorities for Litgrid, Baltpool, EPSO-G.
Approval of the updated plan for centralised internal audits of the EPSO-G Group for the period 2024-2026. The
performance improvement plan of the Audit Committee for 2024 was approved.
5
th
of March. Approval of the Audit Committee’s conclusion on the audited financial statements of Teas for 2023.
18
th
of March. Approval of the Audit Committee’s conclusion on the audited financial statements of Energy Cells
for 2023.
22
nd
of March. Approval of the Audit Committee’s conclusion on the audited separate and consolidated financial
statements of EPSO-G.
25
th
of March. Approval of a new version of the list of compliance priorities of Amber Grid and Tetas.
Recommendations to the EPSO-G Board on the inclusion of the proposed priority risks in the list of EPSO-G group
level risks for 2024. Approval of the report on the activities of the EPSO-G Audit Committee for 2023. Approval of
the report by the Head of Internal Audit of EPSO-G on the achievement of the 2023 objectives.
27
th
of March. Approval of Amber Grid’s audited separate and consolidated financial statements for 2023.
29
th
of March. Approval of Litgrid’s audited financial statements for 2023.
22
nd
of April. Recommendation to Amber Grid on the adoption of a management action plan and periodic reporting
to the Audit Committee.
27
th
of May. The independence assessment of independent the Audit Committee members.
26
th
of June. Recommendation to the Litgrid’s Board on the project management-related KPIs.
26
th
of August. Approval of the Audit Committee report for H1 2024. Resolving to recommend to the EPSO-G
Board to propose to the General Meeting of Shareholders to determine the remuneration of the auditing firm for
the audit of the financial statements for the period 2023-2025. Approval of non-audit services to be provided by a
firm auditing financial statements.
01
JANUARY
02
FEBRUARY
03
MARCH
04
APRIL
05
MAY
06
JUNE
08
AUGUST
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TOC ↑
68
On 27
th
of September , the General Meeting of Shareholders of EPSO-G was convened to elect member of the
EPSO-G’s Audit Committee. The decision was taken to appoint Robertas Vyšniauskas as the member of the
Remuneration and Nomination Committee of EPSO-G for the remaining term of office of the Board. The Audit
Committee activity report for H1 2024 was approved.
21
st
of October. Recommendation to the EPSO-G’s Board to focus on Group level risks above a critical level.
Confirmation of the review of the selected decisions for H2 2023 made by the Boards and senior management of
Litgrid and Tetas, identifying no any significant breaches and/or inconsistencies.
25
th
of November. Election of Rasa Balevičienė the Chair of the Audit Committee. Election of a lawyer of the Audit
Committee. Confirmation of the independence of independent members of the Audit Committee. Conclusion on the
potential threat to the independence from the services to be provided by the firm auditing the financial statements.
The Audit Committee’s activity plan for 2025 was approved. Agreement on Amber Grid’s risk appetite and plan of
risk management measures for 2025, recommendation to the Amber Grid’s Board on the approval thereof.
Agreement on Tetas’s risk appetite and plan of risk management measures for 2025, recommendation to the
Tetas’s Board on the approval thereof. Agreement on Energy Cells’s risk appetite and plan of risk management
measures, recommendation to the Energy Cells’s Board on the approval thereof.
9
th
of December. Agreement on the EPSO-G internal audit unit’s budget for 2025, recommendation to the EPSO-
G’s Board on the approval thereof. Agreement on Litgrid’s risk appetite and plan of risk management measures for
2025, recommendation to the Litgrid’s Board on the approval thereof. Agreement on Baltpool’s risk appetite and
plan of risk management measures for 2025, recommendation to the Baltpool’s Board on the approval thereof.
Agreement on the risk appetite and plan of risk management measures of EPSO-G for 2025, recommendation to
the Board of EPSO-G on the approval thereof.
5.5. Performance self-assessment and results of the activities of the collegial bodies
With respect to the guidelines prepared by the Remuneration and Nomination Committee, at the beginning of 2025, the
management bodies of the holding company EPSO-G and the Group’s subsidiaries carried out the self-assessment of performance
for 2024. The summarised performance assessments of the members of each collegial body and the Group’s Committees were
discussed during the meeting of each collegial body. The fields of activity to be improved were identified and the directions for
improvement of the operational processes were established by drawing up a coherent plan of actions and tasks for 2025.
Self-assessment of the activities of the collegial bodies was coordinated and summarised by the Remuneration and Nomination
Committee of EPSO-G. The Committee identified the following main common areas of the collegial bodies for improvement in
2025:
• Strengthening the sustainability expertise of the EPSO-G Group’s collegial bodies, and including sustainability as an element
on collegial bodies agendas.
• Focus on digitisation and physical security by the EPSO-G Group’s collegial bodies and periodic monitoring of the status of
implementation in these areas.
At its meeting on 29 January 2025, the EPSO-G Board assessed the results of the Plan 2024 (the plan to focus on strategic
matters and cooperation with the Boards of the Group companies was found fulfilled). After the self-assessment of performance
for 2024, the Board members drew the Board’s Performance Improvement Plan 2025, which identifies, inter alia, the Board’s
09
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10
OCTOBER
11
NOVEMBER
12
DECEMBER
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priority areas: strategic projects (including new activities) and their risk management controls, physical and cyber security project
controls, the Group’s digitalisation and data protection.
5.6. Company’s CEO and Management
The Chief Executive Officer of EPSO-G is appointed by the Board of the Company taking into account the recommendations of
the Remuneration and Nomination Committee. The Company’s CEO is accountable to the EPSO-G’s Board.
The competence of CEO of EPSO-G does not differ from the competence of the head of the company established by the Law on
Companies of the Republic of Lithuania, except for the additional competence provided for in the Articles of Association. CEO of
EPSO-G:
• arranges and controls the implementation of the Group’s strategy, approves the Group strategy’s action plan, and ensures the
implementation of the Group’s strategy, within the limits set by law;
• Controls the activities of the Group companies, makes suggestions and conclusions to the Board of EPSO-G regarding the
organization of the Group’s activities and development thereof;
• implements the guidelines, procedures, policies, codes and other documents approved by the Board in relation to the Group’s
activities and functioning within EPSO-G, and, within the scope of his/her authority, takes measures to ensure their
implementation in the Group companies;
• approves Group-wide procedures, rules, descriptions and other Group-level documents, if the relevant areas of the Group are
not governed by Group-level documents approved by the Board or the relevant Group-level documents approved by the
Board confer the relevant competences on CEO;
• and etc.
Members of EPSO-G’s top management:
Mindaugas
Keizeris
CEO of EPSO-G from 22 August 2022
Education:
• Vilnius University, Master in International Finances
• Baltic Institute of Corporate Governance, studies of a professional board members
Other positions:
Member of the Board at Litgrid from 22 December 2022, re-elected for second term
30 April 2024
Mr. Kaizeris does not hold shares of the EPSO-G Group companies.
Darius
Kašauskas
Head of Finance at the EPSO-G Group from 16 January 2023
Education:
• Vilnius University, Master in Economics
• ISM University of Management and Economics, Master in Management
• BI Norwegian Business School, Master in Management
Other positions:
• Chair of the Board at Tetas from 30 March 2023
• Member of the Board at Amber Grid from 30 April 2024
Mr. Kaišauskas does not hold shares of the EPSO-G Group companies.
Tomas
Varneckas
Head of Infrastructure and Project Management at the EPSO-G Group from 9 August
2021
Education:
• Vilnius Tech – Vilnius Gediminas Technical University, Master in Engineering IT
• Vilnius Tech – Vilnius Gediminas Technical University, Bachelor in Environmental
Engineering
Other positions:
• Litgrid Board member since 20 April 2022, Chair of the Board at Litgrid from 29
December 2022, re-elected for second term and as Chair of the Board 22 May 2024
• CEO of EPSO-G Invest from 18 July 2024
Mr. Varneckas does not hold shares of the EPSO-G Group companies.
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70
Simona
Augėnaitė
Head of Legal and Corporate Governance at the EPSO-G Group from 1 January 2023
Education:
• Vilnius University, Master of Law
• Baltic Institute of Corporate Governance, studies of a professional board members
Other positions:
• Rheinmetall Defence Lietuva UAB, member of Supervisory Board, serving since
March, 2025
Ms Augėnaitė does not hold shares of the EPSO-G Group companies.
Simona
Grinevičienė
Head of Organisation Development and Culture at the EPSO-G Group from 24 April
2023
Education:
• Vilnius University, Master of Law
• Vilnius University’s Vilnius International School, Business Administration
• Baltic Institute of Corporate Governance, studies of a professional board members
Other positions:
• Chair of the Board at Baltpool from 24 May 2024
• Independent member of the Supervisory Council at European Merchant Bank
• Baltic Institute of Corporate Governance, chair of the Policy Group
Mrs. Grinevičienė does not hold shares of the EPSO-G Group companies.
Paulius
Butkus
Head of Development and Innovation at the EPSO-G Group from 20 February 2023
Education:
• Vilnius University, Bachelor in Nuclear Physics
• Vilnius Tech – Vilnius Gediminas Technical University, Master in Electrical
Engineering
• Vilnius Tech – Vilnius Gediminas Technical University, PhD in Electrical and
Electronics Engineering
• Baltic Institute of Corporate Governance, studies of a professional board members
Other positions:
• Amber Grid board member since 17 March 2023, re-elected for second term and as
Chair of the Board at Amber Grid from 10 May 2024
• Chair of the Board at Energy Cells from 11 May 2023
• Member of the Board at National Lithuanian Energy Association from 28 February
2024
Mrs. Butkus does not hold shares of the EPSO-G Group companies.
Andrius
Svobonas
Group’s Head of Business Resilience from 2 August 2024
Education:
Mykolas Romeris University, Master in Law
Mr. Svobonas does not hold shares of the EPSO-G Group companies.
5.7. Additional information on the Chairman of the Board, the Chief Financial Officer and the
Head of the Internal Audit:
Žydrūnas Augutis, Chief Financial Officer. Mr. Augutis has more than 20 years of experience in financial accounting and taxation
and holds the position of the Chief Financial Officer of EPSO-G from April 2019. Before joining EPSO-G, he held the position of
the Chief Financial Officer of the subsidiary Litgrid for two years, was the head of the Accounting Department of Lietuvos Dujos
(following the separation of the transmission activities from it, Amber Grid was established). In 2017-2019, Mr. Augutis was a
member of the Board of EPSO-G’s subsidiary Tetas. Mr. Augutis holds a Master’s degree in Accounting and Auditing in Economics
from Vilnius University.
Ms. Rasa Juodelytė, Head of Internal Audit. Holds the position of the Head of Internal Audit Unit at EPSO-G from January 2017.
Before starting to serve in this position, she was responsible for the Internal Audit Unit’s activities at the subsidiary Litgrid for four
years; she held the same position at the international company of wholesale and retail trade in petroleum products. In 2017-
2020, Ms. Juodelytė was also a member of the Audit and Risk Committee of SE Ignalina Nuclear Power Plant. Ms. Juodelytė holds
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71
a Master in Economics, Accounting and Auditing from Vilnius University.
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72
5.8. Membership in organisations
In 2024, the holding company EPSO-G and the Group companies actively participated in the activities of the national and various
international organisations and associations. The involvement in the activities of Lithuanian and foreign organisations allows the
Group companies to build their competences, share best practices, and participate in joint projects with other countries that
contribute to strengthening Lithuania’s energy independence.
European network of gas
transmission system
operators
www.entsog.eu
European clean
hydrogen alliance
www.europa.eu/...
European network of
electricity transmission
system operators
www.entsoe.eu
Association
Bionergy Europe
www.bioenergyeurope.org
Association EASEE-gas
www.easee-gas.eu
European network of
network operators for
hydrogen – www.ennoh.eu
European renewable gas
registry - www.ergar.org
European hydrogen
backbone initiative –
www.ehb.eu
Association Infobalt -
www.infobalt.lt
International council onf
large electric systems
(CIGRE) - www.cigre.org
Association of issuing
bodies - www.aib-net.org
Polish – Lithuanian
chamber of commerce -
www.plcc.lt
Lietuvos projektų vadybos
asociacija - www.ipma.lt
Lithuanian CO2 platform -
enmin.lrv.lt/...
LIETUVOS
CO
2
PLATFORMA
Lithuanian hydrogen
platform – enmin.lrv.lt/...
LIETUVOS
VANDENILIO
PLATFORMA
Nacionalinė Lietuvos
energetikos asociacija –
www.nlea.lt
Personalo valdymo
profesionalų asociacija -
www.pvpa.lt
Lietuvos atsakingo verslo
asociacija –
www.atsakingasverslas.lt
Kauno prekybos, pramonės
ir amatų rūmai –
www.chamber.lt
Oil and gas methane
partnership 2.0 –
www.ogmpartnership.com/
Baltic Institute of Corporate
Governance -
www.bicg.eu
Hydrogen energy
association - www.h2lt.eu
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5.9. Risk Management Framework
The EPSO-G Group follows the Group’s Risk Management Policy and Risk Management Methodology approve by the Board.
These documents embedded a uniform risk management system that is based on common principles and meeting good practice
according to COSO ERM (Committee of Sponsoring Organisations of the Treadway Commission Enterprise Risk Management)
methodology applicable in the international practice.
The Risk Management Policy defines the Group’s key risk management principles and responsibilities to ensure a unified corporate
risk management process based on common principles. The EPSO-G Group companies define risk management principles and
responsibilities in the Risk Management Policy. This policy is available on EPSO-G website.
The Risk Management Policy defines the Company’s risk appetite that is below the highest level of risk. This level (the product of
the probability and the impact of the risk on the Company) is equal to or greater than a score of 15, or the level of risk the EPSO-
G’s governing bodies willing to accept to achieve the strategy and performance objectives set. Risks exceeding the score set for
the risk appetite are subject to additional management measures.
The Group has in place the following risk management process (stages):
1. Environment understanding. The aspects that may have an impact on the Company’s failure to achieve its goals are identified
based on EPSO-G’s internal and external environment, planning documents, the risk assessment history and the monitoring of
the implementation of the risk management measures. Regular environmental assessments are carried out to adapt to changes
and to prepare in advance for unexpected threats.
2. Risk assessment. Risks are regularly identified, analysed and assessed, key risk indicators are identified, and a list of EPSO-
G's risks is prepared. the risk appetite is also identified, and the risks in the list of risks are categorized according to their priority
and the appetite identified.
3. Developing a Plan on risk Management Measures. EPSO-G develops a Plan on Risk Management Measures for risks
exceeding risk appetite.
4. Monitoring of risks and the implementation of the Plan on Risk Management Measures. This process involves continuous
monitoring of EPSO-G’s List of Risks and the Plan on Risk Management Measures, as well as monitoring of the Group-level risks
and the list of the Group-level risks management measures. The monitoring results are communicated to CEO of EPSO-G, the
Board, the Audit Committee, in accordance with the remit of each of them.
5. Communication and information. Regular and effective sharing of information among the participants in the Risk Management
process that has impact on the assessment of the Group companies’ risks and their management. Relevant information on risks
and their management is communicated to EPSO-G’s employees during staff meetings.
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5.9.1 Climate-related risk assessment process
Given the importance of climate-change challenges in the energy sector, the EU regulations (the EU Taxonomy Regulation, the
European Sustainability Reporting Standards (ESRS), etc.), climate-related risk disclosures, in 2023, the EPSO-G Group conducted
a comprehensive analysis of the Group’s climate-related risks, opportunities and climate scenarios (based on IPCC climate change
scenarios) in the short-term (2026), medium-term (2030) and long-term (until 2050). The assessment was carried out in the
Group in line with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).
The assessment comprised climate-related physical risks (impact of occurrence of extreme weather events on transmission
infrastructure, buildings, offices) and transition risks (regulatory, technology, reputation, market, public pressure), measures and
indicators were developed to manage these risks.
Climate-related issues fall within the wide range of sustainability topics and are integrated into the Group’s decision-making
process.
Climate-related risk assessment process
The scale for assessing climate risks is based on the EPSO-G Group’s risk management methodology (the same scale is being
used), and the impact is understood as the financial impact compared to the income level. The impact assessment was carried out
at the individual level of each Group company, and then aggregated in the Group-level analysis.
5.9.2 Key risks and their management
The EPSO-G Group companies identified operational risks for 2024, assessed them, set risk monitoring indicators and provided
risk management measures. Sustainability risks are treated as an integral part of the EPSO-G Group’s day-to-day operations and
are integrated into the risk management process. The Group assess all the risks against the criteria set for the sustainability risks.
Risks that meet these criteria are assigned to the relevant sustainability risk type.
For the purpose of the climate risk assessment, physical and transition risks are identified as moderate or low due to the existing
risk management measures already adapted within the Group. The Group, being aware of the importance of these risks for the
achievement of the sustainability objectives, gives particular attention to the management these risks, better disclosures and
integration of risk-related opportunities into business strategy. More disclosures on the sustainability (climate) related risks are
presented in the Sustainability report unit 8.2.1 Information disclosure in accordance with EU taxonomy regulation and “E1
Climate change”.
1
2
3
Materiality of Risks
A comprehensive list of
physical and transition
climate change risks,
adapted to the Companies'
field of activity.
Probability Assessment
Based on a study by the
Lithuanian Hydrometeorological
Service (physical risk) and an
expert assessment according to
IPCC scenarios (transition risk).
Impact Assessment
An evaluation of the impact of
identified significant and
probable physical and
transition risks, understood as
approximate financial costs.
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Group‘s risk map
Risk level change tendency:
Risk level (RL) asssesment scale:
Increasing
No change
Decreasing
Very high
20-25
High
15-19
Medium
10-14
Low
5-9
Very low
0-4
ESG
Risk of delays in strategic projects
Long-term funding risk
ESG
Regulatory risk
Risk of disruption to systems used in core
business
ESG
Risk of non-compliance with occupational
safety requirements
ESG
Risk of lack of relevant qualification
employees, employee turnover and motivation
ESG
Risk of too little competition in procurement
procedures carried out
ESG
Cybersecurity risk
Risk of failing to meet the Group companies’
budget
ESG
Environmental impact mitigation risk
Tikimybė
5
4
3
2
1
1
2
3
4
5
ESG - environmental, social, governance
Impact
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5.9.3 Full description of the Group’s risks
1. Risk of delays in strategic projects
Risk level
Risk factors
External – technological
Internal – processes
Risk impact
Finances, reputation, business
continuity
ESG type
Governance
Risk area
Project management
Risk description
EPSO-G implements complex, large-
scale projects included in strategic
planning documents at national level,
which are crucial for the development
of Lithuania’s energy system, the
smooth integration of RES, and the
creation of additional opportunities for
market participants to choose to
consume climate-neutral energy.
Delays in government and Group
projects have a negative impact on the
achievement of the Company’s and/or
the Group’s strategic objectives.
Management measures
• The EPSO-G group companies, together with the
Group’s Project Management Officer (PMO),
monitor and control government projects.
• Ongoing (passive and active) controls are in place,
such as monitoring of automated State and Group
project reports and KPIs, and active involvement in
risk management and problem solving.
• The EPSO-G Group companies, together with the
Group’s PMO, participate in meetings between the
programme, the project team and the project
developer and contractors, joint problem solving
and risk assessment.
• Project process audits are carried out to review in
detail risks, issues, benefits, timeliness and
compliance with approved processes.
2. Long-term funding risk
Risk level
Risk factors
External – economic
Internal – processes
Risk impact
Finances, reputation
ESG type
-
Risk area
Finance management
Risk description
There is a risk that EPSO-G (and/or its
Group companies) will face difficulties
in attracting new funding and/or will
be forced to pay significantly higher
than normal prices for new funding,
which would jeopardise the
implementation of its strategic plans.
Risks may arise from unsustainable
financial conditions (e.g.,
overleveraging, underperformance),
adverse changes in the business
environment (e.g., downgrading of a
country’s credit rating, unfavourable
regulatory developments), or inability
to achieve the intended strategic
objectives.
Management measures
• The Treasury and Financial Risk Management
Policy guides day-to-day operations and decision-
making, aiming at ensuring a sustainable financial
position, maintaining a rating of at least
investment grade (BBB-/Baa3 or above), and
ensuring compliance with non-financial
commitments and financial indicator commitments.
• Regular monitoring of budgets and long-term
financial forecasts to ensure that the long-term
financial targets (e.g., debt/EBITDA, ROE) set in
the operational strategy are met
• When drawing up short-term and/or long-term
operational plans, decisions on dividends must
take into account the potential impact of the
decisions on the long-term financial sustainability
of EPSO-G and/or its Group companies, the
fulfilment of financial targets and liquidity.
VERY HIGH
MEDIUM
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3. Regulatory risk
Risk level
Risk factors
External – economic, political
Internal - personnel
Risk impact
Finances, reputation, business
continuity
ESG type
Governance
Risk area
Regulatory
Risk description
The prices of electricity and natural
gas transmission and related services
are regulated, the price and/or revenue
caps are set by NERC. These decisions
have a direct effect on the EPSO-G
Group’s performance and the
allocation of funds for necessary
operating costs, investments to ensure
the transmission grid’s reliability, as
well as the possibility of financing
strategic projects with own or
borrowed funds.
Management measures
• In order to achieve clear and consistent regulation
that should not adversely affect performance, the
Group companies actively communicate with
NERC, participate in the discussions on
amendments to legislation, and submit their
comments on the improvement of the legislation,
arguing the impact of future decisions and the
importance of the companies’ long-term strategic
objectives. Proactive engagement with NERC will
also be crucial in coordinating decisions on the
costs of climate neutrality activities.
4. Risk of disruption to systems used in core business
Risk level
Risk factors
External – political,
technological
Internal – personnel,
infrastructure
Risk impact
Finances, reputationi, business
continuity
ESG type
-
Risk area
Electricity and natural gas
system management
Management of the assets
attributed to the transmission
system
Risk description
One of the key roles and
responsibilities of the EPSO-G Group
companies is to ensure secure,
reliable, and efficient operation of
natural gas and electricity
transmission systems. Technological
risk management aims to avoid
disruptions to operations and the
disconnection of natural gas or
electricity to consumers.
Management measures
• To ensure reliable operation of transmission
systems, the Group companies implement
specialized information systems, modern business
management systems, update accident and
technological disruption and emergency
management, business continuity plans on a
continuous basis, and set high standards for the
contractors.
• To avoid disruptions to the transmission systems,
the systems are continuously monitored,
maintenance plans are drawn up accordingly, and
the necessary new investments in network
upgrades are planned in time.
HIGH
MEDIUM
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78
5. Risk of non-compliance with occupational safety requirements
Risk level
Risk factors
Internal – personnel
Risk impact
Human health, finances,
reputation
ESG type
Corporate social responsibility
Risk area
Occupational safety
Risk description
The Group companies place great
emphasis on occupational safety.
Given the applicable and most
relevant occupational safety
requirements and the current
implementation situation, there is a
risk of non-compliance with the OHS
requirements.
Management measures
• Proper installation of workstations, timely
maintenance and control of systems, equipment,
work tools.
• Internal documents on health and safety have
been approved.
• Staff training, certification and briefings on safety
and health issues.
• Continuous monitoring and supervision of
employees’ and contractors' compliance with OHS
requirements
6. Risk of lack of relevant qualification employees, employee turnover and motivation
Risk level
Risk factors
Internal – personnel
Risk impact
Finances, reputation
ESG type
Corporate social responsibility
Risk area
Personnel education and
renumeration management
Risk description
The EPSO-G Group companies are
facing challenges on the labour market
and competition for highly skilled
professionals is intensifying.
Management measures
• Group companies are improving shift plans for
critical positions. Over the next few years, the
focus will be on updating the competency model,
improving employer branding and developing
talent.
HIGH
HIGH
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7. Risk of too little competition in procurement procedures carried out
Risk level
Risk factors
Internal – processes, personnel
External – economic
Risk impact
Finances, reputation
ESG type
Governance
Risk area
Purchases
Risk description
The EPSO-G Group companies carry
out large-scale projects as part of
NEIS. There is a risk that insufficient
competition from suppliers will lead to
economically unfavourable tenders
exceeding the planned budget/not
meeting the company’s needs or to the
procurement having to be cancelled
and re-tendered.
Management measures
• The requirement to publish all procurements with
the value exceeding EUR 15 thousand on the CPP
IS have been taken into the consideration, and
additional publicity platforms have been utilised.
• Requirement for promoters to identify at least 3
suppliers in their application or justify a smaller
number of suppliers.
• Requirement to carry out a market consultation in
all simplified and international procurement.
• The principle of "4-eye" control is set as a
minimum.
• Events are organised for the suppliers.
8. Cybersecurity risk
Risk level
Risk factors
External – technological
Internal - personnel
Risk impact
Finances, reputation, business
continuity
ESG type
Governance
Risk area
Information security
Risk description
The information and data managed by
the EPSO-G Group are of strategic
importance for the security of
Lithuania, therefore, loss of such
information or data, illegal change or
disclosure, damage thereof, or
termination of the data flow which is
necessary for a secure operation of
transmission systems may cause
disturbances of the activities of the
EPSO-G Group companies, cause
damage to other natural persons and
legal entities.
Management measures
• In order to prevent cyber incidents, threats to the
information systems, physical protection and
security management systems of the EPSO-G
Group companies are regularly assessed, existing
security measures, systems and/or tools are
constantly updated and new ones are introduced
to comply with the strict requirements of the EU
and the Republic of Lithuania’s legislation on
information security.
• EPSO-G staff actively participate in cybersecurity
exercises to train how to manage and respond to
cyber incidents targeting critical information
systems and networks, and to ensure the
functioning of their services.
MEDIUM
MEDIUM
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80
9. Risk of failing to meet the Group companies’ budget
Risk level
Risk factors
External – economic
Internal – processes, personnel
Risk impact
Finances, reputation
ESG type
-
Risk area
Finance management
Risk description
There is a risk that Group companies
will fail to meet their budgets and
financial plans, which will adversely
affect their ability to meet the
commitments of specific companies
and EPSO-G as the Group’s, as well as
ability to meet financial covenants and
other obligations, and to pay
dividends.
Management measures
• Performance control (monitoring by EPSO-G, the
Boards) is a part of the Integrated Planning and
Monitoring Policy.
• For the purpose of regulated activities, comments
and recommendations, as appropriate, on
decisions related to recognition of expenses,
changes in a methodology, and development of a
common Group position.
• For the purpose of non-regulated activities, review
of, amendments to the activity plan, where
appropriate.
10. Environmental impact mitigation risk
Risk level
Risk factors
Internal – processes, personnel
Risk impact
Environment, reputation,
finances
ESG type
Environmental
Risk area
Environmental
Sustainability development
Risk description
Untimely or inaccurate recording and
reporting of sustainability-related
indicators, inaccurate calculation of
GHG emissions from the Group’s
operations, or delays in reporting
compliance with requirements to
institutional investors may result in
sanctions from the exchange
authorities, and fines for defaulting on
commitments to investors. There is
also a risk of non-achievement of
EPSO-G’s long-term strategic
objectives and its commitments
(sustainability indicators) related to
the issued bonds when the regulatory
approval for the necessary
investments to reduce environmental
impacts (GHG emissions) is not
obtained due to regulatory restrictions
or lack of cost-effectiveness.
Management measures
• The Group companies have been provided with a
list of environmental, social responsibility and
governance (ESG) indicators to be collected.
Additional measures are also being put in place:
ESG system (IT solution) is developed for the
timely collection of sustainability-related
indicators.
• Group companies are required to develop and
implement cost-effective mitigation plans and
related measures.
VERY HIGH
LOW
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5.10. Compliance, Anti-Corruption Activities and Conflict of Interest Management
5.10.1 Compliance Management
The EPSO-G Group has compliance management system in place designed to:
• protect the Group companies from financial or reputational damage that may result from behaviour that does not meet
internal and external requirements;
• manage the risks of non-compliance and mitigate their impact and likelihood of occurrence;
• promote a culture of compliance, i. e. encourage the Group’s employees to work in accordance with the set requirements
and to justify their application on the Group’s values.
The Group’s compliance is based on the Three Lines Principle and principle governing the use of the risk-based approach. In 2024,
the Group companies focused their compliance activities on the following high-risk compliance priority areas:
Litgrid
Tetas
EPSO-G
Amber Grid
Baltpool
Protection of personal data
Compliance with sustainability requirements
Information related to the
performance of the functions
of an exchange operator and
other trading/accounting
systems’ administrator to be
published and submitted
publicly (from 2022)
Projects implementation
Accounting, financial
information, and information
on the administration of PSO
funds to be published and
submitted publicly
(from 2022)
Information to be published
publicly
Integration of renewable
energy sources
Operation/Material
s Control
To improve compliance management, in 2024, the Group’s Compliance Management Methodology was updated, the Group’s key
compliance management indicators were defined and the Group’s compliance management maturity assessment methodology
was established. The methodology guided the compliance management maturity assessment of all the Group companies during
the reporting period. In view of the outcome of this assessment and the drive for a higher level of maturity, the Group’s 2035
strategy priorities, shareholder expectations and regulatory developments, the Group has, for the first time, established the
Compliance Management Framework 2025-2027, outlining the key priorities and directions for these activities over a three-year
period. To promote a culture of compliance, as it was every year, the communication with employees involved external and internal
regulatory requirements, training, and encouragement to report non-compliance.
The compliance audits in 2024 did not identify significant non-compliances in the Group companies. During the reporting period,
NERC imposed a EUR 81 thousand fine on the Group company Amber Grid for the non-compliance related to the improper
operation of the GIPL pipeline. Due to the installation of improper components in the GIPL pipeline, Amber Grid is engaged in
legal proceedings in court, which also involve resolving the issue of compensation for replacing the improper components with
proper ones. The case is being heard in the court of first instance in closed sessions, and the case materials are not public. NERC
issued a warning to another Group company, Litgrid, for an identified infringement of the conditions for unregulated activities.
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5.10.2 Anti-corruption activities
The EPSO-G Group’s business decisions are guided by the principles of objectivity, impartiality, transparency, accountability and
the rule of law, combined with the Group’s zero tolerance to corruption or any other forms and manifestations thereof. We aim to
build a transparent and trust-based Group, therefore continuously assess corruption risks and implement measures to manage
these risks. The EPSO-G Group’s anti-corruption activities are based on the international standard ISO 37001:2016 Anti-bribery
management systems — Requirements with guidance for use, as well as the following measures implemented in the Group
companies:
In 2024, an international management accreditation body issued certificates to three of the Group’s companies, Litgrid, Amber
Grid and EPSO-G, confirming their anti-corruption management systems compliance with the standard requirements. It
demonstrates the ability of companies to prevent corruption risks, build trust in the supply chain and protect their reputation
through tangible and organised measures.
Corruption risk assessment is carried out in the Group’s companies on annual basis in accordance with the Group’s Risk
Management Policy and methodology, and the status of implementation of the measures identified to manage corruption risk is
assessed on quarterly basis. To improve the management of third-party corruption risks, the Group implemented a business
partner screening system in 2024. It defines the procedures for assessing the business partner-related risks.
In 2024, the following key corruption-related risks were identified in the Group’s companies:
• Risk of breach of a corrupt nature
• Risk of inadequate conflict of interest management
• Risk of non-compliant hiring people who do not comply with legal requirements.
Anti-corruption education of employees is an important part of the Group’s anti-corruption activities, delivered in various forms:
training sessions for external or in-house coaches, and communication messages on the current anti-corruption related issues. To
ensure consistent anti-corruption awareness-rising among employees, we have developed an interactive mandatory anti-
corruption training in 2024. All employees of the Group companies will be required to complete the training from 2025 onwards,
starting with all new hires. The competences of anti-corruption experts are also developed by inviting guest speakers to give a
talk on practical topics of conflict of interest management.
Restrictions are
established for gifts
and sponsorships
Implementation of
conflict of interest
management
measures
Identification of
corruption risks
Operation of the
Trust Line
Ensuring employee
reliability
Due diligence of
business partners
Conducting internal
investigations
Application of
contract
transparency
measures
Conducting
employee training
Ensuring
procurement
transparency
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83
An annual corruption tolerance survey is conducted among the EPSO-G Group’s employees. The anti-corruption culture survey
helps to determine employees’ approach to corruption and to identify aspects of anti-corruption requiring improvement. The
employees’ participation number remained similar to recent years (456 in 2024, 465 in 2023 and 431 in 2022). The answers to
the main survey questions are systematically positive for several consecutive years.
In 2024, the following key anti-corruption objectives were set within the Group:
• Certify the anti-corruption management systems of EPSO-G, Litgrid, and Amber Grid. Information regarding the achievement
of this objective is provided above.
• Ensure the proper implementation of the Group's employee and collegial bodies' interest management policy. This objective
was achieved across all Group companies by approving the Interest Management Procedure Descriptions, which detail the
Group's interest management model defined in the aforementioned Policy.
Key anti-corruption performance indicators and information about the active Trust Line are provided in the Sustainability Report.
More information on EPSO-G anti-corruption policy and the employee anti-corruption behavior procedure description can be
found here.
5.10.3 Anti-corruption Activities Related to Foreign Countries and Entities
EPSO-G’s anti-corruption activities are targeted to managing corruption risks in Lithuania and abroad. The Company's employees
cooperating with foreign officials or officials acting in foreign countries shall be guided in their activities by the principle of zero
tolerance to corruption set out in the Anti-Corruption Policy and shall comply with other principles of anti-corruption activities.
The EPSO-G Group companies’ Anti-Corruption Policy is available here.
In 2024, no cases of bribery of officials in international business transactions, corruption or other corruption manifestations abroad
or in Lithuania were detected in EPSO-G and the Group companies.
5.10.4 Management of Conflicts of Interest
The EPSO-G Group’s governance framework promotes avoidance of conflicts of interest among the Group companies’ employees
and members of collegial bodies, and ensures a transparent and an effective conflict of interest disclosure mechanism. The Group
has an integrated model for the declaration of private interests as defined in the Policy of Management of Interests of Employees
and Members of Collegial Bodies. It requires to disclose all private interests of the Group’s employees and members of the
collegiate bodies in an internal declaration form prescribed by the Group, and, when applicable to the job position and functions,
in PINREG, the register of private interests. The detailed EPSO-G’s conflict-of interest management policy is available here.
97%
98% 98%
97%
98%
96%
2022 2023 2024
Results of the corruption tolerance survey conducted
among the Group’s employees
The percentage of employees who have not encountered signs of corruption at work
The percentage of employees who know where to report cases of corruption
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The Group implements active monitoring, control and supervision of private interests: assessing potential conflict of interest
situations during the job application process, reviewing and analysing declarations, recommending on potential conflicts of
interest management and actions and/or decisions requiring refraining.
As part of the implementation of the Policy of Management of Interests of Employees and Members of Collegial Bodies, and to
ensure the proper functioning of the conflict of interest framework, the legislation governing the management of interests in the
Group companies was updated in 2024, clarifying the procedures for declaring, and refraining, removing, monitoring, supervising
and controlling in the context of private interests.
At the end of the reporting period:
• The members of the collegial management bodies and the Group companies’ CEOs do not have any shares in EPSO-G group
companies, except for Nemunas Biknius, CEO of Amber Grid, who holds 0.001055% of shares in Amber Grid. His shareholding
remained unchanged during the reporting period.
• The declarations of interests of all members of the collegial management bodies and the Group companies’ CEOs are
submitted and published in the Register of Private Interests (PINREG), on the website of the Chief Official Ethics Commission
(COEC) and at www.epsog.lt.
• No any potential conflicts of interest of the members of the collegial management bodies and the Group companies’ CEOs as
regards their obligations to EPSO-G and their private interests and/or other duties have been identified.
• There were no family relationships between members of the collegial management bodies and the Group companies’ CEOs.
• Members of the collegial management bodies and Group companies’ CEOs have not been convicted of any criminal offence,
have not been subject to any indictment or sanction by any regulatory authority in the last five years, have not been barred by
a court from holding any office as a member of the administrative, management or supervisory bodies of the company or from
holding any managerial position or from managing the affairs of any issuer.
• EPSO-G has not entered into any transactions with the above-mentioned persons which are outside the operating activities
of the company or which have not been duly notified to and authorised by EPSO-G collegiate management bodies.
5.11. Information on the Audit
5.11.1 Information on the Internal Audit
The mission of EPSO-G internal audit function is to create added value for all entities of the Group, and to contribute to the
achievement of their operational goals through systematic and comprehensive assessment of the effectiveness of governance,
risk management and control processes, .and through assistance with the improvement thereof. These functions are implemented
through an independent and objective assurance and advisory activity.
To ensure transparency and efficiency of operations, a centralized Internal Audit Unit operates in the EPSO-G Group companies.
The Unit carries out the functions assigned at the Group level and is directly accountable to the EPSO-G Board, the majority of
which are independent members.
The auditors of the holding company EPSO-G are not subordinate to the administration of a company audited. This creates better
preconditions for identifying possible deficiencies in order to eliminate them and to highlight the areas for increasing efficiency.
The staff members of the Unit carry out internal audits and monitor on a regular basis the way the recommendations of the internal
audit are implemented.
The activities of the centralized Internal Audit Unit covered the following areas that were selected based on the performed
assessment of risks and by identifying the priority companies and processes to be inspected or as separately directed by the
Board:
• Management of technological costs of transmission system operators.
• Adequacy of gas transmission network maintenance.
• Reliability of data on the progress of synchronisation projects.
• Effectiveness of procurement process controls.
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85
• Ensuring compliance of construction products.
Internal audits of technological costs, procurement also assessed control measures aimed to prevent corruption. Much attention
was also paid to monitoring the implementation of internal audit recommendations by companies and to assessing the impact of
implemented actions.
Internal audit findings along with recommendations for areas subject to improvement are submitted to the management of the
audited companies and the Boards of the companies of the Group, as well as to the Board and Audit Committee of EPSO-G. In
addition, a regular assessment of the effectiveness of the internal control system is carried out in all Group companies, identifying
the strengths and weaknesses of the system, discussing them with the boards of the respective companies and planning actions
to strengthen internal control. The overall effectiveness of the internal control system is assessed as strong.
5.11.2 Information on the External Audit
In 2023, Amber Grid, the EPSO-G Group company, carried out a joint procurement of audit services for the audit of the financial
statements of the Group companies for the period 2023-2025, through a negotiated procedure. With regard to the results of the
public procurement of external audit services, the offer of PricewaterhouseCoopers was recognized as the winner.
The Audit Committee of EPSO-G, having assessed the results of the selection procedure for the audit firm, decided to recommend
the boards of the Group companies to propose to their General Meetings of Shareholders to select PricewaterhouseCoopers as
an audit firm to perform the audit of financial statements for the period 2023-2025 by paying the remuneration for the audit
services specified in the offer of this audit firm.
At the General Meetings of Shareholders of the Group companies, decisions were made to select PricewaterhouseCoopers as the
audit firm to perform the audit of financial statements for the period of 2023-2025 and to set the annual remuneration for the
audit services of financial and related statements specified in the offer of the audit firm.
Information on the external audit firms of the EPSO-G Group companies and their remuneration for audit services:
Company
Firm that performed the
audit of the financial
statements 2024
Remuneration for the audit
firm for the audit of the
financial statements 2024,
EUR (VAT excluded)
Firm that performed the
audit of the financial
statements 2023
Remuneration for the
audit firm for the audit
of the financial
statements 2023, EUR
(VAT excluded)
EPSO-G
PricewaterhouseCoopers
UAB
100.000
PricewaterhouseCoopers
UAB
56.000
Litgrid
85.000
86.000
Amber Grid
75.000
77.000
Baltpool
19.000
18.000
Tetas
32.000
31.000
Energy cells
17.000
16.000
During 2024, PricewaterhouseCoopers provided uninsured non-audit services for EUR 64,950 (2023: EUR 65,690) to the EPSO-
G Group companies. Non-audit services included assurance services for banks on financial ratios, real-time monitoring of
sustainability performance indicators, and verification for regulated activity reports. The services were procured in accordance
with the provisions of the EPSO-G Group’s Policy on Acquisition of Non-Audit Services from an audit firm or any network to which
the audit firm belongs.
5.12. Information on the Shareholders and Dividends
5.12.1 Shareholders
The Republic of Lithuania is the sole shareholder of EPSO-G (100% of the shares). The property and non-property rights of the
shareholder, in accordance with Clause 2.3 of the Resolution No 826 On the Establishment of a Private Limited Liability Company
and Investment of State-Owned Capital of the Government of the Republic of Lithuania of 4 July 2012, are implemented by the
Ministry of Energy of the Republic of Lithuania represented by the Minister of Energy of the Republic of Lithuania.
In 2024, there were no changes in the shareholder structure of EPSO-G.
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86
As of 31 December 2024, the issued capital of EPSO-G amounted to EUR 189,631,000.
The Company’s shareholder
Number of
shares
Nominal value per share,
EUR
Share capital,
EUR
Shareholding
The Republic of Lithuania, represented by
the Ministry of Energy of the Republic of
Lithuania
653,900,000
0.29, EUR
189,631,000
100%
Restrictions on the transfer of securities other than those stipulated in the legal acts are not applied for the shares of EPSO-G.
Neither EPSO-G nor the Group companies have issued the convertible securities. EPSO-G has not acquired own shares. EPSO-G
has neither acquired nor transferred own shares during the reporting period. The subsidiaries of the Company have not acquired
the shares of the Company either. The shareholder of EPSO- G does not have special rights of control other than those stipulated
by the legal acts of the Republic of Lithuania.
Shares of EPSO-G’s subsidiaries Litgrid and Amber Grid are traded on Nasdaq Vilnius stock exchange.
Company
ISIN code
Ticker
Trading list
Securities manager
LITGRID AB
LT0000128415
LGD1L
BALTIC SECONDARY
SEB bankas AB
Amber Grid AB
LT0000128696
AMG1L
BALTIC SECONDARY
SEB bankas AB
In early June 2022, sustainability-related bonds issued by EPSO-G have been listed on Nasdaq’s Baltic Debt Securities List.
The securities of other companies owned by EPSO-G are not traded on the stock exchange.
5.12.2 Dividend Policy
The Dividend Policy of EPSO-G that governs the procedure of determining the dividend amount, pay-out and publication on
dividends for all companies forming the Group, establishes clear guidelines of expected return on equity and return on investment
for the existing and potential shareholders while at the same time ensuring a sustainable long-lasting growth of corporate value,
timely implementation of strategic projects that are of great importance for the country, thereby gradually strengthening
confidence in the entire Group of energy transmission and exchange.
The Dividend Policy of EPSO-G directly links the amount of payable dividends with the efficiency of use of the Company’s equity
- the bigger benefit is created by the Company for the shareholder, the bigger share of profit it may allocate for the further
development and implementation of other important projects.
The Dividend Policy is published on EPSO-G’s website here.
5.12.3 Dividends
On the basis of Resolution No 208 of the Government of the Republic of Lithuania of 29 March 2023 On the payment of dividends
by EPSO-G UAB for the shares held by the State by the right of ownership, until 2026, EPSO-G must pay to the state budget
dividends equal to 0.5% of profit available for direct distribution, if the conditions set in the resolution are met.
On the basis of the resolution of the Government of the Republic of Lithuania, EPSO-G paid directly to the state budget dividends
amounting to EUR 196 thousand for the year 2023 (EUR 66 thousand for 2022), while ensuring a sustainable financial position
of the Group.
5.13. Legal disputes and uncertainties
Information on litigations and contingencies, if any, is disclosed in the financial statements
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87
06
Information on Employees and
Remuneration Policy
6.1. Employees and Workforce Composition
6.2. Formation and Monitoring of the Remuneration and Nomination Policy
6.3. Information on Employee Remuneration
6.4. Information on Remuneration of Members of Collegial Bodies
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88
6. Information on Employees and Remuneration Policy
6.1. Employees and Workforce Composition
EPSO-G creates an open, progressive organization guided by the objectives of sustainable development, where the professional
partnership between an employer and employees prevails. The Group’s goal is give every employee the opportunity to self-
realize, to grow together with the organization and to take responsibility for their decisions and actions. In their activities, the
EPSO-G Group’s employees are guided by the following main values: we are open, responsible and reliable. For more details on
EPSO-G’s values see section 3.1 on values of this Report.
The EPSO-G Group constantly fosters employee improvement and upgrade of their skills, encourages employees’ to develop
professional (functional) and general (values-based) competencies, and managers – their management and leadership skills.
The Group set goals for its employees related to the organisation’s strategy and evaluates their achievement. Employees are
encouraged to propose and implement innovations: from methods and tools facilitating everyday processes to breakthrough
innovations that lead to new activities.
The EPSO-G Group operates efficiently, ensures optimal operating costs and takes responsible approach in managing the
remuneration budget. Employees are paid a performance-based salary, they are offered incentives for achieving goals that require
additional efforts. For more information on employee performance assessment and processes thereof, see section 8.3. “Social
area” in the Sustainability Report.
6.1.1 Information on the Employee Number and Job Positions
The number of employees in the graph and following tables and the text in this section of the report represents the number of
employees on payroll (rather than FTEs) as at 31 December 2024.
Due to the specifics of the project work, majority of the employees of Energy Cells worked under fixed-term contracts and part-
time in 2022. In FTE terms, the Company had 19.5 FTEs as at 31 December 2022.
The major holding of GET Baltic (66%) was sold in May 2023, therefore it is no longer considered the Group company. EPSO-G
Invest was established in on 18 July 2024.
All employees were hired in Lithuania, and there are no employees employed abroad. It is planned that over the next 10 years,
the number of employees will increase by more than 20%. It is expected that the team will include not only Lithuanian but also
international experts, which may lead to the geographical expansion of the organization.
60
332
391
393
18
0
19
1271
66
345
418
416
20
0
44
1261
78
352
458
417
24
1
23
1353
EPSO-G Amber Grid Litgrid Tetas Baltpool EPSO-G Invest Energy cells EPSO-G Group
Number of employees in the EPSO-G Group and seperate companies 2022-2024
2022 2023 2024
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6.1.2 Information on the Workforce Composition
6.1.2.1 Distribution of Employees by Age Group
In 2023, the situation was similar, where 61% of the employees were recorded in age group of 30-50 years. 28% of employees
were recorded in the age group over 50 years, and 11% in the age group under 30 years. In 2022, 60% of employees were
recorded in the age group of 30-50 years, 28% in the age group over 50 years, and 11% in the age group under 30 years.
The age structure of employees is the result of the high-level qualifications required for most positions, therefore the EPSO-G
Group attempts to retaining professionals in their respective fields and providing them with favourable and motivating working
conditions until retirement. The EPSO-G Group actively cooperates with educational institutions to raise interest of young
professionals in the energy sector and career prospects, ensuring the employees succession in different fields.
6.1.2.2 Number of employees by length of service
As at 31 December 2024, the distribution of the EPSO-G Group’s employees by length of service was as follows: 58% of the
employees (789) had less than 5 years of service, 19% (252) had 10-19 years of service and 18% (243) had 5-9 years of service.
The remainder of the employees fall into the category of long service, with 3% of employees (39) having 20-29 years of service
and 2% (30) having more than 30 years of service. These figures, compared to the previous year, have not varied greatly and the
distribution by the length of service in the EPSO-G Group remains stable.
Executives, 7 Top management, 28
Mid-leveland and lower-level
management, 161
Experts-specialists, 853
Workers, 304
Distribution of staff by grade at 31 December 2024
58%
18%
19%
3%
2%
Working up to 5 years Working for 5-9 years Working for 10-19 years Working for 20-29 years Working more than 30 years
Distribution of employees by age group at 31 December 2024
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6.1.2.3 Distribution of Employees by Educational Background
At the end of 2024, there was a slight change in the secondary and vocational education groups in the EPSO-G Group compared
to the previous year, with an increase in the percentage of employees in these groups. The largest share of the employees, i.e.
75% (1,014), had a higher education, 10% (132) secondary, 8% (115) vocational education. The lowest share of the employees,
i.e. 7% (92), had a post-secondary education.
6.1.2.4 Other Information on the Employee Structure
As at 31 December 2024, the EPSO-G Group’s employment rate was 25% (333) for women and 75% (1,020) for men. A similar
gender structure of employees has been established over recent years and is due to the specific nature of the Group’s activities,
where the majority of employees are required to have a degree and/or qualification in engineering. Historically, in the Lithuanian
labour market, women are less likely to undertake studies in engineering field. Consequently, the gender structure of the EPSO-
G Group companies’ employees reflects the situation on the labour market in this sector.
Working up to 5 years
58%
Working for 5-9 years
18%
Working for 10-19 years
19%
Working for 20-29 years
3%
Working more than 30 years
2%
Distribution by service record at 31 December 2024
Higher, 75%
Post-secondary
education, 7%
Secondary education,
10%
Vocational education, 8%
Distribution by educational background at 31 December
2024
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A larger variety of information on the Group companies’ employees, including more detailed information on the employee
distribution by gender, can be found in unit 8.3. of the Sustainability report, sub-unit ‘S1 Own Workforce’.
6.2. Formation and Monitoring of the Remuneration and Nomination Policy
The Board of the Company is responsible for the formation and implementation supervision of the Remuneration and Nomination
Policy of EPSO-G. In order to ensure the proper formation, monitoring and management of the remuneration fund, the EPSO-G
Group has a three-member Remuneration and Nomination Committee, the majority of which are independent members. The main
functions of the Remuneration and Nomination Committee are listed in section 5.4.2 of this report.
6.2.1 Remuneration Policy
The EPSO-G Group of companies has the Employee Remuneration, Performance Review and Training Policy (hereinafter the
“EPSO-G remuneration policy”) based on the principles of responsibility, transparency and accountability. Its aim is to effectively
manage the Group’s payroll costs and to create motivational incentives to ensure that the level of remuneration is directly linked
to the achievement of the objectives set for the Group companies and for each employee.
The EPSO-G’s remuneration policy provides that the remuneration of management and staff consists of two main components:
monthly remuneration and financial incentives. The monthly remuneration depends on the level of responsibility of the job
position, which is determined according to a methodology used in international practice. Financial incentives are linked to the
achievement of the Group company’s targets: financial incentives can only be awarded when the annual targets of the relevant
Group company are achieved by at least 80%. The Board of the Company may decide to reduce the minimum threshold for the
achievement of the Company’s objectives set for the financial incentive due to objective and reasonable circumstances, after
assessing the impact of such circumstances on the Company’s performance. Financial incentives for individual staff members
depend on their individual performance, including the objective achievement, value behaviours and performance criteria.
Based on international good governance practice, the Remuneration Policy of EPSO-G is approved or amended by the Board only
following the recommendations of the Remuneration and Nomination Committee, which is composed of a majority of independent
members.
More detailed information on the EPSO-G’s Remuneration, Performance Review and Training Policy available here.
6.2.2 Principles of Remuneration Policy
All companies of the Group are subject to the same principles of the EPSO-G Remuneration Policy:
• The principles of the remuneration policy are identical for executives and employees.
Women,
25%
Men, 75%
Distribution by gender at
31 December 2024
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92
• The remuneration fund is approved by the Boards of the companies.
• The remuneration of EPSO-G’s management and staff consists of two parts: monthly remuneration and financial incentives.
• Monthly salary depends on the level and competencies of the employee, while financial incentives depend on the achievement
of the Group’s annual targets and on the individual performance of the employee.
• No financial incentive is payable if performance does not meet expectations according to the established evaluation criteria.
• The amount of a financial incentive is estimated in the company’s budget and recorded in the financial result, which is audited
and made public.
• CEO’s financial incentives depend on the outcome of the company’s annual objectives, which are linked to the implementation
of the company’s strategy and published on the company’s website.
• Members of the collegiate bodies are not paid a financial incentive.
• The termination benefits for executives and staff do not exceed the amount set by the legislation of the Republic of Lithuania.
• A lump-sum premium may be awarded for outstanding performance.
• The relevant board of the Group company must be informed about the financial incentive to be granted at its next meeting.
• Prior agreements on severance pays, except for companies’ managers whose terms of employment are determined by the
Board, are not concluded.
• Termination benefits are paid to employees in accordance with the procedure laid down in the Labour Code of the Republic of
Lithuania and in employment contracts.
• The EPSO-G Remuneration Policy does not provide for any remuneration entitling the company CEO, a member of the collegial
body or an employee to shares, stock options or to receive remuneration based on changes in share prices other financial
instruments;
• To promote employee engagement and loyalty, the EPSO-G Group companies offer a wide range of non-financial rewards,
including voluntary health insurance, additional leave days, seminars on wellness and psychological well-being, seasonal
vaccinations, employee events and traditions, flexible working time arrangements, recognition programmes, and career
advancement within the Group.
To ensure the effectiveness of the Remuneration Policy, the amounts of fixed remuneration and financial incentives are made
public by functional groups. This practice creates assumptions for the companies of the EPSO-G Group companies to adequately
remunerate the employees for meeting targets and exceeding expectations, on the basis of the average market value. The
competitiveness of remuneration of employees in the Group companies is assessed based on market research data. External
consultants were not engaged to prepare the Remuneration Policy of EPSO-G.
6.2.3 Information on CEO’s remuneration
The Remuneration Policy for EPSO-G’s CEO is the same as for all employees of the Company, as described in paragraphs 6.2.1
and 6.2.2. EPSO-G CEO’s remuneration and benefits consist of the following main components:
• Monthly remuneration. The monthly remuneration of CEO is set by the Board of the Company, taking into account CEO’s
experience, competence and performance.
• Financial incentive. Since 2023, EPSO-G applies the updated Remuneration, performance appraisal and development policy.
This policy replaced the variable remuneration for all employees, including CEO, with a financial incentive, paid at the initiative
of the employer, in the form of an annual bonus. Financial incentive is awarded by the Board of the Company, based on CEOS’
performance in achieving the objectives of the Company, which are linked to the implementation of the Company’s strategy,
values and the quality of performance.
• Fringe benefits. The fringe benefits granted to CEO are defined in the company’s internal legislation. CEO, the same as all
employees, is provided with voluntary health insurance, the option of hybrid working and a company car included in the
package of fringe benefits for top managers.
The information on the actual remuneration received by EPSO-G’s CEO (monthly remuneration and financial incentives) is
presented in section 6.3.2 of this Report.
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6.3. Information on Employee Remuneration
6.3.1 Information on Remuneration in EPSO-G Group
Remuneration by
category of employees
Group
Number of employees (at
the end of the period)
Average monthly remuneration (including financial incentive)
2024
2023
2022
2024
2023
2022
Executives
7
6
7
12,712
12,092
10,256
Top-level managers
28
25
23
9,072
8,862
7,929
Medium-level managers
161
144
145
5,847
5,790
4,970
Specialists
853
783
780
3,638
3,450
2,910
Workers
304
303
316
2,302
1,937
1,583
Total
1,353
1,261
1,271
3,729
3,492
2,857
Wage Guarantee Fund, EUR
thousand
59,133
52,937
45,460
6.3.2 Information on the fixed remuneration and financial incentive applicable in the holding company EPSO-G
Remuneration by
category of
employees
Company
Number of employees (at the end of
the period)
2024
2023
2022
2024
2023
2022
Average monthly
pay, EUR
Financial
incentive for
performance
in 2023, EUR
Average
monthly pay,
EUR
Financial incentive
for performance in
2022, EUR
Average
monthly
pay,
EUR
Financial
incentive
for
performa
nce in
2021,
EUR
Chief Executive
Officer
1
1
1
13,158
2,021
13,803
971
9,708
Top-level
managers
6
6
3
9,116
1,261
8,034
1,207
7,099
1,791
Medium-level
managers
21
19
17
6,644
394
6,379
1,243
5,040
1,019
Specialists
50
40
39
4,001
253
3,792
458
3,278
276
Total
78
66
60
5,305
406
5,049
748
4,063
559
Wage
Guarantee
Fund, EUR
thousand Eur
4,661
4,447
4,627
6.4. Information on Remuneration of Members of Collegial Bodies
6.4.1 Guidelines for Remuneration of Members of Collegial Bodies
The members of EPSO-G’s collegial bodies, the Board, the Remuneration and Nomination Committee and the Audit Committee,
are appointed for the term of office of four years. Civil contracts have been signed with members, detailing their responsibilities,
duties, rights and functions.
The Ministry of Energy of the Republic of Lithuania, exercising the rights and obligations of the sole shareholder, approved the
new version of the Guidelines for Determining the Remuneration for Activities in the Management Bodies of EPSO-G UAB and
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94
the EPSO-G Group of Companies (hereinafter the “Remuneration Guidelines”) on 21 October 2022. The Guidelines were updated
on 26 April 2024.
The currently valid version of the Remuneration Guidelines establishes that remuneration for activities in the collegial bodies of
the Group companies can be paid to such members who meet at least one of the conditions set below and the payment of
remuneration to these members is not prohibited by the legislation in force in the Republic of Lithuania:
• independent members the independence of whom is determined in accordance with applicable normative legal acts and
internal documents;
• members who are civil servants.
Remuneration is not paid to employees of the Group companies and/or employees of shareholders of the Group companies.
The updated version of the Remuneration Guidelines effective from 21 October 2022:
EPSO-G
Subsidiaries and downstream
subsidiaries
Chair of the Board
1/3 AMP (CEO)*
1/3 AMP (CEO)
Member of the Board
1/4 AMP (CEO)
1/4 AMP (CEO)
Member of the Board (civil servant)
1/4 AMP (CEO)**
1/5 AMP (CEO)**
Chair of the Group’s AC and RNC
1/3 AMP (CEO) less 400 EUR
-
Member of the Group’s AC and RNC
1/4 AMP (CEO) less 400 EUR
-
* AMP (CEO) means average monthly pay of the CEO of EPSO-G or the CEO of a subsidiary or downstream subsidiary.
** In the event that a Board member (civil servant) holds the position and is engaged in activities of the collegial body of another state enterprise/state-
owned enterprise and/or municipal enterprise/municipally-owned enterprise, they are paid 1/8 of the average monthly salary of the head of the relevant
Group company. The Board member (civil servant) is not remunerated for activities in the Board Committee.
By the decision of the Ministry of Energy of the Republic of Lithuania of 21 October 2022, the following fixed monthly pay
components (excluding payable taxes) were established for the members of EPSO-G Board and the Audit Committee, which
apply from 1 October 2022:
Position
Monthly fixed pay component (EUR)
Chair of the Board
3,406
Member of the Board
2,555
Member of the Board (civil servant), if the civil servant does not hold the position and is not
engaged in activities of the collegial body of another SE/SOE and/or ME/MOE*
2,044
Member of the Board (civil servant), if the civil servant holds the position and is engaged in
activities of the collegial body of another SE/SOE and/or ME/MOE
1,277
Chair of the Audit Committee
3,006
Member of the Audit Committee
2,155
* SE - state enterprise, SOE - state-owned enterprise, ME - municipal enterprise, MOE - municipality-owned enterprise
By the decision of the Board of EPSO-G of 25 November 2022, the following amounts of remuneration were set for the
members of the Remuneration and Nomination Committee (excluding payable fees):
Position
Monthly fixed pay component (EUR)
Chair of the Audit Committee
3,006
Member of the Audit Committee
2,155
The updated version of the Remuneration Guidelines effective from 26 April 2024:
The general meetings of shareholders and/or other bodies of EPSO-G and the Group companies shall take a decision, falling
within their remit, on the specific fixed monthly remuneration and the procedure for its payment to collegial bodies’ members,
taking into account the amounts (gross) given in the table below, and shall have the right to round up the amount of the monthly
remuneration to the nearest EUR 200 (two hundred euros) calculated on the basis of these amounts:
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95
EPSO-G
Subsidiaries and downstream
subsidiaries
Chair of the Board
1/3 AMP (CEO)*
1/3 AMP (CEO)
Member of the Board
1/4 AMP (CEO)
1/4 AMP (CEO)
Member of the Board (civil servant)
1/5 AMP (CEO)**
1/5 AMP (CEO)**
Chair of the Group’s AC and RNC
1/3 AMP (CEO) less 1,300 EUR
-
Member of the Group’s AC and RNC
1/4 AMP (CEO) less 1100 EUR
-
* AMP (CEO) means average monthly pay of CEO of a company or CEO of a subsidiary or downstream subsidiary.
A fixed monthly remuneration for EPSO-G collegial body members is calculated from the average monthly salary calculated and
paid to the company’s CEO for the previous calendar year at the time of remuneration determination and is not recalculated for
the entire term of office of the collegial body’s member, except if the previously determined remuneration no longer meets the
requirements established in legal acts.
By the decision of the Ministry of Energy of the Republic of Lithuania of 26 April 2024, the following fixed monthly pay
components (excluding payable taxes) were established for the members of EPSO-G Board, which apply from 1 May 2024:
Position
Monthly fixed pay component (EUR)
Chair of the Board
4,400
Member of the Board
3,300
Member of the Board (civil servant), if the civil servant does not
hold the position and is not engaged in activities of the collegial
body of another SE/SOE and/or ME/MOE*
2,600
Member of the Board (civil servant), if the civil servant holds the
position and is engaged in activities of the collegial body of
another SE/SOE and/or ME/MOE
1,700
* SE - state enterprise, SOE - state-owned enterprise, ME - municipal enterprise, MOE - municipality-owned enterprise
By the decision of the Ministry of Energy of the Republic of Lithuania of 18 October 2024, the following fixed monthly pay
components (excluding payable taxes) were established for the newly elected members of EPSO-G Board, which apply from 23
October 2024:
Position
Monthly fixed pay component (EUR)
Chair of the Audit Committee
3,100
Member of the Audit Committee
2,200
In the event that a member of the Board of the Company is elected as a member of the Board Committee formed in the Group
and/or the Chairman of the Board, or a member of the Board of the Company is revoked/resigns from the position of a member of
the Board Committee formed in the Group and/or the Chairman of the Board, the remuneration of such member of the Board of
the Company shall be changed without a separate decision of the Company’s shareholder with reference to a salary set by the
Company shareholder’s decision depending on the position held.
10% from the total relevant collegial body’s budget of the company is allocated to the additional costs of the company intended
to ensure the activities of the collegial body. The budget allocated to the costs of ensuring the activities of the collegial body can
be used for the organization of joint collegial bodies’ trainings, cooperation sessions or joint events of collegial bodies organized
in any other form, where knowledge and good practices are exchanged. The Company’s collegial bodies’ training budgets are not
used for individual training of collegial bodies’ members.
The contracts entered into with the members of supervisory and management bodies do not grant any rights to the shares of the
companies of the EPSO-G Group, other forms of remuneration or additional benefits. The contracts do not provide for any
severance pays and notice periods.
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96
6.4.2 Payments Received by Members of Collegial Bodies
Information on activities and pay-outs for the members of the holding company EPSO-G’s collegial supervisory and
management bodies
As at 31 December 2024
As at 31 December 2023
As at 31 December 2022
Number of meetings of collegial supervisory
and management
49
55
94
Number of members of collegial bodies
remunerated (persons)*
11
7
6
Pay-outs related to members of management
bodies (thousand EUR)
262
257
209
Information on individual payments to the members of the EPSO-G Board
Member’s full name
As at 31 December 2024
As at 31 December 2023
As at 31 December 2022
Gediminas Almantas
-
6,759
32,073
Robertas Vyšniauskas
48,824
40,152
40,480
Ramūnas Abazorius
-
-
6,698
Tomas Daukantas
28,054
24,330
6,132
Dainius Bražiūnas
28,976
24,330
6,132
Liudas Liutkevičius
36,620
23,654
-
Asta Sungailienė
7,253
23,654
-
Rasa Balevičienė
11,330
-
-
Total:
161,057
142,880
91,516
Information on individual payments to the members of the Audit Committee
Member’s full name
As at 31 December 2024
As at 31 December 2023
As at 31 December 2022
Gediminas Šiušas
29,187
36,072
34,473
Robertas Vyšniauskas
20,924
25,860
22,480
Rasa Balevičienė
5,039
-
-
Vytenis Lazauskas
5,039
-
-
Ramūnas Abazorius
-
-
3,204
Total:
60,189
61,932
60,157
Information on individual payments to the members of the Remuneration and Nomination Committee
Member’s full name
As at 31 December 2024
As at 31 December 2023
As at 31 December 2022
Gediminas Almantas
-
5,700
22,480
Jolita Lauciuvienė
-
7,951
34473
Asta Sungailienė
8,533
24,127
-
Ramūnas Bagdonas
25,860
14,726
-
Robertas Vyšniauskas
6,752
-
-
Total:
41,145
52,504
56,953
ve
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97
07
Information on Special Obligations
7.1. PSO Funds Administration Activities
7.2. Implementation of the Functions of the Project Executor for the Installation of
a Physical Barrier at the Border with Belarus
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98
7. Information on Special Obligations
7.1. PSO Funds Administration Activities
Baltpool, a company of the EPSO-G Group, was appointed to implement the special obligation to perform the functions of the
administrator of funds of public service obligations (PSO) in the power sector from 1 January 2013 under the Resolution No 1338
of the Government of the Republic of Lithuania of 7 November 2012 On the Appointment of the Administrator of Funds of Public
Service Obligations (PSO) in the Power Sector.
This activity included in the List of Special Obligations Performed by State-Owned Enterprises and their Subsidiaries, as approved
by the Order No 4- 193 of the Minister of Economy and Innovation of the Republic of Lithuania of 16 March 2021 (hereinafter the
“List of Special Obligations”), is performed by Baltpool in accordance with the Law on Electricity of the Republic of Lithuania, the
Law on Energy from Renewable Source of the Republic of Lithuania, the Description of the Procedure for the Provision of PSO in
the Electricity Sector and Establishment of Their Scopes, as approved by the Resolution of the Government of the Republic of
Lithuania No 916 of 18 July 2012, the Description of the Procedure for the Administration of Funds Raised from PSO in the
Electricity Sector, as approved by the Resolution of the Government of the Republic of Lithuania No 1157 of 19 September 2012
(hereinafter the “Description of the Procedure for the Administration of PSO Funds”) and other regulations governing
administration of PSO funds.
The objective of the administration of the PSO funds is to ensure the proper and legal collection, payment, recovery and
administration of the PSO funds. To ensure the proper implementation of this objective, Baltpool puts special emphasis on the
proper safekeeping of the PSO funds balance, the smooth and transparent collection and payment of the PSO funds, and the
proper representation of Baltpool in legal disputes related to the administration of the PSO funds. In light of this, Baltpool has
identified in its documents governing planning, compliance and risk management, and carried out in 2024 (the same as in 2023)
regular monitoring of the proper implementation of these performance targets:
• information related to the administration of PSO funds is made public and/or submitted to the National Energy Regulatory
Council within time limits set in the applicable legislation (target delay value: 0 days);
• the balance of PSO funds is ensured by flow forecasting of PSO funds, controlling of PSO funds balance through borrowing
arrangements which, in the event of a shortfall in PSO funds balance, would enable immediate and proper fulfilment of
Baltpool’s obligations for payment of PSO funds;
• Baltpool participation in legal disputes related to the administration of PSO funds (target value: 100%).
The legislation governing the administration of PSO funds does not entitle Baltpool to profit from these activities. In accordance
with the provisions of the description of the procedure for the administering PSO funds, Baltpool costs incurred in performing the
activity of administering PSO funds are compensated from the collected PSO funds, but not more than 1/12 of the amount of the
administration of PSO funds approved by NERC for the current calendar year, which is set on an annual basis in accordance with
the Methodology for the pricing of public-interest services in the electricity sector as adopted by NERC by its resolution No O3-
279 of 28 September 2012 (hereinafter the “PSO Pricing Methodology”). Baltpool accounts PSO funds separately from its other
activities. PSO prices for the coming calendar year and the amounts of PSO funds to be paid to the providers of PSO services in
the current calendar year are set by the Council in accordance with the PSO Pricing Methodology.
In 2024, Baltpool provided NERC with the data necessary to determine the need for PSO funds and PSO prices for 2025 in
accordance with the PSO Pricing Methodology. By Resolution No O3E-1353 of 30 October 2024, NERC decided to allocate EUR
208 thousand to Baltpool to compensate the costs of administering PSO funds in 2025 (by Resolution No O3E-1480 of 12
October 2023, NERC allocated EUR 245 thousand for 2024), and fixed PSO price at -0.039 ct/kWh excl. VAT (less than zero, i.e.
negative) applicable to all entities in 2025 (fixed PSO price at 0 ct/kWh excl. VAT applicable to all entities in 2024). The price for
the services (generation of energy using renewable energy sources) specified in Article 74(2)(1) of the Law on Energy of the
Republic of Lithuania was set at -0.039 ct/kWh excl. VAT for 2025 (0 ct/kWh excl. VAT for 2024), the price for the services
specified in Article 74(2)(2) to (8) of the Law on Energy of the Republic of Lithuania was set at 0 ct/kWh (also 0 ct/kWh for 2024).
The cash flow forecast of PSO funds, together with other reports on the administration of PSO funds and detailed information on
PSO, is available on Baltpool’s website at: reports ir Administration of PSO funds (in Lithuanian only).
The balance sheet of PSO funds administration activities as at 31 December 2024 and 2023 was as follows: balance of PSO
funds, PSO funds receivable, related obligations are listed in the following table:
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99
(All amounts are in EUR thousands unless otherwise stated)
2024
2023
Change
+/-
%
Administered PSO funds receivable
26,627
33,427
-6,800
-20
Balance of PSO funds
12,766
35,571
-22,805
-64
39,393
68,998
-32,808
-43
Short-term financial debts
-
-
-
-
PSO funds payable
3,486
12,636
-9,150
-72
VAT payable
0
0
-0
0
Accrued PSO funds payable
35,907
56,362
-20,455
-36
39,393
68,998
-32,808
-43
In carrying out the PSO funds administration activities during the year ended 31 December 2024 and 2023, Baltpool, the EPSO-
G Group company, incurred the below costs which were reimbursed in accordance with the PSO Pricing Methodology. The
reimbursed costs were recognised as income, and therefore revenue and costs, including financial result, related to PSO activities
were reported under the following line items in the income statement of EPSO-G:
(All amounts are in EUR thousands unless otherwise stated)
For the period of
twelve months ended
31 December 2024
For the period of twelve
months ended 31
December 2023
Change
+/-
%
Revenue
245
181
64
35
Total revenue and other income:
245
181
64
35
Wages and salaries and related expenses
-136
-94
-42
45
Legal services and stamp duty
-34
-40
6
-15
Other expenses
-19
-22
3
-14
Total expenses
-189
-156
-33
21
EBIDTA
56
25
31
124
Depreciation and amortisation
-20
-16
-4
25
Operating profit (loss) EBIT
36
9
27
300
Income tax
0
0
0
0
Profit (loss) for the period
36
9
27
300
7.2. Implementation of the Functions of the Project Executor for the Installation of a Physical
Barrier at the Border with Belarus
Upon the implementation of the Law on the Installation of a Physical Barrier on the Territory of the Republic of Lithuania at the
EU External Border with the Republic of Belarus (hereinafter the “Law on the Physical Barrier”), EPSO-G was assigned a special
obligation, i. e. to perform the functions of the executor of the project for the installation of a physical barrier, as defined in Article
2(1) of the Law on the Physical Barrier, under the Resolution No 680 of the Government of the Republic of Lithuania of 23 August
2021 On the Implementation of the Law on the Installation of a Physical Barrier on the Territory of the Republic of Lithuania at
the EU External Border with the Republic of Belarus. EPSO-G used its controlled legal entities to perform the assigned functions.
The physical barrier installation works were completed on time (30 December 2022) and within the scope of the budget.
Detailed information on the physical barrier project implemented, and related project objectives is available on EPSO-G website.
Given that EPSO-G has implemented the functions of the project executor for the installation of a physical barrier at the border
with Belarus, the implementation the functions of the project executor for the installation of a physical barrier at the border with
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100
Belarus, as a specific obligation of EPSO-G, was removed from the List of Special Obligations in accordance with Order No 4-198
of the Minister of Economy and Innovation of the Republic of Lithuania of 11 April 2024.
Information on the special obligations fulfilled by EPSO-G and the Group companies is provided in the List of Special Obligations
(available here), which currently specifies a single obligation, i.e. the administration of public service obligations funds
(BALTPOOL UAB).
101
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08
Sustainability Report
8.1. ESRS 2 General disclosures
8.2. Environmental area
8.3. Social area
8.4. Governance
8.5. Annexes
8.6. Independent auditor’s report
102
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8. Sustainability Report
8.1. ESRS 2 General disclosures
This section presents the EPSO-G Group's consolidated sustainability statement (hereinafter - “Sustainability Report”) for 2024,
prepared in accordance with the European Union's Corporate Sustainability Reporting Directive (CSRD), the Law on Accountability
of Companies and Groups of Companies (LACGC) of the Republic Of Lithuania, and the European Sustainability Reporting
Standards (ESRS). It is an integrated part of the Consolidated Management Report 2024 (hereinafter – Management Report).
EPSO-G provides a sustainability report according to ESRS starting from the reports published in 2025 for the financial year 2024.
This report covers the period from 1 January to 31 December 2024. It is consistent with the scope of the financial statements.
BP-1 General basis for preparation of sustainability statements
The sustainability information presented in this report includes consolidated information for all Group companies. The Group
consists of the parent company EPSO-G and six directly owned subsidiaries LITGRID AB, AMBER GRID, AB, BALTPOOL UAB,
TETAS, UAB, Energy cells UAB, and EPSO-G Invest, UAB, UAB, EPSO-G and its Group companies also own part of the shares of
GET Baltic, UAB, Baltic RCC OÜ, TSO Holding, AS, and Rheinmetall Defence Lietuva, UAB but do not have control over them.
The Sustainability Report discloses the Group's most material sustainability topics and their impacts, risks and opportunities,
based on the Group's Double Materiality Assessment (DMA) carried out by the principles and requirements of ESRS. The
Sustainability Report presents the Group's targets and results in the environmental, social and governance areas (ESG).
The information provided in the Sustainability Report covers the Group's direct activities and the upstream and downstream parts
of its value chain, as specified in ESRS 1, Section 5.1 Reporting undertaking and value chain. The marking of the locations in (parts
of) the value chain is disclosed for each topic. The DMA methodology and assessment are outlined in the Report’s sections “SBM-
3 Material impacts, risks and opportunities and their interaction with strategy and business model. Identifying and assessing
sustainability impacts, risks and opportunities” and “IRO-1 Description of the processes to identify and assess material impacts,
risks and opportunities”.
EPSO-G did not make use of the option to withhold certain information on intellectual property, know-how or results of
innovation, as set out in ESRS 1, section 7.7 Classified and sensitive information, and information on intellectual property, know-
how or results of innovation. The Company has also not used the option not to disclose information on future business
developments or on matters relating to ongoing negotiations, as set out in Directive 2013/34/EC, Articles 19a (3) and 29a (3).
BP-2 Disclosures in relation to specific circumstances
In 2024, EPSO-G revised its methodology for calculating the Group's Scope 1 and Scope 2 greenhouse gas ("GHG") emissions to
estimate GHG emissions with a greater precision. Following the GHG Protocol’s “Corporate Accounting and Reporting Standard”
and best practices in emissions accounting, the Group’s baseline year 2019 and historical values up to 2024 have been
recalculated and adjusted (rebaselining). The revised baseline year value has been confirmed in an independent limited assurance
report along with the EPSO-G Sustainability Indicators Progress Report 2023.
To ensure the comparability of the data, the Group revised the calculations of EU taxonomy-eligible and non-taxonomy-eligible
2023 taxonomy indicators for revenue, capital expenditure, and operating expenditure. Details of the calculation of the indicators
are disclosed in section ‘8.2.1. Disclosure under the EU Taxonomy Regulation’. The report goes on to clearly indicate where data
have been revised and (or) recalculated.
Where new data have been added to the disclosures by the requirements of ESRS (E5-4 Resource inflows), comparative
information for such data is not provided unless it has been previously reported, and comparative information is available.
No significant level of measurement uncertainty has been identified for the reported quantifiable indicators or monetary amounts,
except for GHG Scope 3 emissions, which are subject to various assumptions and can result in several calculation uncertainties.
No data have been estimated using indirect source indicators that include a value chain, unless otherwise specified in the
calculation methodology for such data (e.g. GHG emissions).
The Sustainability Report does not contain additional information required by other legislation or other sustainability reporting
standards and frameworks.
As the Sustainability Report is an integral part of the Management Report, references are made to other clearly identified sections
of the Management Report to provide more detailed information and ensure its integrity.
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Sustainability Governance
GOV-1 The role of the administrative, management and supervisory bodies
EPSO-G Group's corporate sustainability governance structure is in line with the Group's corporate governance structure.
Management, supervisory and advisory bodies oversee and manage sustainability matters by their respective areas of
responsibility and competencies. The number of non-executive members and the percentage of independent board members are
provided in section 5.4 of the Management Report, "EPSO-G’s Board and Committees." There are no executive members. There
are no representatives of employed staff or other workers in the management and supervisory bodies. More information on the
Group’s governance can be found in sections 5.1–5.6 of the Management Report.
The table below sets out the sustainability governance structure, providing information on the structure, role and responsibilities
of the Group's administrative, management and supervisory bodies in managing the sustainability topic.
Sustainability governance and monitoring
The Board
The Board decides on the formulation, approval and implementation of the Group's sustainability-
related policies. It sets out the Group's strategic sustainability directions, approves strategic
sustainability objectives and monitors their implementation. The Board also analyses and evaluates
the material provided by the Company on strategic issues related to the development of the Group's
sustainability (environmental, social and human rights, and governance) and ensures that appropriate
organisational and technical measures are in place to manage the Company's activities in this area.
Audit Committee
The Audit Committee oversees the Group's financial reporting and auditing processes, sustainability
reporting processes; it also oversees the Group's internal controls, risk and compliance management,
and the effectiveness of its business processes (including in the area of sustainability), and makes
recommendations on these matters.
Remuneration and Nomination
Committee
The Committee makes recommendations on the framework for strengthening equal opportunities,
inclusion and diversity within the Group, assists in the selection of members of the management and
supervisory bodies, addresses other recommendations on the appointment of members, and makes
recommendations on the remuneration system and its implementation.
EPSO-G’s CEO
The CEO organises, monitors and ensures that the Group's sustainability strategy is implemented to
the extent required by law; implements recommendations, procedures, policies, codes and
sustainability development plans related to the Group's sustainability activities and operations.
Sustainability coordination and implementation
Group Sustainability Function
The Group Sustainability Function ensures the implementation of sustainability-related policies, the
functioning of the sustainability function and the coordination of sustainability matters at Group level,
and coordinates the preparation of sustainability-related reports.
Group functions
Ensuring coordination and (or) implementation of sustainability matters and activities within the
function, within the operational areas.
Group companies
Implementing the Group's strategic sustainability objectives, preparing sustainability reports and
ensuring regulatory compliance.
The Group also has a Group Executives’ Committee (GMC), composed of the CEOs of all the Group companies and EPSO-G's
top managers. The GMC approves the annual objectives and measures of the Group's sustainability function, decides on
resources at Group level, evaluates the results achieved and carries out other functions.
Composition and diversity of the members of the collegial bodies
The members of the collegial bodies have a wide range of professional experience and competencies providing the basis for
effective management of the Group. These include experts with specialised knowledge including sustainability management
(environmental, social and governance). These competences ensure that the collegial bodies contribute effectively to
sustainability initiatives that are in line with the organisation's strategic priorities and stakeholder expectations. In this way, the
diverse professional experience and knowledge of its members supports the responsible and sustainable development of the
organisation. For further details on the professional experience and backgrounds of the members of the collegial bodies, please
refer to the Management Report section 5.4.1 "The Board of EPSO-G’s", 5.4.2, "EPSO-G Remuneration and Nomination
Committee", and 5.4.3, "EPSO-G’s Audit Committee".
The Guidelines for determining remuneration for activities in the corporate bodies of EPSO-G and EPSO-G Group of companies
set out that members of collegial bodies may receive remuneration. A percentage of the collegial body's budget may also be used
to organise joint training for the collegial body allowing members to develop essential knowledge and competencies, including
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but not limited to sustainability. Members of collegial bodies do not receive financial incentives for the performance of the Group
companies, including in the area of sustainability.
The percentage distribution of collegial body members by gender and other diversity aspects is provided in section 5.4 of the
Management Report, "EPSO-G’s Board and Committees."
GOV-2 Information provided to and sustainability matters addressed by the undertaking’s administrative, management and
supervisory bodies
The table below shows which sustainability-related issues were discussed in the meetings of the collegial bodies during the
reporting period.
Sustainability-related (environmental, social, governance) matters on the agenda of the collegial bodies in 2024
Matters
Collegial body (frequency of discussions per
reporting period)
On the preparation for sustainability-related disclosures in the Group
(including the status and outcome of the Group's Double Materiality
Assessment process)
Audit Committee (discussed 8 times)
Status of the Group's GHG reduction targets
Audit Committee (discussed 1 time)
Group risk management reports
Audit Committee (discussed 3 times)
List of the Group's priority risks
Audit Committee (discussed 1 time)
EPSO-G's sustainability priorities and immediate plans
Board (discussed 1 time)
EPSO-G sustainability issues system
Board (discussed 1 time)
Adoption of the EPSO-G Group's strategy until 2035
Board (discussed 1 time)
2024 performance reports (KPIs monitored, risk reports)
Board (discussed 4 times)
Setting the EPSO-G objectives for 2024 (including sustainability)
Board (discussed 1 time)
On the functioning of the collegial bodies of EPSO-G Group companies (one of
the recommended areas for improvement of the collegial bodies is
sustainability)
Remuneration and Nomination Committee (discussed 1
time)
Equal opportunities, inclusion and diversity status in the Group
Remuneration and Nomination Committee (discussed 1
time)
Workforce continuity status of Amber Grid and Litgrid (the matter covered
talent attraction and retention, and gender balance)
Remuneration and Nomination Committee (discussed 1
time)
GOV-3 Integration of sustainability-related performance in incentive schemes
In line with the Remuneration, Performance Assessment and Training Policy for EPSO-G Group’s employees, the Company’s
Board establishes objectives and criteria for operational quality for the Company’s CEO, evaluates their achievement and awards
financial incentives. The objectives of the Company’s CEO align with the Company’s annual targets, which are announced publicly.
These typically include financial, strategic project and sustainability objectives. Achievement of targets is measured by the
percentage of achievement. For more information on the remuneration policy please refer to Management Report, section 6.2.
“Formation and Monitoring of the Remuneration Policy”.
Members of collegial bodies do not receive financial incentives for the performance of the Group company, including in the area
of sustainability.
For more detailed information on the implementation of the remuneration policy is please refer to Management Report, Part 6
“Information on Employees and Remuneration Policy”.
GOV-4 Statement on due diligence
The Group has a number of operational policies in place to ensure a thorough review of the sustainability in its operations. The
Group continuously assesses potential negative impacts in its operations and value chain, seeks to avoid them, and commits to
cooperate in addressing negative impacts should they occur or be contributed to by the Group. The annexes to this report contain
the table “ESRS 2 GOV-4 Statement on Due Diligence”, which provides information on the Group's due diligence process.
GOV-5 Risk management and internal controls over sustainability reporting
Sustainability reporting is in line with Group-level principles and processes related to regulatory compliance, risk management
and internal control. Internal control in sustainability reporting is based on risk identification, analysis and focus on the most
significant risks identified.
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The preparation of the Sustainability Report is coordinated by the Group's Sustainability function, and sustainability-related
information and data is collected and consolidated by sustainability and other ESG specialists.
The role of management, supervisory bodies and functions related to sustainability reporting:
• The Board. Setting strategic directions and objectives for sustainability, ensuring their implementation and approving
sustainability-related policies.
• Remuneration and Nomination Committee. Evaluating the structure, size, composition and performance of the Group's
corporate governance bodies, and making recommendations on the remuneration policy and the framework for strengthening
equal opportunities, inclusion and diversity within the Group.
• Audit Committee. Overseeing processes related to sustainability reporting, monitoring third-party assurance checks.
• Internal Audit Unit . Conducting audits, including those related to sustainability, in line with internal audit plans approved by
the EPSO-G Board.
• Group Sustainability Function. Coordinating the implementation of sustainability strategic objectives at Group level and
ensuring the preparation of sustainability reports.
EPSO-G's Consolidated Sustainability Report is the responsibility of EPSO-G's management.
SBM-1 Strategy, business model and value chain
Sustainability is part of the Group's strategy and is integrated into all business processes. The strategic sustainability priorities
and objectives set out in the Strategy are linked to the expectations of stakeholders, securing a sustainable future by building an
independent and secure energy system for society and the planet. The Group's strategy also contributes directly to the
sustainability of the country and the region as a whole. By 2029, the industrial, transport and energy sectors are set to be
significantly electrified by interconnecting the country's electricity systems with the continental European grid and accelerating
the development of renewable energy sources. Plans by 2035 foresee the development of a smart electricity grid and hydrogen
infrastructure, allowing Lithuania to make significant progress towards decarbonisation. Those whose activities pose particular
challenges to the achievement of this objective will be offered CO
2
transporting services. For more information on the Group's
business model and strategy, please refer to Management Report, section 1 “EPSO-G Group of companies – Who we are”, section
3 “Business Strategy and Planned Investments”, and section 4 “Annual Performance Report”. The sections provide information
on ongoing feasibility studies to build the infrastructure of the future, new opportunities and (or) services for stakeholders and
ensure that Lithuanian industry can decarbonise. Information on employees is provided in section 6 ‘Information on Employees
and Remuneration Policies’.
The EPSO-G Group's activities are guided by the principles of governance for a sustainable future. These principles enable a
smooth transition to the climate neutral economy.
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Principles and directions for the Group's sustainability governance
We have set out key directions covering the following sustainability topics:
• Climate: Mitigating climate change by reducing GHG emissions across the value chain;
• Nature: Reducing impacts on the environment, biodiversity and resource use;
• Health and Safety: Creating a positive culture and a safe and accident-free working environment;
• People and communities: Fostering a culture of diversity, equality and inclusion, and promoting responsible relations with
communities;
• Governance: Ensuring a sustainable supply chain and sustainable finance.
These areas contribute to the Global Sustainable Development Goals as well as create long-term value for both our organisation
and the Group's stakeholders.
Our transmission infrastructure enables
energy transformation
Driving infrastructure for net-zero
Network
development
& optimisation
CO
2
network
&
ecosystem
Hydrogen
network
Energy HUB
ASSOCIATED PURSUITS
Energy is crucial for welfare, industrial growth,
and high-quality living standards. We ensure
reliable and safe operation of the renewable
based energy system
Ensuring security of supply
Critical
infrastructure
resilience and
national security
System
flexibility and
optimisation
Long-duration energy storage
ASSOCIATED PURSUITS
Enabling cross-sector
decarbonisation
By facilitating the market and integration of
low-carbon assets we enable cross-sector
decarbonisation
Biomass
trading &
ecosystem
Heavy-duty
vehicle
charging
RES connection and integration
ASSOCIATED PURSUITS
ASSOCIATED PURSUITS
With our know-how we assist partners in
developing low-carbon infrastructure
Engineering and consulting
Construction
and O&M
services
Energy
advisory
services
We enable
transition to
a climate
neutral
economy
Climate
Environment
Governance
People and
Communities
Health
and Safety
No net loss of
biodiversity
Transparency, responsible
governance and supply
chain management and
sustainable finance
Empowered people
and positive impact
on communities
Safe, positive, and
accident free
workspace and
culture
Net zero by 2050
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Group Strategic Sustainability Indicators (ESG)
Area
Commitments and goals
Values
2024
2023
Environmental area
Climate
Reduced Scope 1 and Scope 2 emissions compared to
the 2019 base year:
30% by 2026;
50% by 2030.
6.1%
26.1%
Nature
Zero emissions by 2050*
n/a
n/a
No net loss of biodiversity resources in new projects*
n/a
n/a
Social area
Health and safety
Zero serious or fatal accidents (employees and
contractors).
1
0
People and
communities
Women in top management positions:
≥ 21% by 2027
≥ 30% by 2035
13%
15%
Employee engagement rate ≥70%
72%
74%
Governance
Governance
50% of suppliers will have a GHG reduction target by
2035*
n/a
n/a
Transition to circular procurement by 2035*
n/a
n/a
*Note: The commitments have been approved for 2024 with an update of the Group's strategy, so there are no historical and reference year values (n/a). Action
plans to achieve these commitments are envisaged.
Indicators linked to sustainability are also disclosed in the Management Report, section 4.1 “Report on Achievement of Strategic
Indicators”.
Activities in the fossil fuels sector
Amber Grid, a Group company, is active in the transmission of fossil fuels (natural gas). Revenue from natural gas transmission
activities is disclosed in Note 31 to the consolidated Financial Statements. Group companies do not carry out taxonomy-eligible
economic activities related to fossil gas (4.29, 4.30, 4.31), and therefore do not derive any income from these activities.
Value chain
The Group's value chain consists of the upstream (the supply chain), the direct activities of the Group's companies (middle of the
chain), and the downstream (users of the services, and the waste generated by the activities). The picture below shows the main
parts of the supply chain, the main services provided, the resources used and the dependencies.
Group value chain
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SBM-2 Interests and views of stakeholders
Stakeholder engagement is essential to ensure that the Group's activities are carried out responsibly. Our aim is to contribute to
a sustainable future for society and to encourage others to do their part. We also address environmental and social challenges in
partnership with stakeholders. The Group takes stakeholders' expectations into account as an important part of its business
strategy and sustainability priorities.
The Group's new long-term strategy has been developed in response to the expectations of stakeholders to enable the
transformation of Lithuania's energy sector and to ensure sustainable and innovative development of the Group's companies.
Within the Group, we strive to continuously improve the way we engage our stakeholders and ensure that their expectations and
views are relevant to the Group's sustainability priorities and objectives.
The table below describes methods of the Group's stakeholder engagement:
Key stakeholders
Methods of engagement
Why stakeholder engagement is important to the
Group and how their views are taken into account
Clients
Initiating and organizing informative events,
publishing articles, newsletters and
communicating with clients on social media.
The Group's companies operate in a B2B (business-to-
business) environment, therefore it is crucial to
understand the needs of our clients and to develop
tailored services and solutions that contribute to the
implementation of the Group's strategy.
Employees
Conducting regular employee engagement
surveys;
Applying uniform principles of equal pay and
social responsibility towards employees;
Empowered, professional and values-driven employees
are essential to achieving the Group's vision and
strategic objectives. We are committed to creating a
safe, positive working environment and culture as part of
Upstream value chain
Supply chain
Own activities
Downstream value chain
Market/end use
End of life
LNGT exploitation
Energy for balancing and
own use
VIAP funds
Infrastructure and
reconstruction work and
equipment/machineries
Timber, biomass,
biofuel market
users (traders)
Energy
infrastructure
owners
Energy sector
(producers and
users)
Construction and
demolition waste.
Demolished concrete
and ferroconcrete are
reused in our other
projects. Most of the
functioning but not
needed machinery is
given as humanitarian
aid.
Raw materials:
Steel, concrete
Resources and key dependencies
Natural resources:
Renewable energy;
biomass and timber;
renewable fuel
Energy: natural gas,
electricity, carbon
fuel
Real estate: Buildings and
offices; gas grid
infrastructure; electricity
grid infrastructure; battery
park infrastructure
Key assets: car fleet;
heavy machinery
Human resources:
74 % of office employees; 26 %
of outdoors employees
Services: consulting; security;
reconstruction
IT: IT systems; security systems;
biomass, timber and renewable energy
trade system
Financial resources:
green financing; loans
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Organizing employee meetings, sharing
information on intranets;
Setting goals and monitoring results.
the Group's long-term strategy. To do this, we develop
internal policies and improvement plans.
Shareholders and investors
Publishing interim (quarterly) and annual
reports on the Group's financial and
operational performance.
Holding regular meetings to discuss topical
issues.
The company’s business strategy is designed to meet
the national and international expectations of the region.
The success of our strategic projects depends directly on
the trust of our shareholders and quick decisions. The
Group takes shareholders' expectations into account
when shaping strategic priorities and improving
sustainability-related governance.
Foreign partners energy
transmission and biofuels
exchange operators
Initiating and participating in professional
meetings and (or) conferences to present the
objectives of the strategy.
Participating in joint working groups,
conferences and events.
Membership in international organisations
joining electricity and gas transmission
operators.
We are actively involved in national and international
activities in order to safeguard the country's interests
and to position ourselves in the Baltic region and
Europe. Partnerships with foreign operators are helpful
at developing new markets, they contribute to the
development of innovative solutions and increase the
overall sustainability and efficiency of the sector.
National regulatory authority
Providing the information needed to carry out
the regulator's functions in a timely manner.
Cooperating on implementation of new
market mechanisms;
Initiating regular meetings to discuss topical
issues.
Cooperation with the regulator helps our companies to
ensure regulatory compliance as well as build long-term
operational stability and social trust, contributing to
sustainable growth and enhanced market reputation.
State representatives
Holding regular meetings to discuss topical
issues.
Presenting or speaking on topical issues in
the committees of the Lithuanian Parliament
and at the meetings of the Lithuanian
Government.
Participating in inter-institutional working
groups.
Cooperation with government representatives is
essential to ensure a coherent and long-term vision for
the energy sector and the smooth implementation of
important national and regional projects.
Suppliers of services and goods
Consulting market players and conducting
market research.
Making public procurement plans and
procurement policies.
organizing Supplier Day events.
The contribution of suppliers to the continuity and
efficiency of the Group's activities is crucial to
strengthening and improving the value chain. Their
contribution not only supports a stable supply process,
but also promotes compliance with quality standards,
innovation and sustainability objectives. Suppliers
become strategic partners that ensure the efficiency,
resilience and adaptability of the value chain to dynamic
market conditions and increasing environmental and
social demands.
Contractors
Organizing annual informative events for
potential contractors.
Announcing procurement plans and
consultations in advance to ensure stronger
competition among bidders.
Auditing the work carried out by contractors.
Contracting goes beyond cost efficiency or process
optimization. Contractors can make a significant
contribution to the implementation of sustainability
objectives. By working with sustainable contractors, our
undertakings can reduce its negative environmental and
social footprint, ensure responsible use of resources and
achieve stricter environmental standards. This
partnership model strengthens value chain resilience,
increases performance and contributes to long-term
sustainable development.
Non-governmental
organisations (NGOs)
Cooperating on investment projects.
Memberships in associations.
Sharing information for common progress.
Working with NGOs helps our companies focus on
global progress. It is also an opportunity to use
specialised knowledge and resources and reach wider
target audiences.
Trade unions
Facilitating activities of trade unions and (or)
labour councils.
Negotiating collective agreements with trade
unions.
Discussing the implementation of the
collective agreement at periodic meetings
with employees or their representatives.
Employee engagement is key to the success of the
Group. We find it important to maintain a dialogue,
listen to expectations and integrate them into
performance improvement processes.
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Informing and consulting trade unions or
labour councils when taking decisions
relating to labour management relations.
General public and media
Maintaining a constructive relationship with
the energy media, providing sufficient
information to assess the Group's financial
and non-financial performance and the
projects under way.
Organising press conferences.
Disclosing information for the benefit of the
society.
It is important for the Group to maintain alignment with
the public interest and to provide up-to-date information
on its progress.
Local communities
Group companies share experiences on
spatial planning.
Organising informative events for local
communities on planned and ongoing
projects, and meets periodically with
community representatives.
Community support plays a vital role in the
implementation of significant energy projects. We aim to
consider valid comments when implementing projects. In
our long-term strategy, we are committed to creating a
positive impact on communities.
The methods in which stakeholders were engaged in the Group's Double Materiality Assessment process are described in the
section below.
SBM-3 – Material impacts, risks and opportunities and their interaction with strategy and business model
and
IRO-1 - Description of the processes to identify and assess material impacts, risks and opportunities
Group’s double materiality assessment
Evaluation overview
In 2024, the materiality assessment process followed a principle of Double Materiality Assessment, assessing the sustainability
issues set out in the European Union's Corporate Sustainability Reporting Directive. A sustainability issue is material when it
meets the defined criteria of impact materiality and (or) financial materiality. The double materiality was determined following
the ESRS EFRAG implementation guidelines (version May 2024). The assessment takes into account the Group's strategy, value
chain and stakeholders.
The following information is in line with ESRS requirements “IRO-1 Description of the processes to identify and assess material
impacts, risks and opportunities” and “SBM-3 Material impacts, risks and opportunities and their interaction with strategy and
business model. Identifying and assessing sustainability impacts, risks and opportunities”.
The Double Materiality Assessment (DMA) was carried out at the consolidated level, i.e. for the entire EPSO-G group of companies
(Litgrid, Amber Grid, Baltpool, Tetas, Energy cells, EPSO-G Invest), excluding the associated companies GET Baltic, UAB, TSO
Holding, AS, and “, Rheinmetall Defence Lietuva UAB. Associated companies are included in the value chain, but have not been
assessed in the double materiality assessment (due to the lack of control over the associates and because their activities have
little impact on people and the environment).
The DMA was carried out in three phases:
Phase 1: Understanding the context of the undertaking's activities, value chain partners and stakeholders.
Phase 2: Preliminary assessment – identification of potentially material sustainability issues for the EPSO-G Group.
Phase 3: Assessment of sustainability issues of potential materiality to the Group from the double materiality perspective:
impact and financial materiality.
Тo understand the context and scope of the assessment, the Group's activities and the upstream and downstream parts of the
value chain were analysed (the value chain analysis was not limited to direct contractual business relationships). The process
resulted in a map of the Group's value chain and key stakeholders. This map was used for the Double Materiality Assessment.
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Compiling a list of potentially relevant sustainability issues
The ESRS provides a list of sustainability topics, sub-topics and sub-sub-topics (hereafter referred to as 'sustainability matters’)
that the Group considered in its DMA. Sustainability matters are covered by topical ESRS. Phase 2 encompassed a pre-
assessment which identified sustainability matters that are not material to the Group. Non-material sustainability matters were
not included in the Double Materiality Assessment.
Stakeholder engagement
The Group's DMA engaged the stakeholders mentioned above. The assessment also included Nature, which was considered a
silent stakeholder in the assessment. Following good practice, nature's perspective was integrated into the process during the
analysis of topical regulations, internal articles, and other publicly available sources.
Both impact and financial materiality assessments were carried out engaging stakeholders. Stakeholder engagement approaches
(i.e. different levels or methods of engagement) have been developed according to the AA1000 Stakeholder Engagement
Standard.
Methods of stakeholder engagement
• Direct engagement. Direct survey and (or) written questions to stakeholders.
• Analysis of documentation and available sources. Analysis of documents indicating the actions and commitments of
stakeholders, e.g. sustainability reports, supplier policies, results of questionnaires. This method was chosen to understand
opinions and expectations at company level or when individual responses were not available or irrelevant.
Identified stakeholders and methods of engagement in the DMA process
Affected stakeholders
Methods of engagement
Shareholder
Documentary analysis: Overview of the Letter of
Expectations of the Ministry of Energy of the
Republic of Lithuania
General public and local communities
Written questions to the Group's community
relations officers
NGOs
Documentary analysis: analysis of publicly
available information
Employees
Written questions: to HR representatives, to the
Labour Council; analysis of internal documents
and sustainability reports.
Trade unions
Written questions
Business partners
Documentary analysis: publicly available
information from the largest and smallest
suppliers, reports, results of the Supplier Survey
Clients
Documentary analysis: publicly available
information from major clients, reports
Nature
Analysis of regulations, scientific articles, internal
company documents and other sources.
Users of sustainability information
Methods of engagement
Shareholder
Documentary analysis: Overview of the Letter of Expectations of the
Ministry of Energy of the Republic of Lithuania
National regulatory authority (NRA)
Documentary analysis: overview of activity field and information of the key
regulators (National Energy Regulatory Council; the Agency for the
Cooperation of Energy Regulators (ACER), which supervises and advises
the NRAs of the EU Member States); Lithuanian laws and relevant
Directives and (or) Regulations.
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NGOs
Documentary analysis: analysis of publicly available information.
Media
Documentary analysis: analysis of publicly available information.
Different methods of engaging various stakeholders were chosen with regard to:
• whether the relationship with stakeholders is linked to an area of high impact or major dependency, as assessed in the
preliminary and main assessments;
• how stakeholders view the Group.
Location in the value chain
Stakeholder group
Material sustainability matters
Overall importance
Shareholder
All matters
National regulatory authority
General public and local communities
Affected communities
Non-governmental organisations (NGOs)
Media
All matters
Nature
Environmental issues
Group activities
Employees
Own workforce
Supply chain
Business partners
Value chain employees, supplier relationship
management
End users
Customers (B2B)
Consumers and end users
Materiality of impact and financial impact
A detailed assessment of potentially material sustainability issues has been carried out to identify material impacts, risks and
opportunities. The assessment focused on areas where impacts, risks and opportunities are likely to arise, given the nature of
the Group's activities, business relationships, geographical locations and other relevant risk factors.
The value chain perspective in the ESRS implies including essential value chain information. The assessment of material
impacts, risks and opportunities focuses on respective significant relationships, such as relationships with:
• The players that are involved in 'hot spots', i.e. likely to cause actual or potential impacts, or
• the players on whom the undertaking's business model is heavily dependent for goods and services.
During the DMA, the starting point of the evaluation was the impact assessment, meaning that the connections between the
Group’s impacts and dependencies with risks and opportunities were taken into account. However, there may also be material
risks and opportunities that are not directly related to the impact areas of the Group's companies.
Time perspectives
The DMA followed the time perspective framework defined by ESRS:
• short-term period: the reporting period in the undertaking's financial statements;
• medium-term period: 2 to 5 years;
• long-term period: more than 5 years.
Methodology for assessing the impact materiality
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The impact materiality assessment has been carried out considering the Group's material actual or potential, positive or
negative impacts on people or the environment in the short, medium and long term.
The materiality of actual negative impacts is based on the severity of the impact, while the materiality of potential negative
impacts is based on their severity and likelihood.
The severity of the impact is based on the following factors:
• Scale of impact (the extent of the negative impact may depend on compliance with laws, regulations and relevant
intergovernmental instruments that the organisation is expected to follow. For example, if the negative impacts result in
violations of human rights or fundamental labour rights, or non-compliance with greenhouse gas emission limits as defined
under the United Nations (UN) Framework Convention on Climate Change (Paris Agreement), the scale of the impacts may be
greater).
• Scope (the scope is determined by the geographical parameter of environmental damage (‘environmental area’), the number
of stakeholders (‘social area’), the impact of business ethics on the environment and on stakeholders (‘governance area’).
• Irreversible nature of the impact (the assessment considers whether there is any possibility of remediation at all, depending
on the nature of the damage and the remediation solutions (natural, technological, etc.). It also considers the time and
resources needed to eliminate the impact and (or) the cause of the impact. (In the case of actual or potential positive effects,
irreversibility is not assessed.)
When assessing the potential negative impact on human rights, the severity of the impact is more important than the likelihood.
The materiality of the positive impact is based on:
• in the case of actual impacts - the scale and scope;
• in the case of potential impacts - the scale, scope and likelihood.
Establishing impact materiality scoring categories:
Impact materiality categories (actual and potential impacts):
• Informative
• Important
• Material
• Critical
Assessment and categorisation of the materiality of impacts
Impact materiality assessment principles and sources to determine environmental impacts
Impact Strength
Scale
N/A for positive impact
Scope
Irreversibility
Likelihood
(Possible negative impact)
(Possible positive impact)
N/A for actual impact
+
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Principles
Sources
The energy sector as a ‘hot spot’. EPSO-G is a state-owned Group of
energy transmission and exchange companies, and as such, activities
related to the transmission of electricity, the transport of natural gas, and
the operation, maintenance and development of transmission systems have
been identified as the most important environmental impact areas.
The severity and likelihood parameters were assessed based
on available information and sources, including publicly
available information on the EPSO-G Group companies and
interviews with company employees; research data; and
reviews by international organisations on the environmental
impacts of the energy sector (ENCORE, Forest Landscape
Integrity Index).
Conservative approach. The impact materiality assessment employed
conservative approach. If the analysis of the direct operations of the EPSO-
G Group companies revealed that at least one company in the group was
affected, either positively or negatively, this impact was considered material
for the EPSO-G Group as a whole. Material impacts arising from the
activities of Group companies are attributed based on scientific literature.
Severity and likelihood of impact. In assessing the severity and likelihood
of impacts, account was taken of the Group's policies and mitigation
measures to manage environmental issues.
Principles and sources for impact materiality assessment on social issues
Principles
Sources
Conservative approach. The impact severity parameters were assessed
using a conservative approach, i.e. considering the potential for non-
compliance or the most material potential impact. If certain sub-topics could
be associated with both negative and positive impacts (e.g. Working Time
and Work-Life Balance), only negative impacts were assessed, depending
on the sub-group of the stakeholder.
The severity and likelihood parameters were assessed based
on available information and sources. These sources included
Group companies' publicly available reports, internal
procedures and current policies (Equal Opportunities Policy,
Remuneration, Performance Appraisal and Development
Policy, Occupational Health and Safety Policy, Selection
Policy, Personal Data Protection Policy, Undisclosed
Information Protection Policy); annual reports and material
topics from business partners, where accessible; industry
ratings and materiality maps (e.g. SASB, MSCI); EU, national
legislation and international organisation studies and surveys
(e.g. UN, EU, LT, ILO, OECD); statistical data studies and
analyses (Official Statistics Portal, NUMBEO); information
from industry stakeholders regarding social and human rights
impacts; and the outcomes of the stakeholder engagement
assessment conducted as part of the DMA.
‘Hot spots’ in the impact area. The pre-assessment highlighted hotspots in
some sub-topics and scores were given based on the potential impact
associated with the hotspot. For example, the evaluation of the topic of
Own Workforce, specifically the sub-topics of Working Conditions and
Work-Life Balance, concentrated on infrastructure and engineering
employees, whose working conditions differ from those of other employees,
such as those in administrative roles.
Severity and likelihood of impact. The assessment of the severity and
likelihood of impacts has considered the policies and mitigation measures
applied by the Group and the tangible results they produce. In the case of a
human rights violation, the severity of the impact takes precedence over the
likelihood, so likelihood was not assessed.
Impact Classification
Actual
Positive
Actual
Potencial
Actual
Negative
Scale
Scope
Constant
1.5
Scale
Scope
Irreversibility
+
+
+
+
=
=
Potential
Positive
Scale
Scope
Likelihood
+
+
=
Potential
Negative
Scale
Scope
Likelihood
+
+
=
Irreversibility
+
Informative Important Material Critical
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Principles and sources for assessing the significance of impacts on governance issues
Principles
Sources
‘Hot spots’ in the sector. EPSO-G's business and management
model is largely subject to sectoral regulations and restrictions. The
main regulator of the company's activities is the National Energy
Regulatory Council. Also relevant are the National Regulatory
Authorities (NRAs) of the EU Member States, along with the Agency
for the Cooperation of Energy Regulators (ACER), which supervises
and provides advice. The undertaking's performance was assessed in
the context of the local business environment, the regulatory
framework, as well as national and international requirements and
applicable policies.
The severity and likelihood parameters were assessed based on
available information and sources, including information from
National Energy Regulatory Council and the Agency for the
Cooperation of Energy Regulatory Authorities; existing policies
(Anti-Corruption Policy, Employees' Anti-Corruption Procedures,
Interest Management Policy, Employees' Code of Conduct,
Suppliers' Code of Conduct, Groups’ Procurement Policy,
Transparency and Communication Policy, Compliance Management
Policy, Risk Management Policy, Corporate Governance Policy);
annual reports of business partners and topics of materiality to
them; other publicly available information of the Group; the
Whistleblower Protection Act of the Republic of Lithuania in
accordance with the EU Whistleblowers Directive; the results of the
stakeholder engagement as part of the dual materiality assessment.
Regulation of the value chain. The Group's businesses are
inextricably linked to the value chain. Therefore, policies and
management practices related to the value chain (e.g. Supplier Code
of Conduct, supplier selection criteria, commitments and management
practices for the largest and smallest suppliers) were assessed.
Severity and likelihood of impact. In assessing the severity and
likelihood of the impact, account was taken of the Group's policies
and mitigating measures in place to address business ethics issues.
Methodology for assessing financial impact
The assessment of financial materiality was carried out to assess the financial risks and opportunities to the Group's sustainability.
The assessment considered the magnitude and likelihood of financial impacts that could arise both in the direct activities and
along the value chain in the short and long term.
The Group risk assessment methodology was used and adapted for this phase. The assessment considered that risks and
opportunities related to sustainability may arise from the Group's environmental and stakeholder impacts and (or) resource
dependencies (including relationships). Therefore, the assessment of financial materiality was carried out after the impact
materiality assessment.
Establishment of financial materiality scoring categories
For the assessment of the Group's financial materiality, sustainability matters were assessed in the following sequence:
1. If the topic is included in the Group/Group Companies Risk Register, the risk assessment is transferred directly (Group-wide).
2. If the financial expression of the risk is known (the amount of the fine or the cost of the project/investment), it is compared to
the Group's annual revenue to determine the impact of the risk (using the Group's risk assessment methodology).
3. If the financial expression of the risk cannot be determined, the financial impact on the Group shall be assessed expertly and
by applying a risk impact scale (impact on human health, business continuity, reputation or environment).
DMA results
The DMA results are presented below and in the topical sections on sustainability matters.
Impact on relationships
or
Non-Material Informative Material Critical
Important
Ongoing resource use
Magnitude+ Likelihood
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The matrix below presents the most material sustainability matters for the EPSO-G Group, excluding those categorized by the
assessment as "important", "informative", or "non-material" regarding the materiality of impacts, as well as "important",
"informative", or "non-material" in terms of the materiality of financial impact.
The identification of the most material categories of sustainability issues was based on the specific nature of the Group's business,
its long-term business strategy, its commitment to stakeholders, shareholder expectations and best practice and expert advice.
The sustainability issue Business Ethics (Whistleblower Protection) is, with an exception, classified as a material sustainability
issue to the Group (given that the Companies of the EPSO-G Group are state-owned enterprises).
The Group will continue to strive to integrate the DMA methodology, principles, and results consistently into its strategy and risk
management processes.
Group’s Double materiality matrix
The disclosures in accordance with SBM-3, paragraphs 48(b)-(h) are presented together with the relevant topical ESRS
throughout the report.
IRO-2 Disclosure requirements in ESRS covered by the undertaking’s sustainability statement
A table of contents listing the disclosure requirements that have been met in the preparation of the Sustainability Report
considering the results of the DMA can be found in the ESRS Index section of this report. A table of all data points in the ESRS
that derive from other EU legislation, ESRS 2 Appendix B, is provided in the section ‘Annexes’. Climate change is a material topic
for the Group and is included in this report. If any other topic is identified as non-material, the reasons are briefly commented on
in the relevant part of the report. The material information to be disclosed has been determined by the Group based on the DMA
performed.
Minimum Disclosure Requirements
CRITICAL
● Own workforce: (A/+) Freedom
of association; Social dialogue;
Collective bargaining
● Consumers and end-users: (P/-)
Equal access to products and
services
● Business conduct:
(P/-) Corruption and
bribery
● Circular economy:
(P/-) Resources,
inflows, including
resource use; (P/-)
Resource outflows
related to products
and services
MATERIAL
● Climate change: (A/-) Climate
change adaptation
● Biodiversity and ecosystems:
(A/-) Land-use change, fresh
water-use change and sea-use
change
● Circular economy: (A/-) Waste
● Business conduct: (P/-) Corporate
culture
● Own workforce: (A/-) Working
time; Work-life balance; (A/+)
Training and skills development;
(A/-) Gender equality and equal
pay for work of equal value and
Diversity; (A/-) Employment and
inclusion of people with
disabilities
● Consumers and end-users: (P/-)
Access to quality information
● Biodiversity and
ecosystems: (P/-)
Species population size
● Business conduct: (P/-)
Management of
relationships with
suppliers including
payment practices
● Own workforce: (A/+)
Adequate wages;
(P/-) Privacy
● Affected communities:
(A/-) Water and
sanitation; Land-
related impacts;
Security-related
impacts
● Own workforce:
(P/-) Health and
safety;
● Climate change: (A/-)
Climate change
mitigation;
(A/-) Energy
IMPORTANT
● Business conduct:
(G/-) Protection of
whistle-blowers
NON-MATERIAL
INFORMATIVE
IMPORTANT
MATERIAL
CRITICAL
Financial materiality
Impact materiality
● Environmental
● Governance
● Social
A Actual impact
P Potential impact
+ Possitive impact
- Negative impact
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The undertaking applies and discloses information in accordance with the Minimum Disclosure Requirements on policies (MDR-
P), actions (MDR-A), metrics (MDR-M), and targets (MDR-T), together with the relevant disclosure requirements set out in the
topical ESRS further in this report.
8.2. Environmental area
8.2.1. Disclosure under the EU Taxonomy Regulation
General disclosure principles in the European Commission's (EC) Action Plan on Financing Sustainable Growth defines key
measures aimed at directing capital towards environmentally sustainable activities, thereby helping the European Union (EU)
become a climate-neutral continent by 2050 as outlined in the European Green Deal.
The EC laid the foundation for Regulation (EU) 2020/852 on establishing a framework to facilitate sustainable investment, which
amends Regulation (EU) 2019/2088. This regulation, also known as the EU Taxonomy Regulation, defines what is considered
environmentally sustainable economic activity and the criteria by which an economic activity is classified as environmentally
friendly. The purpose of the Taxonomy Regulation is to classify economic activities across the EU based on defined requirements,
considering their contribution to six environmental objectives (as outlined in Article 9 of the Taxonomy Regulation). This
classification aims to support the EU's transition to a climate-neutral economy.
Article 3 of the EU Taxonomy Regulation defines that an economic activity is considered environmentally sustainable when:
• It makes a substantial contribution to at least one or more of the environmental objectives set out in Article 9 (in accordance
with Articles 10–16 of the EU Taxonomy Regulation);
• It does not cause significant harm to any of the environmental objectives set out in Article 9 (in accordance with Article 17 of
the EU Taxonomy Regulation);
• It is carried out in compliance with the minimum safeguards established (in accordance with Article 18 of the EU Taxonomy
Regulation);
• It meets the technical screening criteria defined by the EC in the Environmental Delegated Act (EU) 2023/2486 of June 4,
2021.
In accordance with EC Delegated Regulation (EU) 2021/2178 of July 6, 2021, EPSO-G, as a non-financial company, is required to
disclose the percentage of its total turnover, capital expenditures, and operating expenses that consist of taxonomy-aligned,
taxonomy-eligible, and non-taxonomy-eligible economic activities. Additionally, it must provide relevant qualitative information
explaining these data, as specified in Annexes I and II of the same regulation.
Mitigating climate
change
Adapting to climate
change
Sustainable use and protection of
water and marine resources
Protecting and restoring
biodiversity and ecosystems
Poilution prevention and control
Transition to circular economy
Objectives of the EU Taxonomy Regulation
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The table provides an 2024 overview of the EU Taxonomy activities meeting the criteria set out in the EU Taxonomy Regulation
and the activities not meeting those criteria, according to the six environmental objectives. No activities have been identified that
meet the objectives of adaptation to climate change, sustainable use and protection of water and marine resources, transition to
a circular economy, pollution prevention and control, protection and restoration of biodiversity and ecosystems.
Environmental
Objectives
Share of revenue
Share of capital expenditure
Share of operational
expenditure
Taxonomy-aligned
activity
Taxonomy-
non-aligned
activity
Taxonomy-aligned
activity
Taxonomy-
non-aligned
activity
Taxonomy-
aligned activity
Taxonomy-
non-
aligned
activity
Climate change
mitigation
81.4%
0.0%
95.3%
0.6%
66.1%
0.4%
Climate change
adaptation
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
Sustainable use
and protection of
water and marine
resources
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
Transition to a
circular economy
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
Pollution
prevention and
control
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
Protection and
restoration of
biodiversity and
ecosystems
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
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EU Taxonomy Implementation Process within the Group
Following the EU Taxonomy Regulation and delegated acts, the analysis of the Group's activities was carried out according to the
following steps:
Identification of Taxonomy-Eligible Economic Activities
Assigning activities to taxonomy-eligible economic activities means that such activities are included in the delegated acts on
climate change mitigation and/or adaptation. The identification of the Group’s taxonomy-eligible activities was carried out based
on the criteria set out in EC Delegated Regulation (EU) 2021/2139 of June 4, 2021, and the Environmental Delegated Act (EU)
2023/2486. Taxonomy-aligned economic activities are classified into transition activities and enabling activities, with the
corresponding NACE classification code assigned to them.
It is noted that since the previous reporting period, a new taxonomy-eligible but taxonomy-non-aligned activity has been identified
– Renovation of existing buildings. This activity is listed in the Group’s taxonomy-eligible economic activities list as partially
meeting the criteria for the climate change mitigation objective. Additionally, a taxonomy-aligned activity has been identified –
the Installation, maintenance and repair of charging stations for electric vehicles in buildings (and parking spaces attached to
buildings). This activity is listed in the Group’s taxonomy-eligible economic activities list as meeting the criteria for the climate
change mitigation objective. No activities were identified that align with the climate change adaptation objective.
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List of Taxonomy-Eligible Economic Activities of the Group Companies
Objective, Code, and
Activity as Specified
in Delegated Acts
Description of Activity
Group Companies
Contributing to
Taxonomy-Eligible
Activity
Group Companies’
Activity Alignment
with Climate Change
Mitigation Objective
Group Companies’
Activity Alignment
with Climate Change
Mitigation Objective
CCM 4.1 / CCA 4.1
Electricity generation
using solar
photovoltaic
technology
Construction or operation of
electricity generation facilities that
produce electricity using solar
photovoltaic technology.
Litgrid
Amber Grid
Taxonomy-aligned
Non-aligned
CCM 4.9 / CCA 4.9
Transmission and
distribution of
electricity
Construction and operation of
transmission systems that
transport the electricity on the
extra high-voltage and high-
voltage interconnected system.
Litgrid
TETAS
Taxonomy-aligned
Non-aligned
CCM 4.10 / CCA 4.10
Storage of electricity
Construction and operation of
facilities that store electricity and
return it at a later time in the form
of electricity. The activity includes
pumped hydropower storage.
Energy Cells
Taxonomy-aligned
Non-aligned
CCM 4.14 / CCA 4.14
Transmission and
distribution networks
for renewable and
low-carbon gases
Conversion, repurposing or retrofit
of gas networks for the
transmission and distribution of
renewable and low-carbon gases.
Construction or operation of
transmission and distribution
pipelines dedicated to the
transport of hydrogen or other
low-carbon gases.
Amber Grid
Taxonomy-aligned
Non-aligned
CCM 6.5 / CCA 6.5
Transport by
motorbikes, passenger
cars and light
commercial vehicles
Purchase, financing, renting,
leasing and operation of vehicles
designated as category M1, N1,
both falling under the scope of
Regulation (EC) No 715/2007 of
the European Parliament and of
the Council, or L (2- and 3-wheel
vehicles and quadricycles).
All Group companies
Taxonomy-eligible
Non-aligned
CCM 7.2 / CCA 7.2
Renovation of existing
buildings
Construction and civil engineering
works or preparation thereof.
Amber Grid
Taxonomy-eligible
Non-aligned
CCM 7.4 / CCA 7.4
Installation,
maintenance and
repair of charging
stations for electric
vehicles in buildings
(and parking spaces
attached to buildings)
Installation, maintenance and
repair of charging stations for
electric vehicles in buildings and
parking spaces attached to
buildings.
Litgrid
Amber Grid
Taxonomy-aligned
Non-aligned
CCM 7.6 / CCA 7.6
Installation,
maintenance and
repair of renewable
energy technologies
On-site installation, maintenance,
and repair of renewable energy
technologies, consisting of one of
the following individual measures,
when installed on-site as
technical building systems:
(a) Installation, maintenance, and
repair of photovoltaic solar energy
systems and related technical
equipment.
TETAS
Taxonomy-aligned
Non-aligned
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Revenue, capital, and operating expenses, as well as key performance indicators (KPIs), related to the climate change adaptation
objective are presented as non-aligned activities. It is noted that on June 27, 2023, the EC adopted the Environmental Delegated
Act (EU) 2023/2486, which defines the conditions under which an economic activity is considered to make a substantial
contribution to other environmental objectives, including the sustainable use and protection of water and marine resources, the
transition to a circular economy, pollution prevention and control, and the protection and restoration of biodiversity and
ecosystems. This act also assesses whether an economic activity does not cause significant harm to other environmental
objectives and amends Delegated Regulation (EU) 2021/2178 regarding the disclosure of certain information about these
economic activities. Upon reviewing Delegated Regulation (EU) 2023/2486, no taxonomy-eligible economic activities meeting the
substantial contribution criteria were identified for the Group companies.
The taxonomy-aligned and taxonomy-non-eligible activities listed in Articles 8(6) and 8(7) of Delegated Act (EU) 2022/1214 on
nuclear and gas activities are not relevant to the Group, as it does not engage in activities related to nuclear energy (activities
4.26–4.28) or fossil gas (activities 4.29–4.31). For this reason, the information is presented only in Template 1 of Annex XII of
Regulation (EU) 2021/2178.
EU Taxonomy compliance assessment
Assessment of compliance with technical screening criteria, which determines under what conditions an economic activity is
considered to contribute substantially to climate change mitigation or adaptation. The assessment is performed only for those
activities of Group companies that have been identified as taxonomy-eligible. This assessment is carried out in accordance with
the technical screening criteria set out in Annexes I and II of the European Commission Delegated Regulation (EU) 2021/2139 of
4 June 2021.
4.1. Electricity generation using solar photovoltaic technology according to the climate change mitigation objective
Substantial contribution to climate change mitigation
In 2024, Litgrid generated electricity for its own needs using a solar power plant installed on the roof of the system control and
data center building in Vilnius. To limit fossil fuel extraction, Litgrid invests in clean energy, recognising the importance of
independent energy sources naturally generated by environmental processes. Adaptation to climate change is also pursued
through the implementation of the GHG Reduction Plan, where Litgrid divisions carry out assigned measures, with the installation
of solar power plants being two of the plan’s initiatives. The integration of renewable resources is embedded in the State Strategy,
and Litgrid directly contributes to its implementation. It is assessed that Litgrid activities meet the technical screening criteria for
making a substantial contribution to climate change mitigation.
Climate change adaptation
See the section on climate-related risk and vulnerability assessment.
Sustainable use and protection of water and marine resources
The “Do No Significant Harm” criteria is not applicable to this activity.
Transition to a circular economy
By installing photovoltaic solar energy technology, Litgrid has focused on increasing energy efficiency—reducing energy losses
when electricity is generated and consumed locally, decreasing the need for new large power plants, and minimizing the demand
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for long, high-capacity transmission lines. It has been assessed that the solar power plant modules are easily dismountable and
replaceable, with the mounting system made of aluminum structures. The module construction consists of glass, plastic, and
metal, making them recyclable.
It is assessed that Litgrid’s activities meet the criteria for the transition to a circular economy.
Pollution prevention and control
The "Do No Significant Harm" criteria is not applicable to this activity.
Protection and restoration of biodiversity and ecosystems
Litgrid notes that environmental impact assessment processes are not conducted for photovoltaic solar energy technologies.
Based on expert evaluation, solar energy production does not cause air or water pollution, reduces GHG emissions, and
contributes to climate change mitigation, which directly impacts ecosystems. The solar power plant does not require additional
land, meaning it has no direct impact on natural habitats. Reduced fossil fuel consumption results in fewer ecosystems being
destroyed due to mining, oil extraction, or deforestation for bioenergy. Additionally, solar power plants do not emit strong light
signals or vibrations that could disturb wildlife.
It is assessed that Litgrid activities meet the criteria for the protection and restoration of biodiversity and ecosystems.
We note that Litgrid electricity generation activity using photovoltaic solar energy technology was included in the 2024 CAPEX
KPIs, but due to its insignificant amount, it is not reflected in the report. In 2023, Litgrid had no revenue, capital, or operating
expenses from electricity generation using photovoltaic solar energy technology. Similarly, Amber Grid had no revenue, capital,
or operating expenses from electricity generation using photovoltaic solar energy technology in 2023 and 2024.
4.9. Transmission and distribution of electricity according to the climate change mitigation objective
Substantial contribution to climate change mitigation
In 2023 and 2024, Litgrid carried out electricity transmission and distribution activities that meet the criteria for making a
substantial contribution to climate change mitigation:
1. The transmission and distribution infrastructure or equipment is part of an electricity system that meets at least one of
the following criteria:
a. The system is interconnected within the European system, meaning it is connected to the control areas of EU Member
States, Norway, Switzerland, and the United Kingdom, as well as to systems subordinate to these control areas.
The activity falls under one of the following categories:
(a) Construction and operation of direct connections or expansion of existing direct connections to a substation or the grid,
used for low-carbon electricity generation that does not exceed a threshold of 100 g CO₂e/kWh, measured using a life-cycle
assessment methodology;
(c) Installation of transmission and distribution transformers that comply with the Tier 2 requirements set out in Annex I of
Commission Regulation (EU) No 548/2014 (as of 1 July 2021), and medium power transformers with a maximum voltage not
exceeding 36 kV, which meet the AA0 level requirements for no-load losses specified in EN 50588-1 standard (CEI EN
50588-1, 50 Hz medium power transformers for equipment with a maximum voltage not exceeding 36 kV);
(d) Construction and/or installation and operation of equipment and infrastructure, where the primary objective is to increase
the generation or use of renewable electricity.
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(e) Installation of equipment aimed at enhancing the control and monitoring capabilities of the electricity system and enabling
the development and integration of renewable energy sources, including:
(ii) communication and control equipment (including advanced software and control rooms, automation of substations or
power facilities, and voltage regulation capabilities to adapt to more decentralized renewable energy sources);
(f) Installation of equipment, including, for example, future advanced metering systems or systems replacing advanced
metering systems in accordance with Article 19(6) of Directive (EU) 2019/944 of the European Parliament and of the Council,
which comply with the requirements of Article 20 of Directive (EU) 2019/944, and are capable of remotely transmitting
consumption information to users, including but not limited to customer data centers;
(h) Construction and operation of transmission system interconnectors, provided that one of the systems meets the
requirements.
Litgrid does not connect polluting energy producers to the grid. This company activity does not negatively impact climate change
adaptation efforts or the resilience of people, nature, cultural heritage, property, and other economic activities to climate-related
physical risks. On the contrary, the expansion of the transmission network facilitates access to renewable energy sources, enabling
the connection of wind farms and electrolysis systems. The integration of renewable resources is embedded in the State Strategy,
and Litgrid actively contributes to its implementation. Climate change adaptation is also pursued through the implementation of
the GHG Reduction Plan, where Litgrid divisions carry out their assigned measures.
In 2023 and 2024, TETAS carried out activities within the electricity transmission and distribution system operators' networks.
According to the technical screening criteria defined in point 4.9 of Annex I, the company conducted activities that meet the criteria
for making a substantial contribution to climate change mitigation:
(c) Installation of transmission and distribution transformers that comply with the Tier 2 requirements set out in Annex I of
Commission Regulation (EU) No 548/2014 (178) (as of July 1, 2021), and medium power transformers with a maximum
voltage not exceeding 36 kV that meet the AAA0 loss level requirements for no-load losses specified in standard EN 50588-
1 (179);
(d) Construction and/or installation and operation of equipment and infrastructure where the primary objective is to increase
the production or use of renewable electricity;
(e) Installation of equipment to enhance the capacity for management and monitoring of the electricity system and to enable
the development and integration of renewable energy sources, including:
(i) sensors and measurement devices (including meteorological sensors for renewable production forecasting);
(h) construction and operation of transmission system interconnectors, where at least one of the systems meets the
requirements.
It is assessed that Litgrid and TETAS activities meet the criteria for making a substantial contribution to climate change mitigation.
Climate change adaptation
See the section on climate-related risk and vulnerability assessment.
Sustainable use and protection of water and marine resources
The "Do No Significant Harm" criteria is not applicable to this activity.
Transition to a circular economy
„Litgrid has developed a waste management plan and implements it in accordance with the company’s internal environmental
requirements policy. The sorting and disposal of hazardous and non-hazardous waste generated in Litgrid operations are
entrusted to contractors with the necessary permits, with whom waste management agreements have been established. The
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company also maintains records of valuable waste (suitable for reuse or recycling) generated in its operations. This waste is
handed over to appropriate waste management companies or businesses specializing in waste purchasing.
The electromagnetic field (EMF) exposure within Litgrid substation areas does not exceed the limit values set by the Minister of
Social Security and Labour of the Republic of Lithuania in Order No. A1-614 of October 30. 2015, which establishes regulations
for protecting workers from EMF-related risks. For employee safety, EMF maps are created for 330 kV substations. On
construction sites, Litgrid employees do not work under live voltage, as equipment is disconnected, ensuring no EMF radiation
exposure.
TETAS implements waste management in accordance with the laws of the Republic of Lithuania and the requirements set by
clients. TETAS employees ensure the sorting and disposal of hazardous and non-hazardous waste through contracts with licensed
waste management companies. Records are kept for valuable waste (suitable for reuse or recycling), which is handed over to
companies specializing in waste purchasing.
TETAS organises its activities in accordance with a management system that complies with the ISO 14001 environmental
standard. Following an audit of this system in 2022, no additional recommendations for improvement were received.
It is assessed that Litgrid and TETAS activities meet the criteria for the transition to a circular economy.
Pollution prevention and control
In carrying out its activities, Litgrid applies the environmental, health, and safety requirements stipulated by the laws of the
Republic of Lithuania to contractors working on electricity transmission network facilities. The company's specialists conduct on-
site inspections of contractors and document any work safety non-compliances. When performing work near communities, Litgrid
informs residents in advance about potential noise from heavy transport or ongoing construction activities.
Litgrid has conducted comprehensive measurements of electromagnetic fields generated near high-voltage electricity
transmission lines. The results confirmed that the electromagnetic fields within Lithuania’s electricity transmission network
always comply with the requirements established in the national hygiene standards, do not exceed the prescribed limits, and are
often significantly lower than the regulatory thresholds. The company’s specialists measured the strength of electric and magnetic
fields at various sections of the transmission network—directly under the lines, next to them, and at increasing distances. The
intensity of these fields varies depending on the voltage of the transmission lines (110 kV or 330 kV), the level of electricity
transmission, and the distance from the source.
To prevent potential pollution in the event of an oil spill, oil collection pits are installed beneath transformers. The surface
rainwater drainage system is connected to oil separators, ensuring that, in the event of an accident, oil-contaminated water does
not enter surface water bodies or the soil.
In accordance with European Commission requirements, during construction or reconstruction, some equipment (circuit breakers)
containing SF6 gas is replaced with SF6-free alternatives. Additionally, Litgrid environmental regulations stipulate that
employees servicing such equipment must hold relevant certifications proving they have completed specialized training.
To reduce air pollution and promote sustainable resource use, the vehicle fleet is being modernized by replacing internal
combustion engine vehicles with hybrids or electric vehicles.
TETAS applies the environmental, health, and safety requirements established by the laws of the Republic of Lithuania to
electricity transmission and distribution network facilities. The company's specialists conduct on-site inspections of employees
and document any work safety non-compliances.
TETAS organizes its activities in accordance with management systems that comply with the environmental standard ISO 14001
and the occupational health and safety standard ISO 45000.
TETAS representatives operate on overhead high-voltage lines, where the electromagnetic fields, as determined by Litgrid,
always comply with the requirements set in Lithuania's hygiene standards, do not exceed the established limits, and are often
significantly lower than the regulatory thresholds.
TETAS does not engage in activities involving the use of polychlorinated biphenyls (PCB).
It is assessed that the activities of Litgrid and TETAS comply with pollution prevention and control criteria.
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Protection and restoration of biodiversity and ecosystems
The Litgrid conducts an environmental impact assessment when constructing overhead electricity transmission lines with a
voltage of 220 kV or higher and a length of 15 km or more. During the reconstruction of transmission lines, a screening process
is carried out to determine the need for an environmental impact assessment. The assessment also identifies potential impacts
on biodiversity and ecosystems.
Before planned reconstruction works in sites that are located within or near “Natura 2000” areas (e.g., an overhead line passing
through a “Natura 2000” area), an assessment of the significance of the impact on “Natura 2000” areas is carried out.
In 2024, Litgrid conducted environmental impact assessment (EIA) screenings for the following projects: 110 kV OL Alytus –
Putinai, 110 kV OL Panevėžys – Ekranas and Panevėžys – Velžys, 330 kV OL Aizkrauklė – Panevėžys, 330 kV Lavėnai substation
and part of the OL, and 330 kV Lietuvos E – Neris. The Environmental Protection Agency concluded that an EIA is not required for
these reconstructed transmission lines.
Litgrid conducted an EIA of the impact on “Natura 2000” sites for the planned 330 kV OL Aizkrauklė – Panevėžys project, which
falls within “Natura 2000” areas. It was concluded that there would be no negative impact on these sensitive areas. An EIA
screening is planned for the 330 kV Lietuvos E – Jonava project to assess its potential impact on the “Natura 2000” ecological
network.
TETAS operates in compliance with the environmental impact assessment procedures conducted by electricity transmission and
distribution system operators, as well as the regulations and legal restrictions set by companies managing transmission and
distribution networks. TETAS performing contracting or construction work do not conduct environmental impact assessments or
analysis procedures.
It is assessed that the activities of Litgrid and TETAS comply with the criteria for the protection and restoration of biodiversity and
ecosystems.
4.10. Storage of electricity according to the climate change mitigation objective
Substantial contribution to climate change mitigation
In 2023 and 2024, Energy Cells carried out the construction and operation of facilities that store electricity and later return it in
the form of electrical energy. This activity also includes hydro energy storage.
Energy Cells began operating battery energy storage system (BESS) facilities on the following dates: the first BESS park on
August 26, 2023, the second on September 16, 2023, the third on September 28, 2023, and the fourth on September 29, 2023.
A total of four battery energy storage parks were installed in Lithuania, with a combined capacity of 200 MWh.
It is assessed that the activities of Energy Cells meet the criteria for significant contribution to climate change mitigation.
Climate change adaptation
See the section on climate-related risk and vulnerability assessment.
Sustainable use and protection of water and marine resources
The electricity storage facilities installed by Energy Cells are not pumped hydro storage systems and are not connected to water
bodies. It is assessed that the activities of Energy Cells comply with the criteria for the sustainable use and protection of water
and marine resources.
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Transition to a circular economy
Energy Cells follows the Environmental Requirements Implementation Procedure, which provides a detailed explanation of the
company's waste management principles applied in its operations.
A waste management plan has been developed to ensure reuse or recycling. Energy Cells has entrusted the sorting and
management of both hazardous and non-hazardous waste to contractors with the necessary permits, with whom long-term
service agreements have been established. A long-term maintenance contract for the BESS system also stipulates that the
company's contractors track valuable waste (suitable for reuse or recycling) and transfer it to appropriate waste management
companies or buyers.
It is assessed that the activities of Energy Cells comply with the criteria for the transition to a circular economy.
Pollution prevention and control
The "Do No Significant Harm" criteria is not applicable to this activity.
Protection and restoration of biodiversity and ecosystems
Energy Cells did not conduct an environmental impact assessment (EIA) procedure or analysis during the installation of energy
storage facilities, as these facilities were built within existing electricity transmission and distribution substations. This decision
was made in accordance with the Republic of Lithuania’s Law on Environmental Impact Assessment of Planned Economic
Activities and related regulations based on Directive 2011/92/EU. Additionally, Energy Cells facilities are not located within the
“Natura 2000” protected area network, UNESCO World Heritage sites, or key biodiversity areas.
It is assessed that the activities of Energy Cells comply with the criteria for the protection and restoration of biodiversity and
ecosystems.
4.14. Transmission and distribution networks for renewable and low-carbon gases according to the climate change
mitigation objective
Substantial contribution to climate change mitigation
It is assessed that the activities of Amber Grid meet the following criteria for significant contribution to climate change
mitigation:
(c) Modification of gas transmission and distribution networks where the main objective is to integrate hydrogen and other
low-carbon gases, including any activity related to the operation of a gas transmission or distribution network that enables
the network to increase the share of hydrogen or other low-carbon gases in the gas system.
Amber Grid activities include detecting and repairing leaks in existing pipelines and other network elements to reduce methane
emissions. Two biomethane producers are connected to this segment’s gas transmission system. Additionally, there is an option
to inject biomethane into the system by transporting it in tankers to an established injection point.
Climate change adaptation
See the section on climate-related risk and vulnerability assessment.
Sustainable use and protection of water and marine resources
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The connection and transportation of biogas through Amber Grid gas transmission networks are not related to water resource
use or protection. Therefore, these activities do not hinder the achievement of good marine environmental status and do not
deteriorate the condition of marine waters that are already in good status. It is assessed that Amber Grid activities comply with
the criteria for the sustainable use and protection of water and marine resources.
Transition to a circular economy
The "Do No Significant Harm" criteria is not applicable to this activity.
Pollution prevention and control
„Amber Grid“ savo įrenginių darbui nevartoja transportuojamų biodujų, todėl jiems nėra taikomi Europos Parlamento ir Tarybos
direktyvos 2009/125/EB (1) reikalavimai. Prijungiant prie sistemos biodujų gamintojus laisvam biodujų transportavimo užtikrinimui
„Amber Grid“ sistemoje nebuvo projektuojami ir įrengiami nauji biodujų kuro vartojimo įrenginiai, kuriems būtų taikomi ekologinio
projektavimo reikalavimai. Vertiname, kad „Amber Grid“ veikla atitinka taršos prevencijos ir kontrolės kriterijų.
Protection and restoration of biodiversity and ecosystems
In accordance with the legal requirements of the Republic of Lithuania, Amber Grid conducts environmental impact assessments
(EIA) for infrastructure projects. During the reconstruction of the 16 km Vilnius–Kaunas pipeline in 2022, an EIA was carried out,
and a positive screening decision was obtained for the project implementation. In compliance with the EIA conditions, the
reconstruction of specific sections was completed in 2024.
After the completion of the GIPL (Gas Interconnection Poland-Lithuania) pipeline construction in 2022, a four-year post-
construction monitoring program will be conducted until 2026, following the environmental monitoring program agreed upon
with the Environmental Protection Agency in 2016. This monitoring assesses the recovery of local flora, fauna, and species
diversity characteristic of the area after the construction of the main pipeline, ensuring that no additional measures are needed to
restore or improve the pre-construction environmental conditions. Based on environmental monitoring data from 2021–2024, it
has been determined that the construction of the GIPL pipeline had no significant negative impact on the natural environment. In
line with the Lithuanian Environmental Protection Agency’s screening conclusion on the "Environmental Impact Assessment for
the Connection of the Biomethane Pipeline to the Amber Grid Transmission System in Aukštikalniai and Vytartai, Pasvalys District"
an environmental impact assessment for this activity is not required. It is assessed that Amber Grid activities comply with the
criteria for biodiversity and ecosystem protection and restoration..
7.4. Installation, maintenance and repair of charging stations for electric vehicles in buildings (and parking spaces attached
to buildings) according to the climate change mitigation objective
Substantial contribution to climate change mitigation
The installation of electric vehicle charging stations by Amber Grid and Litgrid in 2023 for company needs supports the transition
towards cleaner energy use and reduces dependence on global fossil fuel markets, which are being phased out or restricted due
to climate change concerns. This initiative aligns with adaptation to climate change through the GHG reduction plan, where Litgrid
divisions implement assigned measures, with the installation of charging stations being one of these actions. Furthermore,
electrification is embedded in the National Strategy, and thus, the activities of Amber Grid and Litgrid contribute directly to its
implementation.
It is assessed that both Amber Grid and Litgrid activities meet the criteria for substantial contribution to climate change
mitigation.
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Climate change adaptation
See the section on climate-related risk and vulnerability assessment.
Sustainable use and protection of water and marine resources, transition to a circular economy, pollution prevention and
control, protection and restoration of biodiversity and ecosystems
The "Do No Significant Harm" criteria is not applicable to this activity.
It is noted that this taxonomy-eligible activity was carried out by the Amber Grid and Litgrid in 2023. However, in 2024, this
activity did not generated any revenue, capital expenditure, or operating expenditure related to this activity.
7.6. Installation, maintenance and repair of renewable energy technologies according to the climate change mitigation
objective
Substantial contribution to climate change mitigation
In 2023 and 2024 TETAS carried out activities including the installation of solar power plants for households and businesses, as
well as the technical maintenance and operational servicing of solar power plants. The activity covered the installation,
maintenance, and repair of renewable energy technologies on-site, comprising one of the following specific measures, provided
they are installed on-site as part of the technical building systems:
(a) installation, maintenance, and repair of photovoltaic solar energy systems and related auxiliary technical equipment.
It is assessed that the activities of TETAS comply with the substantial contribution to climate change mitigation criteria.
Climate change adaptation
See the section on climate-related risk and vulnerability assessment.
Sustainable use and protection of water and marine resources, transition to a circular economy, pollution prevention and
control, protection and restoration of biodiversity and ecosystems
The "Do No Significant Harm" criteria is not applicable to this activity.
.
Climate-related risk and vulnerability assessment
The key risks are outlined in the Management Report under the section 5.9. "Risk Management Framework" and in the
Sustainability Report under the section "Climate Change." It has been determined that physical risks over the short, medium, and
long term (up to 2050) will have a very minor impact on the operations of Group companies. However, flooding and extreme
water level fluctuations could have a greater potential impact. The expected impact of transition risks at the Group level is also
minor. All Group companies have identified potential climate-related risk management opportunities and measures to address
these challenges.
The table below provides an overview of the relevant climate-related physical risks for Group companies.
Activity specified in the
Delegated Acts
Acute physical risk
Chronic physical risk
CCM 4.1. Electricity
generation using solar
photovoltaic technology
Heatwave, cold wave / cold, fires, drought,
heavy precipitation, snow and ice load,
landslide, subsidence
Changing temperature, changing precipitation patterns,
precipitation or hydrological variability, saline water intrusion,
sea level rise, water stress, geographical hazards, soil erosion
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CCM 4.9. Transmission
and distribution of
electricity
Heatwave, fires, storms, wind gusts,
lightning, flood, snow and ice load
Changing precipitation patterns
CCM 4.10. Storage of
electricity
Heatwave, heavy rainfall
Changing temperature
CCM 4.14. Transmission
and distribution
networks for renewable
and low-carbon gases
Heatwave, cold wave/cold, fires, storms,
wind gusts, lightning, drought, heavy
rainfall, flood, snow and ice load, landslide,
subsidence
Changing temperature, precipitation or hydrological variability,
saltwater intrusion, sea level rise, water stress, geophysical
hazards, soil erosion.
CCM 7.4. Installation,
maintenance and repair
of charging stations for
electric vehicles in
buildings (and parking
spaces attached to
buildings)
Heatwave, cold wave/cold, fires, drought,
heavy rainfall, snow and ice load, landslide,
subsidence
Changing temperature, changing precipitation patterns,
precipitation or hydrological variability, saltwater intrusion, sea
level rise, water stress, geophysical hazards, soil erosion
CCM 7.6. Installation,
maintenance and repair
of renewable energy
technologies
Heatwave
-
Assessment of compliance with the minimum safeguards
The Group's assessment of the taxonomy-aligned activities with the minimum safeguards is carried out in accordance with Article
18 of Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a
framework to facilitate sustainable investment. This article stipulates that, when carrying out taxonomy-aligned activities,
compliance with minimum safeguards must be ensured — these are procedures implemented to ensure adherence to the OECD
Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights.
The Group has implemented measures and procedures in the areas of human rights, taxation, fair competition, and anti-corruption,
as well as within its Equal Opportunities Policy, Code of Ethics, Group Supplier Code of Ethics. Considering this, we assess that
the Group’s taxonomy-aligned activities are carried out in compliance with the minimum safeguards.
Accounting Policy
The KPIs calculation is carried out in accordance with the European Commission Delegated Regulation (EU) 2021/2178 of July 6,
2021, which supplements European Parliament and Council Regulation (EU) 2020/852 by establishing the content and
presentation of the information to be disclosed by companies subject to Articles 19a or 29a of Directive 2013/34/EU regarding
environmentally sustainable activities and determining the methodology applicable to fulfilling this disclosure obligation.
KPIs calculations and disclosures are presented based on Article 2 of the Commission Delegated Regulation (EU) 2021/2178,
which stipulates that:
1. Non-financial undertakings disclose the information referred to in Article 8(1) and (2) of Regulation (EU) 2020/852 as
laid down in Annex I to this Regulation.
2. The information referred to in paragraph 1 shall be presented in tabular form, using the templates set out in Annex II to
this Regulation.
The calculation methodology is based on the available interpretation and the clarification of the applicable European Commission
guidelines. The specifics of the calculation are detailed under the specific KPIs corresponding to the requirements of the
implementation of the Regulation along with the context of the limited guidance. In the event of new official guidance or practice
from the European Commission, the calculation particularities will be revised and disclosed.
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An assumption was made that Revenue, OPEX under Taxonomy (Operating Expenses under Taxonomy) and CAPEX under
Taxonomy (Capital Expenditures under Taxonomy), which can be reasonably linked to identified taxonomy-eligible and/or
taxonomy-aligned activities, may accordingly be classified as KPIs of taxonomy-eligible and/or taxonomy-aligned activities.
Revenue and CAPEX under Taxonomy KPIs are directly related to the indicators used in the Management Report and Financial
Statements, adjusting CAPEX for subsidy accounting. OPEX under Taxonomy includes only those expenses required under the
Disclosure Delegated Act (EU) 2021/2178.
Consolidation adjustments, consistent with the principles applied in the financial statements, were made to calculate the
consolidated data.
Calculation of revenues from taxonomy-aligned and/or taxonomy-eligible activities
According to the European Commission Delegated Regulation (EU) 2021/2178, the share of the Group's taxonomy-aligned and/or
taxonomy-eligible economic activities' revenues is calculated by dividing the revenues from products or services related to
taxonomy-aligned and/or taxonomy-eligible activities (numerator) by the Group's total revenues (denominator).
The numerator of the indicator includes the Group's CAPEX, which is recognised as sustainable taxonomy-aligned economic
activity in terms of the environment:
• revenues of the electricity transmission system operator, excluding revenues from other non-typical activities (revenues from
the administration of guarantees of origin, late payment interest, etc.);
• contracting work carried out by the Group’s company on behalf of the electricity distribution operator for the full scope of
energy facility development, maintenance, and operation;
• revenue of the gas transmission operator from activities related to the transmission of renewable and low-carbon footprint
gases through the network;
• revenue from contract work related to the installation, maintenance, and repair of renewable energy technologies. In 2024,
the company completed its previously held commitments and did not sign any new contracts.
When calculating taxonomy-eligible revenues, in accordance with the provisions of IFRS 10 Consolidated Financial Statements,
revenues from construction works performed by Group companies for the electricity transmission system operator, as well as
services provided by the electricity storage operator to the electricity transmission system operator, are eliminated from total
revenues.
The Group does not generate revenue from identified taxonomy-eligible economic activities such as electricity generation using
photovoltaic solar energy technology (activity code 4.1), the installation of electric vehicle charging stations in buildings (and in
parking spaces adjacent to buildings), maintenance and repair (activity code 7.4), transport by motorbikes, passenger cars and
light commercial vehicles (activity code 6.5), and the renovation of existing buildings (activity code 7.2). These activities are carried
out to ensure operational efficiency and cost optimization for internal needs.
The revenue (net turnover) denominator value of the Group corresponds to the revenue disclosed in the Group’s financial
statements. Taxonomy-eligible activity revenue is recognized in accordance with IFRS 15 Revenue from Contracts with
Customers, IAS 1 Presentation of Financial Statements, and other relevant standards and IFRIC interpretations, following the
accounting policies described in the notes to the Group’s financial statements.
In accordance with the described provisions, the comparative revenue figures for 2023 were adjusted. Revenues from electricity
storage facilities were eliminated from the numerator, as they are treated as intra-group transactions.
Calculation of Taxonomy-aligned and/or Taxonomy-eligible CAPEX under the Taxonomy
According to Commission Delegated Regulation (EU) 2021/2178, the share of the Group's taxonomy-aligned and/or taxonomy-
eligible economic activities CAPEX is calculated by dividing the taxonomy CAPEX associated with assets or processes linked to
taxonomy-aligned and/or taxonomy-eligible economic activities by the total taxonomy CAPEX of the Group.
The numerator of the indicator includes the Group's CAPEX, which is recognized as sustainable taxonomy-aligned economic
activity in terms of the environment:
• capital expenditure of the electricity transmission system operator that meets the technical screening criteria;
• capital expenditure for the installation of electricity storage facilities related to infrastructure maintenance and repair;
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INFORMATION ON SUSTAINABILITY MATTERS
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• capital expenditure of the gas transmission system operator for the transmission of renewable and low-carbon gases;
• capital expenditure of electricity and gas transmission system operators for the installation, maintenance, and repair of electric
vehicle charging stations in buildings (and in parking spaces attached to buildings), included in full;
• capital expenditure of the gas transmission system operator for building renovation.
Capitalized remuneration, business travel expenses, interest, and expenses of projects funded by third-party funds that were
transferred to the Company free of charge are not included in the calculation of capital expenditures (CAPEX). All expenses
incurred during the reporting period are recognised as CAPEX, regardless of whether the asset has been put into operation or is
still in the project development stage. Advance payments for tangible fixed assets are not included in the numerator.
Capital expenditures of the Group companies performing construction works are not included in the numerator, as the most
significant investments are made in equipment, work devices, and tools, which cannot be accurately attributed to a specific project
or activity. Additionally, the technical screening criteria set out in the Regulation are intended for projects, not goods or work
equipment.
The denominator of the Group's capital expenditures includes the total amount of acquisitions of property, plant, and equipment
(PPE) with intangible assets and the value of assets received from third parties is eliminated. The carrying amount of PPE
presented in the Group's financial statements is reduced by the amount of grants received. However, the numerator and
denominator amount under the Taxonomy are not reduced by the amount of grants received for the acquisition of assets, to more
accurately reflect the scale of investments made.
Capital expenditures related to Taxonomy-eligible activities are recognised in accordance with IAS 16 Property, Plant and
Equipment and IAS 38 Intangible Assets. Intra-group transactions include the elimination of construction works margin
(unrealized profit) from the Group’s capital expenditures, in line with IFRS 10 Consolidated Financial Statements requirements.
Based on the described provisions and to ensure data comparability, the 2023 indicators have been adjusted.
Calculation of taxonomy-aligned and/or taxonomy-eligible economic activities OPEX under the Taxonomy
According to the European Commission Delegated Regulation (EU) 2021/2178, the share of the Group's taxonomy-eligible and/or
taxonomy-aligned economic activities in OPEX under the Taxonomy is calculated by dividing the portion related to assets or
processes associated with taxonomy-eligible and/or taxonomy-aligned economic activities by the Group's total OPEX under the
Taxonomy.
OPEX under the Taxonomy consists of direct non-capitalized expenses related to maintenance and repair, research and
development, building renovation measures, short-term leases, and all other direct expenses associated with the day-to-day
servicing of property, plant, and equipment carried out by the company or a third party contracted for this purpose. These expenses
are necessary to ensure the uninterrupted and efficient use of such assets. It should be noted that the OPEX calculated in
accordance with the Taxonomy does not correspond to the total amount of the Group’s operating expenses.
In the 2023 report, OPEX under the Taxonomy was assessed on a broader scale, for example, including natural gas and electricity
purchase costs, total payroll expenses, and similar costs. In this report, the comparative 2023 OPEX under the Taxonomy is
recalculated in accordance with the principles described above.
The Group's OPEX under the Taxonomy includes:
• Electricity transmission operator’s operating expenses: include full costs of electricity grid maintenance and repair, as well as
research and development expenses. Salary, information systems, transport, and facility maintenance expenses are included
only to the extent they relate to employees directly involved in grid maintenance;
• Operating expenses of the electricity storage facilities operator include the full costs of maintenance and repair of electricity
storage facilities (after eliminating intra-group transactions), as well as the salaries of dispatchers. For the Group company
performing construction works, the share of operating expenses related to the services provided to the electricity distribution
operator is included;
• Operating expenses related to construction works for the installation, maintenance, and repair of renewable energy
technologies are included in full.
Taxonomy-related operating expenses are recognized on an accrual basis, in accordance with IAS 1 Presentation of Financial
Statements, and intercompany transactions are eliminated in accordance with IFRS 10 Consolidated Financial Statements.
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Double Counting
All disclosed KPIs related to taxonomy-aligned and/or taxonomy-eligible activities avoid double counting, as each KPI is allocated
to different, independent activities. In order to prevent double counting, when calculating the numerator, if an economic activity
contributes to multiple environmental objectives, KPIs have been counted only once. It should be noted that, where necessary,
intra-group transactions are eliminated.
During the reporting period, the Group did not issue new environmentally sustainable bonds or debt securities to finance
taxonomy-aligned economic activities. However, it is important to note that in 2022, the Group issued a green bond, part of which
was used to finance taxonomy-aligned economic activities.
Contextual information on KPIs established by the EU Taxonomy Regulation
All KPIs are disclosed based on the criteria of the climate change mitigation objective.
The share of revenues associated with taxonomy-eligible activities in 2024 amounted to 81.4%, which represents an increase of
1.6 percentage points or EUR 11.3 M compared to 2023. Main changes:
• The main operating revenues of the electricity transmission system operator increased by EUR 9.0 M compared to 2023 due
to higher revenues from additional services;
• The Group company's revenues from electricity distribution activities increased by EUR 3.4 M due to higher volumes of orders
received;
• Revenues from renewable energy technology installation, maintenance, and repair activities decreased by EUR 1.1 M due to
the completion of contractual obligations by the Group company. The 2023 revenue indicator was recalculated. Revenues
from electricity storage activities were eliminated as they are considered intra-group transactions, and the denominator's
revenue figures were adjusted to align with the revenues disclosed in the financial statements.
The share of capital expenditures (CAPEX) associated with taxonomy-aligned activities amounted to 88.2% in 2024, increasing
by 8.6 percentage points or €14.5 M compared to 2023. Main changes:
• Capital expenditures meeting the technical screening criteria of taxonomy-aligned activities in the electricity transmission
sector increased by EUR 46.5 M due to the intensive implementation of projects related to synchronization;
• Capital expenditures in electricity storage activities decreased by EUR 32.5 M due to the completion of the electricity storage
system (a four-battery park system) project in 2023.
The share of operating expenditures (OPEX) associated with taxonomy-eligible activities amounted to 66.5% in 2024, increasing
by 3.8 percentage points or €4.7 M compared to 2023.
• Operating expenses in the electricity storage activity increased by EUR 1.9 M due to the launch of a four-battery park system
and the incurrence of necessary network maintenance and repair costs;
• The electricity transmission operator’s core operating expenses increased by EUR 1.5 M due to higher network maintenance
and repair costs, as well as increased payroll expenses;
• The Group company's operating expenses in electricity distribution activities increased by EUR 2.5 M due to higher workload
volumes;
Due to the completion of contractual obligations, operating expenses related to the installation, maintenance, and repair of
renewable energy technologies decreased by EUR 1.2 M
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TOC ↑
Turnover according to EU Taxonomy regulation
Substantial contribution criteria
DNSH criteria ('Does Not Significantly Harm')
Minimum safeguards
Proportion of Taxonomy
-
aligned (A.1.) or
-
eligible
(A.2.) turnover year 2023
Category (enabling activity)
Category (transitional
activity)
Economic activities
Code(s)
Absolute
turnover
Proportion
of turnover
year 2024
Climate change
mitigation
Climate change
adaptation
Water and
marine
resources
Pollution
Circular
economy
Biodiversity and
ecosystems
Climate change
mitigation
Climate change
adaptation
Water and
marine
resources
Pollution
Circular
economy
Biodiversity and
ecosystems
A. TAXONOMY ELIGIBLE
ACTIVITIES
M EUR
%
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y / N
Y / N
Y / N
Y / N
Y / N
Y / N
Y / N
%
E
T
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL; N/EL
EL;
N/EL
EL; N/EL
A.1 Environmentally sustainable activities (taxonomy-aligned)
Electricity generation using
solar photovoltaic
technology
CCM 4.1. /CCA
4.1.
0.0
0.0%
Y
N
N/EL
N/EL
N/EL
N/EL
Y
Y
Y
Y
Y
Y
Y
0.0%
-
Transmission and
distribution of electricity
CCM 4.9. /CCA
4.9.
390.6
81.2%
Y
N
N/EL
N/EL
N/EL
N/EL
Y
Y
Y
Y
Y
Y
Y
79.0%
E
Storage of electricity
CCM 4.10. /CCA
4.10.
0.0
0.0%
Y
N
N/EL
N/EL
N/EL
N/EL
Y
Y
Y
Y
Y
Y
Y
0.0%
E
Transmission and
distribution networks for
renewable and low-carbon
gases
CCM 4.14. /CCA
4.14.
0,1
0.0%
Y
N
N/EL
N/EL
N/EL
N/EL
Y
Y
Y
Y
Y
Y
Y
0.0%
E
Installation, maintenance
and repair of charging
stations for electric vehicles
in buildings (and parking
spaces attached to
buildings)
CCM 7.4. /CCA
7.4.
0.0
0.0%
Y
N
N/EL
N/EL
N/EL
N/EL
Y
Y
Y
Y
Y
Y
Y
0.4%
E
Installation, maintenance
and repair of renewable
energy technologies.
CCM 7.6. /CCA
7.6.
0.6
0.1%
Y
N
N/EL
N/EL
N/EL
N/EL
Y
Y
Y
Y
Y
Y
Y
0.4%
E
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INFORMATION ON SUSTAINABILITY MATTERS
TOC ↑
Turnover of
environmentally
sustainable activities
(Taxonomy-aligned) (A.1)
391.3
81.4%
81,4%
N
N/EL
N/EL
N/EL
N/EL
Y
Y
Y
Y
Y
Y
Y
79.8%
Of which enabling
391.2
81.3%
81,3%
N
N/EL
N/EL
N/EL
N/EL
Y
Y
Y
Y
Y
Y
Y
79.8%
S
Of which transitional
-
-
-
-
-
-
-
-
-
-
-
A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
Transport by motorbikes,
passenger cars and light
commercial vehicles.
CCM 6.5. /CCA
6.5.
0.0
0.0%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.0%
Renovation of existing
buildings
CCM 7.2. /CCA
7.2.
0.0
0.0%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.0%
EL
Turnover of Taxonomy-
eligible but not
environmentally
sustainable activities (not
Taxonomy-aligned
activities) (A.2)
0.0
0.0%
0.0%
-
-
-
-
-
0.0%
Turnover of Taxonomy-
eligible activities (A.1+A.2)
391.3
81.4%
81.4%
-
-
-
-
-
79.8%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Turnover of Taxonomy-
non-eligible activities
89.6
18.6%
TOTAL (A+B)
480.9*
100%
*The indicator is disclosed in the Consolidated and Company's Financial Statement in section 12.2 "Consolidated Statement of Comprehensive Income". 
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INFORMATION ON SUSTAINABILITY MATTERS
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Capital Expenditures under the EU Taxonomy Regulation (CAPEX)
Substantial contribution criteria
DNSH criteria ('Does Not Significantly Harm')
Minimum safeguards
Proportion of
Taxonomy-
aligned
(A.1.) or eligible (A.2.)
Capex year 2023
Category (enabling activity
Category (transitional
activity)
Economic activities
Code(s)
Absolu
te
turnov
er
Proportion
of Capex
year 2024
Climate change
mitigation
Climate change
adaptation
Water and
marine
resources
Pollution
Circular
economy
Biodiversity and
ecosystems
Climate change
mitigation
Climate change
adap
Water and
marine
resources
Pollution
Circular
economy
Biodiversity and
ecosystems
A. TAXONOMY ELIGIBLE
ACTIVITIES
M EUR
%
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y / N
Y / N
Y
/
N
Y /
N
Y / N
Y /
N
Y / N
%
E
T
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
A.1 Environmentally sustainable activities (Taxonomy-aligned)
Electricity generation using solar
photovoltaic technology
CCM 4.1. /
CCA 4.1.
0.0
0.0%
Y
N
N/EL
N/EL
N/EL
N/EL
Y
Y
Y
Y
Y
Y
Y
0.0%
-
Transmission and distribution of
electricity
CCM 4.9. /
CCA 4.9.
206.3
95.17%
Y
N
N/EL
N/EL
N/EL
N/EL
Y
Y
Y
Y
Y
Y
Y
68.0%
E
Storage of electricity
CCM 4.10. /
CCA 4.10.
0.1
0.0%
Y
N
N/EL
N/EL
N/EL
N/EL
Y
Y
Y
Y
Y
Y
Y
13.9%
E
Transmission and distribution
networks for renewable and low-
carbon gases
CCM 4.14. /
CCA 4.14.
0.3
0.1%
Y
N
N/EL
N/EL
N/EL
N/EL
Y
Y
Y
Y
Y
Y
Y
0.1%
-
Installation, maintenance and repair
of charging stations for electric
vehicles in buildings (and parking
spaces attached to buildings)
CCM 7.4. /
CCA 7.4.
0.0
0.0%
Y
N
N/EL
N/EL
N/EL
N/EL
Y
Y
Y
Y
Y
Y
Y
0.2%
E
Installation, maintenance and repair
of renewable energy technologies
CCM 7.6. /
CCA 7.6.
0.0
0.0%
Y
N
N/EL
N/EL
N/EL
N/EL
Y
Y
Y
Y
Y
Y
Y
0.0%
E
136
INFORMATION ON SUSTAINABILITY MATTERS
TOC ↑
Capex of environmentally
sustainable activities (Taxonomy-
aligned) (A.1)
206.7
95.3%
95.3%
N
N/EL
N/EL
N/EL
N/EL
Y
Y
Y
Y
Y
Y
Y
82.2%
Of which enabling
206.4
95.2%
95.2%
N
N/EL
N/EL
N/EL
N/EL
Y
Y
Y
Y
Y
Y
Y
82.2%
E
Of which transitional
-
-
-
-
-
-
-
-
-
-
-
A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
Transport by motorbikes, passenger
cars and light commercial vehicles
CCM 6.5. /
CCA 6.5.
0.2
0.1%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.1%
Renovation of existing buildings
CCM 7.2. /
CCA 7.2.
1,2
0.5%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.1%
Capex of Taxonomy-eligible but
not environmentally sustainable
activities (not Taxonomy-aligned
activities) (A.2)
1,4
0.6%
0.6%
-
-
-
-
-
0.2%
Capex of Taxonomy-eligible
activities (A.1+A.2)
208.1
95.9%
95.9%
-
-
-
-
-
82.4%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Capex of Taxonomy-non-eligible
activities
8.8
4.1%
TOTAL (A+B)
216.9
100%
137
INFORMATION ON SUSTAINABILITY MATTERS
TOC ↑
Operational expenditures under the EU Taxonomy Regulation (OPEX)
Substantial contribution criteria
DNSH criteria ('Does Not Significantly
Harm')
Minimum safeguards
Proportion of Taxonomy
-
aligned (A.1.) or -
eligible
(A.2.) Opex year 2023
Category (enabling
activity)
Category
(transitional
activity)
Economic activities
Code(s)
Opex
Propor
tion of
Opex
year
2024
Climate change
mitigation
Climate change
adaptation
Water and
marine
resources
Pollution
Circular
economy
Biodiversity and
ecosystems
Climate change
mitigation
Climate change
adaptation
Water and
marine
resources
Pollution
Circular
economy
Biodiversity and
ecosystems
A. TAXONOMY
ELIGIBLE
ACTIVITIES
M EUR
%
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y;
N;
N/
EL
Y; N; N/EL
Y; N;
N/EL
Y / N
Y / N
Y /
N
Y /
N
Y / N
Y /
N
Y / N
%
E
T
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL; N/EL
EL;
N/EL
A.1 Environmentally sustainable activities (Taxonomy-aligned)
Electricity generation
using solar
photovoltaic
technology
CCM 4.1. / CCA
4.1.
0.0
0.0%
Y
N
N/EL
N/
EL
N/EL
N/EL
Y
Y
Y
Y
Y
Y
Y
0.0%
-
Transmission and
distribution of
electricity
CCM 4.9. / CCA
4.9.
31,3
61,3%
Y
N
N/EL
N/
EL
N/EL
N/EL
Y
Y
Y
Y
Y
Y
Y
58.6%
E
Storage of electricity
CCM 4.10. /
CCA 4.10.
2.0
3.9%
Y
N
N/EL
N/
EL
N/EL
N/EL
Y
Y
Y
Y
Y
Y
Y
0.3%
E
Transmission and
distribution networks
for renewable and
low-carbon gases
CCM 4.14. /
CCA 4.14.
0.0
0.0%
Y
N
N/EL
N/
EL
N/EL
N/EL
Y
Y
Y
Y
Y
Y
Y
0.0%
-
Installation,
maintenance and
repair of charging
stations for electric
vehicles in buildings
(and parking spaces
attached to
buildings)
CCM 7.4. / CCA
7.4.
0.0
0.0%
Y
N
N/EL
N/
EL
N/EL
N/EL
Y
Y
Y
Y
Y
Y
Y
0.0%
E
Installation,
maintenance and
repair of renewable
energy technologies
CCM 7.6. / CCA
7.6.
0.5
1,0%
Y
N
N/EL
N/
EL
N/EL
N/EL
Y
Y
Y
Y
Y
Y
Y
3.6%
E
138
INFORMATION ON SUSTAINABILITY MATTERS
TOC ↑
Opex of
environmentally
sustainable
activities
(Taxonomy-aligned)
(A.1)
33.8
66.1%
66.1%
N
N/EL
N/
EL
N/EL
N/EL
Y
Y
Y
Y
Y
Y
Y
62.5%
Of which
enabling
33.8
66.1%
66.1%
N
N/EL
N/
EL
N/EL
N/EL
Y
Y
Y
Y
Y
Y
Y
62.5%
E
Of which
transitional
-
-
-
-
-
-
-
-
-
-
-
A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
Transport by
motorbikes,
passenger cars and
light commercial
vehicles
CCM 6.5. / CCA
6.5.
0.2
0.4%
EL
N/EL
N/EL
N/
EL
N/EL
N/EL
0.2%
Renovation of
existing buildings
CCM 7.2. / CCA
7.2.
0.0
0.0%
EL
N/EL
N/EL
N/
EL
N/EL
N/EL
0.0%
Opex of Taxonomy-
eligible but not
environmentally
sustainable
activities (not
Taxonomy-aligned
activities) (A.2)
0.2
0.4%
0.4%
-
-
-
-
-
0.2%
Opex of Taxonomy-
eligible activities
(A.1+A.2)
34.0
66.5%
66.5%
-
-
-
-
-
62.7%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Opex of Taxonomy-
non-eligible
activities
17.1
33.5%
TOTAL (A+B)
51,1
100%
139
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
139
Nuclear and fossil gas related activities under the Taxonomy regulation
Row
Nuclear energy related activities
1.
The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of
innovative electricity generation facilities that produce energy from nuclear processes with minimal waste from the
fuel cycle.
NO
2.
The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations
to produce electricity or process heat, including for the purposes of district heating or industrial processes such as
hydrogen production, as well as their safety upgrades, using best available technologies.
NO
3.
The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce
electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen
production from nuclear energy, as well as their safety upgrades.
NO
Fossil gas related activities
4.
The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities
that produce electricity using fossil gaseous fuels.
NO
5.
The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined
heat/cool and power generation facilities using fossil gaseous fuels.
NO
6.
The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation
facilities that produce heat/cool using fossil gaseous fuels.
NO
E1 Climate Change
During the Group's DMA assessment, all climate change topics identified by ETAS were evaluated. The preliminary assessment
of topics, evaluation of impact and financial materiality, and stakeholder survey revealed that the topics of "Climate Change
Adaptation," "Climate Change Mitigation," and "Energy" are material and have been assigned material negative impacts and risks.
For more details on the DMA assessment, refer to the sections "SBM-3 Material Impact, Risks, and Opportunities and Their
Interaction with Strategy and Business Model. Identification and Assessment of Sustainability Impacts, Risks, and Opportunities"
and "IRO-1 Description of the Process for Identifying and Assessing Significant Impacts, Risks, and Opportunities."
We note that the Group has entity-specific disclosure information related to energy not supplied (ENS) and technological
electricity losses as part of the climate change topic. These disclosures are provided in the Management Report, part 4 ’Annual
Performance Report’.
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CONSOLIDATED MANAGEMENT REPORT FOR 2024
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140
Sustainability topic
Impacts
Risks and opportunities
Location in the value chain
Climate change adaptation
Actual negative impact due
to the biomass extraction
upstream value chain.
-*
Upstream
Climate change mitigation
Actual negative impact due
to the Group's GHG
emissions.
Risks arise from the need to
finance the renewal of
infrastructure and to provide for
investment in new technologies to
reduce the Group's impact on
climate change (by reducing GHG
emissions).
The whole chain
Energy
Actual negative impacts
from the operations of the
Group companies and the
Group's supply chain.
The risks stem from the need to
invest in RES.
The whole chain
* No significant risks and (or) opportunities have been identified within the Group.
E1-1 Transition plan for climate change mitigation
The Group supports and endorses the global commitment to avoid the effects of climate change and to work towards keeping
global warming within the 1.5˚C scenario of the Paris Agreement compared to pre-industrial levels. The Group is committed to
contributing to climate change mitigation and the sustainable development of the energy sector, in line with the Paris Agreement
and the National Energy Independence Strategy.
The Group has set ambitious strategic targets to reduce its Scope 1 and 2 GHG emissions by 30% by 2026 and by 50% by 2030,
compared to 2019. It should be noted that these objectives are also linked to EPSO-G's long-term sustainability-linked finance
framework (“Finance Framework”) and sustainability-linked bond prospectus. The framework has been independently evaluated
by CICERO Shades of Green, an international climate and environmental research centre. Independant assesment identified the
EPSO-G’s Finance Framework targets as ambitious compared to the sustainability targets set by peers in Europe. These targets
are also largely in line with the Paris Agreement's aspirations for reducing climate change impacts. The performance of the bonds
is presented in the Management Report, section 4 ’Annual Performance Report’.
In 2024, the Group joined the Science Based Targets Initiative (SBTI) and committed to short-term science-based GHG emission
reduction targets for 2030, which were submitted to the SBTi for validation at the end of the reporting year.
The Group's strategy also commits to achieving a net-zero GHG emissions by 2050.
Group’s GHG emission reduction plans
The Group is subject to the European Union's benchmarks in line with Paris Agreement. The Transition Plan to climate-neutral
activities is an integral part of the Company's strategy and financial planning to contribute to the objectives of the Paris Agreement
and the requirements of European climate legislation. The Plan is based on long-term investments, with long-term (10 years)
investments for strategic and major projects. Each year, a budget is planned, which correlates with the work planned in the Action
Plan to achieve the strategic objectives set.
The Group’s GHG emission reduction targets as an integral part of the Group's long-term strategy are approved by the EPSO-G
Board (and separately by the Boards of Group companies). These targets are further broken down into lower-level
implementation plans following the Group's policy of integrated planning and monitoring.
The main measures in the Group's GHG (Scope 1 and 2) Emissions Reduction Plan focus on the largest emitting sources in the
electricity and natural gas transmission activities. This includes various pilot projects, market analyses of suppliers, and investment
plans.
Key decarbonisation levers (actions 2025 to 2030) in the Group companies:
Amber Grid (all measures reduce the Group's Scope 1 GHG emissions):
• Reconstruction of gas compressor stations;
• Installation of fixed and mobile leak detection systems: installation and use for monitoring methane (CH₄) leaks.
• Employment of gas combustion equipment in operational activities;
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141
• Incorporation of biogas into the gas plant system and its combustion;
• Replacement of gas boilers with electric ones at gas distribution stations (GDS);
• Application of stopple during the repair of a main gas pipeline.
The application of gas combustion equipment and stopple equipment in the activities will generate the highest Scope 1 GHG
emission reduction effect.
The company will promote a zero-methane emissions culture to comply with the EU Methane Regulation. These requirements
will significantly impact the organisation of repair work and other operational aspects, promoting the adoption of new
technologies and processes that minimise methane emissions.
Litgrid (the measures reduce the Group's Scope 1 and Scope 2 GHG emissions):
• Elimination of SF
6
gas in transformer substation refurbishments by 2030 (10 units to be replaced).
• Purchasing green electricity through power purchase agreements to cover electricity technological losses in market-based
method (This measure will generate the largest Scope 2 GHG emission reduction effect);;
• Generation of RES for the Company’s own needs (installation of solar panels in newly-built and refurbished transformer
substations and switchgears).
Across all Group companies (the measures reduce the Group's Scope 1 and Scope 2 emissions):
• Energy efficiency and the use of renewable energy for domestic consumption;
• Increasing the use of clean transport through the purchase of electric and hybrid cars. By 2028, it is projected that the Group's
road transport and some of its specialised vehicles will be less polluting than the most polluting, entirely internal combustion-
engine-powered vehicles.
In 2024, modelling of the Group's GHG emissions (Scope 1 and 2) and a review of the plan of measures was carried out, prioritising
measures based on the highest mitigation potential and their cost-effectiveness. Risks and their assumptions that may affect the
achievement of the targets have also been identified, and emissions reduction scenarios (Scope 1 and Scope 2) have been
modelled accordingly.
We also note that the primary objective of all the Group's business segments is to contribute to the climate change mitigation
objective under Regulation (EU) 2020/852 of the European Parliament and of the Council. The Group's taxonomy-eligible turnover
in 2024 was 81.5%, capital expenditure 88.2% and operating expenditure 66.5%. Detailed disclosures under the EU Taxonomy
Regulation are provided in section 8.2.1 Disclosures under the EU Taxonomy Regulation of this report.
Other Group strategy measures contributing to the transition plans
In 2024, the gas transmission system operators of Lithuania, Finland, Estonia, Latvia, Poland, and Germany, successfully
completed the pre-feasibility study for the Nordic-Baltic Hydrogen Corridor (NBHC) to foster clean energy. This study marks an
important step in the development of an international hydrogen transport infrastructure that will connect the Baltic Sea region
with Central Europe. The NBHC project is an essential part of the development of the European hydrogen market to ensure
sustainable energy supply and promote decarbonisation in the region.
In April 2024, the European Commission (EC) granted the Nordic-Baltic Hydrogen Corridor (NBHC) project the status of a Project
of Common Interest (PCI). This project is part of the Baltic Energy Market Interconnection Plan (BEMIP Hydrogen). PCI status
assigns the project a strategic priority at the EU level, enabling it to acquire EU funding and expedite permitting procedures,
thereby facilitating project implementation and accelerating the development of hydrogen infrastructure in the Baltic region. For
more information on the objectives and projects set out in the Group's strategy to contribute to the development of a reliable and
climate-neutral energy system, please refer to the the Management Report, part 3 Operational Strategy and Planned Investments,
and section 4.5 Research and Development Activities.
E1-2 Policies related to climate change mitigation and adaptation
The energy sector is one of the largest industries affecting climate change. As a group of energy transmission and exchange
companies, EPSO-G plays an important role in ensuring a smooth and reliable transformation of the energy system in Lithuania.
This transformation includes the development of renewable energy sources and the smooth integration of the growing amount
of RES into the energy system, allowing the sector to reduce its dependence on fossil fuels, initiate interconnection projects and
facilitate climate-neutral energy exchanges.
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142
The Group's environmental and sustainability policies are the main policies underpinning the Group's management of climate
change mitigation and adaptation. Group-level policies are approved by the Group Board.
Sustainability and environmental policies set out key sustainability principles and regulations that reflect climate change
adaptation and mitigation:
• As a manager of strategically important energy infrastructure, the Group seeks to contribute to the fulfilment of the climate
change and environmental commitments laid out in the Paris Agreement, the European Green Deal, the National Energy
Independence Strategy and the National Climate Change Management Agenda.
• The Group aims to contribute directly to the Sustainable Development Goals by: focusing on ensuring access to clean and
modern energy, combating climate change, developing modern infrastructure and innovation, safe working conditions,
employee welfare and a sustainable supply chain.
• Deploying modern technologies and measures to reduce the Group's GHG emissions by 2030.
• Monitoring the environmental impact of activities – calculating GHG emissions, use of natural and energy resources, and waste
generation from the Group's activities.
• Expanding the use of RES to meet the technological energy needs of transmission grid infrastructure.
• Prioritising and expanding the use of clean transport and consistently reducing the use of polluting fuels.
In designing and implementing its sustainability actions, the Group seeks the full involvement of its stakeholders and promotes
transparent and fair cooperation with consumers and manufacturers, suppliers, the public, the owner, employees, the media and
other stakeholders.
Existing Group’s policies cover all the significant impacts and risks identified in the climate change materiality assessment.
E1-3 Actions and resources in relation to climate change policies
Climate change mitigation
The Group acknowledges that the energy sector plays a vital role in the European Union's efforts to achieve climate neutrality by
2050. The Group's actions regarding climate change and mitigation are outlined in its corporate GHG emission reduction plans
and strategic plans. The main GHG reduction measures are reported in section E1-1.
GHG measures are included in the long-term financial plan of the Group companies (modernisation of gas compressor stations,
reconstruction of main gas pipelines, procurement of mobile gas compressor and natural gas combustion equipment, etc.). The
purchase of guarantees of origin of electricity demonstrates that electricity technological losses have been incurred by the
electricity generated from RES, thus reducing GHG emissions (Scope 2). The cost of technological losses is included in the cost
price.
By 2030, the Group plans to invest around €155 million in measures that will directly contribute to reducing GHG emissions. All
long-term investments and future expenditures are not disclosed as the Group cannot currently ensure the accuracy of this
information. Disclosure options will be assessed in the future.
The Group's direct emissions depend on the scale of the works carried out (reconstructions, new projects, etc.) and the
implementation of mitigation measures. The following GHG emission reductions (Scope 1 and Scope 2) have been achieved on a
Group-wide basis compared to the base year 2019. A minus sign in the table indicates that emissions have decreased compared
to the base year.
2024
2023
2022
2021
2020
The Group's GHG (Scope 1 and Scope 2)
emission performance compared to the
base year 2019.
6.1%
26.1%
-0.9%
-7.4%
-11.4%
Climate change adaptation
143
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
143
EPSO-G Group has carried out a comprehensive assessment of climate change risks and opportunities in 2023, in line with the
recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), to assess the resilience of the EPSO-G
Group's strategy and business model to changes in climate change. The assessment was also based on the Study on Climate
Change Risks by the Middle of the 21st Century (2023) conducted by the Lithuanian Hydro-Meteorological Service under the
Ministry of the Environment of the Republic of Lithuania, Climatic and Research Division, which predicts the level of physical risks
in the future Lithuanian climate.
To better understand the likelihood of climate-related risks occurring, short-term (2026), medium-term (2030) and long-term
(2050) perspectives were considered. The analysis follows international climate change risk assessment practices, i.e. two socio-
economic scenarios developed by the Intergovernmental Panel on Climate Change (IPCC):
• the Paris Agreement-conforming scenario for the increase in mean temperature, limited to 1.5/2 °C (SSP1–2.6), and
• A business-as-usual scenario with an average temperature rise above 4 °C (SSP5–8.5).
The assumptions of the socio-economic scenarios do not differ much in terms of the incidence of physical risks by 2050. The
scenarios vary according to the scale of the energy system transformation. Therefore, the probability of transition risk under the
two scenarios differs dramatically. The assessment of the likelihood of transition risks relevant to the energy sector under the
assumptions of the IPCC scenario was based on the expert judgement of external consultants.
The results of the consolidation exercise show that physical risks will have a very limited impact on the activities of EPSO-G Group
companies in the short, medium and long term (until 2050). Only during floods and extreme fluctuations in water levels the
potential impacts are greater. The expected impact of transition risks is also low at the Group level. However, the difference varies
at the level of the Group companies; for example for Amber Grid, the impact is significantly higher. This preliminary assessment
is a starting point to extend the analysis and provide a more detailed picture of the impact of climate-related risks on the Group's
financial performance and cash flows. The main risks are described in the Management Report, section 5.9 Risk Management
Framework.
The table below gives an overview of the climate-related physical risks and their relevance to EPSO-G Group companies.
Type of risk
Impact on the Paris Agreement
objective and business model
EPSO-G Group companies that may be
affected by physical risks
Acute physical risks
Heat wave, cold wave/freeze, fires,
storms, wind gusts, lightning, drought,
heavy precipitation, flooding, snow and
ice load, landslide, subsidence
For the periods 2026, 2030, and 2050
all risks are very low, except for floods,
where the risk is medium
Heat Wave – Tetas, EPSO-G, Energy Cells,
Litgrid, Amber Grid;
cold wave/freezing – Amber Grid;
fires – Litgrid, Amber Grid; storms, wind gusts,
lightning – Litgrid, Amber Grid;
drought – Amber Grid;
heavy precipitation – Energy Cells, Amber Grid;
flood – "EPSO-G", "Litgrid", "Amber Grid";
snow and ice load - Litgrid, Amber Grid;
landslide – Amber Grid;
subsidence – Amber Grid.
Chronic physical risks
Changing temperatures, changing
precipitation patterns, precipitation or
hydrological variability, saltwater
intrusion, sea level rise, water stress,
geographical hazards, soil erosion
For the periods 2026, 2030, and 2050
all risks are very low
Changing temperatures – Amber Grid, Energy
cells;
changing precipitation patterns – Litgrid;
precipitation or hydrological variability –
Amber Grid;
saltwater intrusion –Amber Grid;
sea level rise – Amber Grid;
water stress – Amber Grid;
geographical hazards – Amber Grid;
soil erosion – Amber Grid.
The table below gives an overview of the transition risks and their relevance for the EPSO-G Group.
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CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
144
Type of risk
Impact on the Paris Agreement
objective and business model
EPSO-G group companies that may be exposed to
risks in the pre-transition period
Political and legal
The regulatory environment,
disorderly energy transition risks of
potentially distortive measures, legal
liability and management
accountability
For the periods 2026, 2030, and
2050 all risks are low
Regulatory environment – EPSO-G, Amber Grid;
Baltpool, Energy Cells;
disorderly energy transition risks from the imposition
of potentially distortive measures – EPSO-G, Amber
Grid, Baltpool, Energy Cells;
legal responsibility and management accountability
- EPSO-G, Litgrid, Amber Grid, Baltpool, Energy Cells.
Technological
Low carbon transition costs,
transition risk for older assets, asset
depreciation risk
For the periods 2026, 2030, and
2050 risk of costs of low carbon
transition is low; for 2050 risk of
transition of older assets, risk of
asset depreciation is medium
Costs of low-carbon transition – EPSO-G, Amber
Grid, Energy Cells, Litgrid.
risk of transition of older assets, risk of asset
depreciation – EPSO-G, Amber Grid.
Markets
Uncertainty in consumer behaviour,
market signals and changes in
supply chain, raw material and
energy prices
For the periods 2026, 2030, and
2050 all risks are low
uncertainty in consumer behaviour, market signals
and supply chain – EPSO-G, Amber Grid, Energy
Cells, Litgrid, Baltpool;
changes in raw material and energy prices – EPSO-
G, Amber Grid, Baltpool.
Reputational
Transmission system reliability,
expectations related to climate risk
management, expectations related
to disclosure of non-financial
information
For the periods 2026, 2030, and
2050 risk of the transmission
system reliability is low, for 2050
risks of expectations related to
climate risk management and the
disclosure of non-financial
information are medium
Transmission system reliability – EPSO-G, Amber
Grid, Energy Cells, Litgrid.
expectations related to climate risk management –
EPSO-G, Amber Grid, Energy Cells, Litgrid, Baltpool;
expectations related to the disclosure of non-
financial information - EPSO-G, Amber Grid, Energy
Cells, Litgrid, Baltpool.
E1-4 Targets related to climate change mitigation and adaptation
The Group's GHG emission reduction targets and related measures are described in sections E1-1, E1-2, E1-3 above. The Group's
GHG reduction targets by SBTi Guidelines are set for a 5-year period, with a focus on 2026 and 2030.
Implementation level is measured in t CO
2
e, base year is 2019. The targets cover Scope 1 and 2 GHGs (direct and indirect
emissions) resulting from the Group's activities.
The Action Plan focuses on Scope 1 and 2 emissions and is structured to reduce the environmentally most significant emission
generators: controlled and uncontrolled methane leakage, which arises from operational leakage from fixed installations
consuming natural gas for process use, and grid losses, which arise from the transmission of electricity through high voltage
networks. Scope 3 emissions were first calculated in 2023. In 2025, a Scope 3 emissions reduction analysis and options are
planned to be carried out to prepare the Group's roadmap for net-zero emission activities.
The Group does not apply GHG removals and GHG mitigation projects financed through carbon credits. There is also no carbon
pricing.
The plans and associated risks for target achievement are managed and included in the Group's risk management register.
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145
For more details on risks please refer to Management Report, section 5.9.2 Key risks and their management and section E1-3
Adaptation to Climate Change.
The Group's Board approves the strategy, which includes climate change and GHG reduction targets as integral components. It
monitors the implementation of the strategy and its targets, reviews the strategy at least once a year, and updates it as necessary.
The Board establishes the Group's annual targets each year, regularly monitors their progress on a quarterly basis, and conducts
an annual evaluation of target achievement. Group's annual targets usually include sustainability objectives. The outcome of the
target implementation is one of the components taken into account in the annual financial incentives for the Group’s CEO. If the
Group's employees have set sustainability-related targets, their financial incentives are also affected by the achievement of these
targets. All actions are relevant to reducing GHG emissions because they have a cumulative effect and influence the achievement
of the targets.
Reports on the implementation of the Group's GHG reduction plans and risk management plans for measures are presented to
the Audit Committee as required.
GHG emission reduction targets
Base year 2019
2024
Target 2025
Target 2026
Target 2030
GHG emissions
before
reduction
actions (Scope
1 and 2)
(tCO
2
e)
205,397
256,568
313,058
340,052
379,712
GHG emissions
after reduction
actions (Scope
1-2 ) (tCO
2
e)
-
217,941
255,659
143,778
102,699
GHG emissions
(Scope 1–2) (%
change
compared to
base year)
-
6%
25%
-30%
-50%
Calculation methodology. The indicators are based on the SBTi guidelines; planned GHG emissions are based on the projected quantities and emission factors of
the main emission sources – electricity losses and methane leakages as well as the newest emission factors, accessible in 2024.
E1-5 Energy consumption and mix
Group companies strive to create an organisational culture based on a philosophy of conservation of nature and other resources.
In the Group's environmental policy, Group companies are committed to using certified green electricity in their administrative
activities, expanding the use of renewable energy sources to meet the technological energy needs of the transmission network
infrastructure, prioritising and expanding clean transport usage while continuously reducing polluting fuels and improving energy
efficiency measures. All these initiatives are consistently integrated within the Group. This is reflected in the aggregated energy
consumption figures shown in the table below.
The energy consumption figures are derived from corporate accounting data and have been consolidated on a Group-wide basis.
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146
Energy consumption and mix
Energy
consumption and
mix
2024
Compar
ative
2024/20
23, %
2023
Comparative
2023/2022,
%
2022
Comparative
2022/2021, %
2021
(1) Fuel
consumption from
coal and coal
products (MWh)
n/a
n/a
n/a
n/a
n/a
n/a
n/a
(2) Fuel
consumption from
crude oil and
petroleum products
(MWh)
10,854.5
4.5
10,383.3
-22.5
13,391.0
244.7
3,885.3
(3) Fuel
consumption from
natural gas (MWh)
86,915.0
-13.2
93,079.0
18.8
78,352.7
139.7
32,682.9
(4) Fuel
consumption from
other fossil sources
(MWh)
n/a
n/a
n/a
n/a
n/a
n/a
n/a
5) Consumption of
purchased or
acquired electricity,
heat, steam, and
cooling from fossil
sources (MWh)
362,245.6
-4.8
380,639.2
-12.3%
434,113.2
9.2
397,316.4
(6) Total fossil
energy consumption
(MWh) (calculated
as the sum of lines
1 to 5)
460,014.7
-6.3
484,101.45
-7.9
525,856.9
21.2
433,884.6
Share of fossil
sources in total
energy consumption
(%)
89.8%
n/a
98.4%
n/a
99.9%
n/a
100.0%
(7) Consumption
from nuclear
sources (MWh)
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Share of
consumption from
nuclear sources in
total energy
consumption (%)
n/a
n/a
n/a
n/a
n/a
n/a
n/a
(8) Fuel
consumption for
renewable sources,
including biomass
(also comprising
industrial and
municipal waste of
biologic origin,
biogas, renewable
hydrogen, etc.)
(MWh)
n/a
n/a
n/a
n/a
n/a
n/a
n/a
(9) Consumption of
purchased or
acquired electricity,
heat, steam, and
cooling from
renewable sources
(MWh)
52,024.2
625.9
7,166.4
1 428.8
468.8
3,662.1
12.5
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147
(10) The
consumption of
self-generated non-
fuel renewable
energy (MWh)
528.3
3.1
512.7
77.7
288.5
n/a
n/a
(11) Total
renewable energy
consumption (MWh)
(calculated as the
sum of lines 8 to
10)
52,552.5
584.4
7,679.1
914.1
757.3
5,977.6
12.5
Share of renewable
sources in total
energy consumption
(%)
10.3%
n/a
1.6%
n/a
0.1%
n/a
0.0%
Total energy
consumption (MWh)
(calculated as the
sum of lines 6, and
11)
512,567.2
4.23
491,780.6
-6.6
526,614.1
21.4
433,897.1
Calculation methodology. Crude oil and petroleum product fuel consumption (MWh) is based on fuel consumption in vehicles and mobile equipment. Natural gas
fuel consumption (MWh) is calculated by including the amount of gas consumed at gas distribution stations for process purposes. The consumption (MWh) of
purchased fossil electricity, heat, steam and cooling is calculated by summing the consumption of fossil electricity for domestic use, technical losses, offices and
heat. Consumption (MWh) of purchased renewable electricity, heat, steam and cooling is based on the consumption of renewable certified electricity. The
consumption (MWh) of non-fuelled renewable energy is based on self-generated electricity from solar power plants. Energy consumption data is obtained from
commercial invoices and (or) accounting systems. Data constraints for energy consumption and energy mix are indicated by "n/a".
Energy intensity per net revenue
Energy intensity per
net revenue
2024
Comparative
2024/2023,
%
2023
Comparative
2023/2022,
%
2022
Comparative
2022/2021, %
2021
Total energy
consumption from
activities in high
climate impact
sectors per net
revenue* from
activities in high
climate impact
sectors (MWh/KEur)
Eur
1.0
-14.0
1.2
32.8
0.9
-24.5
1.2
Calculation methodology. The net income from activities with a high climate impact excludes the activities of EPSO-G (NACE code M.70.22) and Baltpool (K.
66.12), and part of activities of Amber Grid. These activities do not have a high impact on climate change.
*The indicator is disclosed in the Consolidated and Company's Financial Statement in section 12.2 "Consolidated Statement of Comprehensive Income". 
In 2024, the share of renewable energy consumption in the Group's total energy consumption increased 7 times compared to
2023 (1,6% in 2023, 10,3% in 2024). This reflects the Group's successful efforts to use more energy from renewable sources.
This change is also due to Litgrid's GHG emission reduction plan – the purchase of electricity from RES (guarantees of origin) to
cover technological losses and Company's own power consumption, and the use of renewable certified electricity by the Group's
corporate offices. In 2022 and 2023, Litgrid purchased certificates of origin only to cover electricity consumed by office premises,
and from 2024 onwards to cover process losses in the network. In addition, self-consumption of RES in 2024 increased by 3.0%
compared to 2023. Non-renewable electricity consumption decreased by 6,3% compared to 2024 and 2023.
E1-6 Gross Scopes 1, 2, 3 and Total GHG emissions
Greenhouse gas emissions
Group GHG emissions were calculated in accordance with The Greenhouse Gas Protocol A Corporate Accounting and Reporting
Standard (hereinafter – ‘Standard’). Operational GHG emissions are classified into three Groups: direct emissions (Scope 1),
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148
indirect emissions (Scope 2), and other indirect emissions (Scope 3). In the Group's reports, we aim to ensure that GHG emissions
are calculated as accurately as possible and that disclosures are in line with stakeholder expectations.
Group sources of GHG emissions
The main sources of GHG emissions from the Group's activities are electricity losses in the transmission network (Scope 2), natural
gas leakages (Scope 1), fuel for stationary combustion (Scope 1) and emissions from the acquisition of fixed assets (Scope 3,
Category 2).
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149
GHG emissions
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150
Emission type
Retrospective
2024
2023
2022
2021
2020
Base year
2019
Comparat
ive
2024/201
9
Scope 1 GHG emissions
Gross Scope 1 GHG emissions (tCO2eq)
30,859
42,185
25,873
53,935
57,755
63,642
-51.5%
Percentage of Scope 1 GHG emissions
from regulated emission trading
schemes (%)
24
36
12
1
1
7
214%
Scope 2 GHG emissions
Gross market-based Scope 2 GHG
emissions (tCO
2
eq)
187,082
216,804
177,742
136,239
124,261
141,755
32%
Gross location-based Scope 2 GHG
emissions (tCO2eq)
56,366
57,298
90,748
77,609
92,475
60,060
-6%
Scope 1 and 2 GHG emissions
(market-based method)
217,941
258,989
203,616
190,174
182,017
205,397
6%
Significant scope 3 GHG emissions
Gross Scope 3 GHG emissions
(tCO2eq)*
88,021
73,810
44,573
-
-
-
-
1. Purchased goods and services
3,684
2,476
1,870
-
-
-
-
2. Capital goods
59,694
43,968
14,500
-
-
-
-
3. Fuel and energy related activities (not
included in Scope 1 or 2).
22,790
25,839
26,623
-
-
-
-
4. Upstream transportation and
distribution
-
-
-
-
-
-
-
5. Waste generated in operations
71
111
139
-
-
-
-
6. Business traveling
361
183
193
-
-
-
-
7. Employee commuting
1,421
1,232
1,247
-
-
-
-
8. Upstream leased assets
-
-
-
-
-
-
-
9. Downstream transportation
-
-
-
-
-
-
-
10. Processing of sold products
-
-
-
-
-
-
-
11. Use of sold products
-
-
-
-
-
-
-
12. End-of-life treatment of sold
products
-
-
-
-
-
-
-
13. Downstream leased assets
-
-
-
-
-
-
-
14. Franchises
-
-
-
-
-
-
-
15. Investments
-
-
-
-
-
-
-
Total GHG emissions (location-based)
(tCO2eq)
175,246
173,293
161,194
131,544
150,230
123,702
-
Total GHG emissions (market-based)
(tCO2eq)
305,961
332,799
248,188
190,174
182,017
205,397
-
*- Scope 3 emissions are calculated from 2023 onwards (calculated for 2022 and 2023)
Calculation methodology. Scope 3 (categories 1 and 2) emission calculations use data from the Exiobase database, which provides GHG estimates by EUR (kg
CO
2
.e/Eur). Scope 3 emission calculations also use the UK Department for Environment, Food and Rural Affairs (DEFRA) and Statista databases. Direct data from
suppliers are not used due to data availability and reliability issues. Scope 1 and 2 data come from suppliers' invoices and internal systems. Technological losses
(Scope 2) incurred in the “NordBalt” and “LitPol Link” interconnections are not included in Lithuania's energy metering balance and are therefore not included in the
Group's GHG emissions calculation (according to the activity-based control approach). “EPSO-G” subsidiary Litgrid AB is not responsible for the electricity purchased
by the “NordBalt” and “LitPol Link” interconnectors to cover technological losses in accordance with the contracts between the system operators.
In 2024, 6 relevant Scope 3 categories (out of 15) were inventoried:
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151
Category 1: Purchased goods and services. Emissions from third-party production of goods and services used in the Group's
activities. Spend-based method was used for the calculations.
Category 2: Capital goods. GHG emissions arising from the acquisition of long-term assets. This category counts emissions
resulting from the acquisition of capital goods. Spend-based method was used for the calculations. The calculations do not include
GHG emissions from tangible assets acquired from the third parties as the calculations are carried out according to the Standard’s
spend-based method.
Category 3: Fuel-and energy-related activities (not included in the Scopes 1 and 2). Third party emissions from the extraction,
production and transport of fuels consumed by the Group's companies (Well to tank; Tank to wheel) and the emissions from the
preparation of the fuels needed to produce the electricity and heat (central heating) energy consumed. The average data method
was used for the calculations.
Category 5: Waste generated in the Group's operations. Based on actual and estimated waste volumes of Group companies.
The waste-type-specific method is used for the calculations.
Category 6: Business travel. Emissions related to flights and overnight stays of employees on business trips. The distance-based
method was used for the calculations.
Category 7: Employee commuting. The average data method was used for the calculations.
The other level 3 categories are not relevant for the Group. Their relevance is assessed annually. Based on the specificities of the
Group's companies, we plan to improve the calculation and disclosure of Scope 3 GHG emissions in the future.
GHG intensity
GHG intensity per
net revenue
2024
Comparative
2024/2023, %
2023
Comparative
2023/2022, %
2022
Comparative
2022/2021, %
2021
Total GHG emissions
(location-based) per
net revenue (tCO2eq/
millions of Eur)
364.41
1%
361.86
32%
273.26
-25%
362.48
Total GHG emissions
(market-based) per
net revenue (tCO2eq /
millions of Eur)
636.23
-8%
694.92
65%
420.73
-20%
524.04
Calculation methodology. The values were calculated by dividing the total annual emissions (tCO
2
e) by the net revenue (in millions of Eur). The financial indicators
(income) used for the calculations are disclosed in the Consolidated and Company's Financial Statements, section 12.2 "Consolidated Statement of Comprehensive
Income". 
In terms of total GHG emissions in 2024, Scope 2 makes the largest share of 61%. Scope 1 makes 10% and Scope 3 makes 29%.
Looking at total 2024 GHG Scope 1 and 2 emissions, GHG emissions increased by 6% compared to the 2019 baseline and
decreased by 16% compared to 2023. The increase in Scope 1 and 2 emissions in 2024 compared to the 2019 baseline is mainly
due to higher fuel consumption (petrol, diesel, natural gas) in stationary and mobile installations, and higher technological losses
in electricity transmission.
In 2024, Litgrid's GHG emissions from electricity technological losses in its electricity transmission network operations (Scope 2)
decreased by 16% compared to 2023. One of the main reasons for this was the purchase of green electricity certificates to reduce
GHG emissions in this area. The number of technological losses and emissions is determined by the reconstruction works carried
out on the network and the associated planned and unplanned disconnections.
Emissions of sulphur hexafluoride (insulating gas, SF
6
) have decreased by 12% compared to 2019. This gas in Litgrid's Scope 1
GHG emissions accounts for 61%. At Group level, SF
6
gas accounts for only 1.5% of the total (Scope 1). One of the measures to
avoid repeated leaks and SF
6
GHG emissions is better maintenance, whereby, when a refill is made after 6 months or less since
the last one, an investigation is carried out and measures to prevent leaks (usually repairs and replacement of gaskets) are
envisaged. External, uncontrollable factors such as temperature changes also affect SF
6
gas leakage. There is a trend that as the
air temperature drops, the number of signals received from the TSs increases on the reduced SF6 gas pressures in the equipment.
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152
In the natural gas transmission activities, GHG emissions at Scope 1 (natural gas leakage) decreased by 44%. Compared to the
base year, emissions in this area in Amber Grid's operations decreased by 61%. The use of a mobile gas compressor, the reduction
in repair volumes and changes in the methodology for calculating natural gas leakage have contributed to the reduction in
emissions.
Other indirect GHG emissions (Scope 3).Total other indirect emissions from the Group's consolidated activities from sources
outside the Group's control and management (supply chain) increased by 19% compared to 2023. The increase is due to higher
capital investment in the fixed assets (Cat 2) category.
The largest Scope 3 emission categories in 2024: Capital goods (Cat 2) – 68%, Fuel-and energy-related activities (Cat 3) – 26%,
Purchased goods and services (Cat 1) – 4%.
Updates to the methodology for accounting Scope 1 and 2 emissions
In 2024, EPSO-G revised its methodology for calculating the Group's Scope 1 and Scope 2 GHG emissions to estimate greenhouse
gas emissions with a greater precision. In accordance with the Standard and good practice in emissions accounting, the values for
the base year 2019 were recalculated (rebaselining ) and all subsequent years up to 2023 have been recalculated. This revised
methodology was used to calculate GHG emissions for 2024.
The main factors that influenced the review and recalculation of the Group's GHG emissions:
1. The review of the Group's GHG emissions data and accounting methodology found that the Group's baseline GHG
emissions inventory did not apply the most up-to-date and robust GHG emission factors for electricity Scope 2 and Scope 1 gases
[CH
4
, SF
6
]. Calculations of the EPSO-G Group's GHG emissions for the period 2019–2023 used the derived electricity coefficient
obtained from the third-party system OneClickLCA.
The derivative coefficient was based on several databases and remained constant throughout the period. Considering
that the coefficient does not accurately reflect the current, real and evolving situation in the electricity market, and in accordance
with the recommendations of the Standard, we have recalculated the electricity and transmission losses using GHG emission
factors derived from the Association Of Issuing Bodies database (European Residual Mix).
2. In June 2024, Amber Grid's methodology for calculating natural gas, titled "Consumption of natural gas for
technological purposes in the AB Amber Grid gas transmission system," underwent a change. This methodology impacts the
calculation of uncontrolled natural gas (methane) emissions (Scope 1). The methodology assumes that the main gas pipelines are
made of steel and that gases do not penetrate the pipe walls and are thus not released into the atmosphere. For this reason, the
amount of gas leaking from the pipelines of the gas transmission system due to possible defects is only counted in cases where
leaks are detected and identified. According to the methodology, any leakage detected must be measured with available
measuring instruments (leak detection devices). For comparability of data, the updated methodology principles were applied to
recalculate the emissions of this GHG emission amount (uncontrolled methane) i.e. the values for the base year and the
subsequent years (2019–2023).
The 2019 base year recalculations based on the updated emission factors and the 2024 update of the natural gas calculation
methodology have resulted in a rebaselining of the 2019 base year Scope 1 and Scope 2 GHG emissions. All recalculations of
GHG emissions for the subsequent financial reporting years 2020–2023 have been carried out to ensure comparability as well as
to enable consistent monitoring of the Group's progress towards achieving its GHG emission reduction targets in line with the
SBTi based reduction pathway. This recalculation reflects more accurate GHG accounting principles and data (emissions
quantities) and maintains consistency and comparability with industry best practices and requirements. For more detailed
information please refer to the 2023 Progress Report on Sustainability Indicators.
E1-7 GHG removals and GHG mitigation projects financed through carbon credits
The Group does not absorb or store any amounts of GHG. The Group does not finance and has no plans to finance mitigation
projects outside its value chain through the purchase of carbon credits.
E1-8 Internal carbon pricing
The Group does not operate internal carbon pricing systems.
E1-9 Anticipated financial effects from material physical and transition risks and potential climate-related opportunities
The Group uses the option of phased-in disclosure and does not disclose the financial impact.
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153
E4 Biodiversity
During the Group's DMA, all biodiversity-related topics identified in the ESRS across the Group's value chain (more on this in
section 8.1) were evaluated. The preliminary assessment of the topics, the impact and financial materiality assessments and the
stakeholder survey revealed that topics Land-Use Change, Fresh Water-Use Change and Sea-Use Change and Species
Population Size are under material impacts. For more information on the DMA approach and assessment see the sections “SBM-
3 Material impacts, risks and opportunities and their interaction with strategy and business model. Identifying and assessing
sustainability impacts, risks and opportunities” and “IRO-1 Description of the processes to identify and assess material impacts,
risks and opportunities”.
Sustainability topic
Impacts
Risks and opportunities
Location in the value chain
Land-use changes, changes in
freshwater use, and changes in
marine use
Actual negative impacts are
related to land-use changes
resulting from the impact of
network infrastructure on
ecosystems and biomass
extraction upstream value chain.
*
Upstream
Species population size
Potential negative impacts
may be related to the
development and maintenance
of network infrastructure.
*
**
* No material risks and (or) opportunities have been identified within the Group.
**Impact on sustainability topics arises directly from the Group's operations, so no value chain location is indicated.
E4-2 Policies related to biodiversity and ecosystems
Prior to the DMA, the EPSO-G Group followed the principles set out in its environmental and sustainability policies to reduce its
impact on biodiversity. The material biodiversity topics identified during the Group's DMA (during the reporting year) will be
managed in the future through updated and supplemented environmental and sustainability policies and other internal
procedures or inventories. To reduce the impact of the Group's activities on biodiversity, the new strategy sets a new direction of
zero net loss of biodiversity. The Group also foresees updating biodiversity management as defined in the Group's policies and
developing a biodiversity management plan.
E4-3 Policies related to biodiversity and ecosystems
EPSO-G Group companies are dedicated to protecting biodiversity during the operation, expansion, or upgrading of energy system
infrastructure by monitoring biodiversity as needed, and, in cases of unavoidable objective circumstances, through the design and
implementation of necessary mitigation or compensation measures. This is ensured by carrying out a mandatory environmental
impact assessment (EIA) before projects or works are carried out.
Group company’s Amber Grid compressors, gas metering, gas distribution stations and gas pipelines, together with the 25-metre
protection zone, enter, border or cross protected areas and objects. In total, Amber Grid's substations border 3 protected areas
and cross the Luponė stream; whereas the main pipeline is located across the entire territory of Lithuania: it crosses 414 rivers, 9
ponds, enters the territory of 41 nature reserves, 2 botanical natural heritage sites, 5 biosphere polygons and 52 areas important
for habitat protection. Post-construction monitoring of the individual phases of the Gas Interconnection Poland-Lithuania (GIPL)
pipeline will be carried out for 4 years after completion in 2022. It monitors how the local flora, fauna and species diversity
characteristic of the area are recovering after the construction of the pipeline and whether additional measures are needed to
restore or improve the pre-construction situation. Although biodiversity and landscape were damaged during the construction of
the pipeline, monitoring shows a natural recovery of biodiversity and landscape. No additional measures (fixing river slopes,
planting crops, etc.) were needed in 2024.
More than 606 km of Litgrid's overhead transmission lines and about 21 km of cable lines cross protected areas. The most
significant impacts on biodiversity are on birds. After the EIA procedures and on the recommendation of ornithologists, special
pendants and spirals have been hung on the wires to increase the visibility of overhead lines for birds and bats. For its projects,
Litgrid also carries out post-construction period monitoring, which monitors the physical impact of overhead lines on birds and
bats. No material impacts on bird and bat populations or species diversity have been identified from 2021.
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154
During the breeding season, Litgrid and Amber Grid take measures to ensure that their operational or construction activities
minimally interfere with the welfare of birds. On the advice of ornithologists, works are restricted from 1 May to 31 July due to
potential disturbance to birds during their breeding season. This is assessed responsibly before drawing up project schedules.
The material biodiversity topics identified during the Group's DMA assessment (in the reporting year) will be managed in the
future through appropriate actions and resources.
E4-4 Policies related to biodiversity and ecosystems
Currently, there is no information available on the resources and indicators identified to manage the Group's negative impacts on
biodiversity and ecosystems. To reduce the negative impact of the Group's corporate activities on biodiversity and ecosystems,
the new Group strategy sets a target of zero net loss of biodiversity. To meet the target, the Group envisages developing an action
plan shortly.
E4-5 Impact metrics related to biodiversity and ecosystems change
The Group has no biodiversity and ecosystem-related impact indicators identified at this stage.
E5 Circular economy
During the Group's DMA, all circular economy topics identified in the ESRS across the Group's value chain were evaluated (more
details can be found in section 8.1). The preliminary assessment of the topics, the impact and financial materiality assessments
and the stakeholder survey revealed that topics Land-Use Change, Fresh Water-Use Change and Sea-Use Change and Species
Population Size all are related to material impacts.
For more information on the DMA approach and assessment see the sections “SBM-3 Material impacts, risks and opportunities
and their interaction with strategy and business model. Identifying and assessing sustainability impacts, risks and opportunities”
and “IRO-1 Description of the processes to identify and assess material impacts, risks and opportunities”.
Sustainability issue
Impacts
Risks and opportunities
Location in the value chain
Resource inflows, including
resource use.
Resource ouflows related to
products and services
Potential negative impacts
relate to the planned
development of energy
transmission infrastructure.
-*
-**
Waste
Actual negative impacts arise
from waste generated by the
Group's operations and
throughout the value chain.
-*
Entire value chain
* No material risks and (or) opportunities have been identified within the Group.
**Impact on sustainability topics arises directly from the Group's operations, so no value chain location is indicated.
E5-1 Policies related to resource use and circular economy
The Group has no direct policy provisions governing the use of resources and the development of the circular economy within
the Group. The Environmental Policy states that the Group's companies must follow the principles of pollution prevention,
reduce the amount of waste generated by their operations and ensure safe and responsible waste management.
The Group-wide Environmental and Sustainability Policies define the environmental and sustainability principles that guide the
entire Group. The criteria for the development of a circular economy are important, but have not yet been integrated into the
Group's overall strategy. The Group's strategy includes a preference for circular procurement practices.
Minimising the waste produced by the Group's activities and ensuring its responsible management is a key environmental priority
for the Group. The policy does not specify what proportion of secondary resources will be used in the Group's operations, thereby
reducing the need for primary resources.
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The current operational policies at the Group level do not detail impacts, risks and opportunities at the value chain level. Still, we
intend to deepen and broaden our approach to assessing the materiality of the whole chain and to integrate the principles of this
approach into our management policies and other operational documents in these areas.
E5-2 Actions and resources related to resource use and circular economy
The Group has no action plan on resource use and the development of the circular economy. However, a number of circular
economy (resource conservation and waste reduction) processes are already underway across the Group:
• During maintenance and repair of natural gas pipelines, removed components (e.g. metal pipes) are directed for recycling.
• Recovering (secondary use) of resources. Still usable pipeline components are refurbished and reused in new projects (if
possible). Efforts have consistently been made to regenerate insulating oil and SF
6
gas on-site initially; only if the necessary
process parameters are not achieved is the material directed to waste, and the equipment is replenished with fresh oil or gas.
When existing transformers are dismantled, the insulating oil contained in them is diverted to an oil depot for further use (if
the required parameters are met).
• Extending service life. The Litgrid company's requirement to increase the thickness of the zinc layer of steel supports extends
the service life of the supports of transmission lines by up to 1.5 times.
• Replacing old office furniture with new furniture involves auctions (resales) of old furniture, where employees can buy and
reuse the furniture for a second life. There are 3 stages of the resale-purchase, during which the sales price changes to give
the furniture a second life. If not sold within 3 stages, the office equipment and furniture is passed to the recycler.
The focus for 2025–2027 is on promoting and developing a sustainable supply chain:
1. Continuation of existing sustainability initiatives in procurement: Group's Supplier Code of Conduct and Verification
process for Group operating partners have been revised and adjusted as necessary; the information system for supplier
screening has been improved;
2. Initiating new sustainable procurement initiatives: we will perform an initial analysis for the development of a Supplier
Sustainable Engagement Programme during 2025.
The Group's current and anticipated future initiatives regarding waste recycling, reusing and prolonging the life cycle of resources
directly contribute to reducing the amount of waste generated.
The Group is making efforts to ensure that waste generated during operation and maintenance work is managed as efficiently as
possible in accordance with circular economy principles:
• Waste, including waste from precious raw materials such as metals, is separated and sent to certified recyclers, ensuring its
return to the market.
• Disassembled equipment parts that are suitable for reuse are stored and reused during maintenance or other repair work,
reducing the need for new raw materials.
• Contractors carrying out refurbishments are obliged to separate waste on site and to report on its transfer to waste managers.
The Group contributes to the circular economy by promoting collective actions and cooperation with value chain players:
• We work with certified waste managers and recyclers to ensure that 100% of recyclable waste is returned to the market.
• Contractors carrying out refurbishments are obliged to comply with the requirements of the circular economy and to separate
waste on site. They must also provide detailed information on waste management, including the quantities of materials recycled.
Actions to prevent waste at the upstream and downstream end of a undertaking's value chain include reuse, handling, and timely
maintenance. Recovering is also promoted through renting of equipment (saving resources), resales of office furniture and other
equipment.
E5-3 Targets related to resource use and circular economy
Although the Group does not have targets related to resource use and the development of a circular economy, it performs waste
accounting, and all Group companies monitor their waste disposal and recycling trends. A waste log is kept and the quantities of
waste generated are compared each year.
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Waste accounting is regulated by the legislation of the Republic of Lithuania, and recycling is voluntary to ensure that waste is
returned to the market as raw materials.
E5-4 Resource inflows
EPSO-G Group companies neither produce nor market any goods or products in the course of their activities. The resource inflows
categories only disclose the resource inflows necessary for the enterprises to perform their services: the annual quantity of natural
gas and other tangible categories of various types of goods and resources (e.g. metal structures, steel, tin, aluminium, sand,
dolomite rubble and other smaller categories) required to maintain and operate the business. Accurate data is derived from the
accounting system. Information on sustainably sourced bio-based materials and reused secondary materials was not collected.
We plan to gather and share this information more comprehensively in upcoming reports.
The Group's activities involve the use of technical materials that are necessary for the operation and repair of transmission
networks (electricity and gas):
1. Metal parts: pipe sections, electrical cables, valves, fittings and other components made of steel and copper. These
materials are essential for maintaining and upgrading electricity and gas transmission infrastructure.
2. Plastic components: insulation materials and sealants, various composite materials used to protect and seal pipelines,
power lines and equipment.
3. Petroleum products/chemicals: lubricants and other chemicals are used, but their use is optimised to minimise
environmental impact.
The undertaking uses a range of machinery and equipment for network maintenance and repair, including:
1. Heavy machinery: excavators and cranes for pipeline construction and renovation work.
2. Equipment for operations: compressor sets, boilers and other equipment to generate energy.
3. Vehicles: trucks and specialised vehicles for transporting equipment and materials to work sites. Cars.
4. IT equipment: digital monitoring systems that monitor the operation of the gas transmission network in real time.
Materials used to deliver services (2024)
Materials received
Secondary materials
Total quantity
(t)
%
Total quantity (t)
%
Total weight of products
and technical materials
consumed during the
reporting period
(structural steel, steel,
aluminium, sand, etc.), t
18,557
n/a
n/a
n/a
Insulating oil for
transformers
14.9
n/a
n/a
n/a
Calculation methodology. Inflows data is obtained from the Group's accounting records; only data entered into the accounting systems in tonnes and kilograms is
used for the calculations. For materials in quantities recorded in other units (e.g. metres, cubic metres, etc.) we plan to develop a methodology and estimate their
weight in future reports. Historical data was not collected, as previously there was no legislative requirement to collect and disclose it.
The quantities of insulating oil were determined by actual measurements using a weighing scale. Insulating oil is deemed consumed when it has been filled into the
equipment (transformers). Afterwards, if the oil meets the required parameters, it can be returned from the plant to the depot (and it is being returned). Accounting
for returns is not yet in place.
E5-5 Resource outflows
EPSO-G Group companies are committed to the principles of pollution prevention and strive to reduce the amount of waste
generated in their operations and to ensure safe and responsible waste management. The Group's companies aim to handle the
waste generated by their operations according to the waste hierarchy: prevention and reduction, reuse, recycling and disposal. At
all Group companies, waste is sorted and sent to certified recyclers or handled in accordance with waste management
requirements.
EPSO-G Group companies neither produce nor market products or packaging. Consequently, from a resource outflows
perspective, only the waste generated during operations is relevant, with quantities detailed in the table below. The summary
does not include waste from undertakings Baltpool, Energy cells and EPSO-G, as their activities generate negligible amounts of
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office waste. Companies do not have their own containers and do not receive separate bills from the supplier for waste collection,
so it is not possible to obtain accurate data.
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Waste from operations
Waste generated, t
2024
2023
2022
2021
Total quantity
4,071.6
5,060.6
4,422.3
4,271.1
Hazardous
243.5
231.0
205.0
542.6
Non-hazardous
3,828.1
4,830.7
4,217.3
3,728.5
Waste directed for recycling
Total quantity
3,747.1
4,980.0
4,326.7
4,223.9
Hazardous
78.8
195.8
182.1
518.9
Non-hazardous
3,668.3
4,784.1
4,143.7
3,705.1
Waste directed for re-use
Total quantity
0
0
3.1
0
Hazardous
0
0
0
0
Non-hazardous
0
0
3.1
0
Waste directed to other recovery operations
Total quantity
152.3
0
0
9.6
Hazardous
138.3
0
0
0
Non-hazardous
14.0
0
0
9.6
Waste directed for disposal (with energy recovery)
Total quantity
163.8
78.2
50.6
35.1
Hazardous
24.5
35.2
22.9
23.7
Non-hazardous
139.3
43.2
27.6
11.4
Waste directed for disposal (landfill)
Total quantity
8.4
2.5
42.9
2.5
Hazardous
1.9
0.1
0
0
Non-hazardous
6.5
2.4
42.9
2.5
Note: No radioactive waste is generated by the Group's operations.
Non-recycled waste*
2024
2023
2022
2021
Total quantity, t
172.2
80.7
93.5
37.6
Share of total waste, %
4.2
1.6
2.1
0.9
Note: Non-recycled waste – the sum of waste sent for disposal.
Calculation methodology. The quantities of waste generated are recorded and accounted for by the responsible employees at each Group company. The weight of
the waste is recorded on the basis of the weighing results of the waste collection vehicles, which are recorded in the weighing systems of certified waste handlers.
All data is registered in the Unified Product, Packaging and Waste Record Keeping Information System (GPAIS). Consolidated data were processed based on GPAIS
reporting data from Group companies and information from Group companies on recycling and (or) other waste management from waste managers and (or)
collectors.
The main waste categories are construction and demolition waste (89% of total waste). This includes construction, reconstruction
or repair of energy transmission networks carried out by the Group's companies Amber Grid, Litgrid and the undertaking Tetas,
which carries out repairs and construction works at energy facilities. This waste is generated during the reconstruction of electricity
and natural gas transmission infrastructure (dismantling of existing overhead and cable transmission lines, transformer
substations, switchgears, including buildings, and gas mains). The quantities of this waste depend on the reconstruction and
renovation projects planned for a given period. Compared to the previous reporting period, the total amount of waste generated
decreased by 20%.
The bulk of construction and demolition waste consists of concrete and various metals such as steel, iron, aluminium, copper and
metal mixtures, metal structures and wires.
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Hazardous waste accounts for up to 5% of the Group's activities and is generated in the category of waste oil and oils (insulating
oil). The amount of non-recycled waste in the Group's operations for the period 2021 to 2024 ranges from 1% to 4%. 95–99%
of all waste is directed for recycling.
8.3. Social area
S1 Own workforce
During the Group's DMA, all sustainability topics identified in the ESRS across the Group's value chain were assessed (more
details can be found in section 8.1). The preliminary evaluation of topics, assessment of impact and financial materiality, and
stakeholder survey revealed that the activities of the Group's companies have an impact on or pose risks related to the topics
disclosed below.
For more information on DMA approach and assessment see the sections “SBM-3 Material impacts, risks and opportunities and
their interaction with strategy and business model. Identifying and assessing sustainability impacts, risks and opportunities” and
“IRO-1 Description of the processes to identify and assess material impacts, risks and opportunities”.
Sustainability topic
Impacts
Risks and opportunities
Location in the value chain
Working hours. Work-life
balance
Actual negative impact on
workers in the field (non-
administrative).
-*
-**
Decent pay
Actual positive impact due to
the transparent implementation
of remuneration policies.
-*
-**
Social dialogue. Freedom of
association, existing works
councils and workers'
information, consultation and
participation rights. Collective
bargaining, including the share
of workers covered by
collective agreements.
Actual positive impact is
created through open and active
communication and relations
with trade unions, works
councils and workers.
-*
-**
Health and safety
Potential negative impact on
employees' health and safety
due to specific working
conditions, especially for those
working on-site and in outdoor
environments.
Risks arise from non-
compliance with safety and
health requirements.
-**
Training and skills
development
Actual positive impact from the
provision of internal and
external skills (including soft
skills) development
programmes and career
development programmes for
employees across the Group.
-*
-**
Employment and inclusion of
people with disabilities
Actual negative impacts due to
minimal inclusion of people with
disabilities.
-*
-**
Privacy
Potencial negative impacts due
to the improper processing of
personal data, improper
processing of personal data by
third parties and personal data
breaches, which may adversely
affect the rights of employees
as data subjects.
-*
-**
* No material risks and (or) opportunities have been identified within the Group.
**Impact on sustainability topics arises directly from the Group's operations, so no value chain location is indicated.
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Potential negative and actual negative impacts identified in the Group's DMA arise directly to the Group's employees. To
understand and manage these negative impacts, we will review our current policies and internal procedures, risk management
mechanisms and the Group's corporate strategies in the future and aim to manage and mitigate them.
S1-1 Policies related to own workforce
The Group implements governance through policies and internal procedures to mitigate negative impacts on material
sustainability topics related to social issues, manage risks and realise opportunities arising from social issues. The Group actively
implements measures to promote the inclusion of all employees in the organisation's activities, ensuring their rights and well-
being, In accordance with the Group's Equal Opportunities Policy, the Diversity and Inclusion Strategy and the Labour Code of the
Republic of Lithuania. The Labour Code is designed to implement the following EU directives, which are intended to guarantee
internationally recognised human rights. The Group's activities are in line with the United Nations Guiding Principles on Business
and Human Rights, which require businesses to respect human rights and ensure that their activities do not directly or indirectly
contribute to human rights violations. Compliance with these principles is ensured by the policies and procedures described below,
which provide clear principles for preventing discrimination, harassment and violence. The implementation of these policies and
procedures is underpinned by employees training and effective monitoring mechanisms, such as anonymous reporting channels
that allow employees to report possible human rights violations.
These policies and internal procedures apply both within the Group and with external partners. The implementation of policies
and procedures is ensured by designated responsible persons who monitor the effective implementation of all established
measures. Policies relating to own workforce that apply to all employees. The management of material topics and negative
impacts is described below.
Management of the topic Work-life balance
• Equal Opportunities Policy defines measures to adapt working conditions and to match the needs of individual workers with
work processes.
• Compensation, Performance Appraisal and Development Policy provides for performance appraisal, development
opportunities, employee well-being and flexibility in working conditions to ensure work-life balance.
• Policy on Discrimination, Harassment and Violence provides employees’ protection against discrimination on the grounds of
family responsibilities and promotes a good work-life balance.
• The remote working procedures of the companies are designed to provide flexible working opportunities for employees and
cover the procedures for providing and organising remote working, employees' rights and obligations, including those relating
to information and cyber security, and other issues related to teleworking.
• Employees benefit from the guarantees provided by the Labour Code, such as additional vacation days for raising children,
parental leave and paternity leave. During their parental leave (PL), employees have access to additional voluntary health
insurance provided by their employer and one-off social benefits. Furthermore, to maintain good relations and foster loyalty
among employees in the PL, they are informed and invited to participate in internal events and initiatives for employees and
their children in the Group companies where they work.
• Before returning from the PL, employees have their pay reviewed to ensure it is comparable to that of other employees in similar
positions, maintaining fair pay for everyone and enabling them to join their work smoothly. Consideration is also given to the
family needs of employees, such as part-time work at the start or individual working hours.
Training and skills management
• Remuneration, performance appraisal and development policies:
1. The principle of linking to the Group's and the specific Company's strategy, values, performance assessment,
competency model, workforce continuity planning, professional and technical skills assessment.
2. The principle of personal responsibility, where the worker is responsible for his or her own learning outcomes, with
the employer providing the conditions and opportunities for learning and development.
3. The 70-20-10 principle, whereby 70% of development, improvement and learning activities take place during the
employee's work experience, 20% through communication and collaboration with colleagues and managers with diverse
expertise and competencies, sharing best practices, and 10% from structured training events (often, these are external
training events).
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• The Group engages in an annual performance review process assessing all employees' performance from the previous year,
discussing performance criteria and adherence to values and behaviours. It also looks at employees' expectations and career
opportunities, the forms of development that have taken place, competencies strengthened and those that need additional
attention. At the beginning of the year, employees are set goals for the year, and career and work organisation expectations
are recorded. Annual interviews with all employees discuss educational needs and record the year's developmental plan.
• The Group supports the acquisition of new professional competencies necessary for performing the work and anticipating
future needs and methods for obtaining those competencies while also providing the conditions for their acquisition.
Employees can choose the training necessary for their specific roles; Group companies also organise mandatory training at the
company level in accordance with legislation and internal procedures.
• A broad spectrum of training is offered for all or specific groups of employees, including training aimed at enhancing efficiency,
understanding and integrating technology into work processes, leadership and management topics, equal opportunities and
inclusion, motivation, and promoting a safe working environment and health.
• The Group facilitates the integration of new recruits into the working environment and work processes, organising integration
induction meetings, introductory company presentations and integration plans to provide a positive adaptation experience.
Managing equality and diversity, employment and inclusion of people with disabilities
• The Group’s Equal Opportunities Policy ensures equal opportunities for all employees, regardless of disability, gender, age or
other personal characteristics. It regulates the application of non-discrimination principles in employment, working conditions,
professional development and careers, promoting an inclusive and respectful working environment. The policy ensures that
all employees work in an equal opportunity and non-discriminatory working environment.
• The Group has a Diversity and Inclusion Strategy which sets out objectives and measures to promote an inclusive environment
for all employees. The aim of the strategy is to strengthen tolerance, inclusion and equal opportunities throughout the Group.
• Discrimination, Harassment and Violence Prevention Procedure covers measures to ensure a respectful and safe working
environment for all employees.
Decent pay
All employees of the Group are paid more than the minimum wage established by the legislation of the Republic of Lithuania.
Group companies have a unified policy on remuneration, performance appraisal and development based on the principles of
responsibility, transparency and accountability. This policy aims to ensure the effective management of payroll costs and create
motivating incentives, linking remuneration directly to the achievement of annual targets and the quality and value behaviours of
Group companies and individual employees. This Group Policy is approved or amended by the EPSO-G Board on the
recommendation of the Group's Remuneration and Appointments Committee. For more information on remuneration, please refer
to Management Report, part 6 Information on Employees and Remuneration Policy.
Privacy
The Group has a Personal Data Protection Policy based on the General Data Protection Regulation principles. The Policy defines
the measures the Group's companies took to ensure the security of the personal data processed and the roles and responsibilities
of the actors involved in protecting personal data. The requirements for processing personal data are set out in more detail in the
internal regulations of all Group companies. These Group-wide documents, which are based on uniform principles, create
consistent practices across companies when entering into personal data processing agreements, transferring personal data to
third parties, managing personal data security incidents and other processes.
The Group complies with the principle of accountability set out in the General Data Protection Regulation. Its companies maintain
records of their personal data processing activities, prepare privacy notices, and perform and document other actions mandated
by the General Data Protection Regulation.
We manage personal data protection risks by implementing technical and organisational measures, conducting compliance audits
to assess the adequacy of these measures, and unifying personal data protection processes across the Group.
In 2024, the Group carried out six compliance audits in the area of personal data protection. They did not reveal any significant
non-compliances, but identified processes to be improved in relation to the implementation of data subjects' rights.
Health and safety
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The Group has an Occupational Health and Safety Policy designed to ensure that employees enjoy safe and healthy working
conditions in their workplaces. The Group seeks to prevent work-related injuries and occupational diseases while fostering a
Group culture that nurtures a safe and healthy environment in which every employee contributes to this objective.
Group companies Litgrid, Amber Grid and Tetas have an Occupational Health and Safety Management System in place and are
certified according to ISO 45001. The Health and Safety Management System is applied to 100% of the Group's employees.
The Group has a systematic approach to involving employees and their representatives in matters relating to the impact on the
own workforce. This approach is realised by fostering continuous collaboration, commitment to the principles of the Code of
Conduct, the execution of the Diversity and Inclusion Strategy, and policies ensuring equal opportunities.
Trade unions and works councils
The Group maintains constant cooperation between employees and their representatives, promoting mutual dialogue. The Group
has Trade Unions and Labour Councils, which are involved in various decision-making processes in the companies, providing them
with information and advice. Employee representatives offer suggestions and recommendations, representing the interests of
employees in matters concerning working conditions, remuneration, fringe benefits, initiatives and events, enhancing the working
environment, strengthening internal culture, and addressing other issues. Regular meetings with management foster an open
dialogue and provide the opportunity to discuss relevant issues, such as diversity and inclusion initiatives, which enhance
employee engagement and create an inclusive, safe working environment.
Employee representatives are actively engaged in communicating with employees, advocating for their interests, and facilitating
the gathering of employee opinions and needs on various issues through anonymous surveys. In addition to participating in the
surveys, employees can make suggestions to employers' representatives by contacting them directly during meetings or by email.
This ensures that employees' views are heard and considered effectively.
All workers are 100% involved in signing collective agreements.
Recognising the importance of our workforce topic to the company and its stakeholders and the potential negative impact that
the company is causing on these sustainability topics (identified in the reporting year during the DMA), we will seek to review
future governance and policies on this topic.
Ensuring equal opportunities
The Group ensures equal opportunities for all employees, regardless of their gender, age, nationality, religion, disability or other
characteristics. The Equal Opportunities Policy and the Discrimination, Harassment and Violence Prevention Procedure provide
clear guidelines to ensure that every employee works in a respectful and safe environment. These provisions apply both within
the organisation and with external partners. The implementation of the procedures is guaranteed by designated responsible
individuals who oversee the effective execution of all measures.
The Group's Diversity and Inclusion Strategy seeks to foster a workplace culture in which every employee feels respected and
valued. The objectives of this strategy include strengthening the competencies of managers through an inclusive working
environment, the inclusion of diverse Groups in the labour market, and the use of transparent and objective selection processes
in line with the Selection Policy. It also encourages staff participation in inclusion initiatives, such as story sharing and internal
training, which contribute to a tolerant and open environment.
Performance Appraisal and Remuneration Policy The Group adheres to the principles of transparency and objectivity in
employment relations, which are ensured through the Staff Remuneration, Performance Appraisal and Development Policy. The
policy includes clear pay criteria, incentives and performance evaluation processes. The remuneration system is clear, transparent
and based on staff performance, competency assessment and individual objectives. Such attitudes boost employee engagement
and satisfaction.
The Procedures for the Prevention of Discrimination, Harassment and Violence outline specific measures aimed at preventing
discrimination, harassment, and violence in the workplace. This document provides for the appointment of responsible persons,
training and education of workers on their rights and opportunities. Employees have access to anonymous whistleblowing
channels, which help ensure safety and security across the Group.
Mechanisms for monitoring and implementing equal opportunities
• A system of internal channels for reporting irregularities. The Group has established internal whistleblowing channels that
allow employees to report irregularities anonymously or confidentially. The system ensures transparency and accountability
within the organisation; the information collected is regularly analysed to enhance processes and policy implementation.
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• Regular staff training. EPSO-G organises training for staff and managers to strengthen their competences in the areas of anti-
discrimination, equal opportunities, diversity and inclusion. The training centres on practical examples of creating an inclusive
working environment and addressing instances of discrimination.
• Direct contact with employee representatives. The Group has Labour Councils and some group companies have Trade Unions
to ensure that employees' interests are represented. These structures play an active role in addressing employee welfare
issues, ensuring constructive dialogue between management and employees.
The Group provides its employees with easy access to all documents relating to their rights via the intranet platform. The intranet
publishes policy documents, training materials and important information on company initiatives. Regular meetings between
management and employee representatives allow for transparent communication and a swift response to employee needs.
EPSO-G incorporates human rights principles into its supply chain management, ensuring that suppliers adhere to standards
regarding occupational safety, the prevention of forced labour, and the prohibition of child labour. These principles are regularly
reviewed and integrated into the processes of engagement with partners.
Mechanism for redress for human rights violations
The Group actively implements measures to promote the engagement of all employees in the organisation's activities, ensuring
their rights and well-being. In line with the Group's Equal Opportunities Policy, the Diversity and Inclusion Strategy and the
Republic of Lithuania Labour Code, the following measures are being implemented:
• Creating an inclusive working environment: all employees are given equal opportunities to participate in work processes and
decision-making, regardless of their individual characteristics.
• Training for managers and employees: developing competencies in diversity management and equal opportunities.
• Adaptation of working conditions: adjusting working conditions to meet workers' needs, including flexibility in working hours
and technical modifications.
• Anonymous channels: workers can safely report situations that limit their involvement or violate their rights.
These measures ensure that all employees are engaged in the organisation's activities and can maximise their potential.
Measures to remedy affected human rights and to provide an opportunity to redress the impact
The Group guarantees that the consequences of human rights violations are adequately addressed in line with the Republic of
Lithuania Labour Code and the organisation's internal procedures, including the Prevention of Discrimination, Harassment and
Violence Procedure, the Equal Opportunities Policy, and the Code of Ethics.
Main measure:
• Anonymous reporting channels: employees have the opportunity to report human rights violations safely and anonymously
through established channels.
• Internal investigations: reports of irregularities are promptly investigated according to clearly defined procedures.
• Rehabilitation measures: if a violation is confirmed, measures are taken to ensure that the victims receive appropriate
assistance, including counselling, psychological support or adaptation to working conditions.
• Designation of responsible persons: those accountable for safeguarding human rights guarantee that all violations are
thoroughly investigated and remedied.
These measures help to ensure that the impact of human rights violations is effectively remedied and that the organisation
provides a safe and respectful working environment.
S1-2, S1-3 Processes for engaging with own workers and workers' representatives about impacts and Processes to
remediate negative impacts and channels for own workers to raise concerns
Group employees are involved in decision-making. Employees and their representatives, such as trade unions and labour councils,
are engaged by being regularly informed and consulted, as well as by analysing the feedback results and integrating them into
decisions. This process is the responsibility of the Group's People and Culture function.
Annual employee engagement survey and other surveys
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The Group carries out an annual employee engagement survey. This survey assesses the extent to which employees feel involved
in decision-making and empowered, how effectively the company is providing equal opportunities, and whether it upholds a
tolerant and respectful workplace culture. Employees can comment anonymously and share their views. The survey requests
employees to assess not only the company but also their line managers across various dimensions, including empowerment and
engagement levels.
All employees are eligible to participate in the survey, so this tool provides a comprehensive overview of employees' views and
opinions on a wide range of issues within the Group. The results of the survey are presented to both employee representatives
and all employees, and the results are analysed and used to improve business processes.
Some Group companies conduct brief annual surveys on emotional well-being.
Employee meetings
The Group organises periodic employee meetings to present key issues and share news, achievements and targets. During the
meetings, employees are encouraged to participate actively, ask questions of concern, and share their views, thereby fostering a
culture of open dialogue and communication.
Roundtable discussions
It represents a new way of engaging employees and their representatives in discussions on various topics of interest. Its aim is to
collect a wider array of opinions and suggestions on particular subjects in a non-binding meeting format, and to apply these
insights to enhance the Group's processes and decision-making.
Group Equality Policy and Diversity and Inclusion Strategy
The Group encoutages the engagement of the undertaking's employee representatives to ensure the implementation of the Equal
Opportunities Policy, promote diversity and raise awareness of the topic. The Diversity and Inclusion Strategy provides for the full
integration of employee inclusion measures, involving employee representatives in discussions on improving and adapting the
working environment to persons with different needs and in assessing employee needs.
Group Code of Ethics
The Code promotes cooperation between employees and management based on respect, transparency and openness.
Anonymous reporting channels
The Group provides anonymous reporting channels that enable employees to report concerns about the working environment or
possible impacts on their rights, breaches of the Code of Conduct, or equal opportunities in complete confidence.
Health and safety
In 2024, the Group introduced a specialised occupational safety and health information system, DARSIS. This system encourages
workers to record incidents, report occupational safety and health violations or unsafe working conditions, express the need for
additional protective measures, and familiarise themselves with occupational safety instructions. It also highlights the necessity
of mandatory health check-ups, the vaccinations offered by the employer, the results of the occupational risk assessment, and
the measures to mitigate risks.
Privacy
Employees of Group companies are made aware of the privacy legislation and its provisions. Where relevant, employees are
advised and involved in related activities and provided with memos or presentations on key personal data protection issues.
Measures to gather the views of particularly vulnerable and marginalised Groups
EPSO-G takes these measures to find out the views of vulnerable Groups, such as women, migrants or people with disabilities:
• Anonymous messaging channels. In accordance with the procedure on "Internal whistleblowing", employees can
anonymously report problems and express their views.
• Employee engagement surveys. The annual survey allows workers to give their views on working conditions and inclusion
anonymously.
• Equal Opportunities Policy and Diversity Strategy: These policies guarantee that all social groups have a voice and are shielded
from discrimination.
• Labour Council/Trade Union involvement: The Labour Council/Trade Union represents all employees, including vulnerable
Groups, by passing on their comments and suggestions to management.
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These measures help ensure that particularly vulnerable groups can safely express their views.
Mechanisms to ensure remediation
• Anonymous messaging channels: In line with the procedure of "Internal whistleblowing", employees can safely report any
potential adverse impacts.
• Evaluating feedback. Annual employee engagement surveys provide an opportunity to identify potential challenges in the
working environment and address them in a timely manner.
• Monitoring process. The People and Culture team consistently reviews adherence to the organisation's policies and evaluates
the effectiveness of the measures put in place.
Monitoring and ensuring the effectiveness of channels
The Group has clearly defined processes in place to monitor the issues raised and resolved and to ensure the effectiveness of
the reporting channels. These processes are based on the organisation's Code of Conduct, the "Internal Whistleblowing"
procedure, the Prevention of Discrimination, Harassment and Violence procedure and other internal documents.
• Channel monitoring processes. Data collection and analysis: all reports and complaints are recorded according to established
procedures, and their progress and outcomes are systematically monitored. Feedback: employee surveys and annual
engagement surveys gather views on the accessibility, effectiveness, and trust in the channels.
• Statistical analysis: the channels' frequency of use and effectiveness are evaluated to identify opportunities for improvement.
• Principles of ensuring channel efficiency. Legitimacy: all reporting channels function in accordance with the company's
established procedures, ensuring that these procedures comply with legislation and international human rights standards.
Accessibility and visibility of the channels: Information is available in the Document Management System and on the intranet.
Employees are routinely informed about the availability and use of the channels. Transparency: complaint schemes are clear,
and information regarding their progress is shared with whistleblowers to the extent that confidentiality permits. Compliance
of results: the outcomes achieved through reporting channels are evaluated against international human rights standards,
ensuring effective impact management.
• Stakeholder engagement. Dialogue with rapporteurs: EPSO-G encourages constructive dialogue with rapporteurs seeking a
mutual agreement on an acceptable solution rather than resolving issues unilaterally. Labour Council: as the employees’
primary representative, the Labour Council provides feedback on the effectiveness of the channels and the progress of reports.
• Continuous improvement.
• Insights gained: reports and complaints are used to identify systemic problems, which are then addressed to prevent future
impacts.
• Learning: channel improvement is based on continuous process evaluation and analysis of employee feedback.
EPSO-G has integrated monitoring and performance assurance processes to ensure that reporting channels are legitimate,
accessible, transparent and based on constructive dialogue with employees. These processes are continually refined based on
feedback and lessons learned to ensure high levels of trust and effective impact management.
Ensuring awareness, trust and protection
Evaluating awareness of the channels.
The Group ensures that all employees are aware of the channels and processes in place to raise concerns or needs by using the
following methods:
• Compulsory access to internal documents: All employees are made aware of the Internal Whistleblowing Procedures, the
Prevention of Discrimination, Harassment and Violence Procedure and other relevant documents through the Document
Management System.
• Regular reminders via the intranet: The availability of the channels and information on their functioning is periodically updated
and reminded via the company intranet.
• Employee engagement surveys: Annual surveys measure employee awareness and trust in the channels.
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Ensuring trust
• Confidentiality. Channels such as anonymous reporting mechanisms allow employees to submit information securely and
anonymously.
• Feedback. Whistleblowers are kept informed about the progress and outcome of the investigation, as far as confidentiality
requirements allow.
Anti-retaliation policy
EPSO-G applies strict safeguards against retaliation, as set out in the Internal Whistleblowing Procedures. This policy protects
employees who raise concerns from adverse behaviours or consequences.
All employees are informed of these safeguards through the Document Management System and intranet notifications.
EPSO-G ensures that employees are aware of, trust, have confidence in the reporting channels, and are protected from
retaliation. These measures help to create an open and safe working environment where employees can freely express their
needs and concerns.
S1-4 Taking action on material impacts and approaches to mitigating material risks and pursuing material opportunities
related to own workforce, and effectiveness of those actions and approaches
Actions taken to minimise negative impacts on all Groups’ employees.
• Working hours / Work-life balance. In the engagement survey, we measure the work-leisure balance. In 2024, the indicator
has increased by 21 points to 76 in comparison to the previous period. The target total score for the engagement survey as
one of the indicators in the updated strategy is at least 70. The engagement rate for 2024 is 74. Employee engagement is
calculated based on the average of the scores for the five statements. In the engagement survey, employees score these
statements, and the overall score is determined by calculating the percentage of employees who assigned the highest scores
relative to the total number of employees. Other aspects of the engagement survey, which are not directly part of the survey
results but assist in evaluating crucial areas such as training, talent management, or work-life balance, are calculated in a
similar manner. Research based on the Engaged Performance Survey ©.
• Training and skills. Achievement of strategy objectives requires leadership and general competencies, as updated in 2024. A
catalogue of training courses has been created, showcasing the development and planning of all the necessary competencies.
• Employee Engagement Survey measures Talent Management annually; in 2024, the indicator increased by 6 points to 79.
Calculation of the indicator is based on the Engaged Performance Survey©.
• Equality and diversity. The updated strategy aims to create a safe and positive working environment and culture. In November
2024, we established unified Diversity and Inclusion Guidelines for all Group companies and devised a comprehensive action
plan for 2025. Diversity targets for age, gender, the proportion of women in management roles, and the percentage of
employees with disabilities within the overall workforce have been established. Starting in 2025, the engagement survey will
also assess diversity and inclusion. This indicator was not monitored in 2024.
• Employment and inclusion of people with disabilities. The Diversity and Inclusion Plan 2025 anticipates participation in the
SOPA DuoDay project, where a person with a disability spends a working day with a company employee, and the company
receives feedback on how the workplace accommodates individuals with disabilities.
• Decent pay Remuneration scales were updated in 2024. Each year, the performance evaluation is accompanied by a review
of employee remuneration.
• Privacy. In 2024, there were no personal data breaches in Group companies; however, there were isolated incidents.
Health and safety. In 2024, one serious accident was recorded in a Group company.
Timeframes for completion of key actions
• Equality and diversity. The implementation of the Equality and Diversity Strategy commenced in 2024. It is designed as an
ongoing process, with a periodic review of the strategy every three years. Equal Opportunities Month and employee training
is an annual event held every November, accompanied by additional training sessions throughout the year.
• Working hours / Work-life balance. The employee engagement surveys are conducted every January, and their results are
summarised with insights integrated into action planning during the first quarter of the year.
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• Analysis and improvement of key actions. Key actions are implemented and reviewed annually in the light of research and
monitoring results. The process continues throughout the year. Strategic actions are carried out throughout the duration of the
strategy.
EPSO-G's key actions are designed for coherent and continuous implementation over the planned timeframes, focusing on annual
performance reviews and strengthening employee engagement.
S1-5 Tasks related to managing significant negative impacts, enhancing positive impacts and managing significant risks
and opportunities
The Group's strategy involves cultivating a cohesive culture and identity, which includes promoting diversity and inclusion while
building a capable and sustainable organisation. Managing these areas guarantees sustainable performance, employee
satisfaction, and organisational competitiveness.
The Engagement Survey measures employee engagement, job satisfaction, loyalty, work-life balance and other aspects of the
organisation's climate and culture. The target engagement score as one of the indicators in the updated strategy is at least 70.
The updated strategy aims to create a safe and positive working environment and culture. In November 2024, we established
unified Diversity and Inclusion Guidelines for all Group companies. Starting in 2025, the engagement survey shall also assess
diversity and inclusion. The Diversity and Inclusion Plan 2025 anticipates participation in the SOPA DuoDay project, where a
person with a disability spends a working day with a company employee, and the company receives feedback on how the
workplace accommodates individuals with disabilities.
An annual review of employees remuneration is planned to continue.
To enhance the management of associated risks, we plan to develop interactive personal data protection training for all Group
companies in 2025, unify the Group’s operational records, and place a greater emphasis on data processors and their processing
activities.
The updated strategy sets a target of zero serious or fatal accidents (including contractors within the Group's facilities tasked
with operating, refurbishing, and constructing new electricity and gas transmission networks).
S1-6 Characteristics of the Undertaking’s Employees
Breakdown of employees by gender
2024
2023
2022
2021
Men
1,020
968
997
1,021
Women
333
303
278
254
Other
-
-
-
-
Total number of
employees
1,353
1,271
1,275
1,275
Calculation methodology. The number of employees and the breakdown by gender are reported by head-count, regardless of the hours worked.
The Group is dominated by permanent contracts. However, where appropriate, employees are also recruited on fixed-term
contracts, such as to cover for employees on parental leave or for specific project work or additional tasks. The type of contract
does not discriminate on the basis of gender, age, or other personal aspects; rather, it depends on the agreement and the needs
of both the company and the employees. The number of fixed-term contracts in the Group remains stable in 2024.
Breakdown of the number of employees by gender and type of contract
Women
Men
Total
Women
Men
Total
Women
Men
Total
Women
Men
Total
2024
2023
2022
2021
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Number of
employees
333
1,020
1,353
303
968
1,271
278
997
1,275
253
1,022
1,275
Number of
permanent
employees
325
1,008
1,333
292
959
1,251
266
957
1,223
235
988
1,223
Number of
temporary
employees
8
12
20
11
9
20
12
40
52
18
34
52
Calculation methodology. The total number of employees was broken down into three categories according to the type of employment contract and the gender
indicated by the employee. The total number of employees includes staff on parental leave.
Employee turnover
2024
2023
2022
2021
Employees who quit or were made
redundant*
179
248
435
237
Employee Turnover Ratio, %**
13
20
34
19
Calculation methodology. ** Number of resignations or redundancies (based on the number of employees ) divided by the number of employees (headcount,
regardless of the full-time equivalent status) as of the end of the reporting period, i.e., December 31st; this includes employees for whom this day was also the last
working day at the company under their valid employment contract.
* Employees who left voluntarily, were made redundant, retired, or died while performing their duties (headcount).
At the end of 2021, additional employees were hired for a fixed term to support a major project. The project was completed in
2022, so there was no need to hire additional workers, and their contracts expired. In 2024, the Group's Employee Turnover Ratio
was the lowest since 2021 at 13%.
S1-8 Collective bargaining coverage and social dialogue
Collective agreements cover 92% of the Group's employees. Collective agreements are not implemented in EPSO-G, EPSO-G
Invest and Baltpool. All 100% of the Group's employees are represented in the workplace.
S1-9 Diversity metrics
Gender distribution of employees at top management level
Number of
employees
Employee
share, %.
Number of
employees
Employee
share, %.
Number of
employees
Employee
share, %.
Number of
employees
Employee
share, %.
2024
2023
2022
2021
Men
31
2.3
27
2.1
26
2.0
23
1.8
Women
4
0.3
4
0.3
4
0.3
2
0.2
Total
35
2.6
31
2.4
30
2.4
25
2.0
Calculation methodology. The definition of top management: company CEOs, top managers, directors. Board members are excluded.
Distribution of employees by age groups
Number of
employees
Employee
share, %.
Number of
employees
Employee
share, %.
Number of
employees
Employee
share, %.
Number of
employees
Employee
share, %.
2024
2023
2022
2021
Under 30
years old
152
11
147
11
138
11
154
12
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30–50
years old
814
60
760
60
769
60
740
58
Over 50
years old
387
29
364
29
368
29
381
30
Total
1,353
100
1,271
100
1,275
100
1,275
100
Calculation methodology. The calculation uses the total number of employees, which is broken down by year of birth into three categories (under 30, 30–50 and
over 50 years old).
S1-10 Adequate Wages
In 2024, the adequate wage in Lithuania was €924 gross per month (minimum monthly wage). In this context, all employees in
the Group's companies are paid adequate wages.
S1-11 Social protection
All salaried Group employees are protected by social security against income loss resulting from significant life events, including
illness, unemployment (while employed by the company), work-related accidents, acquired disabilities, parental leave, and
retirement, among others. Social protection is provided in accordance with the current legislation of the Republic of Lithuania and
additional benefits offered by the company.
Additional benefits include 100% pay for the first two (2) days of sick leave that coincide with the employee's work schedule;
meeting the national average salary (100%), supplementary voluntary health insurance, lectures on wellness, emotional well-
being, physical activity and motivation, vaccinations against flu and tick-borne encephalitis (for outdoor workers).
Additionally, the Group provides one-time financial support to families upon the birth or adoption of a child, as well as to those
raising three or more children. Various benefits are granted depending on family circumstances, along with one-time payments in
case of emergencies.
S1-12 Persons with disabilities
Proportion of employees with disabilities
2024
2023
2022
2021
Share of employees with
disabilities, %
1.0
0.6
0.6
0.5
Total number of
employees
1,353
1,271
1,275
1,275
Calculation methodology. The data is based only on information provided by employees, subject to restrictions on the collection of such information due to possible
human rights violations.
S1-13 Training and skills development metrics
Information on training and skills development indicators in line with ESRS will be collected from 2025.
Percentage of employees who participated in regular performance and career development reviews
2024
2023
2022
2021
Total number of
employees
96
100
98
99
Women
100
100
94
99
Men
86
100
92
100
Calculation methodology. All employees are counted on the basis of head-counting of hired employees. The gender-based calculation is performed by dividing the
number of participants in reviews by gender by the total number of hired employees of the respective gender. Performance evaluation discussions were conducted
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for 100% of employees who were working during the period when the performance evaluation process was organized in the respective company and had
completed their probationary period at that time.
S1-14 Health and safety metrics
Health and safety metrics
2024
2023
2022
2021
Employees of the company:
Number of fatalities as a result of work-related injuries and work-
related ill health
0
0
0
0
Number of recordable work-related accidents
4
4
4
1
The total number of hours worked by all employees
2,529,242.9
2,459,368.0
2,672,595.9
2,333,738.0
Rate of recordable work-related accidents
1.58
1.63
1.50
0.43
Number of cases of recordable work-related ill health
1
0
0
0
Number of days lost to work-related injuries and fatalities from
work-related accidents, work-related ill health and fatalities from
ill health
126
51
163
47
Non-employees classified as own workforce:
Number of fatalities due to work-related injuries and work-
related ill-health among non-employees working at the
company's sites
0
0
0
0
Calculation methodology. In light of the information received regarding a workplace accident, an investigation into workplace accidents is conducted in accordance
with the Regulations on the Investigation and Recording of Workplace Accidents approved by the Lithuanian Government. Following the issuance of a certificate
from the medical institution where the victim received primary care, the investigation is conducted depending on the nature of the injury, either by an internal
bilateral commission established by the employer (if the injury is not severe) or by a commission set up by the chief inspector of the National Labour Inspectorate (if
the injury is serious). After the investigation, the commission prepares an N-1 form report, which is submitted for information to the employer (the company), the
victim, the National Labour Inspectorate and the State Social Insurance Fund Board (SODRA). The investigation record is recorded in a register in the Group's digital
occupational health and safety software, DARSIS.
S1-15 Work-life balance metrics
Percentage of entitled employees that took family-related leave, and a breakdown by gender
2024
2023
2022
2021
Total number of employees
3.7
3.5
3.3
2.5
Men
2.7
2.6
2.8
2.1
Women
6.6
6.3
5.0
4.3
Calculation methodology. The calculation uses the head-count of employees, data on employees on family-related leave and the employee's gender. In line with
social policy, all employees are entitled to family-related leave.
S1-16 Remuneration metrics
Gender pay gap
2024
2023
2022
2021
Total number of employees
-1.46
-3.70
-10.44
-14.37
Calculation methodology. Formula used to calculate the gender pay gap: (Average hourly earnings before tax of male employees minus average hourly earnings
before tax of female employees) divided by average hourly earnings before tax of male employees multiplied by 100.
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Annual total remuneration ratio
2024
2023
2022
2021
The annual total remuneration ratio of the highest paid
individual to the median annual total remuneration for all
employees (excluding the highest-paid individual)*
3.41
3.49
3.35
3.64
Calculation methodology. Annual total remuneration of the highest-paid individual in the company divided by the average annual total remuneration of salaried
employees (excluding the highest-paid individual).
S1-17 Incidents, complaints and severe human rights impacts
In 2024, the Group received no reports on affected human rights.
S3 Affected communities
During the Group's DMA, all sustainability topics identified in the ESRS across the Group's value chain were assessed (more
details are provided in section 8.1). The preliminary assessment of the topics, the impact and financial materiality assessments
and the stakeholder survey revealed that topics Water and Sanitation, Land-Related Impacts and Security-Related Impacts are
related to material negative impacts.
For more information on the DMA approach and assessment see the sections “SBM-3 Material impacts, risks and opportunities
and their interaction with strategy and business model. Identifying and assessing sustainability impacts, risks and opportunities”
and “IRO-1 Description of the processes to identify and assess material impacts, risks and opportunities”.
Sustainability topic
Impacts
Risks and opportunities
Location in the value chain
Water
and sanitation; Land-related
impacts;
Security-related impacts
Actual negative impacts arise
from the nature of the Group's
activities and the specificity of
the industry, resulting in
impacts on communities (noise,
dust, traffic restrictions, etc.).
-*
Upstream and downstream
* No material risks and (or) opportunities have been identified within the Group.
S3-1 Policies related to affected communities
The Groups’ Policy on Environmental Protection outlines the key Group operating principles to reduce the impact on affected
communities. The Group commits to:
• Ensuring opportunities for local communities and other stakeholders to be involved in environmental impact assessment
procedures.
• Cooperating on environmental issues with business partners, public authorities and bodies, non-governmental organisations,
and other stakeholders including communities.
• Communicating openly to stakeholders about the environmental activities implemented by the Group companies and the
indicators achieved.
The Group’s Sustainability Policy outlines its overarching sustainability principles that guide the development of the Group's
corporate activities and foster a progressive organisational culture. In designing and implementing its sustainability actions, the
Group seeks the full involvement of its stakeholders and promotes transparent and fair cooperation with consumers and
manufacturers, suppliers, the public, the owner, employees, the media and other stakeholders including local communities.
The Group’s Support Policy aims to foster cooperation with communities in areas where the Group's companies operate or
implement projects and programs. It also extends to other societal groups whose interests are affected by the activities of the
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Group's companies, focusing on enhancing the well-being of communities in close proximity to the Group's operations.
Additionally, the Group's companies encourage employees to engage in voluntary and unpaid participation in such activities.
The Group has no formal human rights policy commitments towards affected communities, as its activities do not have a significant
impact on the human rights of communities, and no human rights violations have been identified to date. However, the Group
respects and protects the human rights of affected communities, organizes community engagement processes in accordance with
legal requirements, and, if it becomes evident that the Group's activities have had a negative impact on the human rights of
communities, it would take measures to address and rectify the situation.
Currently, the Group's policy documents are not aligned with internationally recognized measures relevant to communities.
S3-2 Processes for engaging with affected communities about impacts
The Group companies notify all local communities in advance regarding infrastructure projects in their neighbourhoods, where
communities or individuals reside and (or) work nearby. The schedule of works is coordinated with residents during the execution
of projects. The aim is to minimise and remedy inconveniences caused to residents throughout the project, and to answer their
questions. For further information on ways of engagement please refer to SBM-2 Stakeholder interests and views.
The Group's companies are involved in large-scale infrastructure projects and therefore have ongoing relationships with
communities. Community relations are handled by the Group's corporate officers. The main community relations function is carried
out by representatives of the Group's communications function.
Group companies aim to meet the target communities or their representatives as early as possible, to present to them the planned
projects and their progress, their potential impact on the communities, and to minimise potential negative impacts.
S3-3 Processes for remediation of adverse impacts and channels through which affected communities can raise concerns
The Group's activities take into account the interests and views of community members and prioritise open communication and
cooperation.
Community representatives can reach out to the project company electronically or through other methods to inquire about projects
in their vicinity. Communities are kept informed about projects and their progress prior to commencement, including the contact
details of those responsible for community relations.
The Group has a helpline where communities can raise concerns about various issues that matter to them (e.g. corrupt practices,
non-compliance, environmental violations, etc.).
S3-4 Taking action on material impacts on affected communities, and approaches to managing material risks and pursuing
material opportunities related to affected communities, and effectiveness of those actions
Making a positive impact on communities is an area for implementation in the Group's long-term strategy. Specific actions and
(or) targets will be identified in the future, as part of the implementation of the strategy.
Recognising the importance of the topic of affected communities to the company and its stakeholders and the potential negative
impact that the Group companies are causing on this sustainability topic (identified in the reporting year during the DMA), Group
companies will seek to review future governance and policies on this topic.
S3-5 Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and
opportunities
In Group companies, impacts on local communities are managed on a project-by-project basis, taking into account the specific
circumstances and in accordance with the Group's policy principles (see S3-1). The targets are set out in section S3-4.
S4 Consumers and end users
During the Group's DMA, all topics related to Users and End Users identified in the ESRS were evaluated across the Group's value
chain (more details are provided in section 8.1). The preliminary assessment of the topics, the impact and financial materiality
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assessments and the stakeholder survey revealed that topics Access to (Quality) Information and Access to Products and Services
are related to material impacts.
For more information on the DMA approach and assessment see the sections “SBM-3 Material impacts, risks and opportunities
and their interaction with strategy and business model. Identifying and assessing sustainability impacts, risks and opportunities”
and “IRO-1 Description of the processes to identify and assess material impacts, risks and opportunities”.
Sustainability topic
Impacts
Risks and opportunities
Location in the value chain
Access to (quality) information
Potential negative impacts on
consumers and end-users stem
from the absence or inadequate
delivery of information.
*
**
Access to products and
services
Potential negative impacts
may occur along the value chain
due to the possible lack of
continuity of services.
*
End
* No material risks and (or) opportunities have been identified within the Group.
**Impact on sustainability topics arises directly from the Group's operations, so no value chain location is indicated.
To adequately meet shareholder expectations and the needs of stakeholders, Group companies operate in such a way as to ensure
uninterrupted service delivery. The Group's companies operate on a B2B basis, and consumers and end-users of the Group's
services are reached mainly indirectly (through the energy transmission and exchange operator). The Group does not market
products. For more on the Group's targets, indicators and performance management while implementing the strategy (reflecting
the topic Access to Products and Services), see Management Report, section Operational strategy and progress in its
implementation.
S4-1 Policies related to consumers and end-users and S4-2 Processes for engaging with consumers and end-users about
impacts
Understanding the importance of managing consumer and end-user topics, and recognizing that the Group may have a potential
negative impact on this sustainability topic (as identified during the DMA assessment in the reporting year), Group will aim to
review the management and policies of this topic in the future.
S4-3 Processes to remediate negative impacts and channels for consumers and end-users to raise concerns
The Group operates on a B2B (business-to-business) model. Any potential negative impact on direct consumers and end-users
is managed through its direct operations and long-term strategy, with a key focus on ensuring an uninterrupted energy supply
(aligned with Access to Products and Services). Additionally, by implementing legal requirements for public and stakeholder
information disclosure, the Group addresses another potential negative impact—Access to Quality Information.
All stakeholders, including the Group’s service users and end-users, can submit inquiries through both anonymous and non-
anonymous channels (see Whistleblowing Channel and Whistleblower Protection). Communication and information provision to
stakeholders are carried out in accordance with Lithuanian legal regulations and internal procedures.
S4-4 Processes to remediate negative impacts and channels for consumers and end-users to raise concerns and S4-5
Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and
opportunities
Understanding the importance of managing consumer and end-user topics, and recognizing that the Group may have a potential
negative impact on this sustainability topic (as identified during the DMA assessment in the reporting year), Group will aim to
review the management and policies of this topic in the future.
8.4. Governance
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During the Group's DMA, all governance topics identified in the ESRS across the Group's value chain were evaluated (more details
are provided in section 8.1). The preliminary assessment of the topics, the impact and financial materiality assessments and the
stakeholder survey revealed that the topics Corporate Culture, Relationships with Suppliers and Corruption and Bribery are
related to material negative impacts and opportunities.
For more information on DMA approach and assessment see the sections “SBM-3 Material impacts, risks and opportunities and
their interaction with strategy and business model. Identifying and assessing sustainability impacts, risks and opportunities” and
“IRO-1 Description of the processes to identify and assess material impacts, risks and opportunities”.
Sustainability topic
Impacts
Risks and opportunities
Location in the value chain
Corporate culture
Potential negative impacts may
arise from possible non-
compliance with company
policies, or the principles
enshrined therein, including
transparency, accountability,
diversity, inclusion and ethical
behaviour.
-*
-**
Protection of whistleblowers
Potential negative impacts on
the rights of stakeholders may
arise if the whistleblower
protection system does not
function effectively. This
includes breaches of
confidentiality, possible overt or
indirect discrimination,
retaliation or other negative
treatment of whistleblowers.
Opportunity for stakeholders to
express their concerns on
relevant issues, thereby creating
avenues to address stakeholder
needs and enhance the Group's
reputation.
Upstream and downstream
Management of relationships
with suppliers
including payment practices
Potential negative impact on
stakeholders' rights in public
procurement.
-*
-**
Corruption and bribery
Potential negative impacts on
the stakeholders’ rights may
result from corrupt or unethical
practices.
-*
Upstream and downstream
* No material risks and (or) opportunities have been identified within the Group.
**Impact on sustainability topics arises directly from the Group's operations, so no value chain location is indicated.
G1 Business ethics
G1-1 Corporate culture and business conduct policies
The Group's business ethics are grounded in the principles of proportionality, transparency, shareholders' rights, stakeholder
engagement, and corporate governance, consistently applied across all companies within the Group, aiming to facilitate an
integrated and efficient business. The Group's governance system is designed to comply with the principles of corporate
governance, the requirements of corporate governance legislation and international best practice.
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The Group's governance is based on the Group's values and the Group's Code of Ethics, which sets out the Group's basic standards
and principles. The importance of the Group's values and the Code of Ethics is emphasised to employees in training, meetings
and daily activities.
The Group's governance is based on the leadership of employees and collegial bodies and on the following operating principles
set out in the Code of Ethics:
• We behave honestly and prudently.
• We communicate clearly and comprehensibly.
• We show respect and act politely.
• We control interests and avoid conflicts of interests.
• We respect personal data and protect confidential information.
• We are guided by the principles of corruption prevention.
• We report improper behaviour.
• We know that bad behaviour has consequences.
Comprehensive Group Corporate Governance System
EPSO-G Board
– Responsible for the organisational and systemic development and management of the Group's
businesses within the scope and scale of its responsibilities.
– Developing the Group's comprehensive corporate governance policy and ensures the appropriate
selection of the Group's corporate governance model.
– Approving essential Group-level documents: policies, codes, and so forth.
– Approving the Group's strategy, analysing information regarding its implementation, and overseeing
the Group's action plan for executing the strategy.
– Maintaining continuous oversight and control over the management of key strategic and nationally
significant projects assigned to or undertaken by Group companies.
Audit Committee
– Responsible for overseeing the preparation and
auditing of the Group's financial statements.
– Accountable for upholding the independence and objectivity of the Group's corporate auditors and
audit firms, as well as overseeing the services they offer.
– Accountable for monitoring the effectiveness of the Group's internal control, risk and compliance
management, internal audit functions, and business processes.
Remuneration and Nomination
Committee
– Assisting in selecting candidates for membership on the governing bodies of all Group companies,
making recommendations regarding the appointment of selected members of these bodies; analysing the
results of the performance evaluation of the Group's collective management bodies and the Audit
Committee, summarising these results and proposing improvements for performance.
– Making recommendations regarding the Group's remuneration, performance appraisal, and selection
policies, whilst proposing the criteria for evaluating managers' performance within the Group.
Line 1 – all employees and
managers
Ensuring compliance, identifying and managing risks, guaranteeing internal controls, and carrying out
other activities as part of their daily functions.
Line 2 – Compliance
Management function, Risk
Management function, Business
Resilience, Information Security
function
Advising and training.
Checking compliance ensuring by Line 1.
Fostering a culture of risk management, compliance management, information security, and business
resilience.
Carrying out other functions related to risk management, compliance management, information
security, and business resilience.
176
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176
Line 3 – centralised internal
audit
Systematically and comprehensively evaluating and enhancing the Group's corporate governance, risk
management, and internal control framework, thus adding value to all Group companies and
supporting the attainment of their business objectives.
Recognising the importance of the topic of Business ethics and corporate culture to the undertaking and its stakeholders and the
potential negative impact that the Group is causing on this sustainability topic (identified in the reporting year during the DMA),
Group will seek to review future governance, targets and actions on this topic.
Whistleblowing channel and whistleblower protection
The Group promotes a whistleblowing culture and has set up an internal whistleblowing channel – the Trust line. Group
employees and other stakeholders (our partners, customers, etc.) are encouraged to report on a wide range of issues, such as
possible environmental violations, non-compliance, corruption, discrimination, and so forth. Recognising the sensitivity of the
reports, we allow whistleblowers to submit information either anonymously or by disclosing their contact details. The mechanism
of the helpline is governed by internal regulations, which establish legally compliant deadlines for processing reports. This
ensures that the information received is addressed as swiftly as possible, provides feedback to the whistleblower on the cases
handled, identifies the responsible individuals, and facilitates an objective and independent assessment of the reports received.
We provide individuals with the opportunity to express their concerns through various existing Trust line channels: by email, by
completing a form, in writing, or by phone.
All information regarding the Group's Trust line and its operations can be found on the websites of the Group companies.
Safeguards in place to manage the potential impact on whistleblowers (including but not limited to):
dismissing or suspending whistleblowers for their reporting;
downgrading whistleblowers for their reporting;
non-renewal or premature termination of permanent employment contracts;
intimidation, harassment, violence, threats of retaliation, and discrimination;
reducing the salary of the whistleblower;
questioning the competence of the whistleblower;
disciplinary or other sanctions against the whistleblower.
For further details on the guarantees available to whistleblowers, please refer to the websites of Group companies.
G1-2 Management of relationships with suppliers
Sustainable supply chain
Most of the Group's procurement (with the exception of Tetas) is carried out in accordance with the requirements of the Law on
Public Procurement, which ensures that only suppliers meeting the environmental and (or) social requirements of the Law are
eligible to participate in the procure. Every public procurement process includes at least one green criterion, and 100% public
procurement is deemed green. Starting in 2024, companies will also apply social criteria, and the percentage of such purchases
must attain at least 7% by 2025. It should be noted that the majority of the Group's suppliers are local (more than 80% by number
of contracts). The Group has a contract monitoring process that allows companies to oversee and evaluate the capability of
suppliers, including those considered vulnerable, to fulfil their contracts. The most substantial purchases are made by employees
certified as Procurement Officers, thereby managing compliance risk. Companies organise in-house training on social and
environmental topics.
In 2024, EPSO-G received an award established by the Ministry of Economy and Innovation in partnership with the Public
Procurement Office for the most intelligently organised procurement. The procurement of strategy development and consultancy
services was conducted based on the cost-effectiveness criterion of quality, evaluating the project manager's interviews. Leaders
of the procurement function are invited to share their expertise at procurement conferences, and the Group's procurement
practices are regarded as among the most progressive in Lithuania.
177
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177
Procurement policy and supplier code of conduct
The Group's Procurement Policy and Supplier Code of Conduct (SCoC) establish the minimum standards of conduct that the
Group expects all its suppliers and sub-suppliers to comply with, thereby promoting lawful, professional, sustainable and fair
business practices, encompassing the environment, human rights, labour standards and business ethics. Suppliers are encouraged
to integrate sustainability principles into their activities in the above areas. By participating in the Group's procurement, suppliers
acknowledge their awareness of the SCoC and commit to complying with it. In 2024, the Group (excluding Tetas) introduced a
supplier verification process: suppliers voluntarily fill out a pre-contract verification questionnaire in the Group's verification
system and provide information on the policies and standards they apply in their operations on the issues identified by SCoC. The
gathered information is analysed to assist suppliers in identifying operational processes for enhancement.
Questionnaires were sent to 368 suppliers during the reporting period (since the introduction of the supplier verification system
in July). 41% of these suppliers voluntarily responded to the questionnaire and supplied their performance data.
An assessment of these data in 2024 has resulted in the identification of indicators to be monitored in 2025. These are percentage
of suppliers
• complying with the Group's Supplier Code of Conduct;
• implementing GHG emission reduction measures;
• having/implementing policies on business sustainability, social responsibility or other policies related to ESG (environmental,
social, governance);
• who completed the questionnaire.
Tetas does not have the status of a contracting authority, but follows the Group's procurement policy and screens suppliers for
sanctions imposed on them. Tetas has a target of adopting SCoC in 2025, obliging suppliers to comply with SCoC and introducing
a supplier verification process from 2026.
Recognising the importance of the topic of Procurement to the Group and its stakeholders and the potential negative impact that
the Group companies are causing on this sustainability topic (identified in the reporting year during the DMA), Group will seek to
review future governance and policies on this topic.
Contract enforcement
The Group has a harmonised contract execution and control process that enables it to address contract enforcement issues in
the most efficient manner, ensuring consistency in decisions, equivalency among suppliers, comprehensive management of the
contract list, identification of critical contracts, potential risks, and more. It should also be noted that:
• The provisions of contracts with suppliers require that suppliers adhere to the SCoC in executing their contracts;
• Contracts include enforcement mechanisms such as fines, penalties, and bank guarantees;
• Contracts encompass provisions related to environmental, social, and governance requirements.
International and national sanctions
The Group adheres to the systematic implementation of international sanctions. In all ongoing procurements, suppliers to be
awarded contracts are screened for sanctions. If such a fact is established, contracts shall not be concluded or shall be terminated
if the fact emerges during the performance of the contract.
As part of national security policy, the Group refrains from awarding or executing procurement contracts with suppliers linked to
hostile states or territories:
• Group companies of national security importance or Group companies operating critical infrastructure or information
systems have additional requirements for the purchase of hardware, software, maintenance or support services;
• The Group aims to reduce its dependence on product manufacturers and suppliers which do not meet the criteria for
European and transatlantic integration, i.e. are not established or registered in the Member States of the European Union,
the North Atlantic Treaty Organisation, the European Economic Area and (or) the Organisation for Economic Co-operation
and Development.
178
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178
Contractual obligations of the supplier under the SCoC
Measures to implement the SCoC
Zero tolerance of bribery, graft, influence peddling, money
laundering, abuse of office and (or) other forms of corruption.
Publicly available SCoC.
Avoid engaging in any illegal agreements or arrangements that
hinder fair competition, including entering into cartels with
competitors, such as sharing or allocating markets or customers, or
colluding on prices.
Confirmations of knowledge and compliance from suppliers.
Reducing dependence on product manufacturers and suppliers
which do not meet the criteria for European and transatlantic
integration, i.e. are not established or registered in the Member
States of the European Union, the North Atlantic Treaty
Organisation, the European Economic Area and (or) the Organisation
for Economic Co-operation and Development.
Completing questionnaires.
Maintaining transparent, harmonious and cooperative business
relationships in line with the SCoC and the Anti-Corruption Policy.
Information system for verification.
Information system for verification.
Data analysis, recommendations.
Events for suppliers.
G1-3 Prevention and detection of corruption and bribery
The Group is committed to transparency, openness, and legality, and we maintain a zero-tolerance policy towards corruption—
we do not accept corruption, or any acts related to it. We continuously assess potential corruption risks and implement measures
to manage those risks when they are identified. We conduct our anti-corruption activities in accordance with the provisions of
legislation, adhering to best practices and implementing the principles of an anti-corruption management system as defined by
the international standard ISO 37001:2016 Anti-bribery management systems — Requirements with guidance for use. EPSO-G,
Amber Grid and Litgrid have anti-corruption management systems certified according to ISO 37001.
The Anti-Corruption Policy serves as the principal document governing the Group's anti-corruption initiatives, outlining the
principles of anti-corruption and delineating the rights and responsibilities of those engaged in anti-corruption activities. The
policy has been developed in accordance with the above-mentioned international standard ISO 37001:2016, United Nations
Convention against Corruption, Legal acts of the Republic of Lithuania regulating anti-corruption activities, and good practice. For
further details regarding the Group's anti-corruption activities please refer to the Management Report, section Compliance, Anti-
Corruption Activities and Conflict of Interest Management .
Recognising the importance of the topic of Anti-Corruption and Bribery to the undertaking and its stakeholders and the potential
negative impact that the undertaking is causing on this sustainability topic (identified in the reporting year during the DMA), we
will seek to review future governance and policies on this topic.
G1-4 Confirmed incidents of corruption or bribery
2024
2023
2022
Confirmed incidents of corruption
0
0
0
Staff members sanctioned or dismissed for corruption
0
0
0
Corruption-related lawsuits against Group
companies/employees
0
0
0
179
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TOC ↑
179
Confirmed incidents of corruption which led to contracts not
being concluded/renewed with operational partners
0
0
0
Calculation methodology. The data on corruption and bribery incidents are calculated and presented in accordance with the procedures for establishing and
operating whistleblowing channels, as well as the protocols for internal investigations.
G1-6 Payment practices
The Group complies with the payment terms and principles of non-discrimination outlined in its contracts with business partners,
ensuring that small and medium-sized enterprises are subject to the same terms and conditions as large enterprises.
The standard payment terms are 30 calendar days (47.22%) or 60 calendar days (30.94%) following the receipt of the invoice.
The remaining invoices are settled within a period of less than 30 calendar days (16,18 %) or more than 60 calendar days (5,66
%). The average time taken to pay an invoice is 41.81 calendar days. This average calculation is based on data regarding payments
actually made in 2024, including instances where invoices from prior periods have been paid during the reference period. The
calculations exclude payments based on advance reports.
Information on legal disputes is provided in Note 38 of the Consolidated financial statements, "Off-balance Sheet Commitments
and Contingencies."
8.5. Annexes
ESRS IRO-2 Content index of ESRS disclosure requirements
Applicable ESRS Sector
Not available
ESRS 2 General Disclosures
Disclosure Requirement
Page
1. Basis for preparation
BP-1
General basis for preparation of sustainability statements
102
BP-2
Entities included in the organisation's sustainability reporting
102
2. Governance
GOV-1
The role of the administrative, management and supervisory bodies
103
GOV-2
Information provided to and sustainability matters addressed by the undertaking’s
administrative, management and supervisory bodies
104
GOV-3
Integration of sustainability-related performance in incentive schemes
104
GOV-4
Statement on due diligence
104
GOV-5
Risk management and internal controls over sustainability reporting
104
3. Strategy
SBM-1
Strategy, business model and value chain
105
SBM-2
Interests and views of stakeholders
108
SBM-3
Material impacts, risks and opportunities and their interaction with strategy and
business model
110
4. Impact, risk and opportunity management
4.1 Disclosures on the materiality assessment process
IRO-1
Description of the process to identify and assess material impacts, risks and
opportunities
110
IRO-2
Disclosure Requirements in ESRS covered by the undertaking’s sustainability
statement
116
180
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TOC ↑
180
4.2 Minimum disclosure requirement on policies and actions
Policies MDR-P
Policies adopted to manage material sustainability matters
116
Actions MDR-A
Actions and resources in relation to material sustainability matters
116
5. Metrics and targets
Metrics MDR-M
Metrics in relation to material sustainability matters
116
Targets MDR-T
Tracking effectiveness of policies and actions through targets
116
Environmental topics
ESRS E1 Climate Change
Governance
E1 ESRS 2 GOV-3
Integration of sustainability-related performance in incentive schemes
104
Strategy
E1-1
Transition plan for climate change mitigation
140
E1 ESRS 2 SBM-3
Material impacts, risks and opportunities and their interaction with strategy and
business model
110, 140
Impact, risk and opportunity management
E1 ESRS 2 IRO-1
Description of the processes to identify and assess material climate-related impacts,
risks and opportunities
110
E1-2
Policies related to climate change mitigation and adaptation
141
E1-3
Actions and resources in relation to climate change policies
142
Metrics and targets
E1-4
Targets related to climate change mitigation and adaptation
144
E1-5
Energy consumption and mix
145
E1-6
Gross Scopes 1, 2, 3 and Total GHG emissions
147
E1-7
GHG removals and GHG mitigation projects financed through carbon credits
151
E1-8
Internal carbon pricing
151
ESRS E4 Biodiversity and ecosystems
Strategy
E4 ESRS 2 SBM-3
Material impacts, risks and opportunities and their interaction with strategy and
business model
110, 152
Impact, risk and opportunity management
E4 ESRS 2 IRO-1
Description of processes to identify and assess material biodiversity and ecosystem-
related impacts, risks and opportunities
110
E4-2
Policies related to biodiversity and ecosystems
152
E4-3
Actions and resources related to biodiversity and ecosystems
152
Metrics and targets
E4-4
Targets related to biodiversity and ecosystems
153
E4-5
Impact metrics related to biodiversity and ecosystems change
153
ESRS E5 Resource use and circular economy
Impact, risk and opportunity management
E5 ESRS 2 IRO-1
Description of the processes to identify and assess material resource use and circular
economy-related impacts, risks and opportunities
110
E5-1
Policies related to resource use and circular economy
153
181
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TOC ↑
181
E5-2
Actions and resources related to resource use and circular economy
153
Metrics and targets
E5-3
Targets related to resource use and circular economy
154
E5-4
Resource inflows
154
E5-5
Resource outflows
155
Social topics
ESRS S1 Own workforce
Strategy
S1 ESRS 2 SBM-2
Interests and views of stakeholders
108
S1 ESRS 2 SBM-3
Material impacts, risks and opportunities and their interaction with strategy and
business model
110, 158
Impact, risk and opportunity management
S1-1
Policies related to own workforce
159
S1-2
Processes for engaging with own workers and workers’ representatives about
impacts
162
S1-3
Processes to remediate negative impacts and channels for own workers to raise
concerns
162
S1-4
Taking action on material impacts on own workforce, and approaches to mitigating
material risks and pursuing material opportunities related to own workforce, and
effectiveness of those actions
165
Metrics and targets
S1-5
Targets related to managing material negative impacts, advancing positive impacts,
and managing material risks and opportunities
166
S1-6
Characteristics of the undertaking’s employees
166
S1-8
Collective bargaining coverage and social dialogue
167
S1-9
Diversity metrics
167
S1-10
Adequate wages
168
S1-11
Social protection
168
S1-12
Persons with disabilities
168
S1-13
Training and skills development metrics
168
S1-14
Health and safety metrics
168
S1-15
Work-life balance metrics
169
S1-16
Compensation metrics (pay gap and total compensation)
169
S1-17
Incidents, complaints and severe human rights impacts
169
ESRS S3 Affected communities
Strategy
S3 ESRS 2 SBM-2
Interests and views of stakeholders
108
S3 ESRS 2 SBM-3
Material impacts, risks and opportunities and their interaction with strategy and
business model
110, 170
Impact, risk and opportunity management
S3-1
Policies related to affected communities
170
S3-2
Processes for engaging with affected communities about impacts
170
S3-3
Processes to remediate negative impacts and channels for affected communities to
raise concerns
171
182
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TOC ↑
182
S3-4
Taking action on material impacts on affected communities, and approaches to
managing material risks and pursuing material opportunities related to affected
communities, and effectiveness of those actions
171
Metrics and targets
S3-5
Targets related to managing material negative impacts, advancing positive impacts,
and managing material risks and opportunities
171
ESRS S4 Consumers and end-users
Strategy
S4 ESRS 2 SBM-2
Interests and views of stakeholders
108
S4 ESRS 2 SBM-3
Material impacts, risks and opportunities and their interaction with strategy and
business mode
110, 171
Impact, risk and opportunity management
S4-1
Policies related to consumers and end-users
172
S4-2
Processes for engaging with consumers and end-users about impacts
172
S4-3
Processes to remediate negative impacts and channels for consumers and end-users
to raise concerns
172
S4-4
Taking action on material impacts on consumers and end-users, and approaches to
managing material risks and pursuing material opportunities related to consumers
and end-users, and effectiveness of those actions
172
Governance topics
ESRS G1 Business Conduct
Governance
G1 ESRS 2 GOV-1
The role of the administrative, supervisory and management bodies
103
Impact, risk and opportunity management
G1 ESRS 2 IRO-1
Description of the processes to identify and assess material impacts, risks and
opportunities
110
G1-1
Corporate culture and bBusiness conduct policies and corporate culture
173
G1-2
Management of relationships with suppliers
175
G1-3
Prevention and detection of corruption and bribery
177
Metrics and targets
G1-4
Confirmed incidents of corruption or bribery
177
G1-6
Payment practices
177
List of datapoints in cross-cutting and topical standards that derive from other EU legislation
Disclosure
Requirement and
related datapoint
SFDR reference
1
Pillar 3 reference
2
Benchmark
Regulation
reference
3
EU
Climat
e Law
referen
ce
4
Page
ESRS 2 GOV-1
Board's gender diversity
paragraph 21 (d)
Indicator number 13
of Table #1 of Annex
1
Commission Delegated
Regulation (EU)
2020/1816 (27), Annex
II
103
ESRS 2 GOV-1
Percentage of board
members who are
Delegated Regulation
(EU) 2020/1816, Annex
II
103
183
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
183
independent paragraph
21 (e)
ESRS 2 GOV-4
Statement on due
diligence paragraph 30
Indicator number 10
Table #3 of Annex 1
104
ESRS 2 SBM-1
Involvement in activities
related to fossil fuel
activities paragraph 40 (d)
i
Indicators number 4
Table #1 of Annex 1
Article 449a Regulation (EU) No
575/2013;
Commission Implementing
Regulation (EU) 2022/2453
(28)Table 1: Qualitative
information on Environmental
risk and Table 2: Qualitative
information on Social risk
Delegated Regulation
(EU) 2020/1816, Annex
II
105
ESRS 2 SBM-1
Involvement in activities
related to chemical
production paragraph 40
(d) ii
Indicator number 9
Table #2 of Annex 1
Delegated Regulation
(EU) 2020/1816, Annex
II
105
ESRS 2 SBM-1
Involvement in activities
related to controversial
weapons paragraph 40
(d) iii
Indicator number 14
Table #1 of Annex 1
Delegated Regulation
(EU) 2020/1818 (29),
Article 12(1) Delegated
Regulation (EU)
2020/1816, Annex II
105
ESRS 2 SBM-1
Involvement in activities
related to cultivation and
production of tobacco
paragraph 40 (d) iv
Delegated Regulation
(EU) 2020/1818, Article
12(1) Delegated
Regulation (EU)
2020/1816, Annex II
105
ESRS E1-1
Transition plan to reach
climate neutrality by 2050
paragraph 14
Regulatio
n (EU)
2021/111
9, Article
2(1)
140
ESRS E1-1
Undertakings excluded
from Paris-aligned
Benchmarks paragraph
16 (g)
Article 449a
Regulation (EU) No 575/2013;
Commission Implementing
Regulation (EU) 2022/2453
Template 1: Banking book-
Climate Change transition risk:
Credit quality of exposures by
sector, emissions and residual
maturity
Delegated Regulation
(EU) 2020/1818,
Article12.1 (d) to (g),
and Article 12.2
140
ESRS E1-4
GHG emission reduction
targets paragraph 34
Indicator number 4
Table #2 of Annex 1
Article 449a
Regulation (EU) No 575/2013;
Commission Implementing
Regulation (EU) 2022/2453
Template 3: Banking book –
Climate change transition risk:
alignment metrics
Delegated Regulation
(EU) 2020/1818, Article
6
144
ESRS E1-5
Energy consumption from
fossil sources
disaggregated by sources
(only high climate impact
sectors) paragraph 38
Indicator number 5
Table #1 and
Indicator n. 5 Table #2
of Annex 1
145
184
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TOC ↑
184
ESRS E1-5 Energy
consumption and mix
paragraph 37
Indicator number 5
Table #1 of Annex 1
145
ESRS E1-5
Energy intensity
associated with activities
in high climate impact
sectors paragraphs 40 to
43
Indicator number 6
Table #1 of Annex 1
145
ESRS E1-6
Gross Scope 1, 2, 3 and
Total GHG emissions
paragraph 44
Indicators number 1
and 2 Table #1 of
Annex 1
Article 449a; Regulation (EU)
No 575/2013; Commission
Implementing Regulation (EU)
2022/2453 Template 1:
Banking book – Climate change
transition risk: Credit quality of
exposures by sector, emissions
and residual maturity
Delegated Regulation
(EU) 2020/1818, Article
5(1), 6 and 8(1)
147
ESRS E1-6
Gross GHG emissions
intensity paragraphs 53 to
55
Indicators number 3
Table #1 of Annex 1
Article 449a Regulation (EU) No
575/2013; Commission
Implementing Regulation (EU)
2022/2453 Template 3:
Banking book – Climate change
transition risk: alignment
metrics
Delegated Regulation
(EU) 2020/1818, Article
8(1)
147
ESRS E1-7
GHG removals and carbon
credits paragraph 56
Regulatio
n (EU)
2021/111
9, Article
2(1)
151
ESRS E1-9
Exposure of the
benchmark portfolio to
climate-related physical
risks paragraph 66
Delegated Regulation
(EU) 2020/1818, Annex
II Delegated Regulation
(EU) 2020/1816, Annex
II
Phased-
in
disclosu
re
require
ment
ESRS E1-9
Disaggregation of
monetary amounts by
acute and chronic physical
risk paragraph 66 (a)
ESRS E1-9
Location of significant
assets at material
physical risk paragraph 66
(c).
Article 449a Regulation (EU) No
575/2013; Commission
Implementing Regulation (EU)
2022/2453 paragraphs 46 and
47; Template 5: Banking book -
Climate change physical risk:
Exposures subject to physical
risk.
Phased-
in
disclosu
re
require
ment
ESRS E1-9 Breakdown of
the carrying value of its
real estate assets by
energy-efficiency classes
paragraph 67 (c).
Article 449a Regulation (EU) No
575/2013; Commission
Implementing Regulation (EU)
2022/2453 paragraph
34;Template 2:Banking book -
Climate change transition risk:
Loans collateralised by
immovable property - Energy
efficiency of the collateral
Phased-
in
disclosu
re
require
ment
ESRS E1-9
Degree of exposure of the
portfolio to climate-
Delegated Regulation
(EU) 2020/1818, Annex
II
Phased-
in
disclosu
re
185
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
185
related opportunities
paragraph 69
require
ment
ESRS E2-4
Amount of each pollutant
listed in Annex II of the E-
PRTR Regulation
(European Pollutant
Release and Transfer
Register) emitted to air,
water and soil, paragraph
28
Indicator number 8
Table #1 of Annex 1
Indicator number 2
Table #2 of Annex 1
Indicator number 1
Table #2 of Annex 1
Indicator number 3
Table #2 of Annex 1
Not
material
ESRS E3-1
Water and marine
resources paragraph 9
Indicator number 7
Table #2 of Annex 1
Not
material
ESRS E3-1
Dedicated policy
paragraph 13
Indicator number 8
Table 2 of Annex 1
Not
material
ESRS E3-1
Sustainable oceans and
seas paragraph 14
Indicator number 12
Table #2 of Annex 1
Not
material
ESRS E3-4
Total water recycled and
reused paragraph 28 (c)
Indicator number 6.2
Table #2 of Annex 1
Not
material
ESRS E3-4
Total water consumption
in m3 per net revenue on
own operations paragraph
29
Indicator number 6.1
Table #2 of Annex 1
Not
material
ESRS 2- IRO 1 - E4
paragraph 16 (a) i
Indicator number 7
Table #1 of Annex 1
110
ESRS 2- IRO 1 - E4
paragraph 16 (b)
Indicator number 10
Table #2 of Annex 1
110
ESRS 2- IRO 1 - E4
paragraph 16 (c)
Indicator number 14
Table #2 of Annex 1
110
ESRS E4-2
Sustainable land /
agriculture practices or
policies paragraph 24 (b)
Indicator number 11
Table #2 of Annex 1
152
ESRS E4-2
Sustainable oceans / seas
practices or policies
paragraph 24 (c)
Indicator number 12
Table #2 of Annex 1
152
ESRS E4-2
Policies to address
deforestation paragraph
24 (d)
Indicator number 15
Table #2 of Annex 1
152
ESRS E5-5
Non-recycled waste
paragraph 37 (d)
Indicator number 13
Table #2 of Annex 1
157
186
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
186
ESRS E5-5
Hazardous waste and
radioactive waste
paragraph 39
Indicator number 9
Table #1 of Annex 1
157
ESRS 2- SBM3 - S1
Risk of incidents of forced
labour paragraph 14 (f)
Indicator number 13
Table #3 of Annex I
110,
158
ESRS 2- SBM3 - S1
Risk of incidents of child
labour paragraph 14 (g)
Indicator number 12
Table #3 of Annex I
110,
158
ESRS S1-1
Human rights policy
commitments paragraph
20
Indicator number 9
Table #3 and
Indicator number 11
Table #1 of Annex I
159
ESRS S1-1
Due diligence policies on
issues addressed by the
fundamental International
Labor Organisation
Conventions 1 to 8,
paragraph 21
Delegated Regulation
(EU) 2020/1816, Annex
II
159
ESRS S1-1
processes and measures
for preventing trafficking
in human beings
paragraph 22
Indicator number 11
Table #3 of Annex I
159
ESRS S1-1
workplace accident
prevention policy or
management system
paragraph 23
Indicator number 1
Table #3 of Annex I
159
ESRS S1-3
grievance/complaints
handling mechanisms
paragraph 32 (c)
Indicator number 5
Table #3 of Annex I
162
ESRS S1-14
Number of fatalities and
number and rate of work-
related accidents
paragraph 88 (b) and (c)
Indicator number 2
Table #3 of Annex I
Delegated Regulation
(EU) 2020/1816, Annex
II
168
ESRS S1-14
Number of days lost to
injuries, accidents,
fatalities or illness
paragraph 88 (e)
Indicator number 3
Table #3 of Annex I
168
ESRS S1-16
Unadjusted gender pay
gap paragraph 97 (a)
Indicator number 12
Table #1 of Annex I
Delegated Regulation
(EU) 2020/1816, Annex
II
169
ESRS S1-16
Excessive CEO pay ratio
paragraph 97 (b)
Indicator number 8
Table #3 of Annex I
169
187
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
187
ESRS S1-17
Incidents of discrimination
paragraph 103 (a)
Indicator number 7
Table #3 of Annex I
169
ESRS S1-17 Non-respect
of UNGPs on Business
and Human Rights and
OECD paragraph 104 (a)
Indicator number 10
Table #1 and
Indicator n. 14 Table
#3 of Annex I
Delegated Regulation
(EU) 2020/1816, Annex
II Delegated Regulation
(EU) 2020/1818 Art 12
(1)
169
ESRS 2- SBM3 – S2
Significant risk of child
labour or forced labour in
the value chain paragraph
11 (b)
Indicators number 12
and n. 13 Table #3 of
Annex I
110
ESRS S2-1
Human rights policy
commitments paragraph
17
Indicator number 9
Table #3 and
Indicator n. 11 Table
#1 of Annex 1
Not
material
ESRS S2-1 Policies
related to value chain
workers paragraph 18
Indicator number 11
and n. 4 Table #3 of
Annex 1
Not
material
ESRS S2-1Non-respect of
UNGPs on Business and
Human Rights principles
and OECD guidelines
paragraph 19
Indicator number 10
Table #1 of Annex 1
Delegated Regulation
(EU) 2020/1816, Annex
II Delegated Regulation
(EU) 2020/1818, Art 12
(1)
Not
material
ESRS S2-1
Due diligence policies on
issues addressed by the
fundamental International
Labor Organisation
Conventions 1 to 8,
paragraph 19
Delegated Regulation
(EU) 2020/1816, Annex
II
Not
material
ESRS S2-4
Human rights issues and
incidents connected to its
upstream and
downstream value chain
paragraph 36
Indicator number 14
Table #3 of Annex 1
Not
material
ESRS S3-1
Human rights policy
commitments paragraph
16
Indicator number 9
Table #3 of Annex 1
and Indicator number
11 Table #1 of Annex
1
170
ESRS S3-1
non-respect of UNGPs on
Business and Human
Rights, ILO principles or
and OECD guidelines
paragraph 17
Indicator number 10
Table #1 Annex 1
Delegated Regulation
(EU) 2020/1816, Annex
II Delegated Regulation
(EU) 2020/1818, Art 12
(1)
170
ESRS S3-4
Human rights issues and
incidents paragraph 36
Indicator number 14
Table #3 of Annex 1
171
188
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
188
ESRS S4-1 Policies
related to consumers and
end-users paragraph 16
Indicator number 9
Table #3 and
Indicator number 11
Table #1 of Annex 1
172
ESRS S4-1
Non-respect of UNGPs on
Business and Human
Rights and OECD
guidelines paragraph 17
Indicator number 10
Table #1 of Annex 1
Delegated Regulation
(EU) 2020/1816, Annex
II Delegated Regulation
(EU) 2020/1818, Art 12
(1)
172
ESRS S4-4
Human rights issues and
incidents paragraph 35
Indicator number 14
Table #3 of Annex 1
172
ESRS G1-1
United Nations
Convention against
Corruption paragraph 10
(b)
Indicator number 15
Table #3 of Annex 1
173
ESRS G1-1
Protection of whistle-
blowers paragraph 10 (d)
Indicator number 6
Table #3 of Annex 1
173
ESRS G1-4
Fines for violation of anti-
corruption and anti-
bribery laws paragraph
24 (a)
Indicator number 17
Table #3 of Annex 1
Delegated Regulation
(EU) 2020/1816, Annex
II)
177
ESRS G1-4
Standards of anti-
corruption and anti-
bribery paragraph 24 (b)
Indicator number 16
Table #3 of Annex 1
177
ESRS G1-4
Standards of anti-
corruption and anti-
bribery paragraph 24 (b)
Indicator number 16
Table #3 of Annex 1
177
ESRS 2 GOV-4 Statement on due diligence
Core elements of due diligence
Paragraphs in the sustainability
statement
Information related to people
and/or the environment
a) Embedding due diligence in governance,
strategy and business model
ESRS 2 GOV-1, p. 103
ESRS 2 GOV-2, p. 104
ESRS 2 GOV-3, p. 104
ESRS 2 SBM-3, p. 110
People and environment
ESRS 2 SBM-3-E1, p. 139
Environment
ESRS 2 SBM-3-E4, p. 152
ESRS 2 SBM-3-E5, p. 153
ESRS 2 SBM-3-S1, p. 158
People
189
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
189
ESRS 2 SBM-3-S3, p. 170
ESRS 2 SBM-3-S4, p. 171
ESRS 2 SBM-3-G1, p. 173
People and environment
b) Engaging with affected stakeholders in all
key steps of the due diligence
ESRS 2 GOV-2, p. 104
ESRS 2 SBM-2, p. 108
ESRS 2 IRO-1, p. 110
People and environment
S1-2, p. 162
S3-2, p. 170
S4-2, p. 172
People
c) Identifying and assessing adverse impacts
ESRS 2 IRO-1, p. 108
ESRS 2 SBM-3, p. 108
People and environment
E1-3, p. 142
E4-3, p. 152
E5-1, p. 153
Environment
S1-3, p. 162
S3-3, p. 171
S4-3, p. 172
d) Taking actions to address those adverse
impacts
E1-3, p. 142
E4-3, p. 152
E5-2, p. 154
Environment
S1-4, p. 165
S3-4, p. 171
S4-4, p. 172
People
e) Tracking the effectiveness of these efforts
and communicating
E1-4, p. 144
E4-4, p. 153
E5-3, p. 154
Environment
S1-5, p. 166
S3-5, p. 171
People
PricewaterhouseCoopers UAB, J. Jasinskio str. 16B, LT-03163 Vilnius, Lithuania
+370 (5) 239 2300, lt_vilnius@pwc.com, www.pwc.lt
Company code 111473315, is a private company registered with the Legal Entities’ Register of the Republic of Lithuania
190
8.6. Independent auditor's report
Independent practitioner’s limited assurance report on EPSO-G
UAB consolidated Sustainability Statement
To the Board of EPSO-G UAB
Limited assurance conclusion
We have conducted a limited assurance engagement on the consolidated sustainability statement of
EPSO-G UAB (the “Company”), included in 8. Sustainability Report section of the Management Report
(the “consolidated Sustainability Statement”), as at 31 December 2024 and for the year then ended.
Based on the procedures we have performed and the evidence we have obtained, nothing has come to
our attention that causes us to believe that the consolidated Sustainability Statement is not prepared, in
all material respects, in accordance with the Law of the Republic of Lithuania on Reporting by
Undertakings and by Groups of Undertakings Articles 21 and 22 implementing Article 29(a) of EU
Directive 2013/34/EU, including:
• compliance with the European Sustainability Reporting Standards (ESRS), including that the
process carried out by the Company to identify the information reported in the consolidated
Sustainability Statement (the “Process”) is in accordance with the description set out in note
Group’s double materiality assessment; and
• compliance of the disclosures in subsection 8.2.1. Disclosure under the EU Taxonomy
Regulation within 8.2. Environmental area section of the consolidated Sustainability Statement
with Article 8 of EU Regulation 2020/852 (the “Taxonomy Regulation”).
Basis for conclusion
We conducted our limited assurance engagement in accordance with International Standard on
Assurance Engagements (ISAE) 3000 (Revised), Assurance engagements other than audits or reviews
of historical financial information (“ISAE 3000 (Revised)”), issued by the International Auditing and
Assurance Standards Board.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our
conclusion. Our responsibilities under this standard are further described in the Practitioner’s
responsibilities section of our report.
Our independence and quality management
We have complied with the independence and other ethical requirements of the International Code of
Ethics for Professional Accountants (including International Independence Standards) issued by the
International Ethics Standards Board for Accountants (IESBA Code), which is founded on fundamental
principles of integrity, objectivity, professional competence and due care, confidentiality, and
professional behaviour and the Law of the Republic of Lithuania on the Audit of Financial Statements
and Other Assurance Services that are relevant to our sustainability assurance services in the Republic
of Lithuania.
The firm applies International Standard on Quality Management 1, which requires the firm to design,
implement and operate a system of quality management including policies or procedures regarding
compliance with ethical requirements, professional standards and applicable legal and regulatory
requirements.
INFORMATION ON SUSTAINABILITY MATTERS
TOC ↑
191
191
Responsibilities for the consolidated Sustainability Statement
Management of the Company is responsible for designing and implementing a process to identify the
information reported in the consolidated Sustainability Statement in accordance with the ESRS and for
disclosing this Process in note Group’s double materiality assessment of the consolidated Sustainability
Statement. This responsibility includes:
• understanding the context in which the Group’s activities and business relationships take place
and developing an understanding of its affected stakeholders;
• the identification of the actual and potential impacts (both negative and positive) related to
sustainability matters, as well as risks and opportunities that affect, or could reasonably be
expected to affect, the Group’s financial position, financial performance, cash flows, access to
finance or cost of capital over the short-, medium-, or long-term;
• the assessment of the materiality of the identified impacts, risks and opportunities related to
sustainability matters by selecting and applying appropriate thresholds; and
• making assumptions that are reasonable in the circumstances.
Management of the Company is further responsible for the preparation of the consolidated
Sustainability Statement, in accordance with the Law of the Republic of Lithuania on Reporting by
Undertakings and by Groups of Undertakings Articles 21 and 22 implementing Article 29(a) of EU
Directive 2013/34/EU, including:
• compliance with the ESRS;
• preparing the disclosures in subsection 8.2.1. Disclosure under the EU Taxonomy Regulation
within 8.2. Environmental area section of the consolidated Sustainability Statement, in
compliance with Article 8 of EU Regulation 2020/852 (the “Taxonomy Regulation”);
• designing, implementing and maintaining such internal control that management determines is
necessary to enable the preparation of the consolidated Sustainability Statement that is free
from material misstatement, whether due to fraud or error; and
• the selection and application of appropriate sustainability reporting methods and making
assumptions and estimates that are reasonable in the circumstances.
Those charged with governance are responsible for overseeing the Group’s sustainability reporting
process.
Inherent limitations in preparing the consolidated Sustainability Statement
In reporting forward-looking information in accordance with ESRS, management of the Company is
required to prepare the forward-looking information on the basis of disclosed assumptions about events
that may occur in the future and possible future actions by the Group. Actual outcomes are likely to be
different since anticipated events frequently do not occur as expected.
Practitioner’s responsibilities
Our responsibility is to plan and perform the assurance engagement to obtain limited assurance about
whether the consolidated Sustainability Statement is free from material misstatement, whether due to
fraud or error, and to issue a limited assurance report that includes our conclusion. Misstatements can
arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence decisions of users taken on the basis of the consolidated
Sustainability Statement as a whole.
INFORMATION ON SUSTAINABILITY MATTERS
TOC ↑
192
192
As part of a limited assurance engagement in accordance with ISAE 3000 (Revised) we exercise
professional judgement and maintain professional scepticism throughout the engagement.
Our responsibilities in respect of the consolidated Sustainability Statement, in relation to the Process,
include:
• obtaining an understanding of the Process, but not for the purpose of providing a conclusion on
the effectiveness of the Process, including the outcome of the Process;
• considering whether the information identified addresses the applicable disclosure requirements
of the ESRS; and
• designing and performing procedures to evaluate whether the Process is consistent with the
Group’s description of its Process set out in note Group’s double materiality assessment.
Our other responsibilities in respect of the consolidated Sustainability Statement include:
• identifying where material misstatements are likely to arise, whether due to fraud or error; and
• designing and performing procedures responsive to where material misstatements are likely to
arise in the consolidated Sustainability Statement. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
Summary of the work performed
A limited assurance engagement involves performing procedures to obtain evidence about the
consolidated Sustainability Statement. The procedures in a limited assurance engagement vary in
nature and timing from, and are less in extent than for, a reasonable assurance engagement.
Consequently, the level of assurance obtained in a limited assurance engagement is substantially lower
than the assurance that would have been obtained had a reasonable assurance engagement been
performed.
The nature, timing and extent of procedures selected depend on professional judgement, including the
identification of disclosures where material misstatements are likely to arise in the consolidated
Sustainability Statement, whether due to fraud or error.
In conducting our limited assurance engagement, with respect to the Process, we:
• obtained an understanding of the Process by:
o performing inquiries with the Company and its subsidiaries’ representatives to understand
the sources of the information used by management (e.g., stakeholder engagement,
business plans and strategy documents, information available in-house, and publicly
available information); and
o reviewing the Group’s internal documentation of its Process;
• evaluated whether the evidence obtained from our procedures with respect to the Process
implemented by the Company was consistent with the description of the Process set out in note
Group’s double materiality assessment.
In conducting our limited assurance engagement, with respect to the consolidated Sustainability
Statement, we:
• obtained an understanding of the Group’s reporting processes relevant to the preparation of its
consolidated Sustainability Statement by:
INFORMATION ON SUSTAINABILITY MATTERS
TOC ↑
193
193
o obtaining an understanding of the Group’s control environment, processes and information
system relevant to the preparation of the consolidated Sustainability Statement, but not for
the purpose of providing a conclusion on the effectiveness of the Group’s internal control.
o obtaining an understanding of the roles and responsibilities in the preparation of the
consolidated Sustainability Statement, including communication within the Group and
between management and those charged with governance.
• evaluated whether the information identified by the Process is included in the consolidated
Sustainability Statement;
• evaluated whether the structure and the presentation of the consolidated Sustainability
Statement is in accordance with the ESRS;
• performed inquiries of relevant personnel and analytical procedures on selected information in
the consolidated Sustainability Statement;
• performed substantive assurance procedures on selected information in the consolidated
Sustainability Statement;
• where applicable, compared disclosures in the consolidated Sustainability Statement with the
corresponding disclosures in the financial statements and Management report;
• evaluated the methods, assumptions and data for developing estimates and forward-looking
information;
• obtained an understanding of the Company’s process to identify taxonomy-eligible and
taxonomy-aligned economic activities and the corresponding disclosures in the consolidated
Sustainability Statement.
Other matter
The comparative information included in the consolidated Sustainability Statement of the Company as
at 31 December 2023 and for the year then ended was not subject to an assurance engagement. Our
conclusion is not modified in respect of this matter.
On behalf of PricewaterhouseCoopers UAB
Rasa Radzevičienė
Partner
Auditor's Certificate No.000377
Vilnius, Republic of Lithuania
27 March 2025
The auditor's electronic signature is used herein to sign only the Independent Limited Assurance Report
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
194
ve
09
Additional Information
9.1. Information on Compliance with the Transparency Guidelines
9.2. Notification by EPSO-G UAB on compliance with the Code of Corporate
Governance for companies listed on NASDAQ Vilnius
9.3. Details an Other General Information About EPSO-G UAB
9.4. Details on the EPSO-G Group companies
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
195
9. Additional Information
9.1. Information on Compliance with the Transparency Guidelines
The EPSO-G Group and its subsidiaries comply with Resolution No 1052 of the Government of 14 July 2010 On the Approval of
the Description of the Guidelines for Ensuring the Transparency of the Activities of State-Owned Enterprises (the “Transparency
Guidelines”). The Transparency Guidelines are mandatory, as EPSO-G is a State-owned establishment (SOE).
In order to ensure compliance with the Transparency Guidelines within the EPSO-G Group, the Operational Transparency and
Communication Policy has been adopted at Group level, which takes into account in detail the requirements set out in the
Transparency Guidelines and sets out how they apply to the companies in the EPSO-G Group.
The implementation of the Transparency Guidelines is mainly ensured through the information disclosed in the Annual Report
and through the disclosure of information on the websites of EPSO-G's management company and the Group's companies, by
disclosing and presenting the information in a format that is accessible and understandable to stakeholders.
The Transparency Guidelines state that the SOEs follow the provisions of the Nasdaq Vilnius Listed Company Governance Code
relating to public disclosure of information. Information on EPSO-G’s compliance with this Code is disclosed in Annex 4 of EPSO-
G’s annual report and in EPSO-G’s Report on Compliance with the Code of Corporate Governance for Nasdaq Vilnius Listed
Companies.
Below is structured information on the implementation of the Transparency Guidelines:
The EPSO-G website must publish information and comply with other requirements
Company name, company code and the register in which the data on the Company is collected and stored,
registered office (address)
Implemented
Legal status if EPSO-G is being reorganised, reorganised (specify the type of reorganisation), wound up,
bankrupt or insolvent
Not applicable
Information on the national authority, i.e. the Ministry of Energy of the Republic of Lithuania and a link to its
website
Implemented
Operational objectives, vision and mission
Implemented
Structure
Implemented
CEO’s details*
Implemented
Data on the chairperson and members of the Board*
Implemented
Details of the Chair and members of the Supervisory Council*
Not applicable
Names of committees, their chairs and members*
Implemented
*The following data shall be published: name, surname, date of commencement of duties, other management positions held in
other legal entities, education, qualifications, professional experience; whether the member of the collegial body is elected or
appointed as an independent member.
Total amount of the nominal values of the shares owned by the State (to the nearest euro cent) and the
percentage of EPSO-G’s issued capital
Implemented
Special obligations, which shall be established in accordance with the guidelines approved by the Minister
of Economy and Innovation of the Republic of Lithuania: the purpose of the special obligation, the state
budget allocations for its performance in the current calendar year and the legal acts entrusting the SOE with
the performance of the special obligation shall be indicated, the conditions for the performance of the special
obligation shall be established and/or the pricing shall be regulated
Implemented
Information on corporate social responsibility initiatives and measures, major investment projects underway
or planned
Implemented
If EPSO-G is a member of other legal entities (not applicable to subsidiaries and subsidiaries of a subsequent
level), the name, code number and register in which the Company’s data are collected and stored, the
registered office (address) and the website addresses of such legal entities
Implemented
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
196
1
When information is treated as a commercial (industrial) secret or as confidential information of the SOE, the SOE is allowed not to disclose such information;
however, in its annual report the SOE must indicate such non-disclosure and provide the reasons for non-disclosure.
The annual financial statements, the annual report and the auditor's report on the annual financial statements
must be published on EPSO-G’s website within 10 working days of the approval of the annual financial
statements
Implemented
EPSO-G’s interim financial statements and EPSO-G’s interim reports must be published on its website no
later than two months after the end of the reporting period
Implemented
Given that EPSO-G is a parent company, the following information must be additionally published on its website:
Group structure
Implemented
Subsidiaries and downstream subsidiaries:
Company name, company code and the register in which the data on the Company is collected and stored,
registered office (address)
Implemented
Website addresses
Implemented
Percentage of shares held by EPSO-G in the issued capital of companies
Implemented
Annual consolidated financial statements and consolidated annual reports
Implemented
The following documents must be published on the website and other requirements must be met:
Articles of Association of EPSO-G
Implemented
Letter from the Ministry of Energy of the Republic of Lithuania on the definition of state objectives and
expectations for EPSO-G
Implemented
The business strategy or a summary thereof where the business strategy contains confidential information
or information considered to be a commercial/industrial secret
Implemented
Remuneration policy, including the determination of the salary of the Head of EPSO-G and the remuneration
of the members of the collegiate bodies and committees set up by EPSO-G
Implemented
EPSO-G annual and interim reports
Implemented
Sets of annual and interim financial statements for a period of at least five years and auditor’s reports on the
annual financial statements
Implemented
The above documents are published in PDF format and are technically printable
Implemented
Other requirements must be met/published in the financial statements and reports:
EPSO-G keeps its accounting records in a way that ensures preparation of the financial statements in
accordance with International Accounting Standards
Implemented
EPSO-G prepares a set of financial statements for the period of 6 months
Implemented
In addition to the annual report, EPSO-G prepares a set of financial statements for the period of 6 months
Implemented
In addition to the content requirements set in the Law on Financial Reporting by Undertakings of the Republic of Lithuania, the
following information must be disclosed in the annual report of EPSO-G
1
:
Brief description of the business model
Implemented
Information on significant events that occurred during and after the financial year (prior to the annual report)
and which had a material impact on EPSO-G's activities
Implemented
Results for the objectives set out in the Operational Strategy
Implemented
Profitability, liquidity, asset turnover, debt ratios
Implemented
Compliance with specific obligations
Implemented
Implementation of the investment policy, ongoing and planned investment projects and investments during
the year under review
Implemented**
For information on investments, ongoing and planned projects, and investments during the reporting period, see sections 3.4,
3.5 and 4.2.8 of the Annual Report.
Implementation of risk management policy
Implemented
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
197
9.2. Notification by EPSO-G UAB on compliance with the Code of Corporate Governance for
companies listed on NASDAQ Vilnius
In accordance with the Description of the Guidelines for Ensuring the Transparency of the Activities of State-Owned Enterprises,
approved by the Resolution of the Government of the Republic of Lithuania No 1052 of 14 July 2010, and the Transparency and
Communication Policy of the EPSO-G Group of Companies, EPSO-G discloses in this report its compliance with the provisions of
the Corporate Governance Code for the Listed Companies approved by Nasdaq Vilnius. If there is a failure to comply with this
Code or any of its provisions, it shall be stated which provisions are not complied with and for what reasons.
The implementation of the recommendations of the Corporate Governance Code for the Companies Listed on NASDAQ OMX
Vilnius by EPSO-G is mainly ensured through the disclosures in the Annual Report and the extensive disclosures on EPSO-G’s
website, in order to provide information in a format that is accessible and understandable to stakeholders.
Free-form summary of the Corporate Governance Report:
EPSO-G, a state-owned company, is the parent company of the EPSO-G Group of companies. The rights and obligations of EPSO-
G holding shareholder are implemented by the Ministry of Energy of the Republic of Lithuania. The Company’s management
structure and governance model is determined by the Company’s Articles of Association, the Corporate Governance Guidelines
of the EPSO-G Group of Companies approved on 24 April 2018 (new version approved on 29 December 2022) by the Ministry of
Energy of the Republic of Lithuania, the sole shareholder, and the Corporate Governance Policy of the EPSO-G Group of
companies. All of the above documents are publicly available on the Company’s website.
Fig. 1 Principal scheme of the implementation of corporate governance of EPSO-G.
Implementation of the dividend policy
Implemented
Implementation of the remuneration policy
Implemented
Total annual salary bill, average monthly salary by position and/or department
Implemented
It is recommended that SOEs that are not required to prepare a corporate social responsibility, include
information on environmental, social and human resources, human rights, anti- corruption and anti-bribery
issues in their annual report or annual activity report, as appropriate
Implemented
The consolidated annual report shall include the structure of the group, the name, code and register number
of each subsidiary company in which data on the Company are collected and stored, the registered office
(address), the percentage of shares held in the subsidiary company’s issued capital, and the financial and
non-financial performance of the financial year
Implemented
EPSO-G’s interim report shall contain a brief description of EPSO-G’s business model, an analysis of its
financial performance for the reporting period, information on significant events that occurred during the
reporting period, as well as profitability, liquidity, asset turnover, debt indicators and their evolution
compared to the corresponding period of the previous year
Implemented
Function performance
according to the provisions of
the respective committees
and bodies
Implementation of
shareholder rights
Group companies
Other shareholders
THE REPUBLIC OF
LITHUANIA (via MoE)
(through ME)
PRINCIPLES AND
DOCUMENTS OF
THE CORPORATIVE
GOVERNANCE
EPSO-G
Compliance in
activities undertaken
Establishment of
principles and
document approval
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
198
Corporate governance structure:
• General Meeting of Shareholders;
• the Board (5 members, 3 of whom are independent, the other 2 nominated by the Ministry of Energy as the sole shareholder);
• Committees operating on the Group level:
o Remuneration and Nomination Committee (majority of members are independent);
o Audit Committee (majority of members are independent).
• CEO.
The Group has a centralised internal audit function. To ensure the independence of internal audit, the appointment and dismissal
of the head of internal audit is subject to the appointment and dismissal of the Board of the management company, which is
mainly composed of independent members. Internal Audit is accountable to the EPSO-G Audit Committee, which is also mainly
composed of independent members. The Internal Audit recommendations are analysed by the Company’s Board, which also
approves the plan of measures for the implementation of audit recommendations.
The EPSO-G Group’s Risk Management Policy is the basis for the implementation of a unified Group Risk Management System in
accordance with the internationally applicable COSO ERM standards, which define the principles and responsibilities for
identifying, assessing and managing risks. Coordination of risk management is carried out at Group level.
The EPSO-G Group has adopted operational policies to ensure good governance practices. They are designed to introduce a
consistent and effective management system of the organisation helping employees successfully implement important strategic
projects and create value to people and businesses of the country in a transparent and effective manner. To ensure the
effectiveness of the operational policies, the Company prepares an annual progress report on the implementation of the Group's
operational policies for the EPSO-G Board. Progress reports on the implementation of the operational policies of individual
companies within the Group are also presented to the Board of the respective company.
In order to meet the objectives set out in the Shareholder’s Letter of Expectations, the holding company EPSO-G has established
guiding principles and, where appropriate, specific rules (operating policies), presented in paragraph 5.1.2 of this Report.
EPSO-G draws on good governance practices set out in the Good Governance Recommendations published by the Organisation
for Economic Co-operation and Development (OECD), the United Nations and Nasdaq Vilnius Recommendations, and other
internationally recognised standards and good governance recommendations, with the overarching aim of ensuring that state-
owned companies are governed in a transparent and effective manner.
2. Structured table
PRINCIPLES AND GUIDELINES
YES/NO/NOT APPLICABLE
COMMENTARY
Principle 1: General Meeting of Shareholders, fair treatment of shareholders and shareholders' rights
The corporate governance system should ensure fair treatment of all shareholders. The corporate governance system should
protect shareholders’ rights.
All shareholders should have equal access
to the information and/or documents
provided for by law and should be able to
participate in decisions that are important
for the company.
YES
The company has a sole shareholder.
It is recommended that a company’s
capital should consist only of shares that
give their holders equal voting, ownership,
dividend and other rights.
YES
All the Company’s shares are ordinary
registered shares with a nominal value of
EUR 0.29 per share.
It is recommended that investors should
be given the opportunity to familiarise
themselves with the rights attached to
new or existing shares in advance, i.e.
before purchasing them.
NOT APPLICABLE
The Company has a single shareholder and
is not listed.
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
199
Exceptional transactions of major
importance, such as the disposal of all or
almost all of the company's assets, which
would effectively amount to a disposal of
the company, should be subject to the
approval of the General Meeting of
Shareholders.
YES
Article 28 of the Company’s Articles of
Association specifies the cases in which the
sole shareholder’s approval is required,
which are determined taking into account
that the Company's main assets are the
shares of its subsidiaries.
The procedures for organising and
participating in the General Meeting of
Shareholders should give shareholders
equal opportunities to participate in the
General Meeting of Shareholders and
should not prejudice the rights and
interests of shareholders. The choice of the
place, date and time of the General
Meeting should not preclude the active
participation of shareholders in the
General Meeting. In the notice of the
General Meeting, the company should
indicate the latest date on which the
proposed draft resolutions can be
submitted.
NOT APPLICABLE
The Company has a single shareholder and
is not listed.
In order to ensure the right of shareholders
living abroad to access information, it is
recommended that, where possible, the
documents prepared for the General
Meeting of Shareholders be made public in
advance not only in Lithuanian, but also in
English and/or in other foreign languages.
It is also recommended that the minutes of
the General Meeting of Shareholders, after
signing, and/or the decisions adopted be
made public not only in Lithuanian but
also in English and/or other foreign
languages. It is recommended that this
information be published on the
company's website. Not all documents
may be made publicly available if their
public disclosure would be prejudicial to
the company or would disclose the
company’s business secrets.
NOT APPLICABLE
The Company has a single shareholder and
is not listed.
Shareholders entitled to vote should be
able to vote at the meeting of
shareholders, either present or absent in
person. Shareholders should not be
prevented from voting in advance in
writing by completing a single ballot
paper.
YES
A shareholder may vote in writing.
In order to increase shareholders' ability to
participate in General Meetings of
Shareholders, it is recommended that
companies should make greater use of
modern technology to enable shareholders
to participate and vote in General
Meetings of Shareholders by electronic
means. In such cases, the security of the
information transmitted must be
guaranteed and the identity of the person
NOT APPLICABLE
The Company has a single shareholder and
is not listed.
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
200
who participated and voted must be
identifiable.
It is recommended to disclose in the notice of the draft decisions of the convened General Meeting of the Shareholder the
new nominations of the members of the collegial body, the remuneration proposed for them, the proposed appointment of
the audit company, if these issues are included in the agenda of the General Meeting of Shareholders. When proposing to
elect a new member of the collegial body, it is recommended that the member's educational background, work experience
and other management positions held (or proposed to be held) be disclosed.
Members of the Company’s collegial
management body, heads of the
administration
2
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.
NOT APPLICABLE
The Company has a single shareholder and
is not listed.
Principle 2: Supervisory Council
1. Functions and responsibilities of the Supervisory Council
The Supervisory Council should ensure that the interests of the company and its shareholders are represented, that it is
accountable to the shareholders and that it exercises objective and impartial oversight of the company's activities and its
management bodies, and that it makes regular recommendations to the management bodies. The Supervisory Council should
ensure the integrity and transparency of the company's financial accounting and control system.
1) Members of the Supervisory
Council should act honestly,
diligently and responsibly in the
best interests of the company and
its shareholders and represent
their interests, taking into account
the interests of employees and
the public good.
NOT APPLICABLE
The Company does not have a Supervisory
Council.
2) Where the Supervisory Council’s
decisions may affect the interests
of the company’s shareholders
differently, the Supervisory
Council should treat all
shareholders impartially. It
should ensure that shareholders
are adequately informed about
the company’s strategy, risk
management and control, and the
management of conflicts of
interest.
NOT APPLICABLE
The Company does not have a Supervisory
Council.
2
For the purposes of this Code, heads of the administration are the employees of the company who hold top level management positions.
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
201
3) The Supervisory Council should
be impartial in making decisions
that have a bearing on the
company’s operations and
strategy. The work and decisions
of the members of the
Supervisory Council should not
be influenced by those who
elected them.
NOT APPLICABLE
The Company does not have a Supervisory
Council.
4) Members of the Supervisory
Council should make clear their
objection if they consider that a
decision of the Supervisory
Council could be detrimental to
the company. Independent
members of the Supervisory
Council3 should: (a) remain
independent in their analysis and
decision-making; (b) neither seek
nor accept any undue preference
that may cast doubt on the
independence of the members of
the Supervisory Board.
NOT APPLICABLE
The Company does not have a Supervisory
Council.
5) The Supervisory Council should oversee that the company’s tax planning strategies are designed and implemented
in accordance with the law, to avoid flawed practices that are not in the long-term interests of the company and its
shareholders, which may lead to reputational, legal or other risks.
6) The company should ensure that
the Supervisory Council is
provided with sufficient resources
(including financial resources) to
carry out its duties, including
access to all relevant information
and the right to seek independent
professional advice from external
legal, accounting or other
professionals on matters within
the competence of the
Supervisory Council and its
committees.
NOT APPLICABLE
The Company does not have a Supervisory
Council.
2. Establishment of the Supervisory Council
The procedure for the establishment of the Supervisory Council should ensure that conflicts of interest are properly managed
and that the company is governed efficiently and fairly.
1) The members of the Supervisory
Council elected by the General
Meeting of Shareholders should
collectively ensure a diversity of
qualifications, professional
experience and competences, as
well as a gender balance. In order
to maintain an appropriate
balance between the
qualifications of the members of
NOT APPLICABLE
The Company does not have a Supervisory
Council.
3
For the purposes of this Code, the criteria of independence of members of the supervisory council 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.
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
202
the Supervisory Council, it should
be ensured that the members of
the Supervisory Council as a
whole have a broad range of
knowledge, views and experience
to perform their tasks properly.
2) Members of the Supervisory
Council should be appointed for a
fixed term, with the possibility of
individual re-election for a new
term, in order to ensure the
necessary growth in professional
experience.
NOT APPLICABLE
The Company does not have a Supervisory
Council.
3) The Chair of the Supervisory
Council should be a person
whose current or former position
would not be an obstacle to the
impartial exercise of his/her
functions. A former CEO of the
company or member of the Board
should not immediately be
appointed as a Chair of the
Supervisory Council. Where a
company chooses not to comply
with these recommendations,
information should be provided
on the measures taken to ensure
operational impartiality.
NOT APPLICABLE
The Company does not have a Supervisory
Council.
4) Each member should devote
sufficient time and attention to
his/her duties as a member of the
Supervisory Council. Each
member of the Supervisory
Council should undertake to limit
his/her other professional
commitments (in particular
management positions in other
companies) in such a way that
they do not interfere with the
proper performance of his/her
duties as a member of the
Supervisory Council. If a member
of the Supervisory Council
attended less than half of the
Supervisory Council meetings
during the company’s financial
year, the company’s shareholders
should be informed.
NOT APPLICABLE
The Company does not have a Supervisory
Council.
5) Where the appointment of a
member of the Supervisory
Council is proposed, it should be
disclosed which members of the
Supervisory Board are considered
independent. The Supervisory
Council may decide that, despite
the fact that a particular member
meets all the criteria of
independence, he/she cannot be
NOT APPLICABLE
The Company does not have a Supervisory
Council.
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
203
considered independent due to
special personal or company-
related circumstances.
6) The amount of remuneration for members of the Supervisory Council should be approved by the company’s General
Meeting of Shareholders for their activities and participation in the meetings of the Supervisory Council.
7) The Supervisory Council should
carry out an evaluation of its own
performance each year. It should
include an assessment of the
structure, organisation and ability
to act as a group, as well as an
assessment of the competence
and effectiveness of each
member of the Supervisory
Council and an assessment of
whether the Supervisory Council
has achieved its stated
performance objectives. The
Supervisory Council should
publish, at least once a year,
relevant information on its
internal structure and operating
procedures.
NOT APPLICABLE
The Company does not have a Supervisory
Council.
Principle 3: Board
3.1. Functions and responsibilities of the Board
The Board should ensure the implementation of the company’s strategy, as well as good corporate governance, taking into
account the interests of shareholders, employees and other stakeholders.
1) The Board should ensure the
implementation of the company’s
strategy, as approved by the
Supervisory Council, if it is
established. In cases where the
Supervisory Council is not
established, the Board is also
responsible for approving the
company’s strategy.
YES
Article 38 of the Company’s Articles of
Association states that the Board of
Directors of the Company shall approve the
Group’s business strategy, which shall, inter
alia, articulate the overall mission and vision
of the Group. The Board also regularly
considers reports on the implementation of
the strategy (Article 39 of the Articles of
Association).
2) The Board, as the collegial
management body of the
company, performs the functions
assigned to it by the Law and the
company’s Articles of Association
and, in cases where the company
does not have a Supervisory
Board, also performs the
supervisory functions provided for
in the Law. In carrying out its
functions, the Board should take
into account the needs of the
company, shareholders,
employees and other
stakeholders, as appropriate, in
YES
Paragraph 43 of the Company’s Articles of
Association states that the Board of the
Company has supervisory functions.
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
204
order to build a sustainable
business.
3) The Board should ensure
compliance with the laws and
internal company policies
applicable to the company or
group of companies to which it
belongs. It should also put in place
appropriate risk management and
control measures to ensure regular
and direct accountability of
executives.
YES
Article 38 of the Company’s Articles of
Association provides that the Board of the
Company shall consider and approve the
Group-wide corporate documents: policies,
guidelines for the most important activities
of the Group, as well as other Group-wide
corporate documents which are directly
applicable in full in the companies of the
Group, unless there are justified decisions of
the respective governing bodies of the
respective companies of the Group on the
application of exceptions to the application
of these corporate documents. When
approving these documents, the Board may
also lay down measures for their
implementation.
The Board also, by individual decisions,
instructs CEO to report regularly on the
Board’s performance indicators (e.g. the
Company’s strategy, operational plan,
budget, etc.).
4) Moreover, the management board should ensure that the measures included into the OECD Good Practice Guidance
4
on Internal Controls, Ethics and Compliance are applied at the company in order to ensure adherence to the
applicable laws, rules and standards.
5) In appointing the company’s CEO,
the Board should take into account
the appropriate balance of
qualifications, experience and
competence of the candidate.
YES
The Company’s Articles of Association
provide that CEO of the Company is
appointed by the Board on the
recommendation of the Remuneration and
Nomination Committee.
Article 79 of the Company’s Articles of
Association provides that, when assessing
the suitability of a candidate for the position
of the CEO, the Board shall assess the
candidate’s compliance with the
requirements set out in the Articles of
Association and applicable legislation and
may, for that purpose, require the candidate
to submit documents substantiating such
compliance and/or request the competent
public authorities to provide the necessary
information about the candidate.
Establishment of the Board
4
Link to the OECD Good Practice Guidance on Internal Controls, Ethics and Compliance: https://www.oecd.org/daf/anti-bribery/44884389.pdf
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
205
1) The members of the Board
elected by the Supervisory Board
or by the General Meeting of
Shareholders if no Supervisory
Council is established should
collectively ensure a diversity of
qualifications, professional
experience and competences, and
strive for gender balance. In order
to maintain an appropriate
balance between the
qualifications of the members of
the Board, it should be ensured
that the members of the Board as
a whole have a wide range of
knowledge, views and experience
to perform their tasks adequately.
YES
The selection of the members of the Board
of the Company is carried out in accordance
with the procedure established by the
Government of the Republic of Lithuania.
When electing the members of the Board, it
shall be ensured that the Board is composed
of at least three (3) independent members,
their independence being determined in
accordance with the criteria laid down by
the mandatory legislation, and that the
members of the Board have competences in
accordance with the Board’s areas of
responsibility and functions, and, whenever
possible, it is aimed to avoid appointing any
employees of the Company to the Board.
The Board members carry out their
performance assessment on annual basis.
The Remuneration and Nomination
Committee also assesses the performance
of the Board annually and makes
generalised recommendations for improving
the performance of the Group’s collegial
bodies.
2) The names of the candidates for
election to the Board, their
education, qualifications,
professional experience, positions
held, other relevant professional
commitments and potential
conflicts of interest should be
disclosed, without prejudice to
the requirements of the
legislation governing the
processing of personal data, at
the meeting of the Supervisory
Council at which the Board or its
individual members will be
elected. If the Supervisory Council
is not established, the information
set out in this point should be
submitted to the General Meeting
of Shareholders. The Board
should compile the data on its
members referred to in this point
each year and disclose it in the
company’s annual report.
YES
Article 32 of the Company’s Articles of
Association provides that the Meeting, in
assessing the suitability of a candidate for
election to the Board, shall assess his/her
compliance with the requirements laid down
in the Articles of Association and the
applicable legislation. Pursuant to Article 33
of the Company’s Articles of Association,
each candidate for election to the Board is
required to submit a declaration of interests
to the General Meeting of Shareholders.
Information on the appointed members of
the Board is published and updated on the
Company’s website.
The Annual Report does not repeat this
information in addition, but it does include
information on the Chair of the Board, CEO
and the Chief Financial Officer and the Head
of Internal Audit.
3) All new members of the Board
should be briefed on their duties,
the company’s structure and its
activities.
YES
Board members are briefed on the
Company’s structure and activities. The key
corporate documents of the Company are
shared.
4) Members of the Board should be
appointed for a fixed term, with
the possibility of individual re-
election, in order to ensure the
necessary growth in professional
experience and sufficiently
frequent reconfirmation of their
status.
YES
The members of the Board are appointed for
a four-year term of office. A member of the
Board may not serve as a member of the
Board for more than two (2) consecutive full
Board terms and in any case may not serve
as a member of the Board for more than ten
(10) consecutive years.
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
206
5) The Chair of the Board should be
a person whose current or former
position would not be an obstacle
to the impartial conduct of
business. A former CEO of the
company should not immediately
be appointed as a Chair of the
Board. Where a company
chooses not to comply with these
recommendations, information
should be provided on the
measures taken to ensure
operational impartiality.
YES
The Company’s Articles of Association set
out the criteria for a person to be ineligible
for election as a member of the Board.
According to Article 52 of the Company’s
Articles of Association, the Chair of the
Board should be an independent member of
the Board.
6) Each member should devote
sufficient time and attention to his
or her duties as a Board member.
If a member of the Board has
attended less than half of the
meetings of the Board during the
company’s financial year, the
company’s Supervisory Council
should be informed, or, if there is
no Supervisory Council, the
General Meeting of Shareholders.
YES
The Company’s minutes record the
participation and voting of Board members
in decision-making. The attendance of the
Board at meetings shall be indicated in the
annual report.
Each year, the members of the Company’s
Board carry out a performance evaluation,
the results of which are presented to the
shareholder and the Remuneration and
Nomination Committee.
7) If, in the cases provided for in the
Law, when the Board is elected in
the absence of a Supervisory
Council, some of the members of
the Board will be independent
5
, it
should be published which
members of the Board are
considered independent. The
Board may decide that a
particular member of the Board,
although fulfilling all the criteria
for independence set out in the
Law, may not be considered
independent because of special
personal or company-related
circumstances.
YES
Both the Company’s website and the
Annual Report provide information on the
members of the Company’s Board, with
specific reference to independent members.
8) The amount of remuneration to
be paid to members of the Board
for their activities and
participation in Board meetings
should be approved by the
company’s General Meeting of
Shareholders.
YES
Article 28 of the Company’s Articles of
Association provide that the General
Meeting of Shareholders shall decide on the
remuneration guidelines applicable to
remuneration for service on the Board of the
Company and of the Group of Companies.
9) Board members should act honestly, diligently and responsibly in the best interests of the company and its
shareholders and represent their interests, taking into account other interest holders. They should not pursue
personal interests in their decision-making, should be subject to non-competition agreements, and should not, to the
detriment of the company's interests, take advantage of business information and opportunities that are relevant to
the company's activities.
5
For the purposes of this Code, the criteria of independence of members of the board are interpreted as the criteria of unrelated parties defined in Article 33(7) of the
Law on Companies of the Republic of Lithuania.
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
207
10) Every year the management
board should carry out an
assessment of its activities. It
should include an assessment of
the structure, organisation and
ability to act as a group, as well
as an assessment of the
competence and effectiveness of
each member of the Board and an
assessment of whether the Board
has achieved its stated
performance objectives. The
management board should, at
least once a year, make public
respective information about its
internal structure and working
procedures in observance of the
legal acts regulating the
processing of personal data.
YES
The Board carries out an annual evaluation
of its own performance and draws up a
performance improvement plan. The
summary results of the Board’s performance
evaluation are presented in the Company’s
Annual Report.
Principle 4: Working procedures of the Company’s Supervisory Council and the Board
The company's procedures for the work of the Supervisory Council, if established, and the Board should ensure the effective
work and decision-making of these bodies and promote active cooperation between the company’s bodies.
1) The Board and the Supervisory
Council, if established, should
work closely together for the
benefit of both the company and
its shareholders. Good corporate
governance requires an open
discussion between the Board and
the Supervisory Council. The
Board should regularly and, if
necessary, promptly inform the
Supervisory Council of all matters
of importance to the company in
relation to planning, business
development, risk management
and control, and compliance with
the company’s obligations. The
Board should inform the
Supervisory Council of actual
deviations in business
development from the plans and
objectives previously formulated,
stating the reasons for this.
NOT APPLICABLE
The Company does not have a Supervisory
Council.
2) It is recommended that meetings
of the company’s collegial bodies
be held at appropriate intervals in
accordance with a pre-approved
schedule. It is up to each company
to decide on the frequency of
meetings of the collegial bodies,
but it is recommended that they
should be held at such a frequency
as to ensure the uninterrupted
discussion of the company’s key
governance issues. Meetings of
the company’s collegiate bodies
YES
The Company’s Articles of Association
provide that the Board shall take its
decisions at meetings of the Board, which
shall be held as often as necessary to
enable the Board to perform its functions
properly and to take the decisions falling
within its competence.
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
208
should be convened at least once
a quarter of the year.
At the beginning of each year, the Board of
Directors of the Company approves the
schedule of ordinary meetings for the
current year, as well as the activity plan
(preliminary questions for the relevant
Board meeting).
3) The members of the collegial body should be informed in advance of the convening of the meeting in order to allow
sufficient time for adequate preparation of the issues to be discussed at the meeting and for the discussion leading to
the adoption of decisions. The members of the collegial body should be provided with all relevant material relating to
the agenda of the meeting together with the notice of the meeting. The agenda should not be amended or
supplemented during a meeting unless all members of the collegiate body are present and agree to such amendment
or supplementation or unless there is an urgent need to deal with important matters of the company.
1. In order to coordinate the work of
the company’s collegial bodies
and to ensure an efficient decision-
making process, the chairpersons
of the company’s collegial
supervisory and management
bodies should coordinate the
dates and agendas of the
meetings to be convened and
should cooperate closely on other
issues related to the company’s
management. Meetings of the
company’s Supervisory Council
should be open to the members of
the company’s Board, in particular
where the meeting deals with
matters relating to the removal of
members of the Board, their
liability and the determination of
remuneration.
NOT APPLICABLE
The Company does not have a Supervisory
Council.
Principle 5: Nomination, Remuneration and Audit Committees
Purpose and composition of committees
The committees established within the company should enhance the effectiveness of the Supervisory Council and, if the
Supervisory Council is not established, of the Board, which performs supervisory functions, by ensuring that decisions are
taken after due deliberation and by helping to organise the work in such a way as to ensure that decisions are not affected by
material conflicts of interest.
The Committees should act independently and in a principled manner and make recommendations related to the decision of
the collegial body, but the final decision is taken by the collegial body itself.
1) Depending on the specific
circumstances of the company and
the governance structure chosen,
the company’s Supervisory Council
and, if the Supervisory Council not
established, the Board, which
performs the supervisory
functions, form committees. It is
recommended that the collegial
body form Nomination,
Remuneration and Audit
YES
The Company has the Remuneration and
Nomination Committee formed by the Board
of EPSO-G acting in accordance with the
regulations approved by the body that forms
it; and the Audit Committee operating at the
Group level formed by the sole shareholder
EPSO-G and acting in accordance with the
regulations approved by the body that forms
it.
Given the close links between remuneration
and nomination issues and the need for
experts with the same qualifications, it has
been decided to form a single Remuneration
and Nomination Committee.
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
209
committees
6
.
2) Companies may decide to have
fewer than three committees. In
this case, companies should
provide an explanation as to why
they have chosen the alternative
approach and how the chosen
approach meets the objectives set
by the three separate Committees.
YES
3) The functions assigned to the
committees formed in companies
may be performed by the collegial
body itself in the cases provided
for by law. In such a case, the
provisions of this Code relating to
committees (in particular as
regards their role, functioning and
transparency) should, where
appropriate, apply to the
collegiate body as a whole.
NOT APPLICABLE
Please see par. 5.1.
4) Committees established by the
collegial body should normally be
composed of at least three
members. Subject to the
requirements of the legal acts,
committees could be comprised
only of two members as well.
Members of each committee
should be selected on the basis of
their competences by giving
priority to independent members
of the collegial body. The chair of
the management board should not
serve as the chair of committees.
YES
Sections 7.7 to 7.9 of the Company’s
Articles of Association govern the
composition and competences of
committees within the Group. The
aforementioned statutes state that the
Remuneration and Nomination and Audit
Committees shall consist of at least three
members.
It is ensured that from among three
members there is at least one independent
member in the Remuneration and
Nomination Committee, and more than half
of the members in the Audit Committee. The
Chairs of the Remuneration and Nomination
and Audit Committees are independent
members of the Committees. Not all
members of the Remuneration and
Nomination Committee and the Audit
Committee are appointed by the Board of
EPSO-G. One member to each of the
committees is appointed on the basis of
competence when performing the external
selection of an independent member of the
committee.
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 report to the collegial body on their
activities and performance on a regular basis. The Rules of Procedure of each committee, defining its role and
specifying its rights and duties, should be published at least once a year (as part of the information that the company
publishes annually about its governance structure and practices). Companies should also publish each year in their
annual report, without prejudice to the requirements of the legislation on the processing of personal data, the
composition, number of meetings and attendance of members of the existing committees during the previous year, as
6
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).
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
210
well as the main operational goals and their performance.
6) In order to ensure the
independence and objectivity of
committees, members of the
collegial body who are not
members of the committee should
normally be entitled to attend
committee meetings only at the
invitation of the committee. The
Committee may invite or require
the attendance of certain
employees or experts of the
Company. The Chair of each
committee should be able to
communicate directly with
shareholders. The cases in which
this should be done should be
specified in the rules governing
the operation of the Committee.
YES
The Regulations of the Committees provide
for the right of the members of the
Committees, at their discretion, to invite
members of the organs of the companies of
the EPSO-G Group of companies,
employees, proxies, candidates for certain
positions, or other persons to attend their
meetings and to obtain from them, within
the limits of their competence, the necessary
explanations, and for that purpose, to
request the necessary actions to carry out
the Committee’s functions.
Nomination committee.
The main functions of the Nomination Committee should be:
(1) to select candidates for vacancies in the Supervisory, Governing Body and Executive Management positions and to
recommend them to the collegial body for consideration. The Nomination Committee should assess the balance of skills,
knowledge and experience in the governing body, develop a description of the functions and skills required for the specific
position and assess the time required to complete the assignment;
(2) regularly assess the structure, size, composition, skills, knowledge and performance of the supervisory and management
bodies, and make recommendations to the collegiate body on how to bring about the necessary changes;
(3) give due attention to succession planning.
The Company’s CEO should be consulted
on matters relating to members of the
collegial body who have an employment
relationship with the company and to the
Senior Management, with the right to
make proposals to the Nomination
Committee.
YES
The Regulations establish that the right of
initiative to convene the Remuneration and
Nomination Committee is exercised by the
boards or general managers of the group of
companies that also propose the agenda of
the meeting by submitting issue-related
materials and draft resolutions.
The provision is not practically relevant at
the present time as the Board does not
include any employees of the Company.
Remuneration Committee.
The main functions of the Remuneration
Committee should be:
(1) submit proposals to the collegial body
for consideration on the remuneration
policy applicable to members of the
supervisory and management bodies and
the executives. Such policies should cover
all forms of remuneration, including fixed
remuneration, performance-related
remuneration, financial incentive schemes,
pension schemes, severance payments, as
well as conditions that would allow the
company to recover amounts or suspend
YES
Please see par. 5.4.2 of this Report.
CONSOLIDATED MANAGEMENT REPORT FOR 2024
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211
payments, indicating the circumstances
that would make it appropriate;
(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.
Audit Committee.
YES
The Audit Committee of EPSO-G acts as an
advisory body to the Board of the Company
on matters relating to the Committee’s areas
of activity, operating on a Group-wide basis,
with the main functions of:
1. Supervising the preparation of the
Group’s financial statements and the audit
process;
2. Ensuring the independence and objectivity
of the Group’s auditors and audit companies;
3. Providing an opinion on related party
transactions in the cases provided for in the
Articles of Association of listed subsidiaries;
4. Making recommendations regarding the
selection, appointment, re-appointment and
removal of an external auditory and the
terms and conditions of a contract with the
external audit company;
5. Monitoring and making recommendations
on the effectiveness of the internal control,
risk and compliance management, and the
internal audit function, as well as business
processes.
(1) The main functions of the Audit
Committee are defined in the legislation
governing the Audit Committee
7
.
(2) All members of the Committee should
be provided with detailed information
relating to the company’s specific
accounting, financial and operational
characteristics. The Audit Committee
should be informed by the company’s
executives of the accounting treatment of
significant and unusual transactions, which
may be accounted for in different ways.
7
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.
CONSOLIDATED MANAGEMENT REPORT FOR 2024
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212
(3) The Audit Committee should decide
whether (and if so, when) the Chair of the
Board, the Chief Executive Officer, the
Chief Financial Officer (or senior finance
and accounting staff), the internal auditor
and the external auditor should attend its
meetings. The Committee should be able
to meet the persons concerned, if
necessary, without the presence of
members of the management bodies.
YES
The Regulations of the Audit Committee
stipulate that the members of the
Committee, at their own discretion, may
invite to their meetings the members of the
bodies of the companies of the group, their
employees, representatives, candidates for
certain positions or other persons, and
obtain from them the necessary
explanations within their competence, as
well as require for that purpose that
necessary actions would be taken for the
performance of the functions of the
Committee.
(4) The Audit Committee should be
informed of the work programme of the
internal auditors and receive internal audit
reports or a periodic summary. The Audit
Committee should also be informed of the
work programme of the external auditors
and should receive a report from the audit
firm describing any relationship between
the independent audit company and the
company and its group.
YES
The Audit Committee is regularly, at least
quarterly, informed about the internal audit
reports, makes recommendations for the
approval of the internal audit plan and
monitor its implementation.
The Audit Committee organises meetings
with the external auditors to discuss the
auditors’ work program and uncertainties
arising during the audit, and after the
performance of the external audit, their
conclusions and recommendations are
discussed with the external auditors. Each
year, before the start of annual audits, the
audit firm submits its declaration of
independence to the Audit Committee and
to the companies.
(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.
(6) The Audit Committee should report to
the Supervisory Council, or, if the
Supervisory Council is not established, to
the Board at least once every six months,
at the same time as the approval of the
annual and half-yearly reports.
YES
The Regulations of the Audit Committee
stipulate that the Audit Committee shall
submit half-yearly and annual activity
reports to the Board. Annual report is also
submitted to the sale shareholder of EPSO-
G.
Principle 6: Avoidance and disclosure of conflicts of interest
The corporate governance framework should encourage members of the company’s supervisory and management bodies to
avoid conflicts of interest and ensure a transparent and effective mechanism of disclosure of conflicts of interest related to
members of the supervisory and management bodies.
The corporate governance system should recognise the rights of stakeholders as established by law and promote active
cooperation between the company and stakeholders to create wealth, jobs and financial stability. In the context of this
principle, stakeholders include investors, employees, creditors, suppliers, customers, the local community and others with an
interest in the company.
A member of a company’s supervisory and
management body should avoid a
situation where his or her personal
interests conflict or may conflict with the
interests of the company. If such a
situation does arise, a member of the
supervisory or management body of the
company should, within a reasonable
period of time, inform the other members
YES
This obligation is laid down in the Board’s
rules of procedure, in the contract signed
with the Board member and in the Policy of
Management of Interests of Employees and
Members of Collegial Bodies of the EPSO-G
Group companies.
CONSOLIDATED MANAGEMENT REPORT FOR 2024
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213
of the same body, or the body of the
company that elected him or her, or the
shareholders of the company of the
existence of such a conflict of interests,
indicating the nature of the interests and,
where possible, the value.
Article 33 of the Company’s Articles of
Association stipulates that any candidate for
election to the Board must immediately
inform the Board of any new circumstances
which may give rise to a conflict of interest.
Principle 7: Company’s remuneration policy
The company's remuneration policy and the procedures for its review and disclosure should prevent potential conflicts of
interest and abuse in determining the remuneration of the members of the collegiate bodies and of the executives, and ensure
the openness and transparency of the company's remuneration policy, as well as the company’s long-term strategy.
(1) The company should approve and
publish the remuneration policy on it’s
website, which should be regularly
reviewed and be consistent with the
company’s long-term strategy.
YES
The Company applies the Guidelines for
Determining the Remuneration for Activities
in the Management Bodies of EPSO-G and
the EPSO-G Group of Companies, which are
approved by the sole shareholder of EPSO-
G and available in a public domain.
The company applies the Remuneration,
Performance Review and Training Policy of
the EPSO-G Group in full. The policy is
made available to public.
(2) The remuneration policy should cover
all forms of remuneration, including fixed
remuneration, performance-related
remuneration, financial incentive schemes,
pension schemes, severance payments, as
well as clauses providing for situations
where the company may recover amounts
paid or suspend payments.
YES
All possible forms of remuneration for
collegiate bodies and employees are set out
in the Guidelines for Determining the
Remuneration for Activities in the
Management Bodies of EPSO-G and the
EPSO-G Group of Companies and in the
Remuneration, Performance Review and
Training Policy of the EPSO-G Group. Both
documents are made available to public.
(3) With a view to avoid potential conflicts
of interest, the remuneration policy should
provide that members of the collegial
bodies which perform the supervisory
functions should not receive remuneration
based on the company’s performance.
YES
The Company applies the Guidelines for
Determining the Remuneration for Activities
in the Management Bodies of EPSO-G and
the EPSO-G Group of Companies, which
regulate the fixed monthly remuneration for
members of collegial bodies. The members
of the Board are not remunerated on the
basis of the Company’s performance.
CONSOLIDATED MANAGEMENT REPORT FOR 2024
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214
(4) The remuneration policy should
provide sufficient detail on the policy
regarding termination payments.
Termination payments should not exceed
a fixed amount or a fixed number of annual
salaries and should generally not exceed a
fraction of two years' fixed remuneration
or its equivalent. Termination payments
should not be paid if the contract is
terminated because of poor performance.
YES/NO
The Remuneration, Performance Review and
Training Policy of the EPSO-G Group of
companies stipulates that there are no pre-
agreed severance payments in the Group
companies (except for the companies CEO’s,
whose terms of employment are determined
by the Board). The amounts of benefits
related to the termination of employment
relationships are determined by taking into
account the mandatory minimum amounts of
such benefits established by the norms of
labour law, except for exceptional cases
when there are objective reasons for the
agreement on the other benefits. The
relevant Board of the Group company shall
be informed of the disbursement of such
(higher) benefits and the grounds for their
payment at its forthcoming meeting.
(5) If the company has a financial incentive
scheme, the remuneration policy should
contain sufficient details on the retention
of shares after vesting. In the case of a
share-based award, the shares should not
vest for at least three years after the
award. After vesting, members of the
collegiate bodies and executives should
retain a certain number of shares until the
end of their term of office, depending on
the need to cover any costs associated
with the acquisition of shares.
NOT APPLICABLE
The Company does not have a financial
incentive scheme.
(6) The company should publish on the company's website information on the implementation of the remuneration policy,
which should focus on the remuneration policy of the collegial bodies and the management for the next and, where
appropriate, the following financial year. It should also provide an overview of how the remuneration policy was implemented
in the previous financial year. This type of information should not contain information of commercial value. Particular attention
should be paid to significant changes in the company's remuneration policy compared to the previous financial year.
(7) It is recommended that the
remuneration policy, or any material
change to the remuneration policy, should
be included on the agenda of the General
Meeting of Shareholders. Schemes where
members of the collegial body and
employees are remunerated in shares or
share options should be approved by the
General Meeting of Shareholders.
YES
The remuneration of the members of the
Company’s Board shall be determined by
the General Meeting of Shareholders of the
Company. The remuneration is determined
in accordance with the Guidelines for
determining the remuneration for activities
in the corporate bodies of EPSO-G and the
EPSO-G Group, which have been approved
by the sole shareholder of EPSO-G.
The Company does not operate any of the
schemes in question.
Principle 8: The role of interest holders in corporate governance
The corporate governance framework should recognise the rights of stakeholders entrenched in the laws or mutual
agreements and encourage active cooperation between the company and stakeholders in creating the company value, jobs
and financial sustainability. In the context of this principle, stakeholders include investors, employees, creditors, suppliers,
customers, the local community and others with an interest in the company.
CONSOLIDATED MANAGEMENT REPORT FOR 2024
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215
(1) The corporate governance framework
should ensure that the rights and lawful
interests of stakeholders are protected.
YES
The Company has adopted the
Transparency and Communication Policy of
the EPSO-G Group of Companies, which
establishes goals to increase awareness and
understanding of stakeholders about the
activities of the EPSO-G Group of companies
and individual group companies; to ensure
employee engagement; to create and
maintain sustainable relationship with
stakeholders based on mutual respect.
(2) The corporate governance framework
should allow stakeholders to participate in
the governance of the company in
accordance with the law. Examples of
participation by stakeholders in corporate
governance include the participation of
employees or their representatives in the
adoption of decisions that are important
for the company, consultations with
employees or their representatives on
corporate governance and other important
matters, participation of employees in the
company’s authorised capital, involvement
of creditors in corporate governance in the
cases of the company's insolvency, etc.
YES
The Company shall consult, negotiate and
confer with the Company’s employee
representatives on the Company’s business
processes.
Stakeholders can take part in the corporate
governance to the extent permitted by law.
(3) Where stakeholders are involved in the governance of the company, they should be given access to relevant information.
(4) Stakeholders should be able to report
illegal or unethical practices in confidence
to the collegiate body exercising the
supervisory function.
NO
The Company’s website section “Corruption
Prevention” provides the Helpline, an
internal whistleblowing channel, contacts.
The reporting form invites you to report
violations of the provisions of legal acts and
norms of conduct committed by the
executives and employees of EPSO-G and
the companies directly or indirectly
controlled by EPSO-G UAB (Litgrid, Amber
Grid, Baltpool, Tetas, GET Baltic);
transaction and accounting irregularities;
bribery, graft, influence peddling, abuse of
office; conflicts of interest, nepotism and
cronyism; breaches of the requirements of
transparency, equality, non-discrimination,
proportionality and impartiality in
procurement. Information sent to this
address is sent only to EPSO-G’s Anti-
Corruption Officer, who ensures the
confidentiality of the sender.
EPSO-G’s Group-wide Audit Committee
ensures the functioning of the complaints
system and the handling of complaints.
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216
Principle 9: Disclosure of information
The corporate governance framework should ensure that timely and accurate disclosures are made on all material matters
concerning the company, including its financial position, performance and corporate governance.
Without prejudice to the Company’s
procedures for confidential information
and trade secrets, as well as to the
requirements of the legislation governing
the processing of personal data, the
Company’s public disclosures should
include, but not be limited to:
YES
The Transparency and Communication
Policy of the EPSO-G Group of Companies
has been adopted by the Company.
the company’s performance and financial
results;
YES
-
the company's business objectives and
non-financial information;
YES
-
the persons owning or controlling a
shareholding in the company, directly
and/or indirectly and/or jointly with
associated persons, as well as the
structure of the group of companies and
the interrelationships between them, with
an indication of the ultimate beneficial
owner;
YES
-
the members of the company’s supervisory
and management bodies, which of them
are considered independent, the
company's CEO, their shareholdings or
votes in the company, and their
involvement in the management of other
companies, their competence and
remuneration;
YES
-
reports from existing committees on their
composition, number of meetings and
attendance of members during the
previous year, as well as on their main
activities and results;
YES
-
the potential key risk factors, the
company’s risk management and
supervision policy;
YES
-
the company’s transactions with related
parties;
YES
-
key issues relating to employees and other
stakeholders (e.g. human resources
policies, employee participation in the
management of the company, incentives in
the form of shares or share options,
relations with creditors, suppliers, the local
community, etc.);
YES
-
CONSOLIDATED MANAGEMENT REPORT FOR 2024
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217
the company’s governance structure and
strategy;
YES
-
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 relieve a
company of its obligation to disclose
information as required by law.
YES
-
When disclosing the information specified
in Item 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
EPSO-G, as the parent company, discloses
information on the Group’s financial results
and the activities of the Group companies.
(1) When disclosing the information specified in Item 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 CEO 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
CEO of the company should be disclosed, as provided for in greater detail in Principle 7.
(2) 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.
NOT APPLICABLE
The Company has a sole shareholder and is
not listed.
Principle 10: Selecting the company's audit company
The company's mechanism for selecting the audit company should ensure the independence of the audit company's report
and opinion.
(1) In order to obtain an objective opinion
on the company's financial position and
financial performance, the company's
annual set of financial statements and the
financial information contained in the
annual report should be audited by an
independent audit company.
YES
The independent auditor is appointed by the
General Meeting of Shareholders.
(2) It is recommended that the nomination
of the audit company be proposed to the
General Meeting of Shareholders by the
company's Supervisory Board or, if the
company does not have a Supervisory
Board, by the company's Board.
YES
The Group-wide Audit Committee is actively
involved in the auditor selection process.
The Audit Committee shall make a
recommendation to the Board on the
nomination of the auditor. The final decision
is taken by the General Meeting of
Shareholders, which is convened and
submitted draft decisions by the Board.
CONSOLIDATED MANAGEMENT REPORT FOR 2024
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218
(3) If the audit company has received
remuneration from the company for non-
audit services, the company should
disclose this publicly. This information
should also be made available to the
company's Supervisory Board or, if the
company does not have a Supervisory
Board, to the company's Board when
considering which audit company to
propose to the General Meeting of
Shareholders.
YES
The non-audit services provided by the audit
company shall be in accordance with the
policy approved by the Audit Committee of
the EPSO-G Group on the purchase of non-
audit services from the audit company or
from any network to which the audit
company belongs. Any remuneration
received by the audit company during the
reporting period for non-audit services
provided to Group companies is disclosed in
the annual report.
The provision of non-audit services is
supervised by the Audit Committee
operating at the Group level, which, as
mentioned in paragraph 10.2, is actively
involved in the selection process of an
auditor. Therefore, the Audit Committee,
when submitting a recommendation to the
Board on the auditor, has all the necessary
information on the auditors.
9.3. Details an Other General Information About EPSO-G UAB
Company name
EPSO-G UAB
Legal form
Private limited company
Date and place of registration
25 July 2012, the Register of Legal Entities of the Republic of Lithuania
Company code
302826889
Registered office address
Laisvės ave. 10, LT-01103 Vilnius
Telephone
+370 685 84866
Email
info@epsog.lt
Website
www.epsog.lt
Issued capital
EUR 189,631,000
Sole shareholder
The Republic of Lithuania, the property and non-property rights of which are implemented
by the Ministry of Energy of the Republic of Lithuania
EPSO-G is a 100 % state-owned Group of energy transmission and exchange companies. The rights and obligations of EPSO-G
UAB holding shareholder are implemented by the Ministry of Energy of the Republic of Lithuania.
The main activity of the EPSO-G Group is to ensure uninterrupted, stable electricity transmission through high voltage grids and
natural gas transportation through high-pressure pipelines, and efficient management, maintenance, subcontracting and
development of these transmission systems. The Group also manages and develops the biofuel and timber trade platforms
designed to ensure competition in the market of energy resources and roundwood. It also carries out electricity subcontracting
projects and provides infrastructure operation services for low, medium and high voltage network operators.
All the companies belonging to the EPSO-G Group are responsible for effective and timely implementation of the projects of
energy transmission and exchange infrastructure development that are important for the state by contributing to the
implementation of the goals set in the National Energy Independence Strategy thus creating a sustainable long- term value for
the shareholder – the State of Lithuania, people and the economy of the country.
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
219
As at 31 December 2024, the EPSO-G Group (the “Group”) consisted of the holding company EPSO-G, six directly controlled
companies Amber Grid, Baltpool, Energy Cells, EPSO-G Invest, Litgrid and Tetas. EPSO-G and the Group companies also hold
shares in GET Baltic, Baltic RCC and TSO Holding AS.
INFORMATION ON SUSTAINABILITY MATTERS
TOC ↑
220
9.4. Details on the EPSO-G Group companies
Company name
Amber Grid AB
LITGRID AB
BALTPOOL UAB
TETAS UAB
Energy Cells UAB
EPSO-G Invest UAB
Legal form
Public limited company
Public limited company
Private limited company
Private limited company
Private limited company
Private limited company
Date and place of
registration
11 June 2013, the
Register of Legal
Entities of the Republic
of Lithuania
16 November 2010, the
Register of Legal
Entities of the Republic
of Lithuania
10 December 2009, the
Register of Legal
Entities of the Republic
of Lithuania
8 December 2005, the
Register of Legal
Entities of the Republic
of Lithuania
26 January 2021, the
Register of Legal
Entities of the Republic
of Lithuania
18 July 2024, the
Register of Legal
Entities of the Republic
of Lithuania
Company code
303090867
302564383
302464881
300513148
305689545
306949519
Registered office
address
Laisvės ave. 10,
LT- 04215 Vilnius
Karlo Gustavo Emilio
Manerheimo g. 8,
LT- 05131 Vilnius
Žalgirio g. 90,
LT-09303 Vilnius
Senamiesčio st. 102B,
LT- 35116 Panevėžys
Ozo st. 12A-1,
LT-08200 Vilnius
Laisvės ave. 10,
LT- 04215 Vilnius
Telephone
+370 5 236 0855
+370 707 02171
+370 5 239 3157
+370 45 504 670
+370 659 00748
+370 699 89818
Email
info@ambergrid.lt
info@litgrid.eu
info@baltpool.eu
info@tetas.lt
info@energy-cells.eu
info@epsoginvest.lt
Website
www.ambergrid.lt
www.litgrid.eu
www.baltpool.eu
www.tetas.lt
www.energy-cells.eu
www.epsog.lt
Nature of activities
Natural gas
transmission system
operator
Electricity transmission
system operator
Operator of the Energy
Exchange and the
Timber Exchange,
administrator of the
PSO funds
Specialised services of
maintenance, repair and
installation of
transformer substations
and distribution points,
works of testing and
tests, design of energy
objects
Designated energy
storage system operator
Project management,
investments
Shares held by EPSO-G
96.6%
97.5%
67.0%
100.0%
100.0%
100.0%
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
221
221
10
Confirmation of responsible persons
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
222
222
10. Confirmation of responsible persons
27-03-2025
Following the Law on Securities of the Republic of Lithuania and the Rules on Information Disclosure of the Bank of Lithuania,
we, Mindaugas Keizeris, Chief Executive Officer of UAB EPSO-G, Darius Kašauskas, Chief Financial Officer of the Group and
Žydrūnas Augutis, Chief Financier, hereby confirm that, to the best of our knowledge, the attached UAB EPSO-G consolidated
and separate financial statements, for the period ended 31 December 2024, prepared in accordance with International Financial
Reporting Standards adopted by the European Union, give a true and fair view of the UAB EPSO-G and Group assets, liabilities,
financial position, profit and cash flows. UAB EPSO-G consolidated management report for 2024 year gives a true and fair view
of business developments and operating activities and UAB EPSO-G and Group situation including a survey report of the principal
risks and uncertainties.
.
Chief Executive Officer
Mindaugas Keizeris
Chief Financial Officer
Darius Kašauskas
Chief Financier
Žydrūnas Augutis
CONSOLIDATED MANAGEMENT REPORT FOR 2024
TOC ↑
223
223
11
Independent Auditor‘s Report
11. Independent ‘s Report
PricewaterhouseCoopers UAB, J. Jasinskio str. 16B, LT-03163 Vilnius, Lithuania
+370 (5) 239 2300, lt_vilnius@pwc.com, www.pwc.lt
Company code 111473315, is a private company registered with the Legal Entities’ Register of the Republic of Lithuania
224
224
Independent Auditor’s Report
To the shareholder of EPSO-G UAB
Report on the audit of the separate and consolidated financial statements
Our opinion
In our opinion, the separate and consolidated financial statements give a true and fair view of the
separate and consolidated financial position of EPSO-G UAB (the “Company”) and its subsidiaries
(together - the “Group”) as at 31 December 2024, and of the Company’s and of the Group’s separate
and consolidated financial performance and separate and consolidated cash flows for the year then
ended in accordance with International Financial Reporting Standards as adopted by the European
Union.
Our opinion is consistent with our additional report to the Audit Committee dated 27 March 2025.
What we have audited
The consolidated and the Company’s financial statements comprise:
● the consolidated and the Company’s statement of financial position as at 31 December 2024;
● the consolidated and the Company’s statements of comprehensive income for the year then ended;
● the consolidated and the Company’s statements of changes in equity for the year then ended;
● the consolidated and the Company’s statements of cash flows for the year then ended; and
● the notes to the consolidated and the Company’s financial statements, comprising material
accounting policy information and other explanatory information.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit
of the financial statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Independence
We are independent of the Company and the Group in accordance with the International Code of Ethics
for Professional Accountants (including International Independence Standards) issued by the
International Ethics Standards Board for Accountants (IESBA Code) and the Law of the Republic of
Lithuania on the Audit of Financial Statements and Other Assurance Services that are relevant to our
audit of the separate and consolidated financial statements in the Republic of Lithuania. We have
fulfilled our other ethical responsibilities in accordance with the IESBA Code and the Law of the
Republic of Lithuania on the Audit of Financial Statements and Other Assurance Services.
To the best of our knowledge and belief, we declare that non-audit services that we have provided to
the Company and the Group are in accordance with the applicable law and regulations in the Republic
of Lithuania and that we have not provided non-audit services that are prohibited under Article 5(1) of
Regulation (EU) No 537/2014 considering the exemptions of Regulation (EU) No 537/2014 endorsed in
225
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225
the Law of the Republic of Lithuania on the Audit of Financial Statements and Other Assurance
Services.
The non-audit services that we have provided to the Company and the Group, in the period from
1 January 2024 to 31 December 2024, are disclosed in note 37 to the separate and consolidated
financial statements.
Our audit approach
Overview
● Overall Group and Company materiality: EUR 4,700 thousand and
EUR 2,600 thousand, respectively
● We performed a full scope audit of the Company. At the Group level,
based on our assessment of risk of material misstatement of the
financial statements and the significant accounts and disclosures, we
tested the consolidation process and performed full scope audit on
six components including the Company.
● The carrying value of property, plant and equipment
As part of designing our audit, we determined materiality and assessed the risks of material
misstatement in the separate and consolidated financial statements (together “the financial
statements”). In particular, we considered where management made subjective judgements; for
example, in respect of significant accounting estimates that involved making assumptions and
considering future events that are inherently uncertain. As in all of our audits, we also addressed the
risk of management override of internal controls, including, among other matters, consideration of
whether there was evidence of bias that represented a risk of material misstatement due to fraud.
Materiality
The scope of our audit was influenced by our application of materiality. An audit is designed to obtain
reasonable assurance whether the financial statements are free from material misstatement.
Misstatements may arise due to fraud or error. They are considered material if individually or in
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of the financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality,
including the overall Company and Group materiality for the financial statements as a whole as set out
in the table below. These, together with qualitative considerations, helped us to determine the scope of
our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of
misstatements, if any, both individually and in aggregate on the financial statements as a whole.
Overall Company materiality
EUR 2,600 thousand (2023: EUR 2,200 thousand)
Overall Group materiality
EUR 4,700 thousand (2023: EUR 4,700 thousand)
How we determined it
• Overall Company materiality represents 1% of net assets
• Overall Group materiality represents 1% of revenue
Materiality
Group
scoping
Key audit
matters
226
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226
Rationale for the materiality
benchmark applied
We chose net assets as the benchmark for the overall
Company materiality because, in our view, it is the most
appropriate measure for the Company as a holding company
with no external revenue.
We chose revenue as the benchmark for the overall Group
materiality because it is the measure against which the
performance of the Group is assessed by the regulatory
bodies as well as external creditors and other stakeholders.
The Group’s results depend on approved tariffs for regulated
activities, therefore the Group‘s profit before tax fluctuates
widely year over year, whereas its revenue is more stable
and growth-oriented indicator which can be compared to
other market participants.
We chose to apply 1% of net assets to overall Company
materiality and 1% of annual revenue to overall Group
materiality, which are within the range of acceptable
quantitative materiality thresholds for these benchmarks.
We agreed with the Audit Committee that we would report to them misstatements identified during our
audit above EUR 240 thousand for the Group and above EUR 125 thousand for the Company, as well
as misstatements below that amount that, in our view, warranted reporting for qualitative reasons.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial statements of the current period. These matters were addressed in the context of
our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
Key audit matter
How our audit addressed the key audit matter
The carrying value of property, plant and
equipment
(refer to Notes 2.4 and 6)
The Group applies the revaluation model for
subsequent measurement of property, plant
and equipment (‘PPE’). As at 31 December
2024 the carrying value of PPE amounted to
EUR 745,846 thousand, being its fair value at
the date of the revaluation less subsequent
accumulated depreciation and less subsequent
accumulated impairment losses. The most
recent revaluation of PPE was conducted on
31 December 2023.
The management assessed whether the
carrying value of PPE materially differed from
the amount that would be determined using fair
value at the end of the reporting period. The
Group’s management evaluated that there
were no regulatory changes in 2024 that could
significantly affect the asset value, and the
We obtained an understanding and we have
evaluated management’s policies, processes and
controls in determination of fair values of items of
PPE.
We have examined management’s valuation
methodology and their assessment of incurred
2024 changes in tariff setting regulations.
We analysed the management’s assumptions
applied during the revaluation on 31 December
2023 for future periods, which had material impact
on the valuation results: rate of return on
regulated assets and discount rate, expected
capital expenditures, additional tariff component to
finance investments and values of regulated
assets. As appropriate, we traced these
assumptions to the actual data from 2024, as well
as the Group’s internal budgets and investment
plans, or market information, to assess whether
there were any significant changes in these
227
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227
assumptions used in the PPE revaluation on
31 December 2023, remained significantly
unchanged, and concluded that the carrying
amount of the PPE as at 31 December 2023
was the reasonable approximation of the fair
value and therefore no valuation adjustments
have been recognised as at 31 December
2024.
We focused on this area due to significance of
the PPE balance for the Group’s statement of
financial position and because the
management’s assessment of fair values of
PPE is an area of significant management
judgement.
assumptions that could lead to a significant
change in the fair value of the PPE.
We considered whether the overall estimate was
reasonable and whether the management’s
judgement that no revaluation adjustments were
needed was appropriate in the given
circumstances.
We have considered the adequacy of disclosures
in Notes 2.4 and 6.
How we tailored our Group audit scope
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion
on the financial statements as a whole, taking into account the structure of the Group, the accounting
processes and controls, and the industry in which the Group operates.
The Group comprises the Company and five subsidiaries which operate in Lithuania. The Group also
holds investments in three associates and one joint venture (refer to Note 1). For Group audit purposes,
based on our risk and materiality assessment we determined that a full scope audit was required for five
of the Group’s subsidiaries.
We covered 100% of the Group’s revenue and 100% of the Group’s assets.
Reporting on other information including the consolidated management report
Management is responsible for the other information. The other information comprises the consolidated
management report, including the information on corporate governance matters, remuneration and
consolidated sustainability matters (but does not include the financial statements and our auditor’s
report thereon).
Our opinion on the financial statements does not cover the other information, including the consolidated
management report.
In connection with our audit of the financial statements, our responsibility is to read the other information
identified above and, in doing so, consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially
misstated.
With respect to the consolidated management report, including the information on corporate governance
matters and remuneration and excluding the information on consolidated sustainability matters on which
the separate limited assurance report on consolidated sustainability reporting was issued by us on 27
March 2025, we considered whether it includes the disclosures required by the Law of the Republic of
Lithuania on Reporting by Undertakings and by Groups of Undertakings.
Based on the work undertaken in the course of our audit, in our opinion:
● the information given in the consolidated management report for the financial year for which the
financial statements are prepared is consistent with the financial statements; and
● the consolidated management report, including the information on corporate governance matters
and remuneration and excluding the information on consolidated sustainability matters, has been
228
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228
prepared in accordance with the Law of the Republic of Lithuania on Reporting by Undertakings and
by Groups of Undertakings.
In addition, in light of the knowledge and understanding of the Company and the Group and their
environment obtained in the course of the audit, we are required to report if we have identified material
misstatements in the consolidated management report which we obtained prior to the date of this
auditor’s report. We have nothing to report in this regard.
Responsibilities of management and those charged with governance for the financial
statements
Management is responsible for the preparation of the financial statements that give a true and fair view
in accordance with International Financial Reporting Standards as adopted by the European Union, and
for such internal control as management determines is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s and the
Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless management either intends to liquidate
the Company and the Group or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s and the Group’s
financial reporting process.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with ISAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:
● Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
● Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company’s and the Group’s internal control.
● Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
● Conclude on the appropriateness of management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Company’s and the Group’s ability to continue
as a going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the financial statements or, if such
229
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229
● disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence
obtained up to the date of our auditor’s report. However, future events or conditions may cause the
Company and the Group to cease to continue as a going concern.
● Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events
in a manner that achieves fair presentation.
● Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the
financial information of the entities or business units within the Group as a basis for forming an
opinion on the consolidated financial statements. We are responsible for the direction, supervision
and review of the audit work performed for the purpose of the group audit. We remain solely
responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the financial statements of the current period and are therefore
the key audit matters. We describe these matters in our auditor’s report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we determine
that a matter should not be communicated in our report because the adverse consequences of doing so
would reasonably be expected to outweigh the public interest benefits of such communication.
Report on other legal and regulatory requirements
Report on the compliance of the format of the separate and consolidated financial statements
with the requirements of the European Single Electronic Reporting Format
We have been engaged based on our audit agreement by the management of the Company to conduct
a reasonable assurance engagement for the verification of compliance with the applicable requirements
of the European single electronic reporting format of the Company’s separate and the Group’s
consolidated financial statements, including the consolidated management report, for the year ended 31
December 2024 (the “Single Electronic Reporting Format of the separate and consolidated financial
statements”).
Description of a subject matter and applicable criteria
The Single Electronic Reporting Format of the separate and consolidated financial statements has been
applied by the management of the Company to comply with the requirements of art. 3 and 4 of the
Commission Delegated Regulation (EU) 2019/815 of 17 December 2018 supplementing Directive
2004/109/EC of the European Parliament and of the Council with regard to regulatory technical
standards on the specification of a single electronic reporting format (the “ESEF Regulation”). The
applicable requirements regarding the Single Electronic Reporting Format of the separate and
consolidated financial statements are contained in the ESEF Regulation.
The requirements described in the preceding sentence determine the basis for application of the
Single Electronic Reporting Format of the separate and consolidated financial statements and, in our
view, constitute appropriate criteria to form a reasonable assurance conclusion.
230
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230
Responsibility of the management and those charged with governance
The management of the Company is responsible for the application of the Single Electronic Reporting
Format of the separate and consolidated financial statements that complies with the requirements of the
ESEF Regulation.
This responsibility includes the selection and application of appropriate markups in iXBRL using ESEF
taxonomy and designing, implementing and maintaining internal controls relevant for the preparation of
the Single Electronic Reporting Format of the separate and consolidated financial statements which is
free from material non-compliance with the requirements of the ESEF Regulation.
Those charged with governance are responsible for overseeing the financial reporting process, which
should also be understood as the preparation of financial statements in accordance with the format
resulting from the ESEF Regulation.
Our responsibility
Our responsibility was to express a reasonable assurance conclusion whether the Single Electronic
Reporting Format of the separate and consolidated financial statements complies, in all material
aspects, with the ESEF Regulation.
We conducted our engagement in accordance with International Standard on Assurance
Engagements 3000 (Revised) ‘Assurance Engagements other than Audits and Reviews of Historical
Financial Information’ (“ISAE 3000 (R)”). This standard requires that we comply with ethical
requirements, plan and perform procedures to obtain reasonable assurance whether the Single
Electronic Reporting Format of the separate and consolidated financial statements complies, in all
material aspects, with the applicable requirements.
Reasonable assurance is a high level of assurance, but it does not guarantee that the service
performed in accordance ISAE 3000 (R) will always detect the existing material misstatement
(significant non-compliance with the requirements).
Summary of the work performed
Our planned and performed procedures were aimed at obtaining reasonable assurance that the Single
Electronic Reporting Format of the separate and consolidated financial statements was applied, in all
material aspects, in accordance with the applicable requirements and such application is free from
material errors or omissions. Our procedures included in particular:
• obtaining an understanding of the internal control system and processes relevant to the application
of the Single Electronic Reporting Format of the separate and consolidated financial statements,
including the preparation of the XHTML format and marking up the separate and consolidated
financial statements;
• verification whether the XHTML format was applied properly;
• evaluating the completeness of marking up the separate and consolidated financial statements
using the iXBRL markup language according to the requirements of the implementation of single
electronic format as described in the ESEF Regulation;
• evaluating the appropriateness of the Company’s and the Group’s' use of XBRL markups selected
from the ESEF taxonomy and the creation of extension markups where no suitable element in the
ESEF taxonomy has been identified; and
• evaluating the appropriateness of anchoring of the extension elements to the ESEF taxonomy.
231
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231
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our
conclusion.
Conclusion
In our opinion, the Single Electronic Reporting Format of the separate and consolidated financial
statements for the year ended 31 December 2024 complies, in all material aspects, with the ESEF
Regulation.
Appointment
We were first appointed as auditors of the Company and the Group on 30 April 2015 and had an
uninterrupted engagement appointment of 3 years for 2015-2017 audits. After a 2-year break our
appointment was renewed for 2020-2022 audits and renewed again for 2023-2024 audit on 29 August
2023, representing a total period of engagement appointment of 8 years, out of which 5 years represent
the latest uninterrupted period of engagement.
The key audit partner on the audit resulting in this independent auditor’s report is Rasa Radzevičienė.
On behalf of PricewaterhouseCoopers UAB
Rasa Radzevičienė
Partner
Auditor's Certificate No.000377
Vilnius, Republic of Lithuania
27 March 2025
The auditor's electronic signature is used herein to sign only the Independent Auditor's Report
232
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232
.
12. Consolidated and the Company’s Financial Statements
12
Consolidated and the Company’s Financial
Statements
Prepared for the year ended 31 December 2024 in accordance with
International Financial Reporting Standards as adopted by the European
Union
12.1. Consolidated and the Company’s Statement of Financial Position
12.2. Consolidated Statement of Comprehensive Income
12.3. Company’s Statement of Comprehensive Income
12.4. Consolidated and the Company’s Statements of Changes in Equity
12.5. Consolidated and the Company’s Statements of Cash Flows
12.6. Notes to the Consolidated and the Company’s Financial Statements
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12.CONSOLIDATED AND THE COMPANY’S FINANCIAL STATEMENTS
12.1. Consolidated and the Company’s statement of financial position
FOR THE YEAR ENDED 31 December 2024 (all amounts are in EUR thousand unless otherwise stated)
GROUP
COMPANY
Note
As at 31
December 2024
As at 31
December 2023
As at 31
December 2024
As at 31
December 2023
ASSETS
Non-current assets
Intangible assets
5
6,886
8,175
56
77
Property, plant and equipment
6
745,846
707,229
69
83
Right-of-use assets
7
11,604
10,810
537
694
Investments in subsidiaries
8
-
-
352,479
351,526
Investments in associates and joint ventures
8
19,131
17,677
13,830
13,830
Deferred tax asset
29
18,042
12,105
957
45
Receivables after one year
10
10
-
-
Other non-current financial assets
9
1,153
166
-
-
Total non-current assets
802,672
756,172
367,928
366,255
Current assets
Inventories
10
6,942
7,556
-
-
Prepayments and contract assets
11
5,852
6,148
42
69
Trade receivables
12
65,106
41,888
549
383
Other receivables
13
70,087
98,643
33,178
46,225
Prepaid income tax
-
28,916
-
-
Other financial assets
14
155,559
15,898
135,000
-
Cash and cash equivalents
15
101,562
123,236
98,791
120,015
Total current assets
405,108
322,285
267,560
166,692
TOTAL ASSETS
1,207,780
1,078,457
635,488
532,947
EQUITY AND LIABILITIES
Issued capital
16
189,631
189,631
189,631
189,631
Revaluation reserve
17
23,618
26,504
-
-
Legal reserve
18
18,040
14,341
3,765
2,524
Other reserves
18
29,036
38,993
28,614
50
Retained earnings
87,924
25,874
44,259
30,001
Equity attributable to shareholders of the parent company
348,249
295,343
266,269
222,206
Non-controlling interest
8
12,944
12,546
-
-
Total equity
361,193
307,889
266,269
222,206
Non-current liabilities
Borrowings and issued bonds
21
152,205
163,954
74,893
74,849
Lease liabilities
22
9,579
9,282
397
552
Congestion management funds
26
308,802
264,173
-
-
Provisions
27
2,836
2,528
-
-
Other non-current payables and liabilities
28
16,315
3,411
-
-
Total non-current liabilities
489,737
443,348
75,290
75,401
Current liabilities
Borrowings
21
13,425
31,939
1,327
19,308
Borrowings from group companies
21
-
-
291,156
214,806
Lease liabilities
22
2,306
1,599
154
149
Trade payables
24
119,477
68,341
203
153
Prepayments received
25
15,436
44,412
-
-
Congestion management funds
26
81,316
36,901
-
-
Provisions
27
15,588
12,210
-
-
Income tax liability
29
209
-
-
-
Other current payables and liabilities
30
109,093
131,818
1,089
924
Total current liabilities
356,850
327,220
293,929
235,340
Total liabilities
846,587
770,568
369,219
310,741
TOTAL EQUITY AND LIABILITIES
1,207,780
1,078,457
635,488
532,947
The accompanying notes are an integral part of these financial statements
EPSO-G MANAGMENT REPORT FOR 2024
233
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12.2. Consolidated statement of comprehensive Income
FOR THE YEAR ENDED 31 December 2024 (all amounts are in EUR thousand unless otherwise stated)
GROUP
Notes
2024
2023
Revenue
31
476,157
474,424
Other income
31
4,731
4,463
480,888
478,887
Purchase of electricity and natural gas
32
(281,050)
(266,508)
Impact of the change of gas balances
(430)
(7,911)
Purchase of contracting services
32
(13,223)
(12,723)
Wages and salaries and related expenses
32
(55,744)
(48,744)
Repair and maintenance services
(10,043)
(8,436)
Other expenses
32
(35,186)
(33,313)
(395,676)
(377,635)
EBITDA
4
85,212
101,252
Result on loss of control and revaluation of associates
9
-
8,416
Depreciation and amortisation
5,6,7
(40,387)
(34,290)
Impairment of non-current assets
6
(480)
(29,717)
Loss on write-off of non-current assets
(216)
(366)
Gain (loss) on derivatives
9
499
-
Operating profit (EBIT)
4
44,628
45,295
Share of results of associates
8
4,305
1,774
Finance income
33
5,334
6,474
Finance costs
33
(5,433)
(6,248)
Finance costs - net
(99)
226
Profit before income tax
48,834
47,295
Income tax
Current income tax (expenses) / benefit
29
(213)
6,948
Deferred tax benefit / (expense)
29
6,266
(442)
Total income tax
6,053
6,506
Profit for the period
54,887
53,801
Other comprehensive income
Items that will not be reclassified to profit or loss s in subsequent periods
Gain on revaluation of non-current assets
6
(22)
31,696
Deferred tax (expenses)
29
(284)
(4,754)
Total other comprehensive income (expenses) that will not be reclassified subsequently to profit or loss
(306)
26,942
Total comprehensive income for the period
54,581
80,743
Profit for the period attributable to:
Shareholders of the parent company
53,401
52,116
Non-controlling interest
1,486
1,685
54,887
53,801
Total comprehensive income for the period attributable to:
Shareholders of the parent company
53,102
78,380
Non-controlling interest
1,479
2,363
The accompanying notes are an integral part of these financial statements.
EPSO-G MANAGMENT REPORT FOR 2024
234
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12.3.Company’s statement of comprehensive income
FOR THE YEAR ENDED 31 December 2024 (all amounts are in EUR thousand unless otherwise stated)
COMPANY
Notes
2024
2023
Revenue
31
2,315
1,357
Other income
-
14
Dividend income
34
50,632
13,357
52,947
14,728
Wages and salaries and related expenses
32
(5,103)
(4,420)
Other expenses
(1,665)
(1,984)
(6,768)
(6,404)
EBITDA
46,179
8,324
Depreciation and amortisation
(212)
(144)
Reversal of impairment / (impairment) of investments in subsidiaries
8
-
18,406
Operating profit (EBIT)
45,967
26,586
Finance income
33
7,105
8,001
Finance costs
33
(9,774)
(9,508)
Finance costs - net
33
(2,669)
(1,507)
Profit before income tax
43,298
25,079
Income tax
Current income tax expenses
-
-
Deferred tax benefit/(expense)
29
961
(250)
Total income tax
961
(250)
Profit for the period
44,259
24,829
Total comprehensive income for the period
44,259
24,829
The accompanying notes are an integral part of these financial statements.
EPSO-G MANAGMENT REPORT FOR 2024
235
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12.4. Consolidated and the Company’s statements of changes in equity
FOR THE YEAR ENDED 31 DECEMBER 2024 (all amounts are in EUR thousand unless otherwise stated)
Equity attributable to shareholders of the parent company
Group
Notes
Issued capital
Revaluation reserve
Legal reserve
Other reserves
Retained earnings
Subtotal
Non-controlling interest
Total
Balance as at 1 January 2023
189,631
277
16,621
41,128
(30,629)
217,028
10,746
227,774
Comprehensive income (expenses)
Profit for the period
-
-
-
-
52,116
52,116
1,685
53,801
Other comprehensive income
-
26,264
-
-
-
26,264
678
26,942
Total comprehensive income for the period
-
26,264
-
-
52,116
78,380
2,363
80,743
Depreciation of revaluation reserve and amounts written off
17
-
(37)
-
-
37
-
-
-
Transactions with owners in their capacity as owners
Transfers to/from reserves
18
-
-
(2,280)
(2,135)
4,415
-
-
-
Dividends
19
-
-
-
-
(65)
(65)
(563)
(628)
Total transactions with owners in their capacity as owners
-
-
(2,280)
(2,135)
4,350
(65)
(563)
(628)
Balance as at 31 December 2023
189,631
26,504
14,341
38,993
25,874
295,343
12,546
307,889
Comprehensive income
-
-
Profit for the period
-
-
-
-
53,401
53,401
1,486
54,887
Other comprehensive income (expenses)
-
(299)
-
-
-
(299)
(7)
(306)
Total comprehensive income for the period
-
(299)
-
-
53,401
53,102
1,479
54,581
Depreciation of revaluation reserve and amounts written off
17
-
(2,587)
-
-
2,587
-
-
-
Transactions with owners in their capacity as owners
Transfers to/from reserves
18
-
-
3,699
(9,957)
6,258
-
-
-
Dividends
19
-
-
-
-
(196)
(196)
(1,505)
(1,701)
Changed in non-controlling interest due to acquisitions of subsidiaries
8
-
-
-
-
-
-
424
424
Total transactions with owners in their capacity as owners
-
-
3,699
(9,957)
6,062
(196)
(1,081)
(1,277)
Balance as at 31 December 2024
189,631
23,618
18,040
29,036
87,924
348,249
12,944
361,193
Notes
Issued capital
Legal reserve
Other reserves
Retained earnings
Total
Company
Balance as at 1 January 2023
189,631
2,248
50
5,514
197,443
Profit for the period
-
-
-
24,829
24,829
Total comprehensive income for the period
-
-
-
24,829
24,829
Transactions with owners in their capacity as owners
Dividends
19
-
-
-
(66)
(66)
Transfers to reserves
18
-
276
-
(276)
-
Total transactions with ownersin their capacity as owners
-
276
-
(342)
(66)
Balance as at 31 December 2023
189,631
2,524
50
30,001
222,206
Balance as at 1 January 2024
189,631
2,524
50
30,001
222,206
Profit for the period
-
-
-
44,259
44,259
Total comprehensive income for the period
-
-
-
44,259
44,259
Transactions with owners in their capacity as owners
Dividends
19
-
-
-
(196)
(196)
Transfers to reserves
18
-
1,241
28,564
(29,805)
-
Total transactions with ownersin their capacity as owners
-
1,241
28,564
(30,001)
(196)
Balance as at 31 December 2024
189,631
3,765
28,614
44,259
266,269
The accompanying notes are an integral part of these financial statements.
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12.5. Consolidated and the Company’s statements of cash flows
FOR THE YEAR ENDED 31 December 2024 (all amounts are in EUR thousand unless otherwise stated)
GROUP
COMPANY
Notes
For the year ended 31 December 2024
For the year ended 31 December 2023
For the year ended 31 December 2024
For the year ended 31 December 2023
Cash flows from operating activities
Profit for the period
54,887
53,801
44,259
24,829
Adjustments for non-cash items:
Depreciation and amortisation expenses
5,6,7
40,387
34,290
212
144
Impairment of property, plant and equipment
6
480
29,717
-
-
Loss on write -off of property, plant and equipment
216
366
-
-
Loss on impairment and write-off of inventories, trade receivables and other assets
749
615
-
-
Profit (loss) on disposal of property, plant and equipment
(383)
(506)
-
-
Income tax expenses (benefits)
29
(6,053)
(6,506)
(961)
250
Increase in provisions
27
3,686
10,790
-
-
Grant income (amortisation)
20
-
(315)
-
-
Gain on derivatives
9
(499)
-
-
-
Elimination of results of financing and investing activities:
Dividend income
34
-
-
(50,632)
(13,357)
Impairment (reversal of impairment) of investments in subsidiaries
8
-
-
-
(18,406)
Total finance costs, net
33
99
(226)
2,669
1,508
Result on loss of control and revaluation of shares in associate
9
-
(8,416)
-
-
Elimination of share of results of associates
8
(4,305)
(1,774)
-
-
Changes in working capital:
(Increase) decrease in trade and other receivables
(20,020)
48,540
(246)
(186)
(Increase) decrease in inventories, prepayments and other current assets
956
11,194
27
(29)
Increase (decrease) in trade and other payables, grants, deferred income and prepayments received
43,890
(421,165)
131
(75)
Increase in congestion management funds
26
-
108,088
-
-
Changes in other financial assets
1,155
194,457
-
-
Income tax received (paid)
(17)
-
50
(270)
Net cash flows from operating activities
115,228
52,950
(4,491)
(5,592)
Acquisition of property, plant and equipment and intangible assets
(188,198)
(241,905)
(38)
(106)
Disposal of property, plant and equipment and intangible assets
338
936
-
-
Loss of control in subsidiary/(acquisition) of associates and joint ventures
9
-
6,124
-
-
(Acquisition) of associates, joint ventures and subsidiaries
8
-
-
(953)
(6,300)
Grants received
20
86,142
71,455
-
-
Congestion management funds received
26
135,670
-
-
-
Loans (granted)/recovered (intercompany)
-
-
12,305
(23,898)
Dividends received
8.34
2,907
1,406
50,632
13,357
Acquisition of short-term financial investments
(680,802)
(180,366)
(674,987)
(180,366)
Repayment of short-term financial investments
539,987
180,366
539,987
180,366
Interest received
5,764
5,127
7,927
6,709
Net cash flows used in investing activities
(98,192)
(156,857)
(65,127)
(10,238)
Repayments of borrowings
23
(12,061)
(30,878)
-
-
Loans received (repaid) (intercompany)
23
-
-
76,427
(117,420)
Repayment of lease liabilities
22.23
(2,258)
(1,840)
(149)
(109)
Overdraft
(17,981)
17,981
(17,981)
17,981
Interest paid
23
(5,349)
(5,632)
(9,707)
(8,842)
Dividends paid
(1,596)
(646)
(196)
(66)
Transaction with non-controlling interest
459
-
-
-
Other cash flows from financing activities
76
62
-
(9)
Net cash flows from financing activities
(38,710)
(20,953)
48,394
(108,465)
Increase (decrease) in cash and cash equivalents
(21,674)
(124,860)
(21,224)
(124,295)
Cash and cash equivalents at the beginning of the period
123,236
248,096
120,015
244,310
Cash and cash equivalents at the end of the period
101,562
123,236
98,791
120,015
The accompanying notes are an integral part of theses financial statements.
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12.6. Notes to the consolidated and the Company’s financial statements
FOR THE YEAR ENDED 31 December 2024
1.General Information
UAB EPSO-G(the Company) is a private limited liability company registered in the Republic of Lithuania. Registered office:Laisvės ave. 10, Vilnius, Lithuania. UAB EPSO-G (hereinafter ‘EPSO-G’ or the ‘Company’) is a profit-seeking limited civil liability entity registered on 25 July 2012 with the Register of Legal Entities, company code 302826889.
UAB EPSO-G is the parent company responsible for the activities of the group companies by ensuring the uninterrupted, stable transmission of electricity over high voltage networks and transportation of natural gas via high pressure gas pipelines, as well as by ensuring the management, maintenance and development of these transmission systems and organisation of trade on the natural gas and biofuel exchanges; installation and management of electricity storage facilities operating as the primary capacity reserve and ensuring reliable, stable and consumer-focused operation of the Lithuanian electricity system.
EPSO-G provides management services to the subsidiaries and the lower-tier subsidiaries. The purpose of the provision of management services is to increase the efficiency of operations of the EPSO-G group companies, optimise the use of resources, and implement uniform standards of operations. These services are provided in accordance with the agreements concluded through a public procurement process.
As at 31 December 2024 and 2023, the Company’s issued capital consisted of 653,900,000 ordinary registered shares with the nominal value of EUR 0.29 each. All shares, including newly issued shares, were held by the Company’s sole shareholder – the Republic of Lithuania represented by the Ministry of Energy of the Republic of Lithuania.
As at 31 December 2024 and 2023, all shares of the Company were fully paid.
The Company’s shareholder
As at 31 December 2024
As at 31 December 2023
Issued capital (EUR)
%
Issued capital (EUR)
%
Republic of Lithuania represented by the Ministry of Energy of the Republic of Lithuania
189,631,000
100
189,631,000
100
The Company’s management approved these financial statements on 21 March 2025. The shareholder of the Company has a statutory right not to approve these financial statements and require that the management prepares a new set of financial statements.
As at 31 December 2024, the EPSO-G Group had 1,353 employees (as at 31 December 2023, 1,261 employee), and the Company had 78 employees (as at 31 December 2023, 66 employees).
The EPSO-G group (hereinafter the ‘Group’) consists of the Company, directly and indirectly controlled subsidiaries, associates and joint ventures, as listed below:
Company name
Registered office address
Ownership interest (%)
Profile of activities
As at 31 December 2024
As at 31 December 2023
SUBSIDIARIES
Litgrid AB
Karlo Gustavo Emilio Manerheimo st. 8, Vilnius, Lithuania
97.5
97.5
Electricity transmission system operator
AB Amber Grid
Laisvės ave. 10, Vilnius, Lithuania
96.6
96.6
Natural gas transmission system operator
BALTPOOL UAB
Žalgirio st. 90, Vilnius, Lithuania
67.0
67.0
Operator of the exchange for trading in energy resources (biomass products), the administrator of PSO funds
TETAS UAB
Senamiesčio st. 102B, Panevėžys, Lithuania
100
100
Transformer substation, distribution station and electricity line design, construction, reconstruction and maintenance services
Energy Cells, UAB
Ozo st. 12A-1, Vilnius
100
100
Installation and management of electricity storage facilities
EPSO-G Invest, UAB
Laisvės ave. 10, Vilnius
51,0
-
Management of investment project in artillery ammunition production
ASSOCIATES
GET Baltic UAB
(investment through Amber Grid AB)
Geležinio Vilko st. 18A, Vilnius, Lithuania
34.0
34.0
Organisation of trading on the natural gas exchange
TSO Holding AS
Lilleakerveien 2A, 0283 Oslo, Norway
39.6
39.6
Holding company holding a minority interest in equities of the electricity exchange operator and the market coupling operator
Rheinmetall Defence Lietuva, UAB
Jonavos dist. mun. Ruklos eld., Jonalaukis vlg.1
24.5*
-
Production ans sales of artillery ammunition
JOINT VENTURES
Baltic RCC OÜ
Kadaka tee 42 12915 Tallinn Eesti
33.33
33.33
Provision of services ensuring safety and reliability of the electricity system and coordination between the transmission network operators of the Baltic region
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* The effective ownership interest in associate was estimated taking into account 51% ownership interest held by the Company in subsidiary EPSO-G Invest, which holds 48% ownership interest in the associate Rheinmetall Defence Lietuva, UAB.
Investments in subsidiaries are described in more detail in Note 8 and in associates in Note 8.
2.Material accounting policy
The Group’s and the Company’s financial statements for the year ended 31 December 2024 have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union.
The financial statements have been prepared on a historical cost basis, except for property, plant and equipment which is recorded at revalued amount, less accumulated depreciation and estimated impairment and derivatives accounted for at fair value.
Amounts in these financial statements are presented in thousands of euro (EUR), unless otherwise stated.
The financial year of the Company and other Group coincides with the calendar year.
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2.1.Basis of preparation
The accounting policies applied in the preparation of the financial statements are consistent with those of the previous financial year, except as follows:
(a) Adoption of new and/or amended IFRSs and interpretations of the International Financial Reporting Interpretations Committee (IFRIC)
In the year ended 31 December 2024, The following IFRSs, amendments and IFRIC interpretations were adopted by the Company: Amendments to IFRS 16 Leases – Lease Liability in a Sale and Leaseback (issued on 22 September 2022 and effective for annual periods beginning on or after 1 January 2024). The amendments relate to sale and leaseback transactions which satisfy the requirements of IFRS 15 to be accounted for as a sale. The amendments require a seller-lessee to subsequently measure lease liabilities arising from a leaseback in a way that it does not recognise any amount of the gain or loss that relates to the right of use it retains. Based on the Group’s and the Company’s assessment, these amendments have no significant impact on the financial statements.
Classification of liabilities as current or non-current – Amendments to IAS 1 (originally issued on 23 January 2020, amended on 15 July 2020 and 31 October 2022, effective for annual periods beginning on or after 1 January 2024). The amendments clarify that liabilities are classified as either current or non-current, depending on the rights that exist at the end of the reporting period. Liabilities are non-current if the entity has a substantive right, at the end of the reporting period, to defer settlement for at least 12 months. The guidance no longer requires such a right to be unconditional. A liability is classified as current if a condition is breached at or before the reporting date even if a waiver of that condition is obtained from the lender after the end of the reporting period.
Based on the Group’s and the Company’s assessment, these amendments have no significant impact on the financial statements.
(b)Standards, interpretations and amendments thereto that have not been endorsed by the European Union and that have not been early adopted by the Company:
Amendments to IFRS 9 and IFRS 7 - Amendments to the Classification and Measurement of Financial Instruments (issued on 30 May 2024 and effective for annual periods beginning on or after 1 January 2026). The amendments: (a) clarify the date of recognition and derecognition of some financial assets and liabilities; (b) clarify and add further guidance for assessing whether a financial asset meets the solely payments of principal and interest (SPPI) criterion; (c) add new disclosures for certain instruments with contractual terms that can change cash flows (such as some instruments with features linked to the achievement of environment, social and governance (ESG) targets); (d) update the disclosures for equity instruments designated at fair value through other comprehensive income (FVOCI).
Based on the Group and the Company management’s assessment, the amendments will have no significant impact on the financial statements.
Amendments to IFRS 9 and IFRS 7 - Contracts Referencing Nature-dependent Electricity (issued on 18 December 2024 and effective for annual periods beginning on or after 1 January 2026). The amendments help companies better report the financial effects of nature-dependent electricity contracts, which are often structured as power purchase agreements (PPAs). Current accounting requirements may not adequately capture how these contracts affect a company’s performance. To allow companies to better reflect these contracts in the financial statements, the following targeted amendments were made: (a) clarifying the application of the ‘own-use’ requirements; (b) permitting hedge accounting if these contracts are used as hedging instruments; and (c) adding new disclosure requirements to enable investors to understand the effect of these contracts on a company’s financial performance and cash flows.
Based on the Group and the Company management’s assessment, the amendments will have no significant impact on the financial statements.
IFRS 18 Presentation and Disclosures in Financial Statements (issued on 9 April 2024 and effective for annual periods beginning on or after 1 January 2027). In April 2024, the IASB has issued IFRS 18, the new standard on presentation and disclosure in financial statements, with a focus on the statement of profit or loss. The new concepts introduced in IFRS 18 relate to the structure of the statement of profit or loss; disclosure of information about management-defined performance measures (MPMs); enhanced requirements for aggregation and disaggregation of information in both the primary financial statements and the notes.
The Group’s and Company’s management is currently assessing the impact of IFRS 18 on the financial statements.
IFRS 19 Subsidiaries without Public Accountability: Disclosures (issued on 9 May 2024 and effective for annual periods beginning on or after 1 January 2027). The IASB issued a new IFRS Accounting Standard for subsidiaries. IFRS 19 permits eligible subsidiaries to use IFRS Accounting Standards with reduced disclosures. Applying IFRS 19 will reduce the costs of preparing subsidiaries’ financial statements while maintaining the usefulness of the information for users of their financial statements.
The Group’s and Company’s management is currently assessing the impact of IFRS 19 on the financial statements.
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2.2.Basics of consolidation
Subsidiaries
Subsidiaries are consolidated from the date on which control is transferred to the Company. They are de-consolidated from the date that control ceases. All intercompany transactions, balances and unrealised gains or losses on transactions between the Group companies are eliminated.
The consolidated financial statements of the Group include EPSO-G and its subsidiaries. The financial statements of the subsidiaries have been prepared for the same reporting periods and using uniform accounting policies as those of the parent company’s financial statements.
Investments in associates
An associate is an entity over which the Group/Company has significant influence but no control. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies. Significant influence generally accompanies a shareholding of between 20% and 50% of the voting rights.
In the consolidated financial statements, associates are accounted for using the equity method of accounting. Under the equity method, investments in associates or joint ventures are initially recognised at cost, and the carrying amount is subsequently increased or decreased by the post-acquisition change in the Group’s share of the associate’s and joint venture’s net assets, less any impairment of investments.
The Group’s share of the acquired associate’s post-acquisition profits or losses is recognised in profit or loss in the statement of comprehensive income, and the Group’s share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income. The carrying amounts of investments in associates are adjusted by these amounts.
Goodwill related to investments in associates is included in the carrying amount of the investment and it is evaluated for impairment as the part of the investment.
Losses of an associate in excess of the Group’s interest in that associate/joint venture, including any other unsecured receivables, are not recognised, unless the Group had incurred legal or constructive obligations or made payments on behalf of the associate.
Unrealised gain on transactions between the Group and associates is eliminated to the extent of the Group’s interest in the associate. Unrealised loss is also eliminated unless the transaction provides evidence of an impairment of assets transferred.
If the Group’s ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income is reclassified to profit or loss where appropriate.
Gains and losses on decrease in ownership interest in an associate are recognised in the statement of comprehensive income
2.3.Investments in subsidiaries and associates in the Company’s separate financial statements
In the parent company’s financial statements, investments in subsidiaries are stated at cost less impairment, where the investment’s carrying amount in the parent’s statement of financial position exceeds its estimated recoverable amount.
In the parent company’s financial statements, investments in associates are stated at cost less impairment, where the investment’s carrying amount in the parent’s statement of financial position exceeds its estimated recoverable amount.
2.4.Property, plant and equipment and intangible assets
Property, plant and equipment
All property, plant and equipment is shown at revalued amounts, based on periodic (at least every 5 years) property valuations, less the amounts of accumulated depreciation, recognised grants and impairment losses.
Any accumulated depreciation and impairment losses at the date of revaluation are eliminated against gross carrying amount of the asset and net amount is restated to the revalued amount of the assets.
Increases in the carrying amount arising on the first revaluation of property, plant and equipment are credited to the revaluation reserve directly in equity and decreases are recognised in profit or loss. Decreases in the carrying amount arising on the subsequent revaluation of property, plant and equipment that offset previous increases of the same asset are charged against revaluation reserve directly in equity, and all other decreases are charged to the profit and loss account. Revaluation increases in the value of property plant and equipment that offset previous decreases are recognised in profit or loss.
All other increases in the carrying amount arising on subsequent revaluations of property, plant and equipment are credited to revaluation reserve. Each year the difference between depreciation based on the revalued carrying amount of the asset charged to the
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statement of comprehensive income and depreciation based on the asset’s original cost is transferred from revaluation reserve to retained earnings taking into account the effect of deferred income tax. After the sale or write-off of a property unit, any balance of the revaluation reserve related to this property is transferred to retained earnings.
Interest on targeted and general loans and other borrowing costs (such as the bank’s administration fee, etc.) are included in the acquisition cost of property, plant and equipment, if they are directly attributable to the acquisition of a qualifying asset. A qualifying asset is regarded to be an asset which is developed on the basis of a project the value of which is not less than EUR 1 million and the preparation of which for its intended use or sale takes no less than 12 months. Borrowing costs that are attributable to the acquisition of a qualifying asset are capitalised as part of the cost of that asset. The capitalisation of borrowing costs is started when costs related to the production or acquisition of the qualifying asset are incurred (a prepayment is made or a payment for works is made according to the signed statement on the works carried out and their respective value) and ended when all the activities necessary for the preparation of the qualifying asset for its intended use or sale are substantially complete (a statement on the recognition of the construction as fit for use is signed). While determining the amount of borrowing costs eligible for the capitalisation of costs incurred in the acquisition of qualifying assets, the capitalisation rate is applied.
Variable payments that depend on future factors are not accounted for in the cost of property, plant and equipment nor liabilities, when the assets are ready for use in the manner intended by management. Variable payments are capitalised as part of the cost of property, plant and equipment at the time of payment. When, due to uncertainty, the fair value of the variable payments cannot be measured reliably at the time property, plant and equipment is recognised and the information about the value of the liabilities becomes available at a later date, the variable payment is recognised in profit or loss when the information about the value of the liability becomes available.
Prepayments for non-current assets are classified as non-current assets because they are used in long-term activities and are presented in the balance sheet line item ‘construction work in progress’.
Construction work in progress represents property, plant and equipment under construction. The cost of such assets includes design, construction works, plant and equipment being installed, and other directly attributable costs.
Property, plant, and equipment is recorded at acquisition (production) cost, less grants received/receivable for the acquisition of property, property, plant, and equipment. Grants comprise financing from the EU support funds, a portion of congestion management funds designated for the financing of investments, payments for the expenses incurred during the connection of producers to the transmission network and performance of works for the relocation/reconstruction of the transmission network’s installations initiated by customers.
Intangible assets
Intangible assets are initially recognised at cost. Intangible assets are recognised only if they are expected to provide economic benefit to the Group and the Company in future periods and their cost can be measured reliably.
After initial recognition, intangible assets are carried at cost, less accumulated amortisation and accumulated impairment losses, if any.
Depreciation and amortisation
Depreciation/amortisation of property, plant and equipment and intangible assets, except land, construction work in progress and statutory servitudes, is calculated using the straight-line method over estimated useful lives of the asset. The estimated useful lives, residual values and depreciation/amortisation method are reviewed at each year-end to ensure that they are consistent with the expected pattern of economic benefits from these assets. The effect of changes in estimates, if any, is accounted for on a prospective basis.
Estimated useful lives of property, plant and equipment and intangible assets are as follows:
Categories of property, plant and equipment and intangible assets
Useful lives (in years)
Buildings
20–75
Structures and equipment
18–70
Plant and machinery
5–35
Vehicles
4–10
Other property, plant and equipment
3–10
Intangible assets, whereof:
3–4
Statutory servitudes and protection zones of the transmission network
Not subject to amortisation
Statutory servitudes and protection zones have an indefinite useful life because the right to use protection zones on the basis of servitude is unlimited in time.
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Profit or loss resulting from sale of non-current assets is calculated as the difference between the proceeds from sale and the net book amount of the disposed asset and is recognised in profit or loss in the reporting year.
Subsequent repair costs are included in the asset’s carrying amount, only when it is probable that future economic benefits associated with the item will flow to the Group and the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance costs are recognised as expenses in profit or loss in the period in which they are incurred.
2.5.Impairment of property, plant and equipment and intangible assets
At each reporting date, the Group and the Company review the carrying amounts of their property, plant and equipment and intangible assets to determine whether there are any indications that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
The recoverable value is the higher of an asset’s fair value less costs to sell and the value in use. In assessing the value in use, the expected future cash flows are discounted to their present value using the discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable value. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a decrease of revaluation reserve.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as an increase in revaluation reserve (without exceeding the amount of previous impairment).
Each year, the Group and the Company estimate the recoverable amount of intangible assets with the indefinite life in order to estimate the impairment of such assets (if any).
2.6.Right-of-use assets
Right-of-use assets are assets that the Group and the Company have the right to manage during the lease term. The Group and the Company recognise right-of-use assets for all types of leases, including the lease of a right-of-use asset in case of sublease, but excluding leases of intangible assets, short-term leases and leases of low value assets.
Initial measurement of right-of-use assets
At the commencement date, the Group and the Company measure right-of-use assets at cost, which consists of: the present value of the initial measurement of the lease liability, initial costs incurred directly attributable to the underlying asset, any lease payments at the commencement date, less any lease incentives.
Subsequent measurement of right-of-use assets
After the initial recognition, the Group and the Company apply a cost method for right-of-use assets: the carrying amount of the asset at the respective date is calculated as the difference between the acquisition cost and the accumulated depreciation, plus any subsequent adjustments for the remeasurement of lease liability.
The calculation of depreciation of right-of-use assets is started from the date on which the assets are transferred for the use (the commencement date) until the earlier of these dates: the end of the lease term and the end of the useful life.
The Company calculates depreciation of right-of-use assets using the following rates:
Land*
99 years
Buildings
2- 10 years
Vehicles
2 - 4 years
Other property, plant and equipment
2 -3 years
* The Group applies the portfolio method for the land lease agreements concluded with the municipalities not by auction, i.e. a set of the agreements of a respective Group company is accounted for as a single agreement due to similar criteria. Regardless of the remaining term of the land lease agreement, in accordance with the requirements of the legal acts, the agreements must be extended for as long as the facilities of the Group companies exist on the land plots. When assessing the flow generated by the infrastructure
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assets of the Group companies (for the calculation of the recoverable amount of assets), an infinite flow is projected as the ongoing reconstruction and repair works allow using the assets for a longer period than the established original depreciation rates. For this reason, the lease of land is subject to a substantially infinite rate corresponding to the original term of the agreement – 99 years.
2.7.Inventories
Inventories are initially recorded at acquisition cost. Subsequent to initial recognition, inventories are stated at the lower of cost and net realisable value. Acquisition cost of inventories includes acquisition price and related taxes that are not subsequently recovered from tax administration authorities and costs associated with bringing inventory into their current condition and location. The acquisition cost of inventories (other than natural gas) is determined on the first-in, first-out (FIFO) basis. The cost of the remaining amount of natural gas is determined using the weighted average cost. Inventories that are no longer expected to be realised are written off. Net realisable value is the estimated selling price, less the estimated costs of completion and selling expenses.
2.8.Trade payables and other financial liabilities, borrowings
Financial liabilities, borrowings
Financial liabilities are recognised initially at fair value, less transaction costs.
In subsequent periods, financial liabilities are measured at amortised cost using the effective interest rate method. Interest expenses are recognised using the effective interest method.
If a financing agreement concluded before the date of the statement of financial position proves that the liability was non-current as of the date of the statement of financial position, such financial liability is classified as non-current.
Trade payables
Trade payables represent commitments to pay for goods and services acquired from suppliers in the ordinary course of business. Trade payables are classified as current liabilities if the term of their settlement is less than one year; otherwise, they are included in non-current liabilities.
Derecognition of financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.
2.9.Grants
Grants are recognised when there is a reasonable assurance that the grant will be received and the Group entity will comply with all the conditions attaching to it.
Asset-related grants
The government and the EU grants received in the form of non-current assets or designated for the purchase of non-current assets are treated as asset-related grants. These grants are accounted for by reducing the carrying amount of the respective property, plant and equipment. For the purpose of the statement of comprehensive income, grants are recorded by reducing the depreciation charge of the related asset over the expected useful life of the asset.
Public service obligations (PSO) funds allocated to the Group for the preparation and implementation of the strategic projects and a portion of congestion management revenue, which is used to finance investments agreed with the National Energy Regulatory Council (NERC), are recognised as asset-related grants.
Grants received in advance related to the acquisition of non-current assets are stated as non-current liabilities until the moment of acquisition of such assets.
Grants receivable are included in other receivables when the agreement whereby the European Commission commits to finance the strategic projects provides firm evidence confirming that the financing will be received.
Income-related grants
Government and the European Union grants received as a compensation for the expenses or unearned income of the current or previous reporting period, also, all the grants, which are not grants related to assets, are considered as grants related to income. Income-related grants are recognised as used in parts to the extent of the expenses incurred during the reporting or prior periods or unearned income to be compensated by that grant.
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Income-related grants are recognised in profit or loss by increasing other income over the period in which the grant is received or when there is reasonable assurance that the grant will be received and that the Company/Group complies with the conditions for the allocation of the grant established in the grant agreement.
2.10.Provisions
Provisions are recognised when the Group and the Company have a legal obligation or constructive commitment as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If the effect of the time value of money is material, the amount of provision is discounted using the effective pre-tax discount rate set based on the interest rates for the period and taking into account specific risks associated with the provision as appropriate. Where discounting is used, the increase in the provision due to the passage of time is recognised as borrowing costs. This increase is recognised as borrowing cost.
2.11.Employee benefits
Pension benefits to employees of retirement age
According to the legal acts of the Republic of Lithuania, each employee leaving the Group and the Company at the retirement age is entitled to a one-off benefit. Employee benefit liability is recognised in the balance sheet and it reflects the present value of these benefits at the reporting date. The non-current liability for payments to employees at the date of the financial statements is estimated with reference to actuary valuations using the projected relative unit method. The present value of the defined non-current liability for payments to employees is determined by discounting the estimated future cash flows using the effective interest rates as set for government debentures denominated in a currency in which payments to employees are expected to be made and with maturity similar to that of the related liability.
2.12.Lease liabilities
The Group and the Company as the lessees
Initial measurement of lease liability
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date. The lease payments are discounted using the incremental borrowing rate.
The incremental borrowing rate is determined by the rate at which the Group and the Company would be able to borrow funds for the purpose of acquiring certain assets for a respective period.
At the commencement date, the lease payments included in the measurement of lease liability comprise the following payments:
fixed payments less any lease incentives receivable;
variable lease payments that depend on an index or a rate;
amounts expected to be payable by the Group and the Company under residual value guarantees;
the exercise price of the purchase option, if exercise of that option by the Company is reasonably certain;
fines for the termination of the lease, if it is assumed that the Group and the Company will exercise the option to terminate the lease during the lease term.
Subsequent measurement of lease liability
Subsequent to initial recognition, changes in the value of the Group’s and the Company’s lease liability are reflected by:
increasing the value of the liability by the amount of interest charged;
reducing the carrying amount by the lease payments made;
remeasuring the liability for lease modifications or revised payments.
The Group and the Company classifies assets as right-of-use assets by recognising under non-current assets in the statement of financial position, if the asset and lease contract meet all of the following criteria:
the lease is not a short-term (12 months or more) or short-term lease with a purchase option;
value of the leased item or group of items/underlying asset is not less than EUR 4,000 and therefore does not qualify as a lease of a low-value asset;
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if the contract conveys the right to control the use of an identified asset for a period of time, i.e. to obtain economic benefits from use of the identified asset and to direct the use of the identified asset.
The Group and the Company present lease liabilities separately from other liabilities in the statement of financial position. Interest expense on the lease liability is presented separately from the depreciation charge for the right-of-use assets. The interest expense on the lease liability is a component of finance costs recognised in the statement of comprehensive income.
2.13.Revenue recognition
Revenue from contracts with customers
The Group’s revenue is recognised according to a single, principles based five-step model that is applied to all contracts with customers. The Group recognises revenue from the provision of services in the reporting period during which the performance obligation is satisfied, i.e. the control of services or goods is transferred to the customer. This control may be transferred over time or at a point in time. For certain service contracts, revenue is recognised on the basis of the actual service provided before the end of the reporting period as part of the total services to be provided, as the customer benefits from and uses the services simultaneously.
Revenue from electricity transmission and related services
Electricity revenue from contracts with customers comprises revenue from electricity transmission, system services, trade in imbalance and balancing electricity and revenue from connection of new consumers. The Group recognises electricity revenue from contracts with customers over time in the reporting period when the performance obligation is satisfied, i.e., the control of the good is transferred or the service is provided., except for revenue from connection of new consumers, which is recognised by the Group over the useful life of the created asset . When recognising revenue the Group takes into consideration the terms of contracts signed with customers and all significant facts and circumstances, including the nature, amount, timing and uncertainty relating to cash flows arising from the contract with the customer. The main sale contracts are signed for the term of one year and coincide with the reporting period.
Revenue from natural gas transmission and related services
Revenue from system users for the natural gas transmission service is recognised on a monthly basis with reference to the available data on the natural gas quantities distributed to the system users connected to the distribution system and on the statements of transmitted natural gas signed with the system users, which are directly connected to the transmission system.
Revenue from balancing of the natural gas transmission system and from imbalance charges is related to management of gas flows in order to ensure operation of the natural gas transmission system in line with an acceptable pressure range. Revenue from the technical balancing of natural gas is related to changes in gas reserves in the pipeline and the sale of such reserves to a buyer is recognised as income when the ownership of the gas is transferred to the buyer.
The Group’s Natural gas transmission systems operator (hereinafter – Natural gas TSO) acts as an agent in balancing gas purchase/sale transactions for system users and reports net result of balancing gas sales and purchases and neutrality charge income and expenses. Acting as an agent in balancing gas purchase/sale transactions is explained by limited control of the balancing services and purchases of gas, absence of economic benefits, no discretion in establishing the price for the balancing services since the pricing is governed by law, inability to regulate demand, no discretion in choosing a counterparty. In addition, the activities of the Group’s TSO are not associated with trade in natural gas.
Revenue from construction, repair and technical maintenance services
Obligations arising from construction, repair and technical maintenance services contracts are fulfilled over a period if at least one of the following criteria is met: a) the customer simultaneously receives and benefits from the service provided by the Group under this contract; b) the Group creates or improves an asset that the customer controls while the asset is being created or improved; or c) the Group does not create an asset that could be used alternatively and has an enforceable right to receive payment for the performance completed to a certain date.
In contracts with clients where penalties for delays in contract execution can be directly deducted by the clients from the amounts payable for services, the Group assesses that the corresponding amount should be reduced from the Group's sales revenue. In the case of anticipated (forecasted) project delays, the Group evaluates the penalty amount it might be able to defend against the client (when delays are related to third-party influences) and the residual risk remaining with the Group. This remaining amount is assessed according to project management processes and integrated into the project budget updating process.
Revenue from the biofuel exchange, thermal energy auctions, PSO funds administration
Biofuel trade transactions are made among the exchange participants, and the settlements among the participants are made directly. Fees approved by the Council for trade on the biofuel exchange are recognised by the Group as revenue. Such revenue is recognised at a point in time when the transaction is conducted.
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Collected commissions according to the fees approved by the Group and agreed with the NERC are recognised by the Group as revenue from the organisation of the timber auctions. Such revenue is recognised at a point in time when the transaction is conducted.
Collected commissions from the participants for actually conducted transactions according to the fees approved by the Group are recognised by the Group as revenue from the organisation of the thermal energy auctions. Such revenue is recognised at a point in time when the transaction is conducted.
When performing the function of the PSO funds administrator, the Group recognises as revenue only PSO funds allocated to the Group by NERC to cover PSO funds administration expenses.
2.14.Interest income
Interest income is recognised on the accrual basis taking into consideration the outstanding balance of debt and the applicable interest rate. Interest received is recorded in the statement of cash flows as cash flows from investing activities.
2.15.Dividend income
Dividend income is recognised when the right to receive dividend payment is established.
2.16.Income from other (non-operating) activities
Gain on disposal of property, plant and equipment, lease income, income from default charges and fines collected from the contractors as a result of late fulfilment of works, including property, plant and equipment under construction, are recognised by the Company as other income.
Default charges and fines collected from the contractors as a result of late fulfilment of works are calculated upon the completion of a project or a stage thereof and upon notifying a supplier, and they are offset against the supplier’s debt. In case of a legal dispute over the amount of default charges or fines and when it is more likely than unlikely that the amounts of default charges or fines will be reduced or annulled, provisions are recognised.
2.17.Congestion management funds/liabilities
The Group’s electricity transmission operator acquires the right to congestion management revenue when different electricity market prices occur in Lithuania, Sweden, Poland and Latvia as a result of insufficient capacity of electricity lines. Revenue that was received as a result of price differences at different bidding areas is distributed equally by the power exchange operator (Nord Pool AS) to the transmission system operators of the countries operating the interconnections.
Regulation (EU) No 2019/943 of the European Parliament and of the Council of 5 June 2019 on conditions for access to the network for cross-border exchanges in electricity stipulates that congestion management revenue may be used in the following order of priority:
a) When revenue is used for guaranteeing availability of the allocated capacity of the interconnections, it is recognised as income in the period during which the related expenses are incurred. In case of unplanned disconnection of the electricity interconnection and when the trade in the interconnection’s capacities has already been completed at the electricity exchange (i.e. when they have already been allocated), the operators of the line ensure that the capacities traded are available to the market participants. In such a case, the operators incur costs that arise as a result of the price difference between the price of electricity traded by the operators and the price of balancing and/or imbalance electricity purchased/sold by the Company.
b) When revenue is used for maintaining or increasing the interconnections’ capacities, congestion management revenue is accounted for using the accounting policies applicable to grants, i.e. initially congestion management revenue is recognised as liability and recorded by reducing the value of the asset concerned, and subsequently it is recognised by reducing depreciation expenses of the related asset over the useful life of that asset.
c) When revenue is used for reducing the tariff, revenue is recognised as income in the period during which the Company generates lower revenue due to lower tariffs and only in case when revenue cannot be efficiently used for the purposes set out in points (a) and/or (b). Subject to approval by the regulatory authorities of the Member States concerned, they may be used, up to a maximum amount to be decided by those regulatory authorities, as income to be taken into account by the regulatory authorities when approving the methodology for calculating network tariffs and/or fixing network tariffs.
In the statement of financial position, unused congestion management revenue is presented as non-current and current liabilities.
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2.18.Income tax
Income tax expense comprises the current income tax and deferred tax expense (income). Income tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity, in which case income tax is also recognised in other comprehensive income or directly in equity.
Income tax
Income tax expenses for the current year are calculated on the current year profit before tax, as adjusted for certain non-deductible expenses/non-taxable income. Income tax is calculated using the tax rate effective as at the date of issue of the financial statements. The income tax rate of 15% was used in 2024 and 2023. The corporate income tax rate of 16% is applied from 2025.
The tax losses can be carried forward for indefinite period, except for the losses incurred as a result of disposal of securities and/or derivative financial instruments. Such carrying forward is disrupted if the Group changes its activities due to which these losses were incurred, except when the Group does not continue its activities due to reasons which do not depend on the Group itself. The losses from disposal of securities and/or derivative financial instruments can be carried forward for five consecutive years and only be used to reduce the taxable income earned from the transactions of the same nature. Tax losses carried forward can be used to reduce the taxable income earned during the reporting year by a maximum of 70%.
In accordance with the provisions of the legal acts, the Group companies transfer tax losses to other companies of the Group for a fee equal to 15% (until 2024) of the amount of tax losses.
The Group companies are entitled to tax reliefs for investments in qualifying assets. The Group accounts for such reliefs as tax credits, which means that the reliefs reduce the amount of tax payable and the current year’s tax expenses.
Deferred tax
Deferred taxes are calculated using the balance sheet liability method. Deferred tax assets and deferred tax liability are recognised for future tax purposes to reflect differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements.
The Group also recognises deferred tax assets for accumulated tax credits – the amounts of the unused investment relief which are expected to reduce income tax liability in the future. Deferred tax liabilities are recognised for all temporary differences that will subsequently increase taxable profit, and deferred tax assets are recognised to the extent to which they are expected to reduce taxable profit in the future. Deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting, nor taxable profit or loss.
Deferred tax assets are reviewed at each date of the financial statements and if it is not probable that the Group and the Company will generate sufficient taxable profit to realise these assets, they are reduced to the amount which is likely to reduce the taxable profit in future. Deferred tax assets and liabilities are estimated using the tax rate that has been applied when calculating income tax for the year when the related temporary differences are to be realised or settled.
Deferred tax assets and liabilities are offset only where they relate to income tax assessed by the same fiscal authority or where there is a legally enforceable right to offset current tax assets and current tax liabilities.
Current income tax and deferred income tax
Current income tax and deferred income tax are recognised as income or expenses and included in net profit or loss for the reporting period, except for the cases when tax arises from a transaction or event that is recognized directly in equity or in other comprehensive income, in which case taxes are also recorded in equity and other comprehensive income respectively.
3.Critical accounting estimates and judgements in applying accounting policies
The preparation of financial statements according to International Financial Reporting Standards requires management to make estimates and assumptions that affect the accounting policies applied, the reported amounts of assets, liabilities, income and expenses, and the disclosures of contingencies. Actual results may differ from those estimates. The significant management estimates and assumptions and the main sources for uncertainties used in the preparation of these financial statements that might cause substantial changes in the carrying amounts of the related assets and liabilities in the next financial year are presented below:
Property, plant and equipment fair value assessment
As described in Note 6, the Group revalued its property, plant and equipment as at 31 December 2023. The fair value was measured using replacement cost method followed by economic obsolescence test. The assets’ fair value was measured by the Group companies themselves. The assumptions used in determining the fair value of property, plant and equipment are described in more detail in the above mentioned note.
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Property, plant and equipment useful life assessment
The useful life of property, plant and equipment is determined separately for each item (component) of the asset by estimating future economic benefit in view of the expected period of use in the Group’s activities, the intensity of use, the environment of use, changes in the asset’s original standard performance over its entire useful life, technological and economic progress morally outdating the asset, legal and similar factors restricting the useful life of property, plant and equipment.
Useful lives are reviewed annually to ensure that the depreciation period would correspond to the expected useful life of property, plant and equipment. The effect of changes in estimates, if any, is accounted for on a prospective basis.
Measurement of provisions
Provisions are reviewed by the Group at each date of the statement of financial position and adjusted to reflect the changes in circumstances and assumptions. If the amount of the provision is discounted, the amount reversed at each reporting period is equal to the discounting effect (interest expenses). If circumstance change and the provision is no longer necessary, the provision is reversed in the statement of profit or loss and other comprehensive income through the expense line item where it has been recorded initially at the time of establishment. The most significant provisions in the Group are provisions for litigations and claims. Information about the Group’s provisions and their movements disclosed in Note 27.
Impairment testing of investments in subsidiaries
The Company records investments in subsidiaries at cost less impairment. The Company assesses at each annual reporting date whether there is any indication that investments may be impaired. If such indications exist, the Company calculates impairment as the difference between the subsidiary’s carrying amount and its recoverable amount and records the result in profit or loss.
The results of the impairment tests of investments in subsidiaries are disclosed in Note 8.
Assessment of deferred tax asset due to application of investment incentive
The Group estimated the volume of investments of its subsidiary Litgrid qualifying for the income tax incentive for 2024 and recalculated for 2023. For detailed information please refer to Note 29.
Financial Instruments – assessment
The Group assessed financial instruments to identify whether the rights and obligations to acquire or sell shares in Rheinmetall Defence Lietuva, UAB with pre-specified counterparties meet the definition of a derivative under IFRS 9 and IAS 32. More information disclosed in Note 9.
4.Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The Group’s chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors that makes strategic decisions.
Management assesses the Group’s performance based on three business segments which are consistent with the operational goals stipulated in the Group’s strategy:
the electricity transmission segment comprises the activities conducted by LITGRID AB;
the natural gas transmission segment comprises the activities conducted by Amber Grid AB;
Non reportable operating segments that do not meet quantitative threshold:
activities conducted by energy sources exchange operator Baltpool UAB;
activities conducted by natural gas exchange operator GET Baltic UAB until 31 May 2023;
activities conducted by energy facilities construction and contracting company TETAS UAB;
activities conducted by operator of electricity storage facilities Energy Cells UAB;
the activities of EPSO-G Invest which is mandated to carry out project and investment management;
activities conducted by parent company EPSO-G UAB.
Considering that revenue, profit measure (EBITDA) and total assets after consolidation adjustments of the individual elements which comprise the segment of other activities do not reach 10% of the specified financial indicators of all segments, all other operating segments are not reported separately.
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The Group has a single geographical segment – the Republic of Lithuania. The Group’s operations in foreign countries are insignificant for the Group.
The key performance indicators are profit before interest, taxes, depreciation (amortisation), loss on impairment and write-off of property, plant and equipment (EBITDA), profit before interest and taxed (EBIT), net profit, operating expenses(excluding electricity, gas and related expenses). These indicators are calculated on the basis of data reported in the financial statements.
The Board also monitors adjusted performance indicators, i.e. adjusted EBITDA, which is non-IFRS, non-GAAP alternative performance measure. Adjustments include temporary regulatory differences resulting from NERC’s decisions. All adjustments may have both positive and negative impact on the reporting period results. In Board’s view, adjusted EBITDA more accurately presents results of the operations and enable a better comparison of the results between the periods as they indicate results adjusted for the regulation impact by the Group in the reporting year.
Management also analyses investments and net debt of each individual segment.
In 2024, revenue from the Lithuanian clients accounted for 87% of the Company’s total revenue (2023: 86%).
The table below contains the Group’s information on segments for the period ended 31 December 2024:
(All amounts are in EUR thousands unless otherwise stated)
Transmission of electricity
Transmission of natural gas
All other segments
Elimination of intersegment transactions
Total
Revenue and other income
378,326
74,584
59,873
(31,895)
480,888
Dividend income
-
-
50,632
(50,632)
-
Purchase of electricity and natural gas*
(271,579)
(16,509)
(1,239)
7,847
(281,480)
Purchase of contracting services
-
-
(26,916)
13,693
(13,223)
Wages and salaries and related expenses
(20,579)
(15,501)
(22,861)
3,197
(55,744)
Repair and maintenance services
(10,281)
(2,612)
(2,354)
5,204
(10,043)
Other expenses
(15,303)
(13,435)
(5,225)
(1,223)
(35,186)
EBITDA
60,584
26,527
51,910
(53,809)
85,212
Adjusted EBITDA
47,553
27,373
51,910
(53,809)
73,027
Temporary regulatory differences for previous periods
13,100
2,006
-
-
15,106
Temporary regulatory differences for reporting period
(26,131)
(1,160)
-
-
(27,291)
Overall effect of management’s adjustments on EBITDA
(13,031)
846
-
-
(12,185)
Reconciliation of EBITDA and Operating profit (EBIT) and net profit/loss
(23,215)
(15,339)
(2,030)
-
(40,584)
Depreciation and amortisation
(22,562)
(14,932)
(2,893)
-
(40,387)
Gain (loss) on derivatives
-
(364)
863
499
Loss on impairment and write-off of non-current assets
(653)
(43)
-
-
(696)
Operating profit (EBIT)
37,369
11,188
49,880
(53,809)
44,628
Total finance costs, net
5,758
(2,166)
(3,691)
-
(99)
Income tax
5,901
(1,196)
1,348
-
6,053
Share of results of associates
-
480
3,825
-
4,305
Net profit (loss)
49,028
8,306
51,362
(53,809)
54,887
Total assets
820,320
327,196
739,849
(679,585)
1,207,780
Net financial debt
(33,124)
(83,346)
(141,838)
323,170
64,862
Investments (additions of property, plant and equipment and intangible assets)
(232,611)
(6,405)
(656)
3,599
(236,073)
* Includes impact of changes in gas inventory balances
EPSO-G’s EBITDA includes dividend income.
The table below contains the Group’s information on segments for the period ended 31 December 2023:
(All amounts are in EUR thousands unless otherwise stated)
Transmission of electricity
Transmission of natural gas
All other segments
Elimination of intersegment transactions
Total
Revenue and other income
369,838
81,338
44,688
(16,977)
478,887
Operating expenses, excluding electricity, gas and related expenses, depreciation, write-off and imparement*
(40,294)
(30,248)
(36,951)
17,000
(90,493)
EBITDA
78,286
25,739
2,806
(5,579)
101,252
Adjusted EBITDA
37334
24660
2806
(5,579)
59221
Temporary regulatory differences for previous periods
18,942
(2,883)
-
-
16,059
Temporary regulatory differences for reporting period
(59,894)
1,804
-
-
(58,090)
Overall effect of management’s adjustments on EBITDA
(40,952)
(1,079)
-
-
(42,031)
Reconciliation of EBITDA and net profit/loss
(29,900)
(13,177)
15,742
(20,116)
(47,451)
Depreciation and amortisation
(19,737)
(12,595)
(1,958)
-
(34,290)
Loss on impairment and write-off of non-current assets
(21,905)
(8,169)
18,397
(18,406)
(30,083)
Total finance costs, net
4,434
(1,758)
(1,942)
(508)
226
Loss of control and revaluation of subsidiary
-
9,076
-
(660)
8,416
Income tax
7,308
(567)
(235)
-
6,506
Share of results of associates
-
294
1,480
-
1,774
Dividend income
-
542
-
(542)
-
Net profit (loss)
48,386
12,562
18,548
(25,695)
53,801
Total assets
677,416
332,329
681,919
(613,207)
1,078,457
Net financial debt
(39,188)
(95,175)
(208,205)
259,030
(83,538)
Investments (additions of property, plant and equipment and intangible assets)
(165,371)
(35,703)
(33,146)
(8,900)
(243,120)
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* Includes impact of changes in gas inventory balances
The Group’s revenue from the major clients in 2024:
(All amounts are in EUR thousands unless otherwise stated)
Company name
2024
Energijos Skirstymo Operatorius AB
259,132
Ignitis UAB
29,007
Ignitis Gamyba AB
6,676
Total revenue from major clients
294,815
The Group’s revenue from the major clients in 2023:
(All amounts are in EUR thousands unless otherwise stated)
Company name
2023
Energijos Skirstymo Operatorius AB
103,582
Ignitis UAB
42,846
Ignitis Gamyba AB
9,033
Total revenue from major clients
155,461
5.Intangible assets
(All amounts are in EUR thousands unless otherwise stated)
Group
Goodwill
Patents and licences
Computer software
Other intangible assets
Statutory servitudes and protection zones
Total
Net book amount as at 31 December 2022
61
322
4,745
313
2,981
8,422
Additions
-
11
3,177
59
176
3,423
Value adjustment
-
-
-
-
(62)
(62)
Write-offs
-
-
(5)
-
-
(5)
Reclassification with PP&E
-
70
280
-
-
350
Reclassification between categories
-
816
(816)
-
-
-
Off-set of grants against non-current assets (Note 20)
-
-
(2,415)
-
-
(2,415)
Amortisation
-
(335)
(1,078)
(125)
-
(1,538)
Net book amount as at 31 December 2023
61
884
3,888
247
3,095
8,175
Acquisition cost
61
1,843
15,283
584
3,095
20,866
Accumulated amortisation
-
(959)
(11,395)
(337)
-
(12,691)
Net book amount at 31 December 2023
61
884
3,888
247
3,095
8,175
Net book amount as at 31 December 2023
61
884
3,888
247
3,095
8,175
Additions
-
49
2,577
21
-
2,647
Value adjustment
-
-
-
-
(438)
(438)
Write-offs
-
-
(12)
-
-
(12)
Reclassification from PP&E
-
344
(207)
-
-
137
Reclassification between categories
-
-
-
-
-
-
Grants offset with intangible assets (Note 20)
-
(344)
(1,567)
-
-
(1,911)
Amortisation
-
(422)
(1,180)
(110)
-
(1,712)
Net book amount at 31 December 2024
61
511
3,499
158
2,657
6,886
Acquisition cost
61
1,889
13,784
603
2,657
18,994
Accumulated amortisation
-
(1,378)
(10,066)
(419)
-
(11,863)
Accumulated impairment
-
-
(219)
(26)
-
(245)
Net book amount as at 31 December 2024
61
511
3,499
158
2,657
6,886
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Intangible assets are carried at cost, less accumulated amortisation and accumulated impairment losses, if any.
As at 31 December 2024, following the reassessment of the assumptions for the provisions for statutory servitudes and protection zones (Note 27), changes in the regulatory framework for protection zones and differences between the values of forecast and actual services acquired, the provision and related intangible assets as at 31 December 2024 were reduced by EUR 438 thousand.
As at 31 December 2024, the net book amount of the Company’s intangible assets amounted to EUR 56 thousand (as at 31 December 2023, EUR 77 thousand).
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6.Property, plant and equipment
Group
Land
Buildings
Structures and machinery
Vehicles
Other property, plant and equipment
Construction in progress
Total
Net book amount as at 31 December 2022
682
26,062
536,679
1,473
13,327
77,497
655,720
Additions
-
498
14,018
65
4,400
229,576
248,557
Prepayments for PP&E
-
-
-
-
-
(8,860)
(8,860)
Sales
-
-
(110)
(43)
(16)
-
(169)
Write-offs
-
(13)
(718)
-
89
-
(642)
Revaluation
9
889
584
498
143
-
2,123
Impairment loss
-
-
-
-
(108)
(17)
(125)
Reversal of impairment
-
-
(57)
-
-
29
(28)
Reclassification to/from inventories
-
-
(50)
-
(201)
-
(251)
Reclassification between categories
-
2,151
54,135
-
3,632
(59,918)
-
Reclassification (from intangible assets)
-
-
-
-
-
(350)
(350)
Off-set of grants against non-current assets (Note 20)
-
(492)
(13,886)
-
(1,078)
(142,486)
(157,942)
Depreciation
-
(940)
(25,748)
(405)
(3,711)
-
(30,804)
Net book amount as at 31 December 2023
691
28,155
564,847
1,588
16,477
95,471
707,229
Acquisition/revaluation amount
691
30,982
646,728
1,616
26,016
95,471
801,504
Accumulated depreciation
0
(2,827)
(81,881)
(28)
(9,539)
-
(94,275)
Net book amount as at 31 December 2023
691
28,155
564,847
1,588
16,477
95,471
707,229
Additions
-
556
25,053
226
6,317
210,598
242,750
Change in prepayments for PP&E
-
-
-
-
-
(9,324)
(9,324)
Sales
-
-
-
-
(2)
-
(2)
Write-offs
-
(2)
(1,611)
(2)
(3)
(92)
(1,710)
Impairment loss
-
-
(480)
-
-
-
(480)
Reversal of impairment
-
-
(22)
-
-
-
(22)
Reclassification between categories
-
7,062
55,216
-
4,515
(66,683)
110
Reclassification to/from inventories
-
35
70
(62)
(100)
845
788
Reclassification to intangible assets
-
-
-
-
142
(279)
(137)
Off-set of grants against non-current assets (Note 20)
-
(552)
(23,561)
-
(1,130)
(131,817)
(157,060)
Depreciation
-
(1,062)
(30,535)
(433)
(4,266)
-
(36,296)
Net book amount as at 31 December 2024
691
34,192
588,977
1,317
21,950
98,719
745,846
Acquisition/revaluation amount
691
35,244
619,842
1,778
26,325
98,719
782,599
Accumulated depreciation after revaluation
-
(1,052)
(30,385)
(461)
(4,375)
-
(36,273)
Accumulated impairment
-
-
(480)
-
-
-
(480)
Net book amount at 31 December 2024
691
34,192
588,977
1,317
21,950
98,719
745,846
The Group’s property, plant and equipment is carried at a revalued amount, less accumulated depreciation and impairment loss.
Prepayments for property, plant, equipment (PPE), included in the under ‘Construction work in progress’:
(All amounts are in EUR thousands unless otherwise stated)
2024
2023
Carrying amount at the beginning of the period
17,725
26,304
Prepayments paid for PPE over the period
2,585
15,386
Transfer to construction work in progress
(11,909)
(23,965)
Carrying amount at the end of the period
8,401
17,725
As at 31 December 2024, the Group did not capitalise any interest on property, plant and equipment (2023: EUR 329 thousand was capitalised at interest rate of 3.53%).
Write-offs mainly represented derecognition of component parts of assets replaced during reconstruction.
The Group’s property, plant, and equipment is accounted for at a revalued amount. The last revaluation of property, plant and equipment was carried out in 2023. Below are the key assumptions used in measurements for electricity transmission segment and
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natural gas transmission segments. No regulatory decisions that could materially affect the value of the assets were adopted in 2024. The carrying amount of the asset was, within materiality threshold, an approximation of its fair value, therefore no adjustments were made to the assets value as at 31 December 2024. The valuation corresponded to Level 3 of the fair value hierarchy it was performed using the Group’s internal resources, and not engaging an independent external valuer. The Group assessed the assets as a business, but its assessment excluded all activities related to the transmission network development (and not related to the present assets being assessed), i.e. investments in the development projects, connection of new consumers/producers, grants for the development projects.
The assessment of property, plant and equipment identified:
the total fair value of property, plant and equipment of the electricity transmission segment was EUR 5.8 million higher than the carrying amount before revaluation;
the total fair value of property, plant and equipment of the natural gas transmission segment was EUR 4.7 million lower than the carrying value before revaluation;
the total fair value of property, plant and equipment of the other segment (construction and contracting) was EUR 1.0 million higher than the carrying amount before revaluation;
the EUR 15,954 thousand carrying amount of the property, plant and equipment of the other segment (electricity storage facilities) corresponds to its fair value, as the assets were newly acquired (installed) and put into operation in 2023.
Below is the information about gain or loss on revaluation of electricity and natural gas transmission segments as at 31 December 2023:
All amounts are in EUR thousands unless otherwise stated
 Segment
Recognised in other comprehensive income
Recognised through profit or loss
Total revaluation result by segments
EE TSO
27,434
(21 623)
5,811
NG TSO
3,255
(7 940)
(4 685)
Other segments
1,006
(9)
997
Total
31,695
(29 572)
2,123
The valuation of property, plant and equipment of the electricity and natural gas transmission system operators was carried out using the replacement cost method and the discounted cash-flow methods. The valuation of property, plant and equipment of the other segments (construction and contracting) was carried out using the comparable and replacement cost methods. The valuation corresponded to Level 3 of the fair value hierarchy. The valuation of the electricity and natural gas transmission system operators’ assets involved the following steps:
replacement costs of new assets (RCN) were estimated;
the physical deterioration and functional obsolescence of the assets was determined and;
the economic obsolescence of the assets was assessed (using the income approach).
In determining the replacement costs, the management took into account asset-specific current information such as the cost of materials and works, or overall construction costs.
Then physical deterioration and functional obsolescence of the assets was determined to estimate depreciated replacement cost (DRC) for each individual asset.
The income approach was used to determine the economic obsolescence of the assets. Based on the results of the economic obsolescence test, the values of the assets determined by DRC method were reduced on a pro rata basis, except for assets for which such allocation would have resulted in a value lower than the asset’s regulated asset base or estimated regulated cash flows from individual items (hereinafter – RAB value). For such assets the RAB value was considered to be their fair value. The amount of reduction that would otherwise have been allocated to an asset was allocated pro rata to the other assets.
Finally, the management compared previous carrying values of individual assets against revalued amounts determined using the approach described above, and calculated the revaluation gains or losses to be accounted through profit and loss, or other comprehensive income as appropriate.
Estimation of fair value for property, plant and equipment of electricity transmission segment
Application of replacement cost method
The items of property, plant and equipment were allocated to main groups of the technological assets: transformer substations, power transmission lines, back-to-back converters, and autotransformers and replacement cost calculation model was developed for each group. A new replacement cost was calculated for individual items based on their physical parameters (autotransformer capacity, number of transformer substation connectors, number of transmission line circuits and type of poles), the current purchase prices and
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statistical indices. The fair value of construction in progress was considered equal to carrying amount, because it consisted of newly acquired assets.
The remaining useful life of the asset components was estimated as follows:
If the asset component is included in a 10-year reconstruction investment plan (is scheduled for reconstruction), the remaining useful life is the period before reconstruction;
If information on the end of useful life/write-down date of the asset component is available, the remaining useful life is the period before the write-down;
If not included in the plan, the remaining useful life is the difference between the asset component’s standard useful life (55 years for lines, 35 years for autotransformers, substations and converters, 60 years for a building) and the functional obsolescence (the period of time from the date of the asset’s entry into operation, after taking into account the reconstruction/replacement of components).
The depreciated replacement cost of each asset was calculated with reference to the new replacement cost and by the remaining useful life.
Economic obsolescence
Electricity transmission system operator is regulated, the fair value of the system was assessed using the income approach. The following assumptions were applied:
The forecast period until 2031.
Additional component has been established for the financing of investments increasing the level of revenue from the regulated activities. Additional component was estimated by the electricity transmission system operator (hereinafter the ‘Electricity TSO’) in the long-term financial forecasts for 2025-2031 based on a sustainable level of debt (assuming that the average debt to EBITDA ratio over the regulatory period is below but close to 4.5). However, given that the regulatory framework did not define the sustainable level of debt, 86% (EUR 12 million) of the requested additional component has been awarded for 2024, the need for additional component would be lower if actual investments were lower than planned, the amount of undiscounted additional component for 2025-2031 has been decreased in the measurement by 25%.
The updated long-run average incremental costing (hereinafter – LRAIC) model for the establishment of the regulated asset base and the cost of capital is applied in the regulatory pricing from 2022. The cost of capital comprises depreciation expenses of the regulated assets and return on investments, which is calculated by multiplying the regulated asset base by the rate of return on investments. Over the regulatory period of five years (current regulatory period covers 2022-2026), the cost of assets under optimisation (planned to be restored) is determined using the present (replacement) value and investments in the optimised assets over the regulatory period of five years are consistent with the value of assets being replaced, which is calculated under the LRAIC model. The cost of capital of the assets that are not optimised is determined using the historical value.
The amounts of investments until 2031 are used from the actual ten-year investment plan, which excludes all development investments.
All operating expenses attributable to the regulated activities are compensated through transmission revenue, except for wages and salaries, the compensation assumption of which is 96%. The terminal value was calculated based on the assumption that all the costs incurred by the Electricity TSO will be compensated with revenue.
The calculation of cash flows for the years 2024-2025 included a difference between the permitted and actual return on transmission activity investments in 2022-2023. The permitted return on investments was raised as a result of operational cost efficiencies (savings). A regulatory gain is refunded through a lower transmission price and revenue offsetting the higher additional component of services and revenue.
The rate of return on investments (ROI before tax) is equal to 5% for 2024 (equivalent to a 4.25% after tax), and from 2025 it is the same as the discount rate, i.e. 5.87% (equivalent to a 4.99% WACC after tax).
Net cash flows generated from the assets were discounted using the discount rate (WACC after tax) of 4.99% calculated by the management.
In addition, the net present value of regulated expected cash flows was established for individual items with reference to their allowable regulatory depreciation and return on regulated asset value.
The increase in value of property, plant and equipment estimated using income approach was allocated to individual items in proportion to depreciated replacement costs, ensuring that the value estimated is not lower than the regulated cash flow of the individual items.
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Sensitivity analysis
If the additional component for the financing of investments was not awarded, the value of the assets would be lower by EUR 92.1 million, if the total amount estimated in the long-term financial forecasts of the Electricity TSO was allocated, the value of the assets would be higher by an additional EUR 30.7 million. The sensitivity of asset valuation to the additional component for the financing of investments and the change in the rate of return on investments from 2027 is presented in the tables below:
Additional component for the financing of investments, % of forecast
Change in asset value, EUR million
0
-92.1
0.33
-61.4
0.67
-30.7
1
0
1.33
30.7
Change in rate of investment return from 2025, %
Change in asset value, EUR million
-0.005
-15.2
-0.0025
-7.6
0
0
0.0025
7.6
0.005
15.3
Change in discount rate (return on investments is recalculated from 2027 accordingly), %
Change in asset value, EUR million
-0.01
1.5
-0.005
0.7
0
0
0.005
-0.6
Estimation of fair value for property, plant and equipment of gas transmission segment
The cost approach involves determining the replacement cost of a new asset (RCN) at the level of the individual asset item. RCN includes the cost of materials, installation works, labour, transportation and handling fees, overall costs of contractor, also indirect costs, such as engineering and design costs. The market prices were determined using transaction data of the Natural Gas TSO for the last three years, the reports of ACER and Gasgrid and other publicly available data.
Assets of a unique nature (around 1% of the total value of the assets) were subject to the indirect cost method due to inability to apply the direct cost method or the lack of the necessary information. The indirect cost method was used to determine the current replacement value of each new asset by indexing (based on consumer price, gas price, metal price and building cost indices published by Statistics Lithuania) the capitalized historical cost of the new asset.
The calculated RCN will reduced by the amount of functional obsolescence due to occurrence of functional failures over a particular period as a result of intensity of use. The physical obsolescence was estimated using age-life methods, based on the Iowa-type survivor curves. These depreciation curves were used to determine the life cycle of asset based on economic useful life, in view of current repairs and maintenance Based on Iowa-type curves, the useful life of the assets in some cases was different form the useful life used for the accounting purposes of the Natural Gas TSO. The useful life will be reviewed and extended, as appropriate. The changes will apply from 1 January 2024.
After identifying the asset’s RCN and assessing its physical obsolescence, the asset’s replacement residual value (depreciated replacement cost, DRC) was estimated.
Economic obsolescence
Gas transmission system operator is regulated, the fair value of the system was assessed using the income approach.
Key assumptions for the cash flow forecast:
The forecast period until 2028
In the Certificate No O5E-389 of 8 May 2023, NERC set the cap on the revenue from natural gas transmission activities of EUR 67,011 thousand for 2024;
NERC approved a 5.04% pre-tax return on investments (WACC) for 2024, while in the long term, based on NERC’s WACC methodology and market trends, the rate of return on investments will increase and will be equal to the discount rate of 6.07% (post-tax);
A discount rate (post-tax) of 5.16% was applied to discount the cash flows.
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The operating costs are estimated in accordance with the NERC’s methodology for determining the revenue and prices of natural gas transmission activities. Some costs are not included in the regulated prices.
The estimation of the going-concern value of discounted cash flows excludes the growth rate (equal to 0)
Asset values estimated using the DRC method were adjusted for economic obsolescence: reduced in proportion to the results of the economic obsolescence test (the total fair value of assets was determined using income method), except for assets for which such allocation would have resulted in a value lower than the asset’s regulatory asset base (RAB) value. For such assets the RAB value was considered to be its fair value. The amount of reduction that would otherwise have been allocated to the asset was allocated pro rata to the other assets. In order to distribute the value of economic obsolescence among separate items of assets so that the resulting value would reflect more accurately the fair value of the respective separate item of assets, the managemnent followed a policy whereby the fair value of particular item of assets would not be lower than the RAB assumption used in respect of that particular item of assets.
Economic obsolescence was applied (i.e. distributed) to all assets, except for the following categories (or separate items of assets from different categories), where DRC was approximated to the carrying amount of these assets:
construction in progress; because new projects reflect the fair value best, which is included in RAB at full;
other items of property, plant and equipment that are not directly related to the underlying technological asset (e.g. office buildings, furniture, tools, computers, equipment);
assets with the fair value equal to the net book amount for the purpose of valuation (assets acquired no earlier than one year until their valuation date);
assets with the value before economic obsolescence (DRC) lower than RAB value attributed to these assets (those kept at RAB value).
Sensitivity analysis.
The natural gas transmission system operator (TSO) performed sensitivity analysis of the fair value measurement in respect of changes in unobservable inputs. The fair value measurement is the most sensitive to the rate of return (WACC) set by NERC and the discount rate.
The fair value of the asset sensitivity is presented for the following scenarios:
Scenario (1) of sensitivity analysis: to determine the level of revenue from 2024 onwards, NERC would apply a rate of return of 6.04/4.04% (currently is set at 5.04% for 2024) with a 1% increase/decrease in the rate of return and the other valuation parameters remaining unchanged; a 1% increase in the rate of return would result in the EUR 9,727 thousand increase in the fair value of property, plant and equipment, and a 1% drop in the rate of return would result in the EUR 9,727 thousand decrease in the fair value of property, plant and equipment.
Scenario (2) of sensitivity analysis: applying a 1% higher/lower discount rate (after tax) with the other valuation parameters remaining unchanged; a 1% increase in the discount rate would result in the EUR 11,544 thousand decrease in the fair value of property, plant and equipment, and a 1% decrease in the discount rate would result in the EUR 12,181 thousand increase in the fair value of property, plant and equipment.
Below is the table on the asset’s sensitivity analysis:
WACC (pre-tax return on investments approved by NERC)
Discount rate (post-tax), %
Change
4.04%
5.04%
6.04%
-1.00%
0.00%
1.00%
4.16%
-1.00%
2,189
12,181
22,174
5.16%
0.00%
-9,727
-
9,727
6.16%
1.00%
-21,017
-11,544
-2,070
No regulatory decisions that could materially affect the value of the assets were adopted in 2024. The carrying amount of the asset was, within materiality threshold, an approximation of its fair value, therefore no adjustments were made to the assets value as at 31 December 2024. The valuation corresponded to Level 3 of the fair value hierarchy, it was performed using the Group’s internal resources and not engaging an independent external valuer. The Group assessed the assets as a business, but its assessment excluded all activities related to the transmission network development (and not related to the present assets being assessed), i.e. investments in the development projects, connection of new consumers/producers, grants for the development projects.
The table below presents the net book amounts of the Group’s property, plant and equipment, which would have been recognised had the historical cost method been used, less grants received and negative revaluations that would be treated as an impairment equivalent, as at 31 December 2024 and 31 December 2023:
(All amounts are in EUR thousands unless otherwise stated)
Land
Buildings
Structures and machinery
Transport
Other property, plant and equipment
Construction in progress
Total
As at 31 December 2024
682
32,549
562,227
1,012
21,818
81,782
700,070
As at 31 December 2023
682
26,464
535,273
1,115
16,293
61,811
641,638
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Had the value of the Group’s property, plant and equipment not been reduced by the amount of grants, its carrying amount would have been EUR 802,140 thousand higher as at 31 December 2024 (EUR 672,845 thousand as at 31 December 2023). The following table shows information on property, plant and equipment, the value of which was reduced by the amount of grants received/receivable:
All amounts are in EUR thousands unless otherwise stated
As at 31 December 2024
As at 31 December 2023
Carrying amount at the beginning of the period
672,846
532,859
Additions
157,060
157,942
Depreciation
(27,749)
(17,594)
Write-off
(17)
(362)
Carrying amount at the end of the period
802,140
672,845
As at 31 December 2024, the Group had commitments to acquire property, plant and equipment to be fulfilled in the upcoming periods for the amount of EUR 171 million (31 December 2023: EUR 337 million).
As at 31 December 2024, the Company’s property, plant and equipment amounted to EUR 69 thousand, as at 31 December 2023 – EUR 83 thousand. The Company’s other property, plant and equipment comprised computer hardware and furniture.
7.Right-of-use-assets
Group
Land
Buildings
Vehicles
Total
Net book amount as at 31 December 2022
5,833
2,427
3,069
11,329
New contracts
61
836
357
1,254
Indexation
-
(5)
153
148
Write-offs
-
(72)
(2)
(74)
Depreciation
(62)
(609)
(1,176)
(1,847)
Net book amount as at 31 December 2023
5,832
2,577
2,401
10,810
Acquisition cost
6,131
4,291
5,779
16,201
Accumulated depreciation
(299)
(1,714)
(3,378)
(5,391)
Net book amount as at 31 December 2023
5,832
2,577
2,401
10,810
New contracts
-
222
2,469
2,691
Reclassification to (from) PP&E
-
-
(110)
(110)
Indexation
(25)
530
87
592
Depreciation
(62)
(746)
(1,571)
(2,379)
Net book amount as at 31 December 2024
5,745
2,583
3,276
11,604
Acquisition cost
6,106
5,053
7,006
18,165
Accumulated depreciation
(361)
(2,470)
(3,730)
(6,561)
Net book amount as at 31 December 2024
5,745
2,583
3,276
11,604
Company
Net book amount as at 31 December 2022
135
100
235
New contracts
629
-
629
Indexation
-
18
18
Write-offs
(73)
-
(73)
Depreciation
(83)
(32)
(115)
Net book amount as at 31 December 2023
608
86
694
Acquisition cost
629
125
754
Accumulated depreciation
(21)
(39)
(60)
Net book amount as at 31 December 2023
608
86
694
New contracts
-
-
-
Write-offs
-
-
-
Depreciation
(126)
(31)
(157)
Net book amount as at 31 December 2024
482
55
537
Acquisition cost
629
125
754
Accumulated depreciation
(147)
(70)
(217)
Net book amount as at 31 December 2024
482
55
537
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As at 31 December 2024, the increases in the Group’s right-of-use assets were due conclusion of new contracts for the lease of new office premises, vehicles and equipment.
8.Investments in subsidiaries and associates
As at 31 December 2024 and 31 December 2023, the Company had a shareholding in the following Group companies:
Group companies
Acquisition cost
Impairment
Carrying amount
Shareholding (%)
As at 31 December 2024
Subsidiaries
LITGRID AB
217,215
-
217,215
98%
Amber Grid AB
126,528
-
126,528
97%
Baltpool UAB
388
-
388
67%
TETAS UAB
16,150
(11,130)
5,020
100%
Energy Cells UAB
2,375
-
2,375
100%
EPSO-G Invest UAB
953
-
953
51%
Total:
363,609
(11,130)
352,479
Associates
TSO Holding AS*
13,830
-
13,830
39.6%
As at 31 December 2023
Subsidiaries
LITGRID AB
217,215
-
217,215
98%
Amber Grid AB
126,528
-
126,528
97%
Baltpool UAB
388
-
388
67%
TETAS UAB
16,150
(11,130)
5,020
100%
Energy Cells UAB
2,375
0
2,375
100%
Total:
362,656
(11,130)
351,526
Associates
TSO Holding AS
13,830
-
13,830
39.6%
On 18 July 2024, the Company established a new 100% controlled subsidiary EPSO-G Invest UAB. Following the Company’s decision of 13 December 2024 to increase the issued capital of EPSO-G Invest UAB , 49% of its shares were acquired by UAB Valstybės Investicinis Kapitalas (“VIKA”). The Company remains the ultimate shareholder with a 51% shareholding in EPSO-G Invest UAB . Until 31 December 2024, the nominal value of shares in EPSO-G Invest was partially paid at amount of EUR 1,012.5 thousand, of which a non-controlling interest (VIKA) amounted to EUR 459 thousand. The remaining portion of the issue price of the shares (including share premium) is expected to be paid subject to the need for the investments related to EPSO-G Invest ownership interest as described below.
On 13 December 2024, the Shareholders’ Agreement was signed between EPSO-G UAB and VIKA regarding the ultimate goal of EPSO-G Invest UAB being investing in Rheinmetall Defence Lietuva UAB (RDL), developing its business, making investment decisions and managing RDL shares.
On 20 December 2024, Rheinmetall Waffe Munition GmBH, EPSO-G Invest UAB and Giraitės ginkluotės gamyba signed a shareholder cooperation agreement on the development of RDL and the organisation of the production of artillery ammunition, acquisition and management of its shares. The agreement stipulates that Rheinmetall Waffe Munition will hold 51% in RDL, 48% will be owned by EPSO-G Invest UAB and 1% by Giraitės ginkluotės gamykla.
On 23 December 2024, EPSO-G acquired 48% of shares in RDL for a symbolic one euro.
By the decision of 15 December 2023 of the Company, as a sole shareholder, the issued capital of TETAS UAB was increased through issue of 2,000 units of shares with the nominal value of EUR 1 each and cash contribution of EUR 6,300 thousand was made.
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Impairment testing of investments in subsidiaries
As at 31 December 2024, the Company identified indications of impairments and tested its subsidiary TETAS UAB for impairment. Although the estimated recoverable amount of TETAS as at 31 December 2024 exceeded the carrying value by 10%, the Company’s management believes that the impairment should not be reversed, as improving performance of TETAS has no long term prospects and the difference in value is not material. As at 31 December 2023, the impairment of EUR 7,683 thousand was recognised for TETAS UAB, and the estimated impairment loss totalled EUR 11,130 thousand.
In testing the investment in TETAS for impairment as at 31 December 2024, the Company applied the discounted cash flow method and used the following key assumptions:
five year cash flow forecasts until 2029 (2023: cash flow forecast until 2028);
a 2.0% projected cash flow growth rate in the period (beyond 2029) of continuing operations (2023: 2.0%);
a 11.81% discount rate (after tax) was used to calculate discounted cash flows (2023: 11.79%);
The Company also assessed the investments in the subsidiaries Litgrid, Amber Grid and Energy Cells for indication of impairment. As at 31 December 2024, there were no indications of impairment, as the net asset value of the subsidiaries in question, attributable to interest of the Company, is higher than the actual cost.
As at 31 December 2023, the Company fully reversed the impairment of EUR 26,090 thousand recognised in previous periods for the investment in Litgrid, as the investment’s recoverable amount exceeded its carrying amount.
Presented below is the summarised statement of financial position of the Group companies with significant non-controlling interest as at 31 December 2024 and 2023.
(All amounts are in EUR thousands unless otherwise stated)
Company name
Current assets and liabilities
Non-current assets and liabilities
Net assets
Year
Assets
Liabilities
Total net current assets
Assets
Liabilities
Total net non-current assets
Litgrid
As at 31 December 2024
353,059
211,399
141,660
467,261
350,726
116,535
258,195
Net assets attributable to minority interest as at 31 Dec 2024
6,448
As at 31 December 2023
264,797
138,673
126,124
412,619
300,057
112,562
238,686
Net assets attributable to minority interest as at 31 Dec 2023
5,942
Amber Grid
As at 31 December 2024
35,307
90,126
(54,819)
291,889
61,441
230,448
175,629
Net assets attributable to minority interest as at 31 Dec 2024
6,009
As at 31 December 2023
34,421
79,572
(45,151)
297,908
66,093
231,815
186,664
Net assets attributable to minority interest as at 31 Dec 2023
6,387
Presented below is the summarised statement of comprehensive income of the Group companies with significant non-controlling interest for 2024 and 2023.
(All amounts are in EUR thousands unless otherwise stated)
Company name
Year
Revenue
Profit before income tax
Income tax (expense) benefit
Total comprehensive income
Comprehensive income attributable to non-controlling interest
Dividends paid to non-controlling interest
Litgrid
As at 31 December 2024
378,326
43,127
5,901
49,028
1,224
(731)
As at 31 December 2023
369,838
41,078
7,308
71,706
1,792
-
Amber Grid
As at 31 December 2024
74,584
9,502
(1,196)
8,276
281
(690)
As at 31 December 2023
81,338
13,130
(567)
15,330
524
(413)
Presented below is the summarised statement of cash flows of the Group companies with significant non-controlling interest for 2024 and 2023.
(All amounts are in EUR thousands unless otherwise stated)
Company name
Year
Net cash flows from operating activities
Net cash flows from investing activities
Net cash flows from financing activities
Net increase (decrease) in cash flows
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of year
Litgrid
As at 31 December 2024
126,380
(90,783)
(36,118)
(521)
634
113
As at 31 December 2023
58,388
(51,168)
(7,085)
135
499
634
Amber Grid
As at 31 December 2024
34,601
(4,046)
(30,645)
(90)
121
31
As at 31 December 2023
39,437
(15,567)
(23,770)
100
21
121
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Investments in associates and joint ventures
The Group’s investments in associates and joint ventures in the consolidated financial statements included the following:
(All amounts are in EUR thousands unless otherwise stated)
Company name
Nature of investment
Shareholding (%)
Investment value at the beginning of the period
Fair value of the investment after loss of control
Dividends received
Share of results of associate
Investment value 31/12/2024
As at 31 December 2024
TSO Holding AS
Associate
40
13,989
-
(2,342)
3,825
15,472
GET Baltic, UAB
Associate
34
3,643
-
(563)
480
3,560
Baltic RCC OU
Joint venture
33
45
-
-
54
99
Rheinmetall Defence Lietuva UAB
Associate
24
-
-
-
-
-
Total investments in 2024:
17,677
-
(2,905)
4,359
19,131
As at 31 December 2023
TSO Holding AS
Associate
40
13,915
-
(1,406)
1,480
13,989
GET Baltic, UAB
Associate
34
-
3,348
-
295
3,643
Baltic RCC OU
Joint venture
33
45
-
-
45
Total investments in 2023:
13,960
3,348
(1,406)
1,775
17,677
Below is the summarized statement of comprehensive income of TSO Holding, given the operating results of the Group of Nord Pool Holding AS (shareholding of 34%) in 2024 and 2023. This information represent the management’s estimates made based on the available unaudited financial information of the said companies presented in their reports:
(All amounts are in EUR thousands unless otherwise stated)
2024
2023
Operating results of associate
11,760
4,740
Income tax benefit (expenses)
(2,101)
(998)
Net profit (loss)
9,659
3,742
Other comprehensive income
-
-
Total comprehensive income for the period
9,659
3,742
Comprehensive income attributable to non-controlling interest
3,825
1,480
Balance of comprehensive income attributable to the Group
3,825
1,480
In June 2024, the Group received EUR 2,342 thousand in dividends from TSO Holding AS, by which the value of investment in associate was reduced.
Summarized statement of comprehensive income of GET Baltic for 2024 and for the period in 2023 from the date of loss of control until 31 December 2023:
(All amounts are in EUR thousands unless otherwise stated)
2024
2023
Revenue
1,918
1,111
Profit before income tax
1,676
1,027
Income tax benefit (expenses)
(264)
(159)
Net profit (loss)
1,412
868
Other comprehensive income
-
-
Total comprehensive income for the period
1,412
868
Comprehensive income attributable to non-controlling interest
480
295
EPSO-G MANAGMENT REPORT FOR 2024
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Summarized statement of financial position of TSO Holding:
(All amounts are in EUR thousands unless otherwise stated)
As at 31 December 2024
As at 31 December 2023
Non-current assets
1,872
1,037
Current assets
695,509
3 740 910
Total assets:
698,380
3 741 947
Non-current liabilities
701
203
Current liabilities
683,437
3 728 663
Total liabilities:
684,137
3 728 866
Net assets
14,243
13,081
Group’s share, %
39.6%
39.6%
Group’s share of net assets
5,640
5,180
Group’s share of goodwill
9,832
8,809
Carrying amount of investments in associate
15,472
13,989
Summarized statement of financial position of GET Baltic:
(All amounts are in EUR thousands unless otherwise stated)
As at 31 December 2024
As at 31 December 2023
Non-current assets
165
353
Current assets
53,343
74,900
Total assets:
53,508
75,253
Non-current liabilities
43
36
Current liabilities
51,414
72,920
Total liabilities:
51,457
72,956
Net assets
2,051
2,297
Group’s share, %
34%
34%
Group’s share of net assets
697
781
Group’s share of goodwill
2,863
2,862
Carrying amount of investments in associate
3,560
3,643
9.Loss of control of a subsidiary and derivatives
The Group lost control of GET Baltic following the completion of the 67% share sale transaction on 31 May 2023. The remaining portion of the investment in GET Baltic (34% of the shares) after the loss of control is recognised as an investment in an associate, which is accounted for using the equity method and measured at fair value at the time of loss of control. The fair value of the remaining shareholding in GET Baltic was calculated using the share price of the sale transaction, as the strategic partner EEX has a commitment to purchase the remaining shareholding in GET Baltic over a four-year period, on similar terms and conditions, upon fulfilment of the obligations set out in the share purchase and sale contract.
Effect of loss of control on the items of the statement of comprehensive income:
(All amounts are in EUR thousands unless otherwise stated)
2023
Consideration received on disposal of control in subsidiary, cash
6,500
Recognition of the investment in associate at fair value (34%) of the investment
3,345
Fair value of the loss of control transaction
9,848
Net assets of subsidiary
(1,429)
Gain on loss of control and revaluation of associates
8,416
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Main categories of assets and liabilities over which the control was lost at the moment of loss of control:
(All amounts are in EUR thousands unless otherwise stated)
As at 31 May 2023
Non-current assets
498
Current assets
41,791
Total assets:
42,289
Non-current liabilities
48
Current liabilities
40,812
Total liabilities:
40,860
Net assets
1,429
Associate GET Baltic’s share options
On 31 May 2023, the Group issued a put option enabling the Group to sell the remaining 34% shareholding in GET Baltic at a fixed price in the period of 48 months after the loss of control. Under the same option agreement, the strategic partner issued a call option for purchase the remaining shares of GET Baltic at a fixed price, subject to the fulfilment of the obligations set out in the shareholder’s agreement, within 36 months of the date of the issue of put option. In Group management’s assessment, these options meet the definition of derivatives. The put option, given the maximum 48-month option expiration term, creates a non-current financial asset for the Group that is measured at fair value. The investor’s call option creates a financial liability for the Group that can be exercised at any time after the investor has fulfilled its obligations. Based on the management’s estimates, the expected exercise period of the call option is 42 months from the put option date. As the Group does not have an irrevocable right to defer the call option, the liability is recognised as a current liability and measured at fair value.
The Group’s derivatives are reported under the following items of the statement of financial position:
(All amounts are in EUR thousands unless otherwise stated)
As at 31 December 2024
As at 31 December 2023
Other non-current financial assets (put option of GET Baltic)
1,153
166
Other current payables (Call option of GET Baltic)
654
166
At initial recognition on 31 May 2023, the fair value of the put option per share amounted to EUR 0.19, and the 34% shareholding to EUR 202 thousand. The following provides information on the fair value of derivatives:
(All amounts are in EUR thousands unless otherwise stated)
Subscription date
Maturity
Exercise price
Fair value of option
Share option
As at 31 May 2024
As at 31 December 2023
Put option
As at 31 May 2023
As at 31 May 2027
4.07
1,153
166
Call option
As at 31 May 2023
As at 31 December 2026
3.97
654
166
The fair value was determined based on the most likely option exercise period estimated by the management.
Information on the changes in fair value of derivatives:
All amounts are in EUR thousands unless otherwise stated
AS at 31 December 2024
AS at 31 December 2023
Non-current assets
-
-
Carrying amount at the beginning of the period
166
-
Initial recognition
-
166
Change in fair value
987
-
Carrying amount at the end of the period
1,153
166
AS at 31 December 2024
AS at 31 December 2023
Current liabilities
-
-
Carrying amount at the beginning of the period
166
-
Initial recognition
-
166
Change in fair value
488
-
Carrying amount at the end of the period
654
166
Below are the assumptions and estimates used to measure fair values of financial instruments. The Black-Scholes model was used to estimate an option's fair value. The assumptions used in estimating the option’s fair value were as follows:
Put option
Call option
Current share price (EUR)
4.09
4.09
Transaction price (EUR)
4.07
3.97
Maturity (years)
2.417
2
Dividend yield (%)
8.07
8.07
Share price volatility (%)
38.4
38.4
Risk-free interest rate (%)
2.3
2.3
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The current share price was determined under the income approach, using the discounted cash flows calculation method. Sensitivity of the put option’s fair value to changes in key assumptions, the impact is presented for a 34% shareholding:
Share price volatility (%)
34.56%
38.40%
42.24%
Current share value
Change
-10.00%
0.00%
10.00%
EUR 3.68
-10.00%
145 thousand EUR
218 thousand EUR
291 thousand EUR
EUR 4.09
0.00%
(83) thousand EUR
0 thousand EUR
83 thousand EUR
EUR 4.5
10.00%
(270) thousand EUR
(187) thousand EUR
(93) thousand EUR
Sensitivity of the call option’s fair value to changes in key assumptions, the impact is presented for a 34% shareholding:
Share price volatility (%)
34.56%
38.40%
42.24%
Current share value
Change
-10.00%
0.00%
10.00%
EUR 3.68
-10.00%
(280) thousand EUR
(208) thousand EUR
(135) thousand EUR
EUR 4.09
0.00%
(73) thousand EUR
0 thousand EUR
83 thousand EUR
EUR 4.5
10.00%
166 thousand EUR
249 thousand EUR
332 thousand EUR
Associate RDL’s share options
The Group’s subsidiary, EPSO-G Invest UAB, along with its co-shareholders - Giraitės Ginkluotės Gamykla, AB and Rheinmetall Waffe Munition, GmbH - has entered into an agreement to establish a joint business arrangement, Rheinmetall Defence Lietuva, UAB. Simultaneously, they have agreed to certain rights and obligations to acquire or sell each other’s shares in Rheinmetall Defence Lietuva UAB, subject to various trigger events. These certain rights and obligations involve multiple underlying factors, that are specific to the parties of the contract, including, financial variables (changes in equity value and fair value) and non-financial variables (transaction-specific factors, such as various triggering events, e.g. breach of material obligations, liquidation or bankruptcy, completion of construction work, proposal of the management board to finance the company, termination of certain agreements). When such type of instruments have more than one underlying variable, with one underlying being a non-financial variable specific to one of the parties, then judgement is required in determining whether the instrument is a derivative. Since all rights and obligations to acquire or sell shares in Rheinmetall Defence Lithuania, UAB are specific to the parties of the contract and rely heavily on non-financial variables in contrast to financial variables, the Management of the Group concluded that those rights and obligations do not meet the definition of the derivative contracts under IFRS 9 and IAS 32 and shall not be recognised and accounted for as such.
10.Inventories
(All amounts are in EUR thousands unless otherwise stated)
Group
As at 31 December 2024
As at 31 December 2023
Materials, inventories
4,072
4,364
Natural gas
3,908
4,339
Less: write-down allowance
(1,038)
(1,147)
Carrying amount
6,942
7,556
Inventories recognised as expenses during the reporting period amounted to EUR 36,304 thousand as at 31 December 2024 (31 December 2023: EUR 38,546 thousand).
Movements in write-down allowance for inventories in 2024 and 2023 are indicated below:
(All amounts are in EUR thousands unless otherwise stated)
Group
As at 31 December 2024
As at 31 December 2023
Carrying amount as at 1 January
1,147
810
Change in write-down allowance
(109)
337
Carrying amount as at 31 December
1,038
1,147
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11.Prepayments and contract assets
(All amounts are in EUR thousands unless otherwise stated)
Group
As at 31
December 2024
As at 31
December 2023
Prepayments
542
758
Deferred expenses
2,980
2,783
Contract assets
2,330
2,607
Accrued revenue from contract works
1,110
930
Accrued revenue from natural gas transmission and related services
1,220
1,677
Carrying amount
5,852
6,148
12.Trade receivables
Trade receivables comprised:
(All amounts are in EUR thousands unless otherwise stated)
Group
Company
I.       Trade receivables under contracts with customers
As at 31
December 2024
As at 31
December 2023
As at 31
December 2024
As at 31
December 2023
I.1 Trade receivables after one year
10
10
-
-
Less: expected credit losses of non-current receivables
-
-
-
-
Net book amount of non-current receivables:
10
10
-
-
I.2 Current trade receivables
Receivables for electricity transmission and related services
48,901
19,058
-
-
Receivables for transmission and transit of natural gas
9,783
9,038
-
-
Receivables for contract works and other services
5,796
5,195
549
383
Less: expected credit losses of trade receivables
(573)
(249)
-
-
Net book amount of trade receivables under contracts with customers
63,907
33,042
549
383
II.     Trade receivables under other contracts:
Accrued receivables for the services related to electricity transmission
81
8,002
-
-
Congestion management revenue receivable
1,053
770
-
-
Other trade receivables
65
74
-
-
Less: expected credit losses of other trade receivables
-
-
-
-
Net book amount of trade receivables under other contracts:
1,199
8,846
-
-
Total current and non-current trade receivables:
65,116
41,898
549
383
Current trade receivables/Expected credit losses of trade receivables
Trade receivables under other contracts comprised congestion revenue funds receivable, receivables from ITC fund, natural gas imbalance and lease of assets. The fair value of trade receivables under contracts with customers approximates their carrying amount. In 2024, the Group accounted for expected credit losses of EUR 349 thousand with regard to late payments.
As at 31 December 2024, receivables for electricity transmission and related services, compared to 31 December 2023, increased by EUR 29.3 million, because the price of ancillary (system) services in 2024 was 5.1 times higher than in 2023, and the transmission service price was higher 2 times.
Accrued receivables for the services related to electricity transmission consist substantially of the accrued receivables under the Inter-TSO Compensation (ITC) mechanism, which increased due to the significantly higher prices for electricity to compensate for technological losses approved by NERC in 2023.
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The Company assessed whether credit risk of debtors, specificallyGroup companies, has increased significantly and did not identify any indications that the credit risk of debtors increased. Therefore, the Company did not recognise any expected credit losses for trade receivables.
The Group applies a simplified credit risk assessment approach as required by IFRS 9 and accounts for loss allowances for lifetime credit losses from initial recognition of receivables. To determine credit losses of receivables, the Group applies the individual assessment and a loss coefficient matrix. The loss ratio matrix is based on historical data for a period exceeding 36 months on settlements of debts by customers. The loss ratios may be adjusted in view of macroeconomic forecasts. The loss ratios are classified into separate groups of receivables on the basis of credit risk characteristics and overdue period.
(All amounts are in EUR thousands unless otherwise stated)
Not past due
Past due
Total
Trade receivables
1-30 days
31-90 days
91-180 days
181 and more days
As at 31 December 2024
Current portion of trade receivables, of which:
63,917
511
389
374
488
65,679
State-owned companies
34,940
-
-
-
-
34,940
Expected credit losses, %
0%
0%
0%
0%
0%
0%
Other customers
28,977
511
389
374
488
30,739
Trade receivables assessed individually
23,571
-
-
-
486
24,057
Loss allowance
15
-
-
-
486
501
Trade receivables assessed collectively
5,406
511
389
374
2
6,682
Expected credit losses, %
0%
4%
6%
7%
100%
Impairment
-
20
23
27
2
72
Total expected credit losses
-
20
23
27
488
573
As at 31 December 2023
Current portion of trade receivables, of which:
40,370
1,000
191
575
1
42,137
State-owned companies
32,041
-
-
-
-
32,041
Expected credit losses, %
0%
0%
0%
0%
0%
0%
Other customers
8,255
1,000
191
575
1
10,021
Trade receivables assessed individually
7,950
956
140
575
-
9,622
Loss allowance
-
-
8
240
-
248
Trade receivables assessed collectively
379
44
51
-
-
474
Expected credit losses, %
0%
14%
2%
15%
100%
-
Loss allowance
-
1
-
-
-
1
Total expected credit losses
-
1
8
240
-
249
Movements in impairment recognised for the Group’s trade receivables during the year 2024 and 2023 were as follows:
(All amounts are in EUR thousands unless otherwise stated)
2024
2023
Carrying amount as at 1 January
249
17
Additional impairment
363
232
Reversal of impairment
(39)
-
Carrying amount as at 31 December
573
249
13.Other receivables
(All amounts are in EUR thousands unless otherwise stated)
Group
Company
As at 31
December 2024
As at 31
December 2023
As at 31
December 2024
As at 31
December 2023
Non-financial assets
Administered PSO funds receivable
26,627
33,429
-
-
Administered LNG terminal funds receivable
11,626
9,377
-
-
VAT receivable from the state budget
538
1,050
-
-
Grants receivable
30,287
52,199
-
-
Other receivables
842
23
-
-
Less: expected credit losses of other receivables
-
(23)
-
-
Total non-financial assets
69,920
96,055
-
-
Financial assets
Loans to subsidiaries
-
-
32,584
44,889
Other receivables
167
2,588
594
1,336
Total financial assets
167
2,588
33,178
46,225
Carrying amount
70,087
98,643
33,178
46,225
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The fair value of other receivables approximates their carrying amount.
One major part of the Group’s other receivables and receivables past due consisted of PSO and LNG terminal funds receivable. The Group is not exposed to credit risk in collecting PSO and LNG terminal funds as its acts as an administering entity, therefore expected credit losses are not formed for these past due amounts.
The line item of grants receivable includes grants receivable from the EU structural funds for the projects being implemented by the Group. The main amount of receivable grants as at 31 December 2024 consisted of the grant receivable under the instrument Connecting Europe Facility (CEF) for the compensation of expenses incurred in the synchronisation projects.
To determine credit losses of receivables, other than PSO and LNG funds, the Group applies the individual assessment Grants receivable are controlled by the EU and Lithuanian public authorities, therefore they are considered to be of very low credit risk.
As at 31 December 2024, the parent company assessed and did not identify any indications that credit risk of the subsidiaries, i.e. recipients of non-current and current loans, could be increased. Consequently, lifetime ECL were not recognised for current borrowings.
14.Other financial assets
(All amounts are in EUR thousands unless otherwise stated)
Group
Company
As at 31
December 2024
As at 31
December 2023
As at 31
December 2024
As at 31
December 2023
Administered LNG terminal funds
3
-
-
-
Funds deposited for guarantees and deposits
14,741
15,898
-
-
Term deposits and short-term investments
140,815
-
135,000
-
Carrying amount
155,559
15,898
135,000
-
As at 31 December 2024, the Group had 3 term deposits at Lithuanian banks for the amount of EUR 95,815 thousand, the Company had had 2 term deposits at banks which amounted to EUR 90,000 thousand), with maturity more than 90 days (from 120 days to 210 days). Annual interest rate was from 2.88% to % 3.3% for agreements signed. Additionally, the Group and the Company had the EUR 45,000 thousand investments in the debt securities of European governments with maturity more than 90 days (from 91 days to 360 days). In 2024 the Group earned EUR 1,460 thousand interest income from term deposits and short-term investments, the Company – EUR 1,409 thousand. The Group and the Company made these investments with the aim of optimizing return on excess cash balances, taking into account projected need for cash and liquidity forecasts.
The Group holds its deposits for guarantees, security deposits and term deposits with banking institutions, whose long-term obligations are rated by Moody’s or Standard & Poors as investment-grade: Standard & Poors (A+ or AA-), and Moody’s (Aa3). Short-term investments in EU government securities (bonds) are made through the investment-grade banking institutions mentioned above. Consequently, ECLs were not recognised for other financial assets.
15.Cash and cash equivalents
(All amounts are in EUR thousands unless otherwise stated)
Group
Company
As at 31
December 2024
As at 31
December 2023
As at 31
December 2024
As at 31
December 2023
Cash at bank
101,562
123,236
98,791
120,015
Carrying amount
101,562
123,236
98,791
120,015
As at 31 December 2024 and 2023, cash and cash equivalents comprised cash in banks. For bank credit ratings disclosed refer to Note 36.
The fair values of cash and cash equivalents as at 31 December 2024 and 2023 approximated their carrying amounts. The Group and the Company has no pledged current and future cash inflows
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16.Issued capital
As at 31 December 2024 and 2023, the issued capital of the Company amounted to EUR 189,631 thousand and was divided into 653,900,000 ordinary registered shares with the nominal value of EUR 0.29 each. All the shares as at 31 December 2024 and 2023 were fully paid.
Capital management
Capital consists of equity recorded in the statement of financial position. According to the Law on Companies of the Republic of Lithuania, the equity of the Company must account for at least ½ of the amount of the authorised share capital. As at 31 December 2024 and 31 December 2023, the Company and all companies of the Group complied with this requirement.
The Company’s and the Group’s main objective when managing capital is to maintain an optimal capital structure in order to ensure ability to continue as a going concern, minimisation of the cost of capital and risk. The structure of the capital of the Group companies is formed taking into consideration demand for operating activities, planned investments and development.
The Company’s Board approved the dividend policy, which sets uniform principles for the payment of dividends for all companies of the Group to ensure sustainable growth of the value of the business of the Group and its companies, long-term benefit to the shareholders, achievement of long-term and short-term objectives. The dividend policy is one of the capital risk management tools. According to the dividend policy, the allocation of dividends depends on the return on the companies’ equity, availability of financial resources for payment of dividends, implementation of projects important for the State and other circumstances. At least 60% of net profit is allocated for the payment of dividends, depending on the return on equity and other conditions affecting the company’s solvency.
The allocation of the Company’s dividends for 2022-2026 is regulated by Resolution No 208 of the Government of the Republic of Lithuania of 29 March 2023 On the payment of dividends by EPSO-G UAB for the shares held by the State by the right of ownership. Under the provisions of this Resolution, the holders of the Company’s shares can each year allocate 0.5% of profit to be appropriated for the payment of dividends, if EPSO-G UAB implements or participates in the implementation of an economic project of state importance recognised by the decision of the Government of the Republic of Lithuania, or implements a project of state importance recognised by the decision of the Parliament of the Republic of Lithuania, or if, after the payment of a dividends, the liabilities referred to in the decision would exceed the Group’s consolidated equity capital.
There were no changes in capital management objectives compared to previous years.
17.Revaluation reserve
The revaluation reserve arises from revaluation of property, plant and equipment due to the value increase.
(All amounts are in EUR thousands unless otherwise stated)
Group
Revaluation reserve
Deferred tax
Less: deferred income tax
Balance as at 31 December 2022
329
(52)
277
Depreciation of revaluation reserve
(45)
7
(38)
Revaluation of property, plant and equipment
30,900
(4,634)
26,265
Balance as at 31 December 2023
31,184
(4,679)
26,504
Revaluation of property, plant and equipment
(22)
3
(19)
Depreciation of revaluation reserve
(3,020)
453
(2,566)
Revaluation reserve write - off
(25)
4
(21)
Change in deferred tax tariff
-
(280)
(280)
Balance as at 31 December 2024
28,117
(4,499)
23,618
18.Legal and other reserves
Legal reserve
A legal reserve is a compulsory reserve under the Lithuanian legislation. Annual transfers of not less than 5% of net profit are required until the reserve reaches 10% of the issued capital. The legal reserve can only be used to cover future losses. In 2024, the Company’s legal reserve was increased by EUR 1,241 thousand, and in 2023, by EUR 276 thousand (5% of the net profit of a respective year). As at 31 December 2024, the legal reserve of the Company was not fully formed.
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In 2023, amount of EUR 2,280 thousand from the legal reserve accumulated by Group subsidiaries was used to cover their loss from 2022,. In 2024, Group companies increased their legal reserves by transfers from retained earnings, total amount of EUR 3,699 thousand.
Other reserves
Other reserves are formed based on the decision of the shareholders (i.e. for the purpose of business development) and can be redistributed on the distribution of the next year’s profit.
The Ordinary General Meeting of Shareholders of EPSO-G held on 30 April 2024 approved the proposed transfer from retained earnings to other reserves for the amount of EUR 28,064 thousand for the purpose of future investments and EUR 500 thousand for charity support.
The Ordinary General Meeting of Shareholders of EPSO-G held on 30 April 2023 approved the proposed profit appropriation and resolved to transfer EUR 165 thousand to be appropriated to reserve for charity support.
In 2024 ordinary General Meetings of Shareholders of Group subsidiaries made decisions to cover previous losses of the subsidiaries by transferring from other reservesamount of EUR 9,957 thousand (in 2023 - EUR 2,135 thousand) to retained earnings.
19.Dividends
As indicated in Note 16, the Company is eligible to allocate 0.5% of profit to be appropriated for the payment of dividends to the holders of its shares for the period 2022-2026 under Resolution No 208 of the Government of the Republic of Lithuania of 29 March 2023 On the payment of dividends by EPSO-G UAB for the shares held by the State by the right of ownership.
On 13 April 2024, the Ordinary General Meeting of Shareholders of EPSO-G UAB approved the distribution of the Company’s profit (loss) for 2023. EUR 196 thousand was allocated to dividends for the year ended 31 December 2023. Dividends per share amounted to EUR 0.0003 .
On 30 April 2023, the Ordinary General Meeting of Shareholders of EPSO-G UAB approved the distribution of the Company’s profit (loss) for 2022. EUR 66 thousand was allocated to dividends for the year ended 31 December 2022. Dividends per share amounted to EUR   0.0001.
Dividends paid by the Group companies to the Group’s non-controlling interest amounted to EUR 1,505 thousand in 2024, and EUR 563 thousand in 2023.
20.Grants
Grants comprise grants for the acquisition of non-current assets and compensation of expenses. Movements in grants in 2024 and 2023 were as follows:
All amounts are in EUR thousands unless otherwise stated
Group
Opening balance
As at 31 December 2024
As at 31 December 2023
Grants receivable (Note 13)
52,199
32,726
Grants received in advance (non-current liabilities) (Note 28)
-
(32,802)
Grants received in advance (current liabilities) (Note 25)
(28,583)
(35,193)
23,616
(35,269)
Recognised grants
Transfer to property, plant and equipment (Note 6)
157,665
157,942
Other movements
(605)
-
Transfer to intangible assets (Note 5)
1,911
2,415
Grants used for compensation of expenses (Note 31)
1,742
315
160,713
160,672
Grants received
Monetary grants (CFS investment activity)
(86,142)
(71,455)
Congestion revenue transferred to grants (Note 26)
(43,498)
(13,457)
Monetary grants for compensation of expenses (CFS main activity)
(1,546)
(131,186)
(84,912)
Grants received in the form of assets
(26,960)
(16,875)
Closing balance
Grants receivable (Note 13)
30,287
52,199
Grants received in advance (non-current liabilities) (Note 28)
(3,469)
-
Grants received in advance (current liabilities) (Note 25)
(635)
(28,583)
26,183
23,616
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21.Borrowings
The Group’s and the Company’s borrowings comprised as follows:
All amounts are in EUR thousands unless otherwise stated
Group
Company
As at 31
December 2024
As at 31
December 2023
As at 31
December 2024
As at 31
December 2023
Non-current borrowings
Bonds issued
74,893
74,849
74,893
74,849
Bank borrowings
77,312
89,105
-
-
Current borrowings
Current portion of non-current borrowings
11,792
11,792
-
-
Interests accrued
1,633
2,166
1,327
1,327
Current borrowing from the Group companies
-
-
291,156
214,806
Overdraft
-
17,981
-
17,981
Total borrowings
165,630
195,893
367,376
308,963
Non-current borrowings by maturity:
All amounts are in EUR thousands unless otherwise stated
Group
Company
As at 31
December 2024
As at 31
December 2023
As at 31
December 2024
As at 31
December 2023
Between 1 and 2 years
9,649
11,792
-
-
Between 2 and 5 years
103,841
103,797
74,893
74,849
More than 5 years
38,715
48,365
-
-
Total
152,205
163,954
74,893
74,849
On 1 June 2022, the Company placed a EUR 75 million five years’ duration sustainability-linked bond issue. The bonds pay an annual coupon of 3.117%. During 2024, expenses related to interest on the bonds issued amounted to EUR 2,338 thousand (during 2023 – EUR 2,338 thousand).
As at 31 December 2024, the Group had long-term borrowings from Nordic Investment Bank and European Investment Bank, the balance of borrowings less current portion, amounted to EUR 77,312 thousand (31 December 2023 – EUR 89,105 thousand).  As at 31 December 2024, EUR 59,623 thousand (31 December 2023 – EUR 68,717 thousand) of borrowings is subject to a fixed interest rate and EUR 17,689 thousand (31 December 2023 – EUR 20,388 thousand) is subject to a variable interest rate. The interest rate is linked to variable 3 months and 6-month EURIBOR.
Borrowings received by the Company from the subsidiaries under the cash pool agreements amounted to EUR 291,156 thousand as at 31 December 2024 (31 December 2023 – EUR 214,806 thousand).
The interest rate of Borrowings from the Group companies was linked to variable 3-month EURIBOR.
As at 31 December 2024 and 2023, did not have assets pledged under the loan agreements.
The loan agreements of the Group companies include financial and non-financial covenants that the individual Group companies and the Group as a whole are obliged to comply with. As at 31 December 2024 and 2023, the contractual obligations were met.
The Group companies did not have any loans secured by the State guarantee.
22.Lease liabilities
The Group’s and the Company’s lease liabilities and their movements:
Group
Company
As at 31 December
2024
As at 31 December
2023
As at 31 December
2024
As at 31 December
2023
Carrying amount at the beginning of the period
10,881
11,360
701
237
Concluded lease contracts
2,669
1,254
-
629
Terminated lease contracts
-
(76)
-
(74)
Interest charged
284
154
19
6
Lease payments (principal amount)
(2,258)
(1,840)
(150)
(109)
Interests paid
(284)
(154)
(19)
(6)
Indexation
593
183
-
18
Reclassification to disposal group
-
-
-
-
Carrying amount at the end of the period
11,885
10,881
551
701
Non-current lease liabilities
9,579
9,282
397
552
Current lease payments
2,306
1,599
154
149
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Future lease payments under non-cancellable lease contracts are as follows:
Group
Company
As at 31 December
2024
As at 31 December
2023
As at 31 December
2024
As at 31 December
2023
Total lease liabilities:
11,885
10,880
551
701
Current portion
2,306
1,599
154
149
Maturity terms of non-current liabilities:
9,579
9,281
397
552
Between 1 and 2 years
1919
1212
150
154
Between 2 and 3 years
833
961
132
150
Between 3 and 5 years
692
742
115
247
Over 5 year
6,135
6,366
0
0
The Group’s interest calculated on lease liabilities and included in finance costs amounted to EUR 232 thousand during twelve months period ended at 31 December 2024.
23.Net debt
Reconciliation of net debt balances and cash flows from financing activities as at 31 December 2024 and 2023:
All amounts are in EUR thousands unless otherwise stated
Cash
Borrowings
Lease liabilities
Total
Group
Other liquid assets
Net debt at 31 December 2022
248,096
-
(208,174)
(11,361)
28,561
Acquisition (proceeds from borrowings, new leases)
-
-
-
(1 254)
(1 254)
Lease indexation
-
-
-
(183)
(183)
Increase (decrease) in cash and cash equivalents
(124,860)
-
-
-
(124,860)
Change in overdraft
-
-
(17,981)
-
(17,981)
Repayment of borrowings
-
-
30,878
-
30,878
Terminated lease contracts
-
-
-
76
76
Lease payments
-
-
-
1,841
1,841
Other changes
Interest charged
-
-
(6 094)
(150)
(6,244)
Interest paid
-
-
5,478
150
5,628
Net debt at 31 December 2023
123,236
-
(195 893)
(10,881)
(83,538)
Acquisition (proceeds from borrowings, new leases)
-
-
(2,669)
(2,669)
Lease indexation
-
-
-
(593)
(593)
Increase (decrease) in cash and cash equivalents
(21,674)
-
-
-
(21,674)
Acquisition of other liquid assets
-
680,802
-
-
680,802
Disposal of other liquid assets
-
(539,987)
-
-
(539,987)
Other changes
-
Interest charged
-
1,169
-
-
1,169
Interest received
-
(1,169)
-
-
(1,169)
Change in overdraft
-
-
17,981
-
17,981
Repayment of borrowings
-
-
12,061
-
12,061
Lease payments
-
-
-
2,258
2,258
Other changes
Interest charged
-
-
(4,844)
(284)
(5,128)
Interest paid
-
-
5,065
284
5,349
Net debt at 31 December 2024
101,562
140,815
(165,630)
(11,885)
64,862
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(All amounts are in EUR thousands unless otherwise stated)
Cash
Borrowings
Lease liabilities
Total
Company
Other liquid assets
Net debt at 31 December 2022
244,310
-
(407,693)
(236)
(163,619)
Repaid borrowings from the Group companies
-
-
117,420
-
117,420
Proceeds from new leases
-
-
-
(629)
(629)
Increase in cash and cash equivalents
(124,295)
-
-
-
(124,295)
Change in overdraft
-
-
(17,981)
-
(17,981)
Lease payments
-
-
-
109
109
Indexation
-
-
-
(19)
(19)
Amortisation of bond liability
-
-
43
-
43
Terminated lease contracts
-
-
-
74
74
Interest charged (included in expenses and capitalisation)
-
-
(9 588)
(6)
(9,594)
Interest paid
-
-
8,836
6
8,842
Net debt at 31 December 2023
120,015
-
(308,963)
(701)
(189,649)
Acquisition proceeds from borrowings from the Group companies
-
-
(76,427)
-
(76,427)
(Decrease) in cash and cash equivalents
(21,224)
-
-
-
(21,224)
Acquisition of other liquid assets
674,987
-
-
674,987
Disposal of other liquid assets
(539,987)
-
-
(539,987)
Other changes
-
Interest charged
-
1,059
-
-
1,059
Interest received
-
(1,059)
-
-
(1,059)
Lease payments
-
-
-
150
150
Amortisation of bond liability
-
-
44
-
44
Change in overdraft
-
-
17,981
-
17,981
Interest charged (included in expenses and capitalisation)
-
-
(9,699)
(19)
(9,718)
Interest paid
-
-
9,688
19
9,707
Net debt at 31 December 2024
98,791
135,000
(367,376)
(551)
(134,136)
* According to the assessment of the Group‘s and the Company's management, when analyzing the level of net debt for management purposes, calculating this indicator, financial debts are reduced not only by cash and cash equivalents, but also by other liquid asset balances (Note 14), which consist of highly liquid and low-risk instruments, i.e. deposits over 90 days or government securities of high credit rating countries with a maturity of up to 360 days. The composition of the components used in calculating the indicator was selected taking into account the fact that the conversion of these financial instruments into cash can be realized in a very short time and without incurring any or insignificant financial losses.
24.Trade payables
Group
Company
As at 31
December 2024
As at 31
December 2023
As at 31
December 2024
As at 31
December 2023
Payables for electricity
45,522
26,684
-
-
Payables for natural gas
1,513
-
-
-
Payables in performing natural gas balancing
2,253
2,415
Payables for property, plant and equipment
50,757
29,530
Payables for repairs, services
17,359
9,416
-
-
Other trade payables
2,073
296
203
153
Carrying amount
119,477
68,341
203
153
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The fair value of trade payables approximates their carrying amounts.
As at 31 December 2024, debts for electricity were by 71% higher than as at 31 December 2023 due to electricity exchange price changes. As at 31 December 2024, the debt for property, plant and equipment increased by 65% due to the larger-scale investments under the project for synchronisation with the Continental European Network.
25. Prepayments received
All amounts are in EUR thousands unless otherwise stated
Group
As at 31 December 2024
As at 31 December 2023
Financial liabilities
Security deposits received
13,504
14,343
Other prepayments received
423
1,269
Total financial liabilities:
13,927
15,612
Non-financial liabilities
Grants received in advance
635
28,583
Prepayments received from new consumers
874
217
Total non-financial liabilities:
1,509
28,800
Total prepayments:
15,436
44,412
26.Congestion management funds liabilities
(All amounts are in EUR thousands unless otherwise stated)
2024
2023
Congestion management funds liabilities as at 1 January
301,074
351,495
Congestion management funds received during the period*
134,856
108,527
Used to finance property, plant and equipment
(43,498)
(13,457)
Congestion management funds recognised as income during the period
(2,314)
(145,491)
Congestion management funds liabilities as at 31 December
390,118
301,074
Non-current portion of congestion management funds liabilities
308,802
264,173
Current portion of congestion management funds liabilities
81,316
36,901
The principles of the receipt and use of congestion management funds are set out in Note 2.14. A revenue balance unused according to the purposes set out in Regulation (EC) No 714/2009 of the European Parliament and of the Council amounted to EUR 390,118 thousand as at 31 December 2024, and EUR 301,074 thousand as at 31 December 2023.
Congestion management funds received in 2024 were recorded in the cash flows from investment activities, as they were intended to finance the investments. Congestion management funds received in 2023 were recorded in the cash flows from operating activities, as they were intended to compensate for the loss of operating income due to the reduction of the transmission tariff (EUR 142,300 thousand was utilised).
The current portion of liabilities is expected to be settled (used) within 12 months.
27.Provisions
(All amounts are in EUR thousands unless otherwise stated)
Group
As at 31
December 2024
As at 31
December 2023
Provisions for pension benefits to employees
1,655
1,341
Provisions for servitude liabilities
45
419
Provisions for registration of protection zones
369
532
Provisions for litigations/claims
14,853
11,054
Provisions for warranties
1,252
1,242
Other provisions
250
150
Carrying amount
18,424
14,738
Non-current provisions
2,836
2,528
Current provisions
15,588
12,210
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Description of the Group’s provisions and the expected timing of realisation of economic benefit:
All amounts are in EUR thousands unless otherwise stated
Provisions for pension benefits
Provisions for servitude compensations
Provisions for registration of protection zones
Provision for warranties
Provisions for litigations
Other provisions
Total
Carrying amount at 31 December 2022
1,446
468
1,391
1,291
100
161
4,857
Calculated
36
-
176
-
11,054
107
11,373
Revised estimate
(141)
201
(264)
6
-
-
(198)
Payments made
-
(250)
(771)
(55)
(100)
(118)
(1,294)
Carrying amount at 31 December 2023
1,341
419
532
1,242
11,054
150
14,738
Calculated
19
-
-
-
5,815
110
5,944
Revised estimate
295
(287)
(152)
10
-
-
(134)
Payments made
-
(87)
(11)
-
(1,358)
(10)
(1,466)
Reclassification of trade debts
-
-
-
-
(658)
-
(658)
Carrying amount at 31 December 2024
1,655
45
369
1,252
14,853
250
18,424
Provisions for litigations
In prior periods, a contract for the purchase of contract work was executed under which the Group’s operator of the battery energy storage system (BESS), in line with the provisions of the purchase contract, charged EUR 9,696,873 thousand of default interest to the seller. The total amount of default interest and the consideration under contract for work were disputed and the contractor brought a claim before the court in August 2024, which is currently pending. Due to the uncertainty of the surrounding the situation (uncertain amount and timing), the Group recognised the provision until the outcome of the dispute is certain. The details of this dispute are withheld on the grounds that their disclosure could prejudice the position of the BESS operator in the context of a dispute with a contractor over a deferral, contingent liability or contingent asset. Furthermore, the court has recognized the case and is refraining from releasing its materials to the public.
As at 31 December 2024, the natural gas transmission system operator recognised the provision of EUR 5.815 thousand for a provision for potential repayments of funds received under guarantee. The funds are planned to be used for the potential replacement of the Lithuanian-Polish gas pipeline interconnectors. For more details refer to Note 38.
Provisions for pension benefits
Each employee of retirement age who terminates his/her employment with the Group upon retirement is entitled to receive a payment equal to 2-4 monthly salaries as stipulated in the Lithuanian laws and the Collective Agreement. The term of the non-current provision is calculated for each employee using actuarial assumptions: age of the employee, probability of death, employee turnover rate, discount rate (31 December 2024: 0.96%; 31 December 2023: 1.24%), long-term salary growth rate (31 December 2024: 2.8%; 31 December 2023: 3%).
Provisions for servitude compensations and registration of protected zones
Expenses related to provisions for servitudes are recognised as non-current intangible assets taking into consideration the amounts of compensation. Compensation payments to land owners are accounted for as a decrease in provisions, while remeasurement of provisions due to changes in underlying assumptions is recorded as a change in respective intangible asset (Note 5). In 2024, the Group adjusted the provision for servitude compensations by reducing it by EUR 287 thousand, taking into account the statistics on payment requests: the estimated number of applications to be received – 236, average compensation amount per application EUR 212 (2023: reduced by EUR 201 thousand, the estimated number of applications to be received – 1,813, average compensation amount per application EUR 213).
Expenses related to provisions for registration of protection zones are recognised as non-current intangible assets taking into consideration the amounts of compensation. Payments related to registration of protection zones are recorded as decreases of provision, while remeasurement of provision due to changes in underlying assumptions is recorded as change in respective intangible asset (Note 5). In 2024, the Group adjusted the provision for registration of protected zones by reducing it by EUR 152 thousand (in
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2023, the Group recognised a new EUR 176 thousand provision of protection zones for the protection of electronic communications infrastructure, but reduced it by EUR 264 thousand due to changes in assumptions).
As at 31 December 2024, the provisions for servitude compensations and registration of protected zones were calculated using a discount rate of 2.09%, and, as at 31 December 2023, a discount rate of 1.74%.
Provisions for warranties
In the Group, provisions for warranties are established for ongoing contract works on energy projects, given the nature of the services performed, and are calculated as a 30% portion of the value of works accepted and performed by the client. In 2024, the provisions for warranties were reviewed under the standard Group’s procedure applicable to collective project assessment, however, there were no material changes in the provisioning.
28.Other non-current payables and liabilities
(All amounts are in EUR thousands unless otherwise stated)
Group
As at 31
December 2024
As at 31
December 2023
Non-financial liabilities
Prepayments received for connecting new consumers*
11,005
1,595
Grants received in advance
3,469
-
Contractual obligations under connection agreements
1,841
1,531
Total non-financial liabilities:
16,315
3,126
Financial liabilities
Non-current trade payables
-
285
Total financial liabilities:
-
285
Total other non-current payables and liabilities:
16,315
3,411
* In 2024, the Group electricity transmission system operator’s prepayments received for the connection of new consumers/producers/facilities significantly increased due to one of the largest railway infrastructure modernisation projects in Lithuania implemented by LTG Infra AB.
Contractual obligations under connection agreements comprised new consumers’ funds designated for the connection to the gas transmission system. These obligations will be recognised as income over the operation period of the assets created during the connection. A part of contractual obligations, which will be recognised as income within one year, was recorded in current liabilities from contracts with customers.
29.Current and deferred income tax
Income tax expenses comprised as follows:
(All amounts are in EUR thousands unless otherwise stated)
Group
Company
2024
2023
2024
2023
Income tax benefit for the period
(213)
6,948
-
-
Deferred tax expenses
6,266
(442)
961
(250)
Income tax expenses/(benefit) for the reporting period
6,053
6,506
961
(250)
The movement in deferred tax assets and liabilities prior to offsetting the balances with the same fiscal authority was as follows:
(All amounts are in EUR thousands unless otherwise stated)
Group
Deferred tax assets:
PP&E revaluation (impairment)
Impairment for other assets
Congestion management funds
Differences in depreciation rates
Unused investment relief
Accumulated tax loss
Other
Total
As at 31 December 2022
3,623
187
2,378
633
2,192
8,796
1,525
19,334
Recognised in profit or loss
3,829
164
(58)
(566)
1,421
(6,463)
440
(1,233)
As at 31 December 2023
7,452
351
2,320
67
3,613
2,333
1,965
18,101
Recognised in profit or loss
(1,424)
12
139
1,779
6,251
(1,926)
971
5,802
As at 31 December 2024
6,028
363
2,459
1,846
9,864
407
2,936
23,903
Deferred tax liabilities
Revaluation of PP&E (increase in value)
Tax relief on acquisition of PP&E
Other
Total
As at 31 December 2022
(46)
(1,374)
(877)
(2,297)
Recognised in profit or loss
9
247
799
1,055
Recognised in other comprehensive income
(4,754)
-
-
(4,754)
As at 31 December 2023
(4,791)
(1,127)
(78)
(5,996)
Recognised in profit or loss
450
29
(60)
419
Recognised in other comprehensive income
(284)
-
-
(284)
As at 31 December 2024
(4,625)
(1,098)
(138)
(5,861)
Deferred tax assets, net, as at 31 December 2023
12,105
Deferred tax assets, net, as at 31 December 2024
18,042
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The maturity analysis of deferred tax assets and liabilities over time is as follows:
(All amounts are in EUR thousands unless otherwise stated)
Group
As at 31
December 2024
As at 31
December 2023
Deferred tax assets:
Deferred tax assets to be realised after more than 12 months
14,600
12,105
Deferred tax assets to be realised within 12 months
9,303
5,996
Total:
23,903
18,101
Deferred tax liabilities to be settled after more than 12 months
(5,722)
(5 791)
Deferred tax liabilities to be settled within 12 months
(139)
(205)
Total:
(5,861)
(5 996)
(All amounts are in EUR thousands unless otherwise stated)
Group
Company
As at 31
December 2024
As at 31
December 2023
As at 31
December 2024
As at 31
December 2023
Profit (loss) before taxation
48,834
47,295
43,298
25,079
Income tax calculated at a rate of 15%
7,325
7,094
6,495
3,762
Effect of investment incentive 
(11,586)
(5,961)
-
-
Tax effect of non-taxable income and non-deductible expenses  
(270)
(483)
(7,508)*
(3,762)*
Prior year adjustments
(131)
(7,156)
-
-
Effect of unrecognised tax losses
-
-
52
250
Effect of changes in income tax rate
(1,391)
-
-
-
Income tax expenses/(benefit) in profit or loss
(6,053)
(6,506)
(961)
250
Income tax expenses/(benefit) through other comprehensive income
284
4,754
-
-
* The income tax calculated by the Company in 2024 included income not subject to tax representing dividends received from subsidiaries and associates of EUR 48,286 thousand (2023: EUR 13,357 thousand).
During Year 2024 the prepaid income tax balance from Year 2023 for the amount of EUR 28,916 thousand was settled against other indirect payable taxes.
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30.Other current payables and liabilities
(All amounts are in EUR thousands unless otherwise stated)
Group
Company
As at 31
December 2024
As at 31
December 2023
As at 31
December 2024
As at 31
December 2023
Non-financial liabilities
Administered PSO funds payable
39,393
68,998
-
-
Administered LNG terminal funds payable
10,794
8,906
-
-
Accrued administered LNG terminal funds*
833
471
-
-
Accrued administered Emergency intervention funds*
12,714
12,348
-
-
Employment-related liabilities
4,968
3,986
355
402
Accrued expenses relating to vacation reserve
5,261
4,755
525
297
VAT payable
145
135
-
35
Real estate tax payable
1,489
753
-
-
Total non-financial liabilities:
75,597
100,352
880
734
Financial liabilities
Dividends payable
665
561
-
-
Accrued liabilities for non-current assets (CBCA contribution)*
27,450
27,450
-
-
Accrued other expenses
2,017
1,049
209
190
Other payables
2,710
2,240
-
-
Total financial liabilities:
32,842
31,300
209
190
Derivative liabilities at FVPL
654
166
-
-
Total other current payables and liabilities:
109,093
131,818
1,089
924
In 2024, the balance of PSO funds decreased due to reduced PSO price tarrif.
*Accrued liabilities for non-current assets of EUR 27,450 thousand include the commitment to pay CBCA contribution. In accordance with the cross-border cost allocation principles, as part of GIPL project, the CBCA contribution will be paid to the Polish transmission system operator upon fixing and auditing the value of construction works. As at 31 December 2024, the final amount of the contribution to be paid was not agreed between the Lithuanian natural gas transmission system operator and the Polish transmission system operator, therefore the liability was accounted for based on the management’s best estimate.
31.Revenue
The Group’s revenue included as follows:
(All amounts are in EUR thousands unless otherwise stated)
Group
As at 31
December 2024
As at 31
December 2023
Group’s revenue from contracts with customers
Revenue from electricity transmission and related services
Electricity transmission services
128,973
64,171
Trade in balancing/imbalance electricity
102,653
108,063
Electricity ancillary services
139,069
27,979
Revenue from other sales of electricity and related services
2,764
5,945
Total revenue from electricity transmission and related services:
373,459
206,158
Revenue from natural gas transmission and related services
Natural gas transmission services
61,231
67,376
Revenue from transmission system balancing service
12,879
12,543
Revenue from connection of new customers
76
42
Total revenue from natural gas transmission and related services:
74,186
79,961
Other revenue from contracts with customers
Revenue from construction, repair and technical maintenance services
24,346
25,110
Revenue from trading on the gas exchange and related services
-
880
Revenue from the biofuel exchange, thermal energy auctions, PSO funds administration and other revenue
2,006
1,805
Total other revenue:
26,352
27,795
Total Group’s revenue from contracts with customers:
473,997
313,914
Group’s revenue not attributable to contracts with customers
Congestion revenue used to compensate the electricity transmission tariff*
2,314
142,300
Congestion revenue recognised compensating for the cost incurred
-
3,191
Other services related to electricity
(322)
14,937
Revenue from connection of producers and relocation of electrical installations
14
13
Other income
154
69
Total revenue not attributable to contracts with customers:
2,160
160,510
Total Group revenue:
476,157
474,424
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* The congestion management funds used as income when calculating the electricity transmission tariff in 2023.
Revenue from electricity transmission and related services in twelve months of 2024 compared to twelve months of 2023 increased by 1.8 times as:
The revenue from balancing/imbalance energy sale decreased by 5% due to decrease in the electricity sale price by 41%, although increase the volume of electricity sold increased by 62%;
The revenue from electricity ancillary services sale increased 5 times due to increased ancillary services acquisition component to the transmission service.
Transmission revenue increased 2times due to twice higher transmission services tariff. However, transmission revenues combined with congestion management revenue for compensating transmission tariff, decreased by 37.5%. In the period of 12 month of 2023, EUR 142.3 million of congestion management revenue was used to reduce the tariff.
Imbalance pricing has changed since October 2024, when the Electricity Transmission System Operator (EE TSO) connected to a single European platform for the exchange of balancing energy from frequency restoration reserves with manual activation (MARI). The neutrality component, which is added to (deducted from) the balancing energy reference price, before the connection to MARI, was calculated based on the actual balancing trade data for the reporting month, to socialise the expenses and/or income, which the Baltic EE TSO incurred. After the connection to MARI, the neutrality component is calculated in advance and adjusted for subsequent months using actual data from previous months, which may result in a significant difference between the balancing and imbalance income and expenses during the reporting period.
The Company’s revenue from contracts with customers comprised revenue from the provision of management and professional services, which amounted to EUR 2,315 thousand in 2024 (EUR 1,357 thousand in 2023).
(All amounts are in EUR thousands unless otherwise stated)
Group
2024
2023
Revenue recognised over time
Electricity transmission and related services
375,465
366,599
Natural gas transmission and related services
74,340
80,030
Revenue from performance of construction contracts
6,187
13,623
Revenue from repair and maintenance services
18,159
11,487
Total revenue recognised over time:
474,151
471,739
Revenue recognised at a point in time upon provision of services
Revenue from trading on the exchanges
2,006
2,685
Total revenue recognised at a point in time upon provision of services:
2,006
2,685
Total revenue:
476,157
474,424
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The Group’s other income comprised as follows:
(All amounts are in EUR thousands unless otherwise stated)
Group
As at 31
December 2024
As at 31
December 2023
Revenue grants
1,742
315
Income from lease of assets
757
786
Interest on late payment and default charges
1,115
1,030
Other income
1,117
2,332
Total other revenue:
4,731
4,463
32.Expenses
The Group’s electricity, natural gas and other services purchase expenses comprised the following:
(All amounts are in EUR thousands unless otherwise stated)
Group
2024
2023
Expenses for purchase of electricity services
Expenses for purchase of balancing and imbalance electricity
(107,429)
(108,391)
Expenses for electricity ancillary (system) services
(114,214)
(95,792)
Expenses for electricity technological needs
(37,869)
(38,536)
Expenses for electricity and related services
(5,459)
(6,349)
Total expenses for purchase of electricity services:
(264,971)
(249,068)
Purchase of natural gas services
Purchase for natural gas system balancing service
(13,079)
(12,193)
Purchase for natural gas technological needs
(3,000)
(5,247)
Total expenses for purchase of natural gas services:
(16,079)
(17,440)
Total electricity, natural gas and other services purchases:
(281,050)
(266,508)
Expenses for subcontracting services and raw materials acquisitions
(13,223)
(12,723)
Wages and salaries and related expenses
(All amounts are in EUR thousands unless otherwise stated)
Group
Company
2024
2023
2024
2023
Wages and salaries
54,711
47,869
5,013
4,342
Social insurance contributions expenses
1,033
875
90
78
Total wages and salaries and related expenses:
55,744
48,744
5,103
4,420
(All amounts are in EUR thousands unless otherwise stated)
Group
2024
2023
Other expenses
Taxes and charges
(9,694)
(9,711)
Telecommunications and IT maintenance expenses
(5,835)
(5,431)
Transport expenses
(3,244)
(3,316)
Premise expenses
(1,532)
(1,836)
Business protection expenses
(1,563)
(1,412)
Insurance expenses
(1,718)
(1,405)
Consultation service expenses
(1,710)
(1 426)
Business trip expenses
(1,216)
(1,068)
Personnel development costs
(794)
(783)
Membership fee
(843)
(776)
Expenses of governing bodies
(633)
(561)
Public relations
(532)
(492)
Audit expenses
(328)
(284)
Other expenses
(5,544)
(4,812)
Total other expenses:
(35,186)
(33,313)
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33.Finance expenses, net
All amounts are in EUR thousands unless otherwise stated
Group
Company
2024
2023
2024
2023
Finance income
Interest income
5,334
6,474
7,105
8,001
5,334
6,474
7,105
8,001
Finance costs
Interest on borrowings
(5,084)
(6,230)
(9,546)
(9,453)
Other finance costs
(349)
(18)
(228)
(55)
(5,433)
(6,248)
(9,774)
(9,508)
Total finance costs, net
(99)
226
(2,669)
(1,507)
34.Dividend income
All amounts are in EUR thousands unless otherwise stated
Company
2024
2023
Dividend income from subsidiaries
48,290
11,951
Dividend income from associates
2,342
1,406
Total dividends and income from investing activities
50,632
13,357
35.Related-party transactions
As at 31 December 2024 and 31 December 2023, the Group’s and the Company’s parent was the Republic of Lithuania represented by the Ministry of Energy of the Republic of Lithuania. For the purposes of the related-party disclosure the Republic of Lithuania excludes central and local government authorities. Disclosures comprise transactions and balances on transactions with the shareholder, the subsidiaries (in the Company’s transactions), all state-controlled or significantly influenced companies (the list of such companies is published at https://governance.lt/apie-imones/vvi-sarasas and transactions are disclosed only when the amount of transactions exceeds EUR 100 thousand during a calendar year) and the management and their family members.
Transactions with related parties are carried out under market conditions, in line with the tariffs approved under relevant legal acts or in accordance with the requirements of the Law on Public Procurement.
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The Group’s transactions conducted with the related parties during the twelve-month period of 2024 and balances arising on these transactions as at 31 December 2024 were as follows:
(All amounts are in EUR thousands unless otherwise stated)
Related parties
Purchases of services
Purchase on gas exchange, PSO and LNG funds deducted*
Sales of services
Sale on gas exchange, PSO and LNG funds credited*
Payables for services
Payables for gas, LNG terminal funds and PSO funds*
Receivables for services
Receivables for gas, LNG funds and PSO funds
Ignitis group companies:
Ignitis Grupė AB
-
-
-
-
-
-
-
-
Energijos Skirstymo Operatorius AB
4,057
25,179
259,132
150
29,236
291
3,465
15
Ignitis UAB
11,988
31,797
29,007
7,047
1,337
6,817
3,268
733
Ignitis Gamyba AB
151,979
-
6,676
8,568
1,068
-
28,040
864
Ignitis Grupės Paslaugų Centras UAB
301
-
-
-
33
-
-
-
Ignitis Polska Sp.z.o.o.
-
-
-
-
-
-
-
-
Vilniaus Kogeneracinė Jėgainė UAB
418
-
2,015
-
26
-
148
-
Kauno Kogeneracinė Jėgainė UAB
66
-
317
-
3
9
-
Vėjas LT UAB
97
1
Transporto Valdymas UAB
91
-
-
-
8
-
-
-
Other state-owned companies:
State Enterprise Ignalina Nuclear Power Plant
1,196
-
2
-
121
18
-
KN Energies AB
-
-
-
-
-
3,975
-
-
LTG Infra AB
806
-
60
-
85
4,891
-
Other state-owned enterprises
106
-
321
-
64
-
29
-
Total
171,105
56,976
297,530
15,765
31,982
11,092
39,859
1,612
* Purchases and sales of the gas product of the gas exchange operator, as well as the Group’s PSO and LNG funds deducted are not presented in the Group’s statement of profit or loss, as the Group acts as an agent in respect of these funds when collecting and allocating these funds.
The Group’s transactions conducted with the related parties during the twelve-month period of 2023 and balances arising on these transactions as at 31 December 2023 were as follows:
(All amounts are in EUR thousands unless otherwise stated)
Related parties
Purchases of services
Purchase on gas exchange, PSO and LNG funds deducted*
Sales of services
Sale on gas exchange, PSO and LNG funds credited*
Payables for services
Payables for gas, LNG terminal funds and PSO funds*
Receivables for services
Receivables for gas, LNG funds and PSO funds
Ignitis group companies:
Ignitis Grupė AB
-
-
-
-
-
-
-
-
Energijos Skirstymo Operatorius AB
2,301
79,250
103,582
(13,398)
1,170
8,710
16,280
14
Ignitis UAB
14,926
11,235
42,846
2,796
1,618
4,932
2,440
528
Ignitis Gamyba AB
133,126
-
9,033
3,172
12,886
-
1,102
640
Ignitis Grupės Paslaugų Centras UAB
9
-
285
-
-
-
29
-
Ignitis Polska Sp.z.o.o.
-
-
121
-
-
-
-
-
Vilniaus Kogeneracinė Jėgainė UAB
616
-
592
-
100
-
123
-
Kauno Kogeneracinė Jėgainė UAB
276
-
89
-
36
-
1
-
Transporto Valdymas UAB
456
-
-
-
48
-
-
-
Other state-owned companies:
State Enterprise Ignalina Nuclear Power Plant
-
-
535
(382)
-
41
55
-
KN Energies AB
-
-
-
-
-
3,975
-
-
LTG Infra AB
1
-
296
(160)
75
23
37
-
Other state-owned enterprises
653
-
1,378
-
60
-
69
-
Total
152,364
90,755
158,757
(7,972)
15,993
17,681
20,136
1,182
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* Purchases of the gas product of the gas exchange operator, as well as the Group’s PSO and LNG funds deducted are not presented in the Group’s statement of profit or loss, as the Group acts as an agent in respect of these funds when collecting and allocating these funds.
The Company’s related-party transactions during the twelve-month period of 2024 and the balances thereof as at 31 December 2024 were as follows:
(All amounts are in EUR thousands unless otherwise stated)
Related parties
Payables and accrued expenses
Receivables and accrued revenue
Sales
Dividend income
Loans granted/(received)
Finance income
Finance costs
State-owned companies
Group companies
Litgrid AB
588
210
923
28,521
(265,472)
-
6,182
Amber Grid AB
-
273
759
19,484
23,482
1,084
-
Tetas UAB
-
96
284
-
7,723
447
-
Baltpool UAB
62
36
168
169
(25,096)
-
977
Energy Cells UAB
-
89
302
117
1,379
495
-
Total:
650
704
2,436
48,291
(257,984)
2,026
7,159
The Company’s related-party transactions during the twelve-month period of 2023 and the balances thereof as at 31 December 2023 were as follows:
(All amounts are in EUR thousands unless otherwise stated)
Related parties
Payables and accrued expenses
Receivables and accrued revenue
Sales
Dividend income
Loans granted/(received)
Finance income
Finance costs
State-owned companies
Group companies
Litgrid AB
482
150
505
-
(166,600)
-
4,849
Amber Grid AB
227
349
11,646
25,009
683
-
Tetas UAB
-
295
172
-
4,842
537
-
Baltpool UAB
146
26
101
305
(47,541)
2,069
GET Baltic UAB
-
-
12
-
-
-
-
Energy Cells UAB
-
172
209
-
15,038
815
-
Total:
628
870
1,348
11,951
(169,252)
2,035
6,918
(All amounts are in EUR thousands unless otherwise stated)
Group
Company
Payments to key management personnel
As at 31
December 2024
As at 31
December 2023
As at 31
December 2024
As at 31
December 2023
Employment-related payments
3,981
3,629
929
870
Whereof: termination benefits
211
35
46
30
Number of key management personnel (average)
35
32
7
7
No loans, guarantees or any other benefits were paid or calculated, nor any assets were transferred to the Group’s and the Company’s management personnel in 2024 and 2023.
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Key management personnel consists of the heads of administration and departmental directors. In 2024, payments to the i members of the management bodies amounted to EUR 558 thousand (2023: EUR 518 thousand).
As at 31 December 2024, the accrued vacation reserve attributable to the Company’s management totalled EUR 38 thousand, and the financial incentives amounted to EUR 124 thousand.
36.Financial risk management
The Group and the Company are exposed to financial risks in their operations. In managing these risks, the Group and the Company seek to mitigate the impact of factors which could adversely affect the Group’s and the Company’s financial performance. The Group and the Company comply with the Treasury and Financial Risk Management Policy of the EPSO-G UAB Group, as approved by the Board of EPSO-G UAB (hereinafter ‘the Risk Policy’).
Financial instruments by category (as per the statement of financial position)
(All amounts are in EUR thousands unless otherwise stated)
Group
Company
Financial assets
As at 31
December 2024
As at 31
December 2023
As at 31
December 2024
As at 31
December 2023
Trade receivables (Note 12)
65,116
41,888
549
383
Other receivables (Note 13)
167
2,588
33,178
46,225
Other financial assets (Note 14)
155,556
15,898
135,000
-
Cash and cash equivalents (Note 15)
101,562
123,236
98,791
120,015
Financial assets at amortised cost
322,401
183,610
267,518
166,623
Derivative assets (Note 9)
1,153
166
-
-
Total financial assets:
323,554
183,776
267,518
166,623
Group
Company
Financial liabilities
As at 31
December 2024
As at 31
December 2023
As at 31
December 2024
As at 31
December 2023
Loans and bonds issued (Note 21)
165,630
195,893
367,376
308,963
Lease liabilities (Note 22)
11,885
10,881
551
701
Trade payables (Note 24)
119,477
68,341
203
153
Other payables and liabilities (Note 30)
32,842
32,026
209
190
Security deposits and other prepayments received (Note 25)
13,927
15,612
-
-
Total financial liabilities:
343,761
322,753
368,339
310,007
Derivative liabilities (Note 9, 30)
654
166
-
-
Total financial liabilities:
344,415
322,919
368,339
310,007
Credit risk
As at 31 December 2024 and 31 December 2023, credit risk was related to the following line items:
(All amounts are in EUR thousands unless otherwise stated)
Group
Company
As at 31
December 2024
As at 31
December 2023
As at 31
December 2024
As at 31
December 2023
Financial assets at amortised cost*
322,391
183,610
267,518
166,623
Derivative assets
1,153
166
-
-
Credit risk
323,544
183,776
267,518*
166,623*
*Credit risk also relates to undrawn lending facility to the subsidiaries (disclosed under Liquidity risk)
Credit risk arising from trade and other receivables are disclosed in Notes 12 and 13.
The Group has a significant credit risk concentration, because exposure to credit risk is shared among 10 main customers, receivables from which accounted for approximately 90% as at 31 December 2024 (as at 31 December 2023: approximately 92%) of the Group’s total trade receivables (financial assets). As at 31 December 2024, receivables from the major customer, distribution network operator Energijos Skirstymo Operatorius AB, accounted for 30% (as at 31 December 2023, 35%) of the Group’s total trade receivables (financial assets).
Credit risk is managed through regular monitoring procedures (individual supervision of debtors, monitoring and analysis of customers in order to identify potential solvency issues that may arise in the future, etc.). The Group companies have approved regulations for trade receivables management, which sets out specific actions and deadlines required for the reduction of trade receivables.
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The table below provides the ratings of the banks where the Group and the Company hold their cash and cash equivalents (Note 15) and other financial assets (Note 14):
Cash balance as at 31 December 2024
Cash balance as at 31 December 2023
S&P
Moody’s   
Company
Group
Company
Group
Swedbank
AA-
27
178
1
269
SEB
AA-
10
47
14
1126
OP Corporate Bank
AA-
68,608
71,114
5
Luminor
A3
30,146
30,223
1,836
Total
98,791
101,562
15
3,236
As at 31 December the Group’s and Company’s term deposit for the amount of EUR 40,000 thousand were held at OP Corporate Bank and for the amount of EUR 50,000 thousand at Luminor. All Group’s and Company’s debt securities were from same geographical location of France with the credit rating of AA- according to S&P.
Liquidity risk
The Group’s policy is to ensure a sustainable financial position enabling to maintain an investment grade credit rating and provide sufficient liquidity, i.e. to ensure that the Group will have sufficient cash and/or committed credit facilities and overdrafts to meet its contractual obligations at any time. Liquidity risk is managed centrally by forecasting and regularly updating cash flows for the Group companies and by ensuring efficient management of liquid funds through the Group’s account.
The Group’s cash flows from operating activities were positive in 2024, therefore its exposure to liquidity risk is not significant. As at 31 December 2024, the Group’s current ratio (total current assets / total current liabilities) and quick ratio ((total current assets – inventories) / total current liabilities) were 1.14 and 1.12, respectively (31 December 2023: 0.98 and 0.96, respectively). As at 31 December 2024, the Group’s net debt was negative, i.e. the Group companies’ liabilities to creditors exceeded their cash. As indicated below, like the Company, the Group has overdraft contracts to meet its financial liabilities.
As at 31 December 2024, the Company’s current and quick ratios were 0.91 (31 December 2023: 0.71). As at 31 December 2024, the Company and the Group had undrawn credit limit of EUR 100,000 thousand under the agreement with OP Corporate bank, effective until 29 April 2026. As at 31 December 2024, the Company’s borrowing limits under the cash pool agreement with the subsidiaries LITGRID and Baltpool amounted to EUR 340,000 thousand (undrawn amount was EUR 49,431 thousand). As at 31 December 2024, the Company’s loan-commitments limits applicable to the subsidiaries Amber Grid, Tetas and Emergency Cells amounted to EUR 95,250 thousand (undrawn amount was EUR 62,666 thousand).
The table below discloses the contractual maturities of the Group’s and the Company’s financial liabilities. This information has been prepared based on undiscounted cash flows of financial liabilities based on the earliest date on which the Group and the Company can be required to pay. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.
(All amounts are in EUR thousands unless otherwise stated)
Group
Less than 3 months
Between 4 months and 1 year
Between 2 and 5 years
More than 5 years
Total liabilities
As at 31 December 2024
Trade and other payables
139,898
12,421
654
-
152,973
Borrowings
2,494
14,721
120,186
40,137
177,538
Lease liabilities
651
1,802
3,868
10,461
16,782
As at 31 December 2023
Trade and other payables
70,991
29,500
42
-
100,533
Borrowings
2,456
31,764
125,698
50,644
210,562
Lease liabilities
445
1,248
3,614
10,864
16,171
(All amounts are in EUR thousands unless otherwise stated)
Less than 3 months
Between 4 months and 1 year
Between 2 and 5 years
More than 5 years
Total liabilities
Company
As at 31 December 2024
Trade and other payables
203
209
-
-
412
Borrowings
291,756
3,665
78,357
-
373,778
Lease liabilities
39
118
410
-
567
As at 31 December 2023
Trade and other payables
153
190
-
-
343
Borrowings
238,711
-
80,688
-
319,399
Lease liabilities
43
130
593
-
766
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Market risk
The Group has non-current borrowings with interest rates linked to EURIBOR. The Company’s current borrowings from the Group companies are linked to variable interest rates. Increasing/decreasing the interest rate by +/- 1% would decrease/increase the Group’s profit before tax by EUR 960 thousand as at 31 December 2024 (2023: the profit before taxes would decrease/increase by EUR 1,230 thousand).
The Group and the Company did not have any financial instruments to manage the exposure to the risk of variations of interest rates as at 31 December 2024 and 2023.
Fair value of financial assets and financial liabilities
The Group’s and the Company’s principal financial assets and liabilities not carried at fair value are trade and other receivables, cash and cash equivalents, loans, trade and other payables and other financial assets.
The following methods and assumptions are used to estimate the fair value of each category of financial instruments that are not measured at fair value:
The carrying amount of current trade and other receivables, other financial assets, cash and cash equivalents, loans to the related parties, current trade payables and other payables approximates their fair value (Level 3).
The fair value of non-current borrowings is estimated based on the quoted market price for the same or similar loans or on the current interest rates available for debt with the same profile. In making these estimates, the Company and the Group relied on interest rates published by the Bank of Lithuania. The fair value of the Group’s non-current borrowings with fixed interest rates was approximately EUR 11,539 thousand lower than their carrying amount as at 31 December 2024 (31 December 2023, EUR 17,220 thousand). As at 31 December the carrying value of Group non-current borrowings with fixed interest rate amounted to EUR 68,717 thousand (as at 31 December 2023 – EUR 77,810 thousand). As at 31 December 2024 the fair value of issued debt bonds with fixed interest rate coupon was approximately EUR 5,074 thousand (2023: EUR 2,177 thousand) lower than it’s carrying amount.
37.Services provided by the audit firm
In the period of from 2023 to 2024 the audit firm provided the following audit and non-audit services to the Group and to the Company: Information on non-audit services is disclosed based on the date of services rendered:
Type of services
Group
Company
As at 31 December 2024
As at 31 December 2023
As at 31 December 2024
As at 31 December 2023
Audit services, in EUR
Financial statements audit services
269,000
284,000
41,000
56,000
Other services, related to audit services
59,000
-
59,000
-
Total audit services
328,000
284,000
100,000
56,000
Non-audit services, in EUR
Assurance and other related services
56,450
49,565
14,950
14,935
Other services
8,500
16,125
2,500
4,335
Total non-audit services:
64,950
65,690
17,450
19,270
_060_Headline
38.Off-balance sheet commitments and contingencies
In respect of the contractor carrying out the investment project, the Group imposed penalties for delay damages and deferred payment against issued VAT invoices totalling EUR 8,943 thousand. It is likely that, during, or after the term of the contract, the Contractor may bring an action to the Vilnius Court of Commercial Arbitration, requesting a reduction or cancellation of the penalties charged.
In October 2023, the arbitration proceedings were brought to the Arbitration Institute of the Stockholm Chamber of Commerce brought against several transmission system operators, including LITGRID AB, which are still under way. The arbitration proceedings were started in respect of suspension of payments by the TSOs, adhering to international sanctions. In accordance with the rules of the Arbitration Institute of the Stockholm Chamber of Commerce, the details are currently considered confidential.
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A consolidated administrative case is pending where contractor Alvora UAB, claims for the payment that was received by the Group under the warranty performance bank guarantees. The contractor claims that he use of the guarantee funds were unfounded and unlawful. The Group has received EUR 5.815 thousand in warranty performance security funds based on the claims submitted. However, a provision for the possible repayment of the same amount has been recognized in the provision account for a possible return of the guarantee funds. At the moment, the proceedings are pending at the court of first instance. The Group considers that the bank guarantees were used duly in accordance with laws and terms and conditions of the contract, as defects were found in the work, which Alvora UAB refused to remedy. The proceeds from the guarantees will be used to remedy the defects found. In the event Alvora UAB remedies the defects found at its own expense until the outcome of the proceedings, the Group will reimburse the money to the contractor Alvora UAB received under the guarantees.
A related consolidated administrative case is pending on two appeals by the Group against two decisions of the National Energy Regulatory Council (NERC). NERC following a non-routine inspection of the construction contract for the Poland-Lithuania gas pipeline (GIPL) issued a resolution imposing obligation for the Group to replace the interconnectors installed by contractor Alvora UAB. The obligation to replace the interconnector fittings declared unfit by the resolution will also be subject to the outcome of the case of the Group and Alvora UAB (see point above). By order of 11 February 2025, the Court suspended the administrative proceedings until the final judgement in the case between the Group and Alvora UAB becomes effective.
Due to significant uncertainty regarding the outcome of those cases, the useful life of the current interconnectors was not reviewed as of December 31, 2024. Should it become clear that the interconnectors need to be replaced, the useful life of those interconnectors should be reassessed and significantly shortened, estimating the useful life up to their replacement date. A preliminary assessment suggests that the useful life of the replaced connecting parts could be reduced to 3 years, with the cost of the replaced parts evaluated at the value of the replacement expenses, and therefore depreciation costs would increase by 3 million euros. There is also a significant risk that the replacement costs of the new parts would not be included in the regulated asset base (RAB), which could result in a decrease in asset value.
39.Impact of climate change
Natural gas activities
According to the assessment of the Group's management, in the context of combating climate change, the tightening requirements of the European Union's environmental policy, the promotion and development of the use of renewable energy sources and more efficient use of energy will reduce the consumption of natural gas for both energy needs and industrial needs in Lithuania. However, natural gas will play an important role as a transitional energy in achieving European and national greenhouse gas emission reduction goals. The main goal set out in the Group's strategy is to act together on the path of Lithuania's energy transformation towards a climate-neutral economy. One of the Group's main sustainable activity goals is the aim of reducing the impact of its activities on the environment.
Measures related to climate change mitigation and reduction of GHG emissions and relevant investments are provided for in the ten-year (2024-2033) network development plan of the Group's natural gas transmission system operator (hereinafter referred to as GD TSO).
Upon implementation of these investments, they will be included in the regulated asset base, which will ensure additional income and economic benefits for DG TSO. These investments are related to the creation of new assets and the replacement of depreciated existing assets, in order to increase the efficiency and sustainability of the transmission network. No shortening of the useful lives of existing assets or write-offs of regulated assets are planned, since the assets will depreciate before the implementation of the planned investments, and there are no other signs of asset impairment.
According to the assessment of the Group's management, the requirements related to climate change do not cause significant uncertainties and doubts regarding the continuity of DG TSO's operations and the validity and effectiveness of environmental impact reduction measures. The risk related to climate change does not cause credit risk and expected credit losses. The assessments and assumptions of the impact of climate change do not have a significant risk of significant adjustment of the carrying amounts of assets and liabilities, or impairment of non-current assets and inventories. Climate change-related issues do not have a significant impact on the recognition of deferred tax assets, contingent liabilities for the implementation of climate change-related requirements, market and liquidity risk.
More information on climate impact is provided in the 2024 Sustainability Report section “E1 Climate Change”.
The Company’s sustainability-linked bonds issued
In June 2022, EPSO-G issued a 5-year sustainability-linked bond issue of EUR 75 million, which is listed on the Nasdaq Baltic Debt Securities list. In the prospectus of these bonds, the company committed to implementing two sustainability-related targets, KPI1 and KPI2, by the redemption of the bonds, which will be carried out in 2027.
More information on the implementation of the target is provided in the Sustainability Report section “E1 Climate Change”.
The results of one of the planned indicators depend to a large extent on factors beyond the control of management, but the achievement of the indicator will be assessed after the end of the 5-year period. In the opinion of the company's management, despite the high uncertainty, the indicator value may not be exceeded after the end of the 5-year period.
If the requirements for KPI1 or KPI 2 are not met, the interest paid to bondholders would be increased by 0.3 percent and 0.2 percent, respectively for the last year issuance. The increased interests for failure to meet each indicator would be applied separately.
40.Events after the reporting period
On 8 February 2025, power systems of the Baltic States successfully disconnected from the Russia-controlled IPS/UPS system. On 9 February 2025, the electricity transmission system operator, together with the transmission system operators of Estonia and Latvia, synchronized their electricity grids with the Continental Europe Synchronous Area. This is a historic and practically significant event for the Baltic States and Europe, enhancing the region’s energy independence and resilience.
In January 2025, the Group’s contract services company received claims for default interest of EUR 1.9 million and damages of EUR 9.1 million (hereinafter the ‘Claims’) from the customer, who is the party to the contracts for designing and performing works on the facility of strategic importance to the Republic of Lithuania. The situation is currently being analysed. Given that the claim is brought in parallel with the claim for damages and that the default interest is included in the damage, the Group company has reduced the projected revenue in the Contract Budgets (for the portion of the Claim likely to give rise to potential liability but not for the total amount), no additional provisions for losses on the Claims have been recognised. The Group is actively involved in the Claims assessment and, in consultation with legal counsel, makes decisions appropriate in the circumstances. The details of this dispute are withheld on the grounds that their disclosure could significantly prejudice the position of the Group company in the context of a dispute with a customer over a deferral or contingent liability.
At the extraordinary general meeting of shareholders of Rheinmetall Defence Lietuva, UAB, held on January 31, 2025, it was decided to increase the company's share capital, with UAB "EPSO-G Invest" being granted the right to acquire 36,500,000 company shares, with a total value of 36,500,000 EUR.
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