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AB Kauno Energija
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
CONSOLIDATED AND COMPANY’S ANNUAL
FINANCIAL STATEMENTS WITH EXPLANATORY
NOTES AND MANAGEMENT REPORT FOR THE
YEAR 2025
2
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2025 Consolidated and Company‘s Financial
Statements
(in thousands euro, unless specified otherwise)
TABLE OF CONTENTS
Page
Management's approval of the financial statements
3
SET OF CONSOLIDATED AND COMPANY'S FINANCIAL STATEMENTS FOR 2025
Statement of financial position
4
Statement of profit (loss) and other comprehensive income
6
Statement of Changes in Equity
8
Cash Flow Statement
9
Explanatory notes
11
Management Report
43
3
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2025 Consolidated and Company‘s Financial
Statements
(in thousands euro, unless specified otherwise)
Management's approval of the financial statements
In accordance with the provisions of Article 12 of the Law on Securities of the Republic of Lithuania and Disclosure Rules
approved by Resolution of the Board of the Bank of Lithuania No. O3-223 of 13 December 2019, we hereby confirm that
the separate and consolidated annual financial statements have been prepared in accordance with International Financial
Reporting Standards as adopted by the European Union. In our opinion, the accounting principles applied are appropriate
and the financial statements give a true and fair view in all material respects in accordance with the International Financial
Reporting Standards adopted by the European Union. The 2025 consolidated annual management report accurately
presents an overview of business development and operations, the financial position of the Company and the
consolidated entities as a whole, along with a description of the key risks and uncertainties encountered.
We recommend that the Annual financial statements be approved by the General Meeting of
Shareholders.
Kaunas, March 23, 2026
On behalf of the management:
Tomas Garasimavičius
General Manager
Virgilijus Motiejūnas
CFO (Chief Financial Officer)
Ramunė Petkevičienė
Head of Financial Management and Accounting Department
4
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2025 Consolidated and Company‘s Financial
Statements
(in thousands euro, unless specified otherwise)
STATEMENT OF FINANCIAL POSITION
Group
Company
Notes
2025-
2024-
2024-
2025-
2024-
2024-
12-31
12-31*
01-01*
12 31
12-31*
01-01*
ASSETS
Non-current assets
Intangible fixed assets
4
241
314
249
220
304
241
Land and buildings
5,827
6,039
6 201
5,753
5,963
6,122
Buildings
155,837
146,994
134 610
155,837
146,994
134,610
Machinery and plant
18,136
17,250
13 824
18,124
17,221
13,779
Vehicles
735
804
975
710
773
975
Plant and tools
7,286
5,704
3 263
7,225
5,657
3,217
Constructions in progress and
prepayments
20,015
18,210
23 483
19,975
18,117
23,483
Investment property
1,298
1,082
1 114
-
-
-
Total property, plant and
equipment
5
209,134
196,083
183 470
207,624
194,725
182,186
Assets managed under the right
7
1,307
1,171
1 083
997
854
916
of use
Deferred income tax assets
14
-
-
-
-
-
Non-current financial assets
Investments in subsidiaries
1, 6
-
-
-
2,763
2,763
2,763
Investments in associates
1, 8
190
164
75
75
75
75
Amounts receivable after one year
3
58
128
3
1
1
Non-current financial assets, total
193
222
203
2,841
2,839
2,838
Non-current assets, total
210,889
197,790
185 005
211,682
198,722
186,181
Current assets
Inventories and prepayments
Inventories
9
1,300
1,761
1 777
1,102
1,652
1,429
Prepayments
1,313
1,507
1 019
796
1,482
942
Total inventories and
prepayments
2,613
3,268
2 796
1,898
3,134
2,371
Amounts receivable within one year
Trade receivables
10
17,905
15,698
14 437
17,718
15,482
13,621
Other receivables
10
776
860
2 755
655
817
2,757
Amounts receivable within one
18,681
16,558
17 192
18,373
16,299
16,378
year, total
Term deposits
-
500
-
Cash and cash equivalents
11
10,863
11,074
8 547
9,168
9,600
7,315
Current assets, total
32,157
31,400
28 535
29,439
29,033
26,064
Assets, total:
243,046
229,190
213 540
241,121
227,755
212,245
(continued on the next page)
5
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2025 Consolidated and Company‘s Financial
Statements
(in thousands euro, unless specified otherwise)
STATEMENT OF FINANCIAL POSITION (CONTINUED)
Group
Company
Notes
2025-
2024-
2024-
2025-
2024-
2024-
12-31
12-31*
01-01*
12-31
12-31*
01-01*
EQUITY AND LIABILITIES
Equity
Capital
1
74,476
74,476
74,476
74,476
74,476
74,476
Legal reserve
12
7,510
7,504
7,447
7,448
7,448
7,447
Other reserves
12
50
75
50
50
75
50
Retained profit (loss)
-
-
-
-
-
-
Current year profit
18,328
8,449
6,078
18,000
8,288
5,454
Previous year retained profit (loss)
24,628
17,202
11,206
23,647
16,376
10,947
Total retained profit (loss)
42,956
25,651
17,284
41,647
24,664
16,401
Total equity
124,992
107,706
99,257
123,621
106,663
98,374
Amounts payable after one year
and liabilities
Long-term financial debts
13
57,825
62,658
54,736
57,825
62,658
54,736
Lease (finance lease)
14
1,374
1,172
1,121
1,052
842
950
Deferred profit tax liabilities
22
6,695
6,687
6,516
6,695
6,695
6,516
Grants and subsidies
15
28,357
29,858
30,850
28,354
29,854
30,850
Employee benefit liabilities
16
368
449
385
358
420
365
Other amounts payable and long-term
liabilities
70
29
-
46
29
-
Amounts payable after one year,
and long-term liabilities, total
94,689
100,853
93,608
94,330
100,498
93,417
Accounts payable within one year
and other liabilities
Financial debts and leasing
13, 14
4,851
4,094
3,269
4,846
4,090
3,265
Trade payables
13,997
12,387
14,105
14,001
12,547
14,136
Employee related liabilities
1,290
1,024
715
1,218
970
701
Received prepayments
936
1,076
840
920
1,047
815
Tax payable
1,429
1,059
804
1,323
972
612
Current year's share of employee
16
276
242
163
276
242
162
benefit liabilities
Other provisions
-
-
-
-
-
-
Accrued costs and deferred income
410
606
441
410
583
426
Other short-term amounts payable
176
143
338
176
143
337
and liabilities
Accounts payable within one year
23,365
20,631
20,675
23,170
20,594
20,454
and other liabilities, total
Total accounts payable and
liabilities
118,054
121,484
114,283
117,500
121,092
113,871
Total equity and liabilities
243,046
229,190
213,540
241,121
227,755
212,245
(end)
*Details of the adjustment can be found in explanatory note 17 to these financial statements.
The notes below form an integral part of these financial statements.
6
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2025 Consolidated and Company‘s Financial
Statements
(in thousands euro, unless specified otherwise)
STATEMENT OF PROFIT (LOSS) AND OTHER COMPREHENSIVE INCOME
Group
Notes
2025
2024*
Operating income
Sales revenue
18
100,488
85,447
Other operating income
20
2,388
2,958
Total operating income
102,876
88,405
Operating expenses
Fuel and purchased energy
(46,926)
(47,525)
Salaries, social insurance
(12,317)
(10,600)
Depreciation and amortisation
(8,783)
(7,489)
Repair and maintenance
(2,634)
(1,857)
Change in impairment of receivables
(398)
(500)
Taxes, other than income tax
(3,516)
(2,858)
Electricity
(1,581)
(1,547)
Raw materials and goods used
(287)
(232)
Water
(3,131)
(2,218)
Change in realisable value of inventories and
impairment of fixed assets
(527)
(12)
Other costs
19
(2,496)
(2,565)
Other operational expenses
20
(1,185)
(1,257)
Operating expenses, total
(83,781)
(78,660)
Operating profit (loss)
19,095
9,745
Profit share of associates
21
26
89
Other interest and similar income
21
761
594
Interest and other similar expenses
21
(1,506)
(1,839)
Income from financing and investment
21
(719)
(1,156)
activities, net value
Profit before taxation
18,376
8,589
Income tax
22
(54)
30
Deferred income tax income (expense)
22
6
(170)
Profit for the reporting period
18,328
8,449
Other provisions that later will/may be reclassified
-
-
subsequently to profit or loss
Other provisions that will not be reclassified to profit
-
-
or loss
Total comprehensive income
18,328
8,449
Profit for the period attributable to the
Company's shareholders
18,328
8,449
To the shareholders of the company
18,328
8,449
Non-controlling interest
-
-
Total comprehensive income attributable to
18,328
8,449
To the shareholders of the company
18,328
8,449
Non-controlling interest
-
-
Earnings per share (EUR)
22
0.43
0.20
7
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2025 Consolidated and Company‘s Financial
Statements
(in thousands euro, unless specified otherwise)
STATEMENT OF PROFIT (LOSS) AND OTHER COMPREHENSIVE INCOME
Company
Notes
2025
2024*
Operating income
Sales revenue
18
99,364
84,817
Other operating income
20
1,607
1,593
Total operating income
100,971
86,410
Operating expenses
Fuel and purchased energy
(46,926)
(47,525)
Salaries, social insurance
(11,355)
(9,947)
Depreciation and amortisation
(8,753)
(7,473)
Repair and maintenance
(2,603)
(1,801)
Change in impairment of receivables
(398)
(271)
Taxes, other than income tax
(3,509)
(2,856)
Electricity
(1,534)
(1,541)
Raw materials and goods used
(287)
(232)
Water
(3,131)
(2,218)
Change in realisable value of inventories and impairment of
fixed assets
(527)
(12)
Other costs
19
(2,652)
(2,472)
Other operational expenses
20
(528)
(409)
Operating expenses, total
(82,203)
(76,757)
Operating profit (loss)
18,768
9,653
Other interest and similar income
21
745
567
Loss on sale of securities
21
(1,513)
(1,844)
Income from financing and investment activities, net
value
21
(768)
(1,277)
Profit before taxation
18,000
8,376
Income tax
22
-
90
Deferred income tax income (expense)
22
-
(178)
Profit for the reporting period
18,000
8,288
Other provisions that later will/may be reclassified
subsequently to profit or loss
-
-
Other provisions that will not be reclassified to profit or loss
-
-
Total comprehensive income
18,000
8,288
Earnings per share (EUR)
22
0.42
0.19
*Details of the adjustment can be found in explanatory note 17 to these financial statements.
The notes below form an integral part of these financial statements.
8
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2025 Consolidated and Company‘s Financial
Statements
(in thousands euro, unless specified otherwise)
STATEMENT OF CHANGES IN EQUITY
Group
Notes
Capital
Legal reserve
Other
Retained
Total
reserves
profit (loss)
Balance on 31 December 2023*
74,476
7,447
50
17,284
99,257
Formed reserves
-
57
75
(132)
-
Reversed reserves
-
-
(50)
50
-
Dividends
-
-
-
-
-
Profit for the reporting period
-
-
-
8,449
8,449
Other comprehensive income
-
-
-
-
-
Balance on 31 December 2024*
74,476
7,504
75
25,651
107,706
Formed reserves
-
6
-
(6)
-
Reversed reserves
-
-
(25)
25
-
Dividends
12
-
-
-
(1,042)
(1,042)
Profit for the reporting period
-
-
-
18,328
18,328
Other comprehensive income
-
-
-
-
-
Balance as at 31 December
74,476
7,510
50
42,956
124,992
2025
Company
Notes
Capital
Legal reserve
Other
reserves
Retained
profit (loss)
Total
Balance on 31 December 2023*
74,476
7,447
50
16,401
98,374
Formed reserves
-
1
75
(75)
1
Reversed reserves
-
-
(50)
50
-
Dividends
-
-
-
-
-
Profit for the reporting period
-
-
-
8,288
8,288
Other comprehensive income
-
-
-
-
-
Balance on 31 December 2024*
74,476
7,448
75
24,664
106,663
Formed reserves
-
-
-
-
-
Reversed reserves
-
-
(25)
25
-
Dividends
12
-
-
-
(1,042)
(1,042)
Profit for the reporting period
-
-
-
18,000
18,000
Other comprehensive income
-
-
-
-
-
Balance as at 31 December
2025
74,476
7,448
50
41,647
123,621
*Details of the adjustment can be found in explanatory note 17 to these financial statements.
The notes below form an integral part of these financial statements.
9
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2025 Consolidated and Company‘s Financial
Statements
(in thousands euro, unless specified otherwise)
CASH FLOW STATEMENT
Group
Company
Notes
2025
2024*
2025
2024*
Cash flows from operating activities
Profit for the reporting period
18,328
8,449
18,000
8,288
Depreciation and amortisation
10,843
9,581
10,762
9,516
Amortization covered by grants/subsidies
(1,587)
(1,551)
(1,586)
(1,551)
Write-offs and changes in impairment of
receivables
398
305
398
281
Loss (gain) on sale and write-down of fixed
54
(38)
54
(38)
assets and value of shares
Change in realisable value of inventories and
impairment of fixed assets
527
12
527
12
Change in employee benefits liability
(47)
143
(28)
135
Changes in other non-cash items
22
622
(29)
553
Change in provision liabilities
(196)
169
(173)
157
Elimination of results of financing and
investing activities
719
1,067
768
1,276
Decrease (increase) in inventories
63
16
23
(223)
Decrease (increase) in prepayments
194
(488)
686
(540)
Decrease (increase) in trade receivables
(2,735)
(1,191)
(2,634)
(1,861)
Decrease (increase) in other amounts
84
1,955
162
1,940
receivable
Increase (decrease) in long-term trade debts
41
29
-
-
Increase (decrease) in trade debts
1,610
(1,718)
1,454
(1,589)
Decrease (increase) in liabilities related to
employment relations
266
309
248
269
Paid Income Tax
(60)
(125)
-
-
Increase (decrease) in taxes payable
430
320
351
360
Decrease (increase) in received prepayments
(140)
236
(110)
261
Increase (decrease) in other current liabilities
33
(195)
33
(194)
Net cash flows from operating activities
28,847
17,907
28,906
17,052
(continued on the next page)
10
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2025 Consolidated and Company‘s Financial
Statements
(in thousands euro, unless specified otherwise)
STATEMENT OF CASH FLOWS (CONTINUED)
Group
Company
Notes
2025
2024
2025
2024
Cash flows from investing activities
Acquisition of intangible fixed assets and property,
plant and equipment
(23,815)
(22,362)
(23,578)
(22,222)
Sale of property, plant and equipment
74
17
74
17
Interest and late payment fees received
762
594
745
567
(Acquisition) disposal of investments
498
(500)
(2)
-
Net (used) cash flows from investing activities
(22,481)
(22,251)
(22,761)
(21,638)
Cash flows from financing activities
Loans received
-
12,000
-
12,000
Loans repaid
(4,078)
(3,896)
(4,078)
(3,896)
Interest paid
(1,543)
(1,844)
(1,543)
(1,844)
Lease payments
-
(16)
-
(12)
Dividend paid
(1,042)
-
(1,042)
-
Subsidy received
86
627
86
623
Net cash flows from (used in) financing
(6,577)
6,871
(6,577)
6,871
activities
Net increase (decrease) in cash flows
(211)
2,527
(432)
2,285
Cash and cash equivalents at the beginning of
the period
11,074
8,547
9,600
7,315
Cash and cash equivalents at the end of the
period
10,863
11,074
9,168
9,600
(end)
*Details of the adjustment can be found in explanatory note 17 to these financial statements.
The notes below form an integral part of these financial statements.
11
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2025 Consolidated and Company‘s Financial
Statements
(in thousands euro, unless specified otherwise)
EXPLANATORY NOTES TO THE FINANCIAL STATEMENTS
1. General information
AB Kauno energija (hereinafter referred to as the Company) is a public limited liability company registered in the
Republic of Lithuania. Its registered office address is Raudondvario pl. 84, Kaunas, Lithuania. Data about the Company
is collected and stored in the Registry of Legal Entities.
The Company is engaged in the supply of heat and hot water, production and sale of electricity and maintenance of
collector-tunnels. The Company also provides heating system maintenance services. The Company was registered on 1
July 1997 following the reorganisation of AB Lietuvos energija. The company code 235014830. The Company's shares
are traded on the Baltic Additional Trading List of the Nasdaq Vilnius Stock Exchange.
As at 31 December 2025 and 31 December 2024 the Company's shareholders were:
2025-12-31
2024-12-31
Number of held
Number of held
shares, units
Ownership (%)
shares, units
Ownership (%)
Kaunas city municipality
39.736.058
92,84
39.736.058
92,84
Kaunas district municipality
1.606.168
3,75
1.606.168
3,75
Jurbarkas district municipality
746.405
1,74
746.405
1,74
Other small shareholders
713.512
1,67
713.512
1,67
42.802.143
100,00
42.802.143
100,00
The Company's authorized share capital is equal to EUR 74,475,728.82 and is divided into 42,802,143 ordinary shares
with a nominal value of EUR 1.74. As of 31 December 2025 and 31 December 2024, the Company did not hold any
treasury shares. As of 31 December 2025 and 31 December 2024, all shares were fully paid .
On 31 December 2025 the Company and its subsidiary UAB GO Energy LT form a group (hereinafter the Group):
Capital structure of the subsidiary as of 31 December 2025:
Company,
Part of the
Profit (loss) for
Statutory
registered office
Company-
Cost of
the
reporting
reserve
Equity
Main activities
address
owned
investment
period
formed
shares
UAB
GO
Energy
Innovative
energy
LT,
100 per
2,763
1,214
62
4,039
projects,
Raudondvario
pl.
cent.
consultations, lease
84, Kaunas
The Company and the Group also hold a 22% stake in UAB Kauno miesto paslaugų centras. Investment at cost is EUR
75 thousand.
In the separate financial statements of the Company, investments in the company of UAB "Kauno miesto servizi centras"
are recognised and accounted for using the cost method. When preparing the consolidated financial statements of the
Group, these investments are accounted for using the equity method, according to which the value of the investment is
adjusted according to the Group's share in the profit or loss of the associated company and other changes in equity.
In 2025, AB Kauno energija established the Public Enterprise "Transformations". The incorporation contribution is 2
thousand. The activity of the public institution is the organization of cultural artistic activities for the residents of Kaunas
city and guests of the city. The investment is not consolidated due to insignificance.
The Group's average number of employees during the reporting period was 391, the Company’s average number of
employees was 350 (in 2024, respectively, 378 and 349).
12
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2025 Consolidated and Company‘s Financial
Statements
(in thousands euro, unless specified otherwise)
1. General information (continued)
Legal regulation
Pursuant to the Law of the Republic of Lithuania on the Heat Sector, the Company's activities are licensed and regulated
by the State Energy Regulatory Council (hereinafter referred to as the Council). On 26 February 2004 the Council granted
the Company a heat supply licence. The licence is valid for an unlimited period, but may be revoked by an appropriate
decision of the Council depending on compliance with certain conditions. The Council also sets price caps for heat supply.
On 13 September 2018, the Council, by Resolution No. O3E-283, established the basic heat price components for the
Company, which remained in effect until 31 March 2024. As of 1 April 2024, new heat prices came into effect, calculated
based on the revenue level for heat production and supply of AB Kauno Energija, unilaterally set by the Council’s
resolution of 23 February 2024.
Economic activities
The Company's production capacities consist of the Petrašiūnai power plant, 5 boiler houses in Kaunas integrated
network, 7 regional boiler houses in Kaunas district, 1 in Jurbarkas, 14 isolated network and 26 local (household) boiler
houses in Kaunas city, as well as 8 boiler houses for water heating in Sargėnai district.
The total installed thermal capacity of the Company is approximately 520.6 MW (of which 52.9 MW are condensing
economisers and 3.1 MW are absorption heat pumps), with an electrical capacity of 8.75 MW. Of this, the Petrašiūnai
Power Plant has a thermal capacity of 169.2 MW (including 17.8 MW of condensing economisers and 2.4 MW of
absorption heat pumps) and an electrical capacity of 8 MW. In Jurbarkas – 40.1 MW thermal capacity (including 4.4 MW
of condensing economisers and 0.7 MW of absorption heat pumps). The total power generation capacity of the Company
as a whole is approximately 534.7 MW (of which 52.9 MW are condensing economizers).
The Company makes investments based on an assessment of the economic situation, the competitive environment and
the availability of financing. Investment plans are approved by the shareholders and coordinated by the Board.
2. Basis of preparation of the financial statements
These financial statements are prepared on an historical cost basis, except for financial assets and liabilities for which
changes in fair value are recognised as profit or loss. Historical cost is essentially based on the fair value of the
consideration paid for an asset. These financial statements have been prepared on a going concern basis, on the
assumption that the Company and the Group will be able to continue in business for the foreseeable future.
The Company’s and the Group’s financial statements for the period ended 31 December 2025 have been prepared in
accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU) and their
interpretations. Standards have been issued by the International Accounting Standards Board (IASB) and interpretations
have been issued by the International Financial Reporting Interpretations Committee (IFRIC).
New and/or amended standards and interpretations applicable from 1 January 2025:
The following standards, amendments to the existing standards and interpretations issued by the International Accounting
Standards Board (IASB) and adopted by the European Union (further – EU) are effective for the current period and were
adopted by the Group:
• Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability (effective
for annual periods beginning on or after 1 January 2025).
The application of the above-mentioned standards, their amendments and interpretations, did not have a material impact
on the Group's consolidated and separate financial statements of the Company.
Standards, amendments and interpretations of existing standards issued by the IASB, adopted by the EU, but not yet
effective:
At the date of the authorization of these consolidated and separate financial statements, the Group and the Company
have not early adopted the following new and revised IFRS standards, amendments and interpretations that have been
issued but are not yet effective::
• Annual Improvements Volume 11 (effective for annual periods beginning on or after 1 January 2026);
• Contracts Referencing Nature-dependent Electricity – Amendments to IFRS 9 and IFRS 7 (effective for annual
periods beginning on or after 1 January 2026);
13
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2025 Consolidated and Company‘s Financial
Statements
(in thousands euro, unless specified otherwise)
• Amendments to the Classification and Measurement of Financial Instruments – Amendments to IFRS 9 and
IFRS 7 (effective for annual periods beginning on or after 1 January 2026);
• IFRS 18 Presentation and Disclosure in Financial Statements (effective for annual periods beginning on or after
1 January 2027).
The management of the Group and the Company do not expect that the adoption of these standards, their amendments
and interpretations will have a material impact on the Group's consolidated and separate financial statements of the
Company during the period of their initial application
Standards, amendments and interpretations to existing standards that are not yet effective and have not been endorsed
by EU:
IFRSs currently endorsed by EU are not significantly different from the standards, endorsed by IASB, except the
standards, amendments and interpretations that were not endorsed by EU (the effective dates are applicable to IFRS to
full extent). These standards, amendments and interpretations are listed below:
• IFRS 19 Subsidiaries without Public Accountability: Disclosures (effective for annual periods beginning on or
after 1 January 2027);
• Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Translation to a Hyperinflationary
Presentation Currency (effective for annual periods beginning on or after 1 January 2027);
• Amendments to IFRS 19 Subsidiaries without Public Accountability: Disclosures (effective for annual periods
beginning on or after 1 January 2027).
The management of the Group and the Company do not expect that the application of these standards, their amendments
and interpretations will have a material impact on the Group's consolidated and separate financial statements of the
Company during the period of their initial application
The currency of the presentation is the euro. These statements are presented in thousands of euros, unless otherwise
stated.
The Company's financial year coincides with the calendar year.
The Company's management has approved these financial statements on 23 March 2026.
3. Summary of significant accounting policies
3.1. Consolidation principles
The consolidated financial statements of the Group include AB Kauno energija and its subsidiaries. The financial
statements of the subsidiaries are for the same reporting period as those of the Parent Company. The consolidated
financial statements are prepared on the basis of uniform accounting principles for like transactions and other events in
similar circumstances.
Businesses acquired or disposed of during the year are included in the consolidated financial statements from the date
of the transfer of control or until the date on which control is lost. Intercompany transactions, balances and unrealised
gains and losses are eliminated on consolidation. The gross income of subsidiaries is attributable to the owners of the
enterprise and to the non-controlling interest, even if the result of the non-controlling interest is negative.
A subsidiary is an undertaking controlled, directly or indirectly, by its parent undertaking. Typically, a company is
controlled when the Group directly or indirectly owns more than 50 per cent of the company's share capital carrying the
voting rights and/or when it is able to control the financial and operating activities so as to obtain benefits from its activities.
The financial statements of subsidiaries are included in the consolidated financial statements at the beginning and end
of the control dates.
Changes in the Group's equity interest in subsidiaries
Changes in the Group's equity interest in subsidiaries that do not result in a loss of control of the Group by the subsidiaries
are accounted for as equity transactions. The carrying amounts of the Group's interest and non-controlling interest are
adjusted to reflect changes in their respective interests in subsidiaries. Any difference between the adjustment for the
non-controlling interest and the fair value of the consideration paid or received is recognised directly in equity and
attributable to the owners of the entity.
When the Group loses control of a subsidiary, the gain or loss on disposal is calculated as the difference between (i) the
sum of the fair value of the consideration received and the aggregate of the fair value of any retained interest; and (ii) the
previous carrying amounts of the subsidiary's assets (including goodwill) and liabilities and non-controlling interests.
When a subsidiary's assets are accounted for by re-measuring the fair value amount and the related gain or loss has
been included in comprehensive income and accumulated in equity, the amounts previously included in other
14
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2025 Consolidated and Company‘s Financial
Statements
(in thousands euro, unless specified otherwise)
comprehensive income and accumulated in equity are accounted for in the same way as the disposal of the related asset
(i.e. reclassified to profit or loss or transferred directly to retained earnings, as specified in the relevant IFRS).
The fair value of the remaining investment in the former subsidiary at the date of the loss of control is treated as the fair
value at initial recognition for subsequent accounting purposes in accordance with IFRS 9 Financial Instruments, or, if
appropriate, as the acquisition cost of the investment in an associate or jointly controlled entity at initial recognition.
3.2. Investments in subsidiaries
In the statement of financial position of the company, investments in subsidiaries are accounted for using the acquisition
cost method. Dividends received from subsidiaries are recognised in profit or loss and other comprehensive income.
IAS 36 “Impairment of Assets” applies impairment criteria to determine whether it is necessary to recognise impairment
losses in respect of the Company's investment in a subsidiary. When necessary, the full carrying amount of an investment
(including goodwill) is tested for impairment in accordance with IAS 36 as a single asset by comparing its recoverable
amount (the higher of its value in use and its fair value less costs to sell) with its carrying amount. Any impairment losses
recognised shall form part of the carrying amount of the investment. Any reversal of an impairment loss is recognised in
accordance with IAS 36 to the extent that the recoverable amount of the investment subsequently increases.
3.3. Intangible Assets
Intangible assets acquired separately
Intangible assets acquired separately are carried at cost less accumulated amortisation and accumulated impairment
losses. Amortisation is recognised on a straight-line basis over the estimated useful lives. The useful life and depreciation
method are reviewed at each reporting date, prospectively recording any changes in the estimate assessment. The
amortisation calculation shall be discontinued from the first day of the month following the disposal of the asset or when
the total cost of the acquisition of an intangible asset is transferred to cost or to the value of another asset. Intangible
assets with an indefinite useful life acquired separately are carried at cost less impairment losses.
Derecognition of intangible assets
An intangible asset is derecognised when it is sold or when no future economic benefit is expected from the use or sale
of the asset. Gains or losses arising from the derecognition of an intangible asset, calculated as the difference between
the net disposal proceeds and the carrying amount of the asset, are recognised in profit or loss when the asset is
derecognised.
Licenses
The acquisition costs of licenses with a validity period of 3 years or more are capitalized and amortized over their validity
period. If the validity period of the licenses is shorter than 3 years, their acquisition costs are allocated to expenses over
their validity period, accounting for them in the expense items of future periods.
Software
The new software acquisition costs are capitalized and recognized as an intangible fixed asset if these costs are not an
integral part of the hardware. Software is amortized over a period no longer than 3 years. Costs incurred in order to
restore or maintain the future economic benefits that the Company expects from the originally assessed standard of
performance of existing software systems are recognised as an expense when the restoration or maintenance work is
carried out.
3.4. Accounting for emission allowances
Emission allowances received shall be accounted for using the net commitment method. Under this approach, the Group
and the Company account for emission allowances at nominal value.
Commitments to acquire additional emission allowances are recognised when they arise (e.g. commitments are not
accounted for on the basis of expected future emissions) and are accounted for only when the actual emissions of the
Group and the Company exceed the amount of available emission allowances.
Under the net commitment approach, the Group and the Company assess the lack of emission allowances by comparing
the quantity of emission allowances available with the actual annual emissions.
Sales of emission allowances are recorded at the amount of the sales transaction. Any differences between the fair value
of the sale and the carrying amount of the allowances held shall be recognised as profit or loss, regardless of whether
there is an actual or expected shortfall in the allowances at the time of the transaction. Where the sale of emission
allowances results in an actual shortfall of emission allowances, the financial position reports shall recognise additional
liabilities, including profits or losses that affect the relevant costs.
3.5. Property, plant and equipment
Property, plant and equipment is carried at acquisition cost, which does not include routine maintenance costs, less
accumulated depreciation and estimated impairment losses, if any. The cost of acquisition includes the cost of replacing
property, plant and equipment when they are incurred, provided that these costs qualify for the recognition of the asset.
Property classified as construction in progress, under construction for production, supply or administrative purposes, or
for other purposes not yet determined, is carried at acquisition cost less impairment losses. The cost includes professional
fees and capitalised borrowing costs of long run assets in accordance with the accounting policies of the Group and the
Company. Once an asset is ready for use, it is transferred to the item of Property, Plant, and Equipment, put into
15
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2025 Consolidated and Company‘s Financial
Statements
(in thousands euro, unless specified otherwise)
operation, and depreciation of this asset is commenced. As long as an asset is recorded under construction in progress,
no depreciation is recognised.
Depreciation is recognised in such a way that, over the useful life of the asset, its cost (excluding land and construction
in progress) less its residual value is written off on a straight-line basis. The estimated useful lives, residual values, and
depreciation methods are reviewed at each year-end, with any changes in the accounting estimate accounted for
prospectively.
The useful service lives are reviewed every year to ensure that the period of depreciation is consistent with the expected
useful life of the long-term tangible asset.
Depreciation is computed on a straight-line basis over the following estimated useful lives:
Buildings
50
Investment property
50
Buildings
15 – 70
Machinery and plant
5 – 20
Vehicles
4 – 10
Plant and tools
3 – 16
Land is not depreciated.
An asset is recognised as non-current when it has a useful life of more than one year and the acquisition cost exceeds
EUR 144.81. From 2026, this minimum value will be increased to EUR 500. No adjustments will be made to the
accounting, as the minimum value of fixed tangible assets of EUR 500 will be applied to newly acquired assets in a viable
manner.
Property, plant and equipment are derecognised when they are sold or when no future economic benefits are expected
from the use or sale of the asset. Any gain or loss arising on the sale or write-down of an item of property, plant and
equipment is calculated as the difference between the net disposal proceeds and the carrying amount of the asset and
is recognised in profit or loss in the profit (loss) statement and other comprehensive income.
Subsequent repair costs are added to the cost of an asset if it is probable that future economic benefits will flow to the
Group and the Company from the expenditure and the cost of the expenditure can be measured reliably. The carrying
amount of the modified portion is derecognised. All other repair costs are recognised as an expense that affects profit or
loss for the period when they are incurred.
Construction-in-progress is stated at cost. This includes the cost of construction, plant and equipment and other directly
attributable costs. Depreciation is not charged on construction in progress until the asset is placed in service or is ready
for use.
Fixed assets held for sale
Property, plant and equipment, or groups of saleable assets that consist of assets and liabilities that are expected to be
recovered primarily through sale and not through continuing use, are classified as held for sale. Immediately before
classifying an asset as held for sale, the asset (or parts of a pool of available-for-sale assets) is measured in accordance
with the applicable International Financial Reporting Standards as adopted for application in the European Union. (Non-
current assets held for sale are accounted for at the lower of their carrying amount and fair value less the cost of selling
such assets).
Impairment losses on assets held for sale measured at the time of initial classification and subsequent gains and losses
related to the revaluation of assets shall be included in profit or loss. Revenue from the reversal of depreciation is not
recognised at a higher amount than accumulated impairment losses.
When property, plant and equipment is recorded as held for sale, depreciation is no longer charged.
Impairment of property, plant and equipment and intangible assets other than goodwill:
At each date of preparation of the statement of financial position, the Group and the Company shall review the residual
value of property, plant and equipment and intangible assets to determine whether there is any indication that these
assets are impaired. If any such indication exists, the Group and the Company assesses the recoverable amount of the
asset in order to be able to assess the impairment loss (if any). Where it is impossible to assess the recoverable value
of assets, the Group and the Company estimates the recoverable amount in the cash-generating group to which the
asset belongs. When a reasonable and consistent basis of allocation can be identified, the assets of the Group and the
Company are also allocated to separate income-generating groups of assets, or alternatively, they are allocated to the
lowest income-generating group of assets for which a reasonable and consistent basis of allocation can be identified.
The recoverable amount is the higher of fair value less costs to sell and value in use. In assessing the value in use, the
estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
assessments conditions, time value of money and the risks associated with the assets, which was not taken into account
in estimating the future cash flows.
If the estimated recoverable amount of the asset (or cash-generating asset group) is less than its carrying amount of this
asset, the carrying amount of the asset is reduced to the recoverable value of this asset (or cash-generating asset group).
Impairment losses are recognised immediately through profit or loss. The Group and the Company have one group of
income-generating assets for the heat business.
16
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2025 Consolidated and Company‘s Financial
Statements
(in thousands euro, unless specified otherwise)
If after the recognition of impairment loss the value of the asset increases, the carrying amount of the asset (cash-
generating asset group) is increased to the newly estimated recoverable amount, but so that the increase does not
exceed the carrying value of the asset (cash-generating asset group) if the losses due to value impairment in previous
years had not been recognized. Reversals of impairment losses are recognised immediately in profit or loss.
3.6. Investment property
Property, plant and equipment are assets that the Company manages and controls in order to generate rental income
and/or increase the value of these assets. Assets that are used for the production of goods, services or for
administrative purposes, and the sale of which is classified as a typical activity of the Company, not included in
property, plant and equipment. Investment property is initially valued at acquisition cost, including related transaction
costs. Subsequent to initial recognition, buildings are carried at cost less accumulated depreciation and impairment
losses, if any. Depreciation is calculated on a straight-line basis so as to write off the cost of the asset on a straight-line
basis over the asset's useful life of 50 years. Depreciation of investment property is recorded in the statement of profit
or loss and other comprehensive income under operating expenses.
3.7. Financial assets
The Group and the Company classify their financial assets in the following groups:
• Financial assets that are measured at fair value in subsequent periods, with the change in fair value recognised
in other comprehensive income or profit or loss; and
• Financial assets measured at amortised cost.
The classification depends on the financial asset management model used and the contractual cash flow terms.
Recognition and initial measurement
Trade receivables are initially recognised when they arise. On initial recognition, all other financial assets and financial
liabilities are recognised when the Group and the Company become a party to the contractual provisions of the
instrument.
Financial assets (other than trade receivables without a significant financing component) or financial liabilities are initially
measured at fair value plus, if the instrument is not measured at fair value through profit or loss, transaction costs directly
attributable to the acquisition or issue. Trade receivables without a significant financing component are initially recognised
at transaction price.
Classification and subsequent assessment
At initial recognition, financial assets are classified and measured as follows:
• amortised cost;
• at fair value through profit or loss.
Financial assets are not reclassified in subsequent periods unless the Group and the Company change their financial
asset management model. In this case, all related financial assets shall be reclassified on the first day of the first reporting
period following the change in business model.
A financial asset is measured at amortised cost if it meets both of the following criteria and is not classified as an asset
measured at fair value through profit or loss:
• The entity intends to hold the asset for contractual cash flows;
• Contractual cash flows on specific dates include only payments of principal and interest on the amount due.
Write-off
The carrying amount of a financial asset is written down, in whole or in part, if there is no realistic prospect of its recovery.
This usually occurs when the Group and the Company determine that the debtor does not have sufficient assets or
sources of income to generate sufficient cash flows to repay the amounts written off. However, financial assets that are
written off may be recovered to meet debt collection requirements imposed by the Group and the Company.
Assessment of significantly increased credit risk
The Group and the Company assess the probability of default at the initial recognition of financial assets and at each
balance sheet date, taking into account whether there has been a significant increase in credit risk since initial recognition.
In order to assess whether there has been a significant increase in credit risk, the Group and the Company compare the
risk of default on assets at the date of preparation of the statements with the risk of default on initial recognition. In
analysing whether credit risk has increased significantly, the following factors shall be assessed:
• Significant changes in the internal credit rating;
• Significant changes in the external credit rating (if any);
• Actual or foreseeable material adverse changes in the business environment, financial or economic situation
which may materially affect the ability of the customer to meet its obligations;
• Actual or anticipated significant changes in the client's performance.
Based on the Group's and the Company's debt recovery statistics, management considers that the credit risk has
increased from the time of initial recognition only if the contractual payments are delayed by more than 30 days.
ECL valuation – trade receivables and other contract assets
The Group and the Company apply a simplified approach to the calculation of lifetime expected credit losses over the
lifetime of a loan, using the provisioning matrix for all trade receivables and other receivables. In order to calculate
expected credit losses using the provisioning matrix, trade receivables and other receivables are classified into separate
17
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2025 Consolidated and Company‘s Financial
Statements
(in thousands euro, unless specified otherwise)
groups according to the general characteristics of credit risk. The amounts of each group are analysed on the basis of
the number of days past due and a loss indicator shall be assigned to each group of amounts past due. Loss ratios are
calculated using management's expert judgement using statistical recovery information for the last 2 years.
For trade receivables that have no significant financing component, an estimated credit loss is recorded over the period
of the debt.
Such information shall be adjusted, if necessary, in the light of forward-looking information. The table below provides
information on the expected credit losses calculated for the Group and the Company for each group of overdue amounts.
As trade receivables and other receivables generally do not include collateral or other credit protection, the expected loss
ratio corresponds to the probability of default:
Debt overdue in days
Not
from 1 to
from 31
from 91
from
from
from
more
Group
overdue
30
to 90
to 180
181 to
271 to
361 to
than 721
Expected
credit
loss
270
360
720
1.35
22.15
53.64
73.02
83.08
89.80
95.17
99.07
rate %
Company
Expected
credit
loss
1.35
22.15
53.64
73.02
83.08
89.80
95.17
99.07
rate %
3.8. Inventories
Inventories are stated at the lower of cost or net realisable value. Net realisable value refers to the estimated selling price
of inventories less any estimated selling costs. The cost of inventories is calculated using the FIFO method.
The cost of inventories is reduced by discounts and write-downs received from suppliers during the reporting period and
applied to inventories held in stock.
Inventories held for more than one year (calculated from the acquisition date), excluding essential reserves, are written
down by 100%.
3.9. Provisions
A provision is recorded when, as a result of a past event, the Company has a present obligation (legal or constructive)
and it is probable that the Group and the Company will be required to settle the obligation, and a reliable estimate of the
amount of the obligation can be made.
The amount recognised as a provision is the best estimate at the end of the reporting period of the consideration that will
be required to settle the present obligation, taking into account the risks and uncertainties arising from the obligation.
When a provision is valued using the estimated cash flows to cover a liability, its carrying value is the present value of
these cash flows.
Where it is expected that part or all of the economic benefits needed to cover the provision will be recovered from a third
party, the amount receivable is covered by the asset if it is certain that the compensation will be received and that the
amount receivable can be measured reliably.
3.10. Cash and cash equivalents
Cash consists of money in bank accounts and in cash, and cash in transit. Cash equivalents are short-term, highly liquid
investments that are readily converted to known amounts of cash. The term of such investments does not exceed three
months, and the risk of value changes is very insignificant.
3.11. Borrowing costs
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset the
preparation of which for the intended use or sale takes a long time are included in the cost of the asset until the asset is
prepared for the intended use or sale.
Investment income earned on a temporary investment of a specific amount borrowed that has not yet been used for a
qualifying asset shall be deducted from the borrowing costs allowed for capitalisation.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
3.12.` Financial liabilities and equity instruments
The Group and the Company recognise financial liabilities at cost on initial recognition.
The Group and the Company classify financial liabilities into the following categories:
• measured at amortised cost,
• measured at fair value through profit or loss,
• hedging financial instruments.
18
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2025 Consolidated and Company‘s Financial
Statements
(in thousands euro, unless specified otherwise)
The Group and the Company classify trade debts, financial debts, leasing liabilities, interest liabilities and other payables
as financial liabilities measured at amortised cost.
Derecognition of financial liabilities
The Group and the Company derecognise financial liabilities when, and only when, the obligations of the Group and the
Company are discharged, cancelled or expire.
3.13. Employee benefits
The Group and the Company account for employee benefits in accordance with applicable legal requirements and
accounting standards. Employee benefits are classified into the following main categories:
• Short-term employee benefits
These include salaries, bonuses, holiday pay, social security contributions, and other benefits related to
employment relationships. These benefits are recognised as expenses in the period in which they are earned and
recorded as liabilities if they remain unpaid as of the reporting date.
• Vacation accruals
Accumulated unused employee leave is recognised as an expense and a liability in accordance with the accrual
principle. Leave accrual is made for accumulated but unused leave as of the reporting date.
• Accrued bonuses and incentives
The Group and the Company accrue bonuses and incentives payable after management approval in 2026. These
amounts are recognised on an accrual basis once it is clear that they will be paid.
• Retirement benefit provisions
The Group and the Company accrue benefits for employees reaching the age of retirement. This obligation is
calculated based on actuarial assessments and discounted to reflect its present value. Accumulated retirement
benefits are recognised as an expense over the employee’s period of service.
• Termination benefits
If the Group or the Company commits to paying termination benefits, these benefits are recognised as an expense
when it becomes clear that the obligation will be fulfilled.
• Post-employment benefits
The Group and the Company make mandatory contributions to the state social insurance fund. These
contributions are recognised as an expense when the related wages are earned. The Group and the Company
have no additional voluntary obligations to employee pension funds or other post-employment benefits.
Provisions
All employee benefit provisions are classified as:
• Short-term liabilities – amounts payable within 12 months from the balance sheet date.
• Long-term liabilities – amounts payable after more than one year.
3.14. Lease
The Group and the Company are the lessee
At the commencement date, the lessee shall measure the lease liability at the present value of the lease payments
outstanding at that date, including the following:
• Fixed charges (including those assimilated to fixed charges) less any rental incentives receivable;
• Variable rents that depend on an index or rate initially measured using an index or rate at the start date;
• Amounts that the tenant should pay under the liquidation value guarantees;
• Penalties for terminating the lease if it is assumed that the tenant will exercise its option to terminate the lease
during the lease term.
Rents is discounted using the interest rate provided for in the lease agreement, if that rate can be easily determined. If
that rate cannot be easily determined, the tenant shall use the borrowing rate calculated by the lessee.
The interest rate specified in the lease is the interest rate that results in the present value of the lease payments and the
unguaranteed residual value being equal to the sum of the fair value of the leased asset and any initial direct costs
incurred by the lessor.
The lease liability is measured at amortised cost using an imputed interest rate consistent with the discount rate used to
discount the lease payments. Interest expense relating to a lease liability is allocated over the lease term and recognised
in profit or loss.
The cost of an asset held under right of use at initial recognition comprises:
• The amount of the initial measurement of the lease liability;
• Any lease payments made on or before the commencement date less any lease incentives received;
• Any primary direct costs incurred by the lessee; and
• An estimate of the cost of restoring the asset.
Thereafter, the lessee shall measure the right-of-use asset at cost less any accumulated depreciation and any
accumulated impairment losses. If, before the end of the lease period, the ownership of the leased asset is transferred
to the tenant , or if the price of the asset managed under the right of use indicates that the tenant will exercise the right
to purchase, the tenant shall calculate the depreciation of the asset managed under the right of use from the beginning
to the end of the useful life of the leased asset. Alternatively, the lessee shall calculate the depreciation of the right-of-
19
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2025 Consolidated and Company‘s Financial
Statements
(in thousands euro, unless specified otherwise)
use asset from the commencement date to the earlier of: the end of the useful life of an asset held under a right-of-use
arrangement, or the end of a lease term.
Payments relating to short-term leases or leases of low-value assets are recognised as an expense through profit or loss
on a straight-line basis. Short-term leases are considered to be leases with a term of 12 months or less. Low-value assets
include tools and small items of office furniture.
The Group and the Company are the lessor
In transactions where the Company is a lessor, the assessment of whether the concluded Agreement is a finance or
operating lease are carried out on the date of commencement of the lease. For the purpose of determining the type of
lease assignment, all risks and rewards of ownership of the leased asset are assessed jointly or substantially transferred
from the lease. If substantially all the risks and rewards of ownership of the leased asset are transferred, such leases are
treated as finance leases, otherwise, as operating leases. In transactions in which the Company acts as an intermediate
Lessor, the sublease shall be classified on the basis of the right-of-use assets specified in the main agreement.
3.15. Accounting for grants and subsidies
The Group and the Company account for grants and subsidies in accordance with International Accounting Standard 20
(IAS 20) Accounting for Government Grants and Disclosure of Government Assistance.
• Recognition of government grants
Grants and subsidies are recognised as income only when there is sufficient assurance that:
o the Group and the Company will meet all conditions related to the grant;
o The grant or subsidy will actually be received.
• Operating grants
o Grants intended to cover operating expenses are recognised systematically over the period in which
they help to offset the related costs.
o They are accounted for as other operating income in the reporting period in which the related expenses
are incurred.
• Grants related to assets
o If a grant is intended for the acquisition or construction of non-current assets, it is recorded as a long-
term liability and recognised over the useful life of the asset, proportionally reducing depreciation
expenses.
o Grants may be presented as deferred income in the balance sheet or deducted from the value of the
grant-funded asset.
• Subsidies for interest or tax compensation
o If the Group and the Company receive a subsidy intended to compensate for interest expenses, it is
recognised by reducing interest expenses in the period when the respective costs are covered.
o If the subsidy is related to taxes, it is recognised by reducing the corresponding tax expenses in the
period in which the related taxes are incurred.
• Refundable grants
o If a grant becomes refundable, it is recognised as a liability from the moment the repayment obligation
arises.
o The refund of asset-related grants adjusts the carrying amount of the asset or the deferred income
balance, while the refund of operating grants is recognised directly in the profit or loss statement.
3.16 Income tax
Income tax expense reflects current year tax and deferred tax.
Current year's tax
Tax of the current year is payable based on taxable profit for the year. Taxable profit differs from the profit reported in the
statement of comprehensive income because of the income or expense that is taxable or deductible in the following year
and the income or expense that is never taxable or deductible. Income tax is calculated using tax rates that have been
enacted or substantively enacted by the balance sheet date. The Group and the Company are subject to a corporate
income tax rate of 16 per cent in 2025 (15 per cent in 2024).
Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally
recognized for all taxable temporary differences and deferred tax assets are recognized to the extent that it is probable
that taxable profits will be available against which deductible temporary differences can be utilized. Such assets and
liabilities are not recognised if the temporary differences relate to goodwill, or to the initial recognition of assets or liabilities
(other than in a business merger) that are not affected by either taxable or financial profit at the time they arise
(transactions).
Deferred tax liabilities are recognised to offset temporary tax differences. Deferred income tax assets are recognised for
deductible temporary differences only to the extent that it is probable that sufficient taxable profit will be available to
realise the benefit of the temporary differences and is expected to be realised in the foreseeable future.
20
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2025 Consolidated and Company‘s Financial
Statements
(in thousands euro, unless specified otherwise)
The carrying amount of deferred tax assets is reviewed at each statement of financial position date and reduced to the
extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be
recovered by the Group and the Company.
Deferred tax assets and liabilities are measured using the tax rates that will apply to the Group and the Company in the
year in which those temporary differences are expected to be recovered or settled, based on tax rates (and tax laws) that
have been or will be approved before the end of the reporting period. The measurement of deferred tax liabilities and
assets reflects the tax consequences that would follow from the manner in which the Group and the Company expect, at
the reporting period, to recover or to settle the carrying amount of its assets and liabilities.
Current and deferred tax for the period
Current and deferred tax is recognised as an expense in profit or loss, except when it relates to items recognised outside
profit or loss (in other comprehensive income or directly in equity). In such cases, tax is also recognised outside profit or
loss, or when it arises from the initial recognition of a business combination. In the case of a business merger, the tax
effect is included in the accounting for the business merger.
3.17. Basic and diluted earnings per share
The basic and diluted earnings per share shall be calculated by dividing the profit for the reporting period attributable to
shareholders by the weighted average of the ordinary shares issued. There is no difference between basic and diluted
earnings per share.
3.18. Revenue recognition
Revenue accounting policy
The Group and the Company recognise revenue by reflecting the transfer of goods or services to customers for
consideration expected to be received, net of VAT, discounts, and returns. Revenue is accounted for in five key steps:
• Contract identification – the contract between the Group/Company and the customer is identified, defining the
rights and obligations of both parties.
• Identification of performance obligations – specific goods or services to be transferred to the customer are
determined.
• Determination of transaction price – the total revenue amount the Group/Company expects to receive is
calculated. It may be fixed or variable and may include non-monetary consideration or financing components.
• Allocation of transaction price – revenue is allocated to individual goods or services based on their relative
selling prices.
• Revenue recognition – revenue is recorded when the customer obtains control of the transferred goods or
services. This may occur at a point in time or over a certain period.
Revenue recognition methods
Sales of heat and hot water
Revenue is recognised based on invoices issued to customers, using meter readings as the basis. At the end of the
period, services provided but not yet billed are accounted for on an accrual basis.
Sales of goods
Revenue from the sale of goods is recognised when:
• Ownership is transferred to the buyer;
• The Group/Company no longer retains control or management rights;
• The amount of income can be measured reliably;
• It is probable that economic benefits will be received, and the related costs can be reliably measured.
Financing elements
As the Group/Company does not have contracts with payment periods exceeding one year, no separate accounting for
a financing component is applied.
Other income
• Rental income – recognised on an accrual basis when the amount can be reliably measured and the receipt of
economic benefits is probable.
• Late payment interest – recognised only when received.
• Dividends – recognised when shareholders acquire the right to receive payments and it is probable that they
will be received.
• Interest income – accrued over the period, taking into account the effective interest rate and the probability of
fund collection.
3.19 Expense recognition
Expense recognition principles:
• Expenses are recognised in accounting based on the accrual and matching principles.
• Expenses are recorded in the reporting period in which the related revenue is earned, regardless of the timing
of cash payments.
• If expenses cannot be directly linked to specific revenue and will not generate future income, they are recognised
as expenses in the period they are incurred.
Expense measurement:
21
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2025 Consolidated and Company‘s Financial
Statements
(in thousands euro, unless specified otherwise)
• The amount of expenses is measured as the paid or payable amount, excluding VAT.
• If the settlement period is long and interest is not separately distinguished, the expense amount is measured by
discounting the settlement amount using the market interest rate.
3.20. Foreign currency transactions
The Group and the Company account for foreign currency-denominated transactions in accordance with IAS 21 The
Effects of Changes in Foreign Exchange Rates.
• Initial recognition of foreign currency transactions
o Foreign currency transactions are initially translated into the functional currency of the Group and the
Company at the official exchange rate prevailing on the transaction date.
• Monetary and non-monetary items
o Monetary items (cash, receivables, payables) are recalculated in the balance sheet using the official
exchange rate at the reporting date. The impact of exchange rate changes is recognised in the profit
or loss statement.
o Non-monetary items accounted for at fair value (e.g., revalued non-current assets) are translated at
the exchange rate in effect on the date their fair value was determined.
o Non-monetary items measured at historical cost are not recalculated.
• Recognition of foreign exchange differences
o Foreign exchange differences related to changes in the value of monetary items are recognised in the
profit or loss statement.
o If foreign exchange differences arise from financial liabilities designated as hedges against foreign
currency risk, they may be accounted for under hedge accounting principles.
3.21. Application of assessments in preparation of financial statements
In preparing the financial statements, management makes decisions, estimates, and assumptions that affect the
disclosed amounts of income, expenses, assets, liabilities, and uncertainties as of the reporting date.
Since the uncertainty of these assumptions and estimates may impact results, significant adjustments to the carrying
amounts of assets or liabilities may be required in the future.
3.21.1. Property, plant and equipment – useful life
Key assumptions used to determine the useful life:
• Estimated duration of asset usage.
• Technical and technological obsolescence, including service innovations and changes.
• Legal or other restrictions, such as the validity periods of finance lease agreements.
3.21.2. Investments in subsidiaries – impairment losses
• The return on investments is assessed by discounting the future cash flows of subsidiaries.
• The applied discount rate is the weighted average cost of capital, reflecting current market assumptions
regarding the time value of money.
3.21.3. Impairment of receivables
• A provision for expected credit losses (ECL) is recognised for trade receivables, other receivables, and accrued
income.
• Loss rates are determined based on statistical recovery data from the past two years and management’s expert
assessment.
• Both quantitative and qualitative data, including forward-looking information, are used in ECL assessments.
• Loss provisions are presented in the profit or loss statement as expenses related to impairment.
3.21.4. Deferred profit tax assets
• A deferred tax asset is recognised for unused tax losses if it is probable that sufficient taxable profit will be
available for their utilisation.
• Management determines the amount that can be recognised based on:
o Forecasts of expected future taxable profits.
o Tax planning strategies.
3.21.5. Fair value of financial instruments
• Fair value is the amount at which assets or services can be exchanged or liabilities settled between unrelated
parties.
• Valuation is determined using:
o Market prices (if an active market exists).
o Discounted cash flow models.
o Option pricing models (depending on circumstances).
Fair value hierarchy
Fair value is classified into one of three levels based on valuation methods:
• Level 1 – Quoted prices in active markets (unadjusted).
• Level 2 – Other observable inputs (e.g., derived from prices).
• Level 3 – Unobservable inputs based on management’s judgment.
If different level inputs are used in a fair value assessment, the classification is based on the lowest significant input level.
The Company transfers amounts between levels at the end of the reporting period when a change occurs.
22
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2025 Consolidated and Company‘s Financial
Statements
(in thousands euro, unless specified otherwise)
3.22. Contingencies
Contingent liabilities are not recognised in the financial statements. They are disclosed unless the possibility of an outflow
of resources generating economic benefits is small.
A contingent asset is not recognised in the financial statements but is disclosed when an inflow of economic benefits is
probable.
3.23. Events after the date of the balance sheet
Post-reporting events that provide additional information about the situation of the Group and the Company at the date
of preparation of the statements of financial position (adjusting events) are reflected in the financial statements. Events
after the date of the balance sheet that are not corrective events, are described in the notes when they are significant.
3.24. Mutual settlements and comparative numbers
When preparing the financial statements, assets and liabilities, income and expenses are not offset unless the specific
International Accounting Standards specifically require such offsetting.
3.25. Segment reporting
Segment information shall be reported in the same manner as other internal reporting to the chief operating decision
maker. The chief operational decision maker responsible for allocating resources and assessing the performance of the
segments is the Board, which takes strategic decisions.
The activities of the Group and the Company are carried out in a single segment, therefore, these financial statements
do not provide additional disclosures about the segments.
4. Intangible fixed assets
Movement of long-term intangible assets (acquired rights and software) during the reporting and previous periods:
Group
Company
Acquisition value:
Balance as at 31 December 2023
1,868
1,860
Acquisitions
3
-
Transfers and write-offs (changes in value).
(22)
(22)
Reclassification from construction in progress
199
199
Balance as at 31 December 2024
2,048
2,037
Acquisitions
14
-
Transfers and write-offs (changes in value).
(111)
(111)
Reclassification from construction in progress
154
154
Balance as at 31 December 2025
2,105
2,080
Amortization:
Balance as at 31 December 2023
1,619
1,619
Amortisation per year
137
136
Disposals and write-offs
(22)
(22)
Balance as at 31 December 2024
1,734
1,733
Amortisation per year
217
214
Disposals and write-offs
(87)
(87)
Balance as at 31 December 2025
1,864
1,860
Balance as at 31 December 2024
314
304
Balance as at 31 December 2025
241
220
23
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2025 Consolidated and Company‘s Financial
Statements
(in thousands euro, unless specified otherwise)
5. Property, plant and equipment:
Details of the Group's and Company's property, plant and equipment:
Constructio
Land
Machin
ns
in
Invest
Group
and
Buildin
ery
and
Vehicles
Plant and
progress
ment
Total
buildin
gs
plant
tools
and
propert
Acquisition value:
gs
s
prepayment
y
Balance
as
at
31
17,608
232,742
61,946
2,535
14,490
23,483
1,631
354,435
December 2023
Acquisitions
-
-
-
35
9
22,315
-
22,359
Sold and written off
assets
-
(134)
(1,479)
(130)
(770)
-
-
(2,513)
Transfer
to
202
18,394
5,412
2
3,299
(27,309)
-
-
intangible assets
Reclassifications
-
-
-
-
-
(199)
-
(199)
Restoration
of
11
2
1
-
1
(80)
-
(65)
impairment (loss (-))
Balance
as
at
31
17,821
251,004
65,880
2,442
17,029
18,210
1,631
374,017
December 2024
Acquisitions
-
-
-
-
15
23,640
146
23,801
Sold and written off
assets
-
-
(3,202)
-
(385)
(15)
-
(3,602)
Reclassifications
136
15,251
3,264
134
2,832
(21,666)
104
55
Transfer
to
-
-
-
-
-
(154)
-
(154)
intangible assets
Restoration
of
9
6
-
-
-
-
-
15
impairment (loss (-))
Balance
as
at
31
17,966
266,261
65,942
2,576
19,491
20,015
1,881
394,132
December 2025
Accumulated depreciation:
Balance
as
at
31
11,407
98,132
48,122
1,560
11,227
-
517
170,965
December 2023
Depreciation
during
375
5,944
2,020
208
865
-
32
9,444
the year
Reclassifications
-
(66)
(1,512)
(130)
(767)
-
-
(2,475)
Sold and written off
assets
-
-
-
-
-
-
-
-
Balance
as
at
31
11,782
104,010
48,630
1,638
11,325
-
549
177,934
December 2024
Depreciation
during
355
6,358
2,354
203
1,293
-
34
10,597
the year
Reclassifications
-
-
(3,155)
-
(378)
-
-
(3,533)
Sold and written off
assets
2
56
(23)
-
(35)
-
-
-
Balance
as
at
31
12,139
110,424
47,806
1,841
12,205
-
583
184,998
December 2025
Book value:
Balance
as
at
31
6,039
146,994
17,250
804
5,704
18,210
1,082
196,083
December 2024
Balance
as
at
31
5,827
155,837
18,136
735
7,286
20,015
1,298
209,134
December 2025
24
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2025 Consolidated and Company‘s Financial
Statements
(in thousands euro, unless specified otherwise)
Construct
Machiner
ions
in
Company
Land and
Buildings
y
and
Vehicles
Plant and
progress
Total
buildings
plant
tools
and
prepayme
nts
Acquisition value:
Balance
as
at
31
17,493
232,553
61,281
2,535
14,650
23,483
351,995
December 2023
Acquisitions
-
-
-
22,222
22,222
Sold
and
written
off
(134)
(1,479)
(130)
(770)
-
(2,513)
assets
Transfer
to
intangible
202
18,394
5,412
2
3,299
(27,309)
-
assets
Reclassifications
-
-
-
-
-
(199)
(199)
Impairment losses (-)
11
2
1
-
1
(80)
(66)
Balance
as
at
31
17,706
250,815
65,214
2,407
17,180
18,117
371,439
December 2024
Acquisitions
-
-
-
-
23,578
23,578
Sold
and
written
off
-
-
(3,202)
-
(379)
(15)
(3,596)
assets
Reclassifications
136
15,251
3,264
134
2,821
(21,551)
55
Transfer
to
intangible
-
-
-
-
-
(154)
(154)
assets
Restoration
of
9
6
-
-
-
-
15
impairment (loss (-))
Balance
as
at
31
17,851
266,072
65,276
2,541
19,622
19,975
391,337
December 2025
Accumulated
depreciation:
Balance
as
at
31
11,371
97,943
47,502
1,560
11,433
-
169,809
December 2023
Depreciation during the
year
372
5,944
2,003
204
857
-
9,380
Reclassifications
-
(66)
(1,512)
(130)
(767)
-
(2,475)
Sold
and
written
off
-
-
-
-
-
-
-
assets
Balance
as
at
31
11,743
103,821
47,993
1,634
11,523
-
176,714
December 2024
Depreciation during the
year
353
6,358
2,337
197
1,281
-
10,526
Reclassifications
-
-
(3,155)
-
(372)
-
(3,527)
Sold
and
written
off
2
56
(23)
-
(35)
-
-
assets
Balance
as
at
31
12,098
110,235
47,152
1,831
12,397
-
183,713
December 2025
Book value:
Balance
as
at
31
5,963
146,994
17,221
773
5,657
18,117
194,725
December 2024
Balance
as
at
31
5,753
155,837
18,124
710
7,225
19,975
207,624
December 2025
The amounts of the Group's and the Company's depreciation expenses were included in operating expenses in the profit
and loss and other comprehensive income statements (depreciation and amortisation and other expenses).
Part of the Group’s property, plant, and equipment, with an acquisition cost of EUR 32,884 thousand as of 31 December
2025 (EUR 33,987 thousand as of 31 December 2024), and of the Company’s assets, valued at EUR 32,848 thousand
as of 31 December 2025 (EUR 33,987 thousand as of 31 December 2024), was fully depreciated but remains in use.
After assessing internal and external indicators, the management of the Group and the Company did not identify any
significant additional impairment of property, plant, and equipment in 2025.
25
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2025 Consolidated and Company‘s Financial
Statements
(in thousands euro, unless specified otherwise)
On 31 December 2025 and 31 December 2024, the Group's and the Company's construction in progress consists mainly
of the reconstruction and overhaul of boiler plants and heat supply networks.
The Heat Supply Routes and Collectors, the residual value of which as of 31 December 2025 amounted to EUR 6,089
thousand (in 2024 – EUR 5,628 thousand) were pledget to the Ministry of Finance of the Republic of Lithuania based
under loan agreements with a final repayment term of 2034 .
6. Investments in subsidiaries and loans to group companies
2025-12-31
2024-12-31
Investments in
Acquisiti
Impairment
Book value
Acquisiti
Impairment
Book value
subsidiaries
on price
on price
UAB GO Energy LT
2,763
-
2,763
2,763
-
2,763
Total:
2,763
-
2,763
2,763
-
2,763
Loans to entities of the group
As of 31 December 2025 and 31 December 2024, the Company had not provided loans to the Group companies.
7. Right-of-use assets
Movements of right-of-use assets during the reporting period and previous periods:
Group
Company
Assets managed under
Assets
managed
under
the right of use
the right of use
Acquisition value:
Balance as at 31 December 2023
1,118
1,016
Recognition of the right to use an asset
267
22
Disposals, write-offs (change in value)
(70)
(70)
Balance as at 31 December 2024
1,315
968
Acquisitions
180
180
Recognition of the right to use an asset
Disposals, write-offs (change in value)
1,495
1,148
Balance as at 31 December 2025
Amortization:
34
100
Balance as at 31 December 2023
115
19
Amortisation per year
(5)
(5)
Disposals, write-offs (change in value)
144
114
Balance as at 31 December 2024
29
22
Amortisation per year
15
15
Disposals, write-offs (change in value)
188
151
Balance as at 31 December 2025
Book value:
Balance as at 31 December 2024
1,171
854
Balance as at 31 December 2025
1,307
997
26
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2025 Consolidated and Company‘s Financial
Statements
(in thousands euro, unless specified otherwise)
8. Investments in associates
In the item of other financial assets, the Company records 75,460 units of shares in UAB Kauno miesto paslaugų centras.
From 2024, the shares of the Associate Company are consolidated using the equity method. By 31 December 2024, the
share of profit recognised in investment activity income amounted to EUR 89 thousand. In 2025, the share of profit earned
was 26 thousand euros.
Group
Company
2025-12-31
2024-12-31
2025-12-31
2024-12-31
Shares in Associates and Share of Profit
190
164
75
75
190
164
75
75
9. Inventories
Group
Company
2025-12-31
2024-12-31
2025-12-31
2024-12-31
Technological fuels
673
1,268
673
1,268
Spare parts
457
435
457
435
Materials
262
329
261
329
Goods for resale
197
109
-
-
1,589
2,141
1,391
2,032
To be deducted: write-down to net
realisable value at the end of the
period
(289)
(380)
(289)
(380)
Carrying amount of inventories
1,300
1,761
1,102
1,652
The write-down of the Group's and the Company's inventories to net realisable value as at 31 December 2025 amounted
to EUR 289 thousand (on 31 December 2024: EUR 380 thousand). The change in inventory write-downs to net realisable
value in 2025 and 2024 is included in the inventory impairment expense line item in the Group’s and the Company’s profit
(loss) and other comprehensive income statements.
10. Amounts receivable within one year
10.1. Trade receivables
Group
Company
2025-12-31
2024-12-31
2025-12-31
2024-12-31
Trade receivables
23,013
20,409
22,810
20,193
To be deducted: expected credit
(5,108)
(4,711)
(5,092)
(4,711)
losses
17,905
15,698
17,718
15,482
Change in impairment of doubtful receivables as at 31 December 2025 and 31 December 2024 in the Group's and the
Company's Statements of Profit and Loss and Other Comprehensive Income is included in the item of impairment
charges on receivables. Impairment of doubtful receivables is measured based on expected credit losses.
The Group's and the Company's receivables from customers are interest-free and normally have a maturity of 30 days
or individually agreed.
27
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2025 Consolidated and Company‘s Financial
Statements
(in thousands euro, unless specified otherwise)
Change in the Group's and Company's expected credit losses on trade receivables:
Group
Company
Balance as at 31 December 2023
4,362
4,322
Recognised (reversed) expected credit losses
472
472
Written off
(123)
(83)
Balance as at 31 December 2024
4,711
4,711
Recognised (reversed) expected credit losses
513
513
Written off
(116)
(132)
Balance as at 31 December 2025
5,108
5,092
10.2. Other receivables
Group
Company
2025-12-31
2024-12-31
2025-12-31
2024-12-31
Recoverable taxes
115
137
5
88
Other receivables
661
808
650
814
Deducted credit losses (-)
-
(85)
-
(85)
776
860
655
817
As of 31 December 2025, other receivables of the Group and the Company consisted of taxes receivable from the state
and amounts receivable from municipalities for compensation paid to low-income families. As of 31 December 2024, this
line item also included trade receivables for resold goods, rent, and sold scrap metal. Starting from 2025, all trade
receivables are presented under Trade receivables.
The Group's and the Company's other receivables are interest-free and are generally due within 30 to 45 days.
No impairment is calculated on receivables not overdue as management does not consider that there is any indication
that debtors will be unable to meet their obligations.
Credit risk
The Group and the Company are not exposed to significant concentrations of credit risk as they deal with a large number
of customers.
Movement in impairment in value of other receivables of the Group and the Company:
Group
Company
Balance as at 31 December 2023
275
275
Recognition of expected credit losses
(190)
(190)
Balance as at 31 December 2024
85
85
Recognised (reversed) probable credit losses
(85)
(85)
Balance as at 31 December 2025
0
0
28
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2025 Consolidated and Company‘s Financial
Statements
(in thousands euro, unless specified otherwise)
11. Cash and cash equivalents
Grupė
Bendrovė
2025-12-31
2024-12-31
2025-12-31
2024-12-31
Cash in transit
304
330
304
330
Cash in bank
10,559
10,744
8,864
9,270
10,863
11,074
9,168
9,600
12. Changes in equity
Legal reserve
The legal reserve is required under the legislation of the Republic of Lithuania. At least 5% of net profits, calculated in
accordance with International Financial Reporting Standards, must be transferred to the reserve annually until it
reaches 10% of the authorised capital. The legal reserve may not be distributed as dividends but can be used to
cover future losses.
In 2025, when distributing the profit for 2024, the legal reserve was additionally formed only in the Subsidiary, with
EUR 4 thousand allocated. The Company's legal reserve is fully formed.
Other reserves
By shareholder decision, the Company allocated EUR 50 thousand from profits to a reserve for donations.
Annual allowances
No annual bonuses were granted in 2024 or 2025.
Dividends
In 2025, EUR 1,042 thousand of dividends were paid to the Company's shareholders (in 2024, no dividends were
paid by the shareholders' decision). Dividends per share amounted to EUR 0.025
13. Financial debts
All loans of the Group and the Company are accounted for and repaid in euro. The weighted average interest rate on
outstanding long-term loans (in percentage) as of 31 December 2025 and 31 December 2024 was:
Group
Company
2025-12-31
2024-12-31
2025-12-31
2024-12-31
Long-term
2.80
3.61
2.80
3.61
Repayment terms of long-term loans:
Group
Company
2025-12-31
2024-12-31
2025-12-31
2024-12-31
Long-term financial debts (loans):
57,825
62,658
57,825
62,658
Payable between 1 and 5 years
22,047
21,368
22,047
21,368
Payable after 5 years
35,778
41,290
35,778
41,290
Current portion of long-term loans
4,833
4,078
4,833
4,078
62,658
66,736
62,658
66,736
Interest payable to financial institutions, amounting to EUR 176 thousand and EUR 176 thousand, is accounted for by
the Group and the Company under the Accrued Expenses section of the balance sheet (31 December 2024 – EUR 244
thousand and EUR 244 thousand, respectively).
In 2025, EUR 524 thousand in interest expenses were capitalised. In 2024, EUR 688 thousand in interest expenses were
capitalised.
29
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2025 Consolidated and Company‘s Financial
Statements
(in thousands euro, unless specified otherwise)
Detailed information on the Group’s and the Company’s long-term loans as of 31 December 2025:
Loan
Loan
balance as
To be paid
Credit institution
Date of contract
amount in
Maturity
of 31
in
2026,
EUR
December
thousand
thousand
2025 in EUR
EUR
thousand
1
EIB**
2020-08-07
15,000
2035-08-24
9,750
1,000
2
EIB**
2020-08-07
12,000
2036-08-18
9,736
906
3
EIB**
2020-08-07
14,000
2037-08-22
12,415
1,057
4
EIB**
2020-08-07
14,000
2038-09-29
13,472
1,057
5
EIB**
2024-10-30
12,000
2039-10-31
12,000
226
6
LR Finansų m.*
2010-10-26
807
2034-03-15
347
38
7
LR Finansų m.*
2010-04-09
2,410
2034-03-15
842
93
8
LR Finansų m.*
2014-01-15
793
2034-12-01
374
42
9
LR Finansų m.*
2014-03-31
7,881
2034-12-01
3,722
414
62,658
4,833
* Ministry of Finance of the Republic of Lithuania; ** European Investment Bank.
On 12 September 2024, AB Kauno energija signed a EUR 35 million long-term loan agreement with the European
Investment Bank. The loan funds will finance investments in 2024–2026, including the modernisation of existing pipelines,
the construction of new heat supply networks, the reconstruction of biomass boiler plants, and the installation of heat
pumps, heat storage tanks, and solar power plants. The investments will enhance energy efficiency and reduce fossil
fuel consumption. As of the financial statement preparation date, EUR 12 million of the loan amount had been utilised.
In 2025, the Company did not make additional use of loans..
The EIB stipulated that the Company must maintain a net financial debt-to-EBITDA ratio not exceeding 4.75 on a semi-
annual basis. Under the loan agreements, the Company's equity ratio (total equity/total assets) must be at least 35%. As
at 31 December 2025, the Company has met its targets.
Loan agreements contain certain restrictions. The Company may not grant dividends, issue and/or obtain new loans,
make grants, sell or lease mortgaged assets without the written consent of the banks.
14. Lease
The Group’s and the Company’s lease obligations:
Group
Company
2025-12-31
2024-12-31
2025-12-31
2024-12-31
Within one year
18
16
13
12
after one year
1,374
1,172
1,052
842
Total lease liabilities
1,392
1,188
1,065
854
The Group's and the Company's assets leased under lease agreements consist of land with a lease term of 26 to 99
years.
In accordance with IFRS 16, the Group and the Company recognised depreciation and interest costs associated with the
lease in question, rather than operating lease costs. Over the 12-month period ended 31 December 2025, the Group
recognised depreciation costs of 29 thousand euro and rental interest of 34 thousand euro, the Company recognised
depreciation costs of 22 thousand euro and rental interest of 26 thousand euro.
30
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2025 Consolidated and Company‘s Financial
Statements
(in thousands euro, unless specified otherwise)
15. Grants and subsidies
Breakdown of grants and subsidies for 2025:
Group
Company
2025-12-31
2024-12-31
2025-12-31
2024-12-31
Opening balance at the beginning of the
reporting period
29,858
30,850
29,854
30,850
Received during the period
86
627
86
623
Written off
-
(63)
-
(63)
Transferred to results
-
(5)
-
(5)
Amortization
(1,587)
(1,551)
(1,586)
(1,551)
Balance at the end of the reporting period
28,357
29,858
28,354
29,854
16. Employee benefit liability
Every worker who leaves their job and reaches retirement age is entitled to receive between 0.5 and 2 months' salary, in
accordance with the laws of the Republic of Lithuania and the Collective Agreement.
The Group's and the Company's employee benefits liability were as follows:
Group
Company
Employee
benefit
liability
at
the
2025-12-31
2024-12-31
2025-12-31
2024-12-31
beginning of the period
691
548
662
527
Paid
(42)
(22)
(42)
(22)
Formed
(5)
165
14
157
Employee benefit liability at the end of
the period:
644
691
634
662
Long-term portion
368
449
358
420
Short-term portion
276
242
276
242
When calculating long-term employee benefits, the Group and the Company assessed the mortality rate in Lithuania,
discount rate, retirement age, age and turnover of employees, salary growth, inflation rate and other factors. The key
assumptions used to determine the planned benefit obligation of the Group and the Company are set out below:
2025-12-31
2024-12-31
Discount rate,
2.787
2.943
Employee turnover rate, %
9.171
9.828
Planned annual salary increase
6%
7%
The actuarial gains and losses related to these liabilities are presented under the item of operating expenses,
remuneration and social security and in the Statements of Financial Position under the current portion of the liability for
long-term employee benefits and the liability for employee benefits.
17.Change in accounting policy for provisions
The Group and the Company reviewed their accounting policies for the year ended 31 December 2025 regarding the
provisions for future price reduction obligations. In previous periods, these obligations were recorded in provisions,
however, management believes that it is more appropriate to record this obligation as an off-balance sheet liability, as it
31
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2025 Consolidated and Company‘s Financial
Statements
(in thousands euro, unless specified otherwise)
arises from a periodic price regulation mechanism and is settled by charging a lower tariff to consumers in the future.
The detailed amount of the Group and the Company’s obligations is disclosed in Note 26.
The impact of the adjustment on the financial statements of the Group and the Company is presented below:
Previous
Group
Adjusted
Previous
Company
Adjusted
As
of
1
January
amount
Adjustment
amount
amount
Adjustment
amount
2024
Total assets
213,540
-
213,540
212,245
-
212,245
Other provisions
1,573
(1,573)
-
1,573
(1,573)
-
Accrued
costs
and
519
(78)
504
(78)
deferred income
441
426
Total
accounts
payable
and
115,934
(1,651)
114,283
115,522
(1,651)
113,871
liabilities
Current year profit
4,505
1,573
6,078
3,881
1,573
5,454
Previous
year
11,128
78
11,206
10,869
78
10,947
retained profit (loss)
Total equity
97,606
1,651
99,257
96,723
1,651
98,374
As of 31 December
2024
Total assets
229,190
-
229,190
227,755
-
227,755
Other provisions
2,269
(2,269)
-
2,269
(2,269)
-
Accrued
costs
and
684
(78)
661
(78)
deferred income
606
583
Total
accounts
payable
and
123,831
(2,347)
121,484
123,439
(2,347)
121,092
liabilities
Current year profit
7,753
696
8,449
7,592
696
8,288
Previous
year
15,551
1,651
17,202
14,725
1,651
16,376
retained profit (loss)
Total equity
105,359
2,347
107,706
104,316
2,347
106,663
The impact of the adjustment on the statements of profit (loss) and other comprehensive income of the Group and the
Company is presented below:
Previous
Group
Adjusted
Previous
Company
Adjusted
As of 31 December
amount
Adjustment
amount
amount
Adjustment
amount
2024
Sales revenue
84,751
696
85,447
84,121
696
84,817
Profit
for
the
7,753
696
8,449
7,592
696
8,288
reporting period
Total
comprehensive
income
7,753
696
8,449
7,592
696
8,288
After the adjustment, in 2024 the earnings per share of the Group and the Company increased from EUR 0.18 to EUR
0.20 and 0.19, respectively.
The adjustment did not affect the cash flows of the Group and the Company's operating, investing or financing activities.
32
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2025 Consolidated and Company‘s Financial
Statements
(in thousands euro, unless specified otherwise)
18. Sales revenue
The Group and the Company are engaged in the supply of thermal energy, maintenance of building heating and hot
water supply systems, electricity generation, and other activities. A part of the residents selected the Company as their
hot water supplier. These activities are closely interlinked and, for management purposes, the Group and the Company
are considered to be organised in a single segment – the supply of thermal energy.
The Group's and the Company's activities are seasonal, with the majority of revenue generated during the heating
season, which starts in October and ends in April.
Sales revenues by the Group and the Company activities are presented below:
Group
Company
2025
2024
2025
2024
Heat supply
88,114
76,989
88,135
76,989
Hot water supply
9,931
6,759
9,931
6,759
Maintenance of hot water metering devices
1,914
1,311
923
712
Maintenance of collectors
366
379
366
348
Maintenance of heating and hot water systems in buildings
9
9
9
9
Cooling supply
154
-
-
-
100,488
85,447
99,364
84,817
Sales revenues by consumer groups of the Group and the Company are presented below:
Group
Company
2025
2024
2025
2024
Residents
73,583
63,079
73,573
63,079
Other users
12,177
10,384
11,063
9,755
Budgetary organisations financed from the state budget
6,657
5,706
6,657
5,706
Budgetary organisations financed from municipal budgets
4,339
3,590
4,339
3,589
Institutions financed by territorial sickness funds
2,733
2,202
2,733
2,202
Industrial users
999
486
999
486
100,488
85,447
99,364
84,817
19. Other costs
Other costs include:
Group
Company
2025
2024*
2025
2024*
Utility bills
452
501
493
501
Vehicle operation
187
180
184
180
Consulting costs
165
147
147
126
Ash disposal costs
130
123
130
123
Support provided
12
65
12
65
Debt collection costs
136
161
136
161
Costs of IT services, applications and licenses
239
182
239
182
Other staff-related costs
222
205
217
205
Customer Service Costs.
142
111
142
111
Membership Fee Cost
39
42
39
42
Audit costs
43
40
43
40
Advertising and representation costs
158
135
153
131
Rental costs
3
74
131
62
Communication costs
82
77
71
75
Low-value inventory costs
109
107
91
107
Cost of transportation services
57
55
57
55
Other costs
320
360
367
306
2,496
2,565
2,652
2,472
33
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2025 Consolidated and Company‘s Financial
Statements
(in thousands euro, unless specified otherwise)
*The 2024 classification has been revised to match the 2025 presentation.
20. Other operating income and expense
Other operating income includes:
Group
Company
Other operational incomes
2025
2024
2025
2024*
Inventories sold
771
1,641
455
784
Miscellaneous services rendered
1,237
617
767
617
Compensation received
6
19
6
8
Profit from the sale of fixed assets
40
529
45
32
Other
334
152
334
152
2,388
2,958
1,607
1,593
Other operating expenses include:
Group
Company
Other operational expenses
2025
2024
2025
2024*
Cost of miscellaneous services rendered
(667)
(542)
(370)
(294)
Inventories sold
(380)
(495)
(27)
(33)
Costs of previous periods
(109)
(78)
(109)
(78)
Sale of fixed assets, write-off
(21)
-
(21)
-
Other
(5)
(142)
(1)
(4)
(1,182)
(1,257)
(528)
(409)
*The 2024 classification has been revised to match the 2025 presentation.
The Group and the Company lease real estate, supply technical water, perform maintenance of heating equipment and
provide transport services.
21. Financial activity
Interest and other similar income
Group
Company
2025
2024
2025
2024
Profit share of associates
26
89
-
-
Default
interest
received
on
overdue
227
48
227
48
receivables
Interest
534
546
518
519
787
683
745
567
Interest and other similar expenses
Group
Company
2025
2024
2025
2024
Interest
(1,510)
(1,837)
(1,510)
(1,842)*
Interest / penalties
(3)
(2)
(3)
(2)
(1,513)
(1,839)
(1,513)
(1,844)*
*The 2024 classification has been revised to match the 2025 presentation.
34
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2025 Consolidated and Company‘s Financial
Statements
(in thousands euro, unless specified otherwise)
22. Income tax
22.1. Income tax
Corporate income tax calculation:
Group in 2025
Group 2024 m.
Theoretic
Theoretic
al
al
corporate
Corporate
corporate
Corporate
Taxable value,
Taxable value,
income
income
income
income
thousand EUR
thousand EUR
tax value,
tax %
tax value,
tax %
thousand
thousand
Profit before
EUR
EUR
taxation
18,376
2,940
16.00
8,589
1,288
15.00
Increase in the
corporate income
tax base due to non-
deductible expenses
1,484
237
1,29
1,111
166
1.94
under the Law on
Profit Tax
Reduction of the
corporate income
tax base due to non-
taxable income
(111)
(18)
(0.10)
(504)
(75)
(0.88)
under the Law on
Profit Tax
Reduction of the
corporate income
(24)
(4)
(0.02)
(130)
(19)
(0.23)
tax base due to the
donation relief
Reduction (-) or
increase (+) of the
corporate income
tax base due to
depreciation
(3,746)
(599)
(3.26)
(3,510)
(526)
(6.13)
differences under
the Law on Profit
Tax
Total calculated
15,979
2,557
13.91
5,556
834
9.70
taxable profit
Reduction of taxable
profit by
accumulated tax
(10,950)
(1,752)
(9.53)
(3,611)
(542)
(6.31)
losses (max. 70%)
Reduction of taxable
profit by the applied
(4,693)
(751)
(4.09)
(1,548)
(232)
(2.70)
Investment project
relief
Adjustment of
income tax for
previous periods
6,00
1
0,00
(603)
(90)
(1.05)
342
54
0.30
(206)
(30)
(0,35)
Total taxable profit
Effective corporate
income tax rate for
the period
0.30
(0.35)
35
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2025 Consolidated and Company‘s Financial
Statements
(in thousands euro, unless specified otherwise)
Company in 2025
Company in 2024
Theoretica
Theoretical
l corporate
% of
corporate
% of
Taxable value,
income tax
theoretica
Taxable value,
income tax
theoretic
thousand EUR
value,
l tax
thousand EUR
value,
al tax
thousand
thousand
Profit before
EUR
EUR
taxation
18,000
2,880
16,.00
8,376
1,256
15.00
Increase in the
corporate income tax
base due to non-
deductible expenses
under the Law on
Profit Tax
1,461
234
1,.30
837
126
1.50
Reduction of the
corporate income tax
base due to non-
taxable income under
the Law on Profit Tax
(49)
(8)
(0.04)
(414)
(62)
(0,.74)
Reduction of the
corporate income tax
(24)
(4)
(0.02)
(130)
(20)
(0.23)
base due to the
donation relief
Reduction (-) or
increase (+) of the
corporate income tax
base due to
depreciation
(3,196)
(511)
(2.84)
(3,510)
(526)
(6.29)
differences under the
Law on Profit Tax
Total calculated
(550)
(88)
(0.49)
-
-
-
taxable profit
Reduction of taxable
profit by accumulated
15,642
2,503
13.90
5,15
774
9.24
tax losses (max.
70%)
Reduction of taxable
profit by the applied
(10,950)
(1,752)
(9.73)
(3,611)
(542)
(6.47)
Investment project
relief
Adjustment of income
(4,692)
(751)
(4.17)
(1,548)
(232)
(2.77)
tax for previous
periods
Total taxable profit
-
0.00
(603)
(90)
(1.08)
Effective corporate
income tax rate for
the period
-
-
0,00
(603)
(90)
(1.08)
36
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2025 Consolidated and Company‘s Financial
Statements
(in thousands euro, unless specified otherwise)
22.2. Deferred income tax
Group
Company
2025
2024
2025
2024
Deferred income tax asset
Tax losses
1,141
3,324
1,141
3,324
Accruals
289
233
278
229
Change in value of assets
1,019
831
1,016
827
Investment allowance
2,711
988
2,711
988
Deferred income tax asset
5,160
5,376
5,146
5,368
Deferred income tax liability
Depreciation differences
(11,841)
(12,063)
(11,841)
(12,063)
Deferred profit tax liabilities
(11,841)
12,063)
(11,841)
(12,063)
Deferred income tax, net value
(6,681)
(6,687)
(6,695)
(6,695))
As of 31 December 2025, deferred corporate income tax is recognised at a 17% tax rate due to amendments to the
Republic of Lithuania Law on Corporate Income Tax coming into force in 2025 (as of 31 December 2024 – 16%).
22.3. Total corporate income tax:
Group
Company
2025
2024
2025
2024
Components of income tax expense
Income tax income (expense) of the reporting year
(54)
30
0
90
Deferred income tax income (expense)
6
(170)
0
(178)
Income (expense) from income taxes recognised in
the statement of comprehensive income
(48)
(140)
0
(88)
Effective corporate income tax rate (%)
(0.27)
(1.77)
0
(1.15)
23. Basic and diluted earnings per share
The Group's basic and diluted earnings per share calculations are presented below:
Group
Company
2025
2024*
2025
2024*
Profit for the reporting period
18,328
8,449
18,000
8,288
Number of shares (thousands), beginning of period
42,802
42,802
42,802
42,802
Number of shares (thousands), end of period
42,802
42,802
42,802
42,802
Weighted average number of ordinary shares in issue
42,802
42,802
42,802
42,802
(thousands)
Basic and diluted earnings per share (EUR)
0.43
0.20
0.42
0.19
*Details of the adjustment can be found in explanatory note 17.
37
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2025 Consolidated and Company‘s Financial
Statements
(in thousands euro, unless specified otherwise)
24. Fair value disclosures:
The interest rates on the Group's and the Company's long-term financial liabilities are periodically reviewed in accordance
with market conditions. Although part of the liabilities have a fixed margin, the main part of the interest is variable and
depends on market indicators, so the book value remains close to fair value. The classification of financial instruments
according to the levels of the fair value hierarchy in 2025 and 2024 is presented below:
Group 2025-12-31
Level of the fair value hierarchy
Total book
value:
Assets
Level 1
Level 2
Level 3
Shares in Associates and Share of Profit
-
-
190
190
Amounts receivable after one year
-
-
3
3
Trade receivables
-
-
17,905
17 905
Other receivables
-
-
776
776
Cash and cash equivalents
10,863
-
-
10 863
Total financial assets
10,863
-
18,874
29 737
Liabilities
Financial debts and leasing
-
(64,050)
-
(64 050)
Trade debts and other current liabilities
-
-
(14,243)
(14,243)
Total financial liabilities
-
(64,050)
(14,243)
(78 293)
Company 2025-12-31
Level of the fair value hierarchy
Total book
value:
Assets
Level 1
Level 2
Level 3
Shares in Associates and Share of Profit
-
-
75
75
Receivables after one year
-
-
3
3
Trade receivables
-
-
17,718
17,718
Other receivables
-
-
655
655
Cash and cash equivalents
9,,168
-
-
9,168
Total financial assets
9,168
-
18,451
27,619
liabilities
Financial debts and leasing
-
(63,723)
-
(63,723)
Trade debts and other current liabilities
-
-
(14,223)
(14,223)
Total financial liabilities
-
(63,723)
(14,223)
(77,946)
Group 2024-12-31
Level of the fair value hierarchy
Total book
value:
Assets
Level 1
Level 2
Level 3
Shares in Associates and Share of Profit
-
-
164
164
Receivables after one year
-
-
58
58
Trade receivables
-
-
15,698
15,698
Other debtors
-
-
860
860
Cash and cash equivalents
11,574
-
-
11,574074
Total financial assets
11,574
-
16,780
28,354
liabilities
Financial debts and leasing
-
(67,924)
-
(67,924)
Trade debts and other current liabilities
-
-
(12,530)
(12,530)
Total financial liabilities
-
(67,924)
(12,530)
(80,454)
38
AB KAUNO ENERGIJA
Company code 235014830
2025
Consolidated and Company‘s Financial
Raudondvario pl. 84
Statements
Kaunas, Lithuania
(in thousands euro, unless specified otherwise)
Company 2024-12-31
Level of the fair value hierarchy
Total book
value:
Assets
Level 1
Level 2
Level 3
Shares in Associates and Share of Profit
-
-
75
75
Trade receivables
-
-
15,482
15,482
Other debtors
-
-
817,
817
Cash and cash equivalents
9,600
-
-
9,600
Total financial assets
9,600
-
16,374
25,974
liabilities
Financial debts and leasing
-
(67,590)
-
(67,590)
Trade debts and other current liabilities
-
-
(12,690)
(12,690)
Total financial liabilities
-
(67,590)
(12,690)
(80,280)
25. Risk management
Group
Company
Number of unique clients (units)
2025
2024
2025
2024
Natural persons
121,223
121,174
121,140
120,976
Other legal entities
4,002
3,972
3,977
3,897
Legal entities financed from municipal and state
584
562
577
559
budgets
125,809
125,708
125,694
125,432
Receivables due from customers of the Group and the Company by customer groups:
Group
Company
Customer distribution (thousand EUR)
2025
2024
2025
2024
Natural persons
16,406
15,184
16,395
15,176
Other legal entities
3,479
3,152
3,378
2,946
Legal entities financed from municipal and state
3,128
2,073
3,037
2,071
budgets
Recognition of expected credit losses
(5,108)
(4,711)
(5,092)
(4,711)
17,905
15,698
17,718
15,482
As at the date of the financial statements, for trade and other receivables that are neither past due nor impaired,
management believes that there is no indication that the debtors will not meet their payment obligations as the receivable
balances are under constant control. The Group and the Company consider that the maximum exposure is the amount
of trade and other receivables less any impairment losses recognised at the statement of financial position date (Note
10).
39
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2025 Consolidated and Company‘s Financial
Statements
(in thousands euro, unless specified otherwise)
Cash and cash equivalents in banks rated on a long-term basis *:
Group
Company
2025
2024
2025
2024
Aa3
5,054
6,455
5,054
4,981
Aa2
4,875
-
3,180
-
A2
362
-
362
-
A3
-
4,252
-
4,252
Baa1
260
31
260
31
Unrated bank
312
336
312
336
10,863
11,074
9,168
9,600
*- External borrowing ratings determined by the Moody’s international credit rating agency.
The credit risk arising from the Group's and the Company's other financial assets consisting of cash and cash equivalents
and trade receivables. The Group's and the Company's potential credit risk arises from the default of the counterparties,
with the maximum potential exposure being equal to the carrying amount of these instruments. The total maximum credit
risk exposure of the Group and the Company amounts to EUR 28,768 thousand and EUR 26,886 thousand, respectively
(as of 31 December 2024 – EUR 26,772 thousand and EUR 25,082 thousand, respectively).
Interest rate risk
The Group's and the Company's long-term loans, other than those with the Ministry of Finance of the Republic of
Lithuania, are at variable interest rates (3 month EURIBOR). The Group and the Company are exposed to interest rate
risk.
The Company's long-term loans, with the exception of loans received from the Ministry of Finance of the Republic of
Lithuania, have a variable interest rate, which depends on EURIBOR fluctuations.
A sensitivity analysis determined how a 1% change in the interest margin would impact the Group’s and the Company’s
results:
EURIBOR +1% would increase interest expenses (reduce accounting profit) by EUR 580 thousand;
EURIBOR -1% would decrease interest expenses (improve accounting profit) by EUR 580 thousand.
Liquidity risk
Liquidity risk is the risk that the Company or the Group will not be able to meet its financial obligations when they fall
due. Liquidity risk is very low as the Group and the Company are both active in state-regulated heat supply activities.
Heat generators have a 30-day settlement period. The contractual maturity of the Group's and the Company's financial
liabilities to banks and suppliers based on undiscounted payments:
2025-12-31
Group
On request
Up to 3
months
3 months
to 1 year
From 1 to
5 years
After 5
m.
Total
Amounts receivable
-
18,681
-
17
-
18,698
Cash and cash equivalents
-
10,863
-
-
-
10,863
Trade debtors
-
(13,997)
-
-
-
(13,997)
Taxes payable
(1,376)
(53)
(1,429)
Payroll-related benefits
(233)
(337)
(570)
Other amounts payable
(176)
(69)
(245)
Loans received
-
(1,137)
(3,696)
(22,047)
(35,778)
(62,658)
Share of long-term loan
interest
-
(422)
(1,266)
(5,258)
(3,719)
(10,665)
Finance lease
(4)
(14)
(96)
(1,278)
(1,392)
-
12,199
(5,366)
(27,453)
(40,775)
(61,395)
40
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2025 Consolidated and Company‘s Financial
Statements
(in thousands euro, unless specified otherwise)
2025-12-31
Company
On request
Up to 3
months
3 months
to 1 year
From 1 to
5 years
After 5
m.
Total
Amounts receivable
-
18,373
-
1
-
18,373
Cash and cash equivalents
-
9,168
-
-
-
9,168
Trade debtors
-
(14,001)
-
-
-
(14,001)
Taxes payable
(1,323)
(1,323)
Payroll-related benefits
(214)
(337)
(551)
Other amounts payable
(176)
(46)
(222)
Loans received
-
(1,137)
(3,696)
(22,047)
(35,778)
(62,658)
Share of long-term loan
interest
-
(422)
(1,266)
(5,258)
(3,719)
(10,665)
Finance lease
-
(4)
(10)
(75)
(977)
(1,066)
-
10,264
(5,309)
(27,426)
(40,474)
(62,945)
2024-12-31
Group
On request
Up to 3
months
3 months
to 1 year
From 1 to
5 years
After 5 m.
Total
Receivables
-
16,616
-
58
-
16,674
Time deposits
500
500
Cash and cash
equivalents
-
11,074
-
-
-
11,074
Trade debts
-
(12,387)
-
-
-
(12,387)
Loans received
-
(988)
(3,090)
(21,368)
(41,290)
(66,736)
Related interest payable
-
(624)
(1,717)
(7,579)
(6,256)
(16,176)
Finance lease
(4)
(12)
(64)
(1,108)
(1,188)
-
13,687
(4,319)
(28,953)
(48,654)
(68,239)
2024-12-31
Company
Pareikalavus
Up to 3
3 months to 1
From 1 to
After 5 m.
Total
months
year
5 years
Receivables
-
16,299
-
1
-
16,300
Cash and cash
-
9,600
-
-
-
9,600
equivalents
Trade debts
-
(12,547)
-
-
-
(12,547)
Loans received
-
(988)
(3,090)
(21,368)
(41,290)
(66,736)
Related interest payable
-
(624)
(1,717)
(7,579)
(6,256)
(16,176)
Financial lease
-
(3)
(9)
(48)
(794)
(854)
-
11 737
(4 816)
(28 994)
(48 340)
(70 413)
Foreign currency risk
All purchases, sales and financial debts of the Group and the Company are denominated in euro, therefore, there is no
significant foreign currency risk.
Capital management
The main objective of capital management is to ensure that the Group and the Company meet the external capital
requirements and that they maintain appropriate capital ratios in order to sustain their business and maximise the benefits
for shareholders.
The Group and the Company manages its capital structure and makes adjustments to it in the light of changes in
economic conditions and in accordance with their operational risk characteristics. In order to maintain or change the
capital structure, the Group and the Company may issue new shares, repay the capital to the shareholders. There were
no changes to the capital management objectives, policy or process as of 31 December 2025 and 31 December 2024.
41
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2025 Consolidated and Company‘s Financial
Statements
(in thousands euro, unless specified otherwise)
The main objective of capital management is to ensure that the Group and the Company meet the external capital
requirements and that they maintain appropriate capital ratios in order to sustain their business and maximise the benefits
for shareholders.
The Group and the Company manages its capital structure and makes adjustments to it in the light of changes in
economic conditions and in accordance with their operational risk characteristics. In order to maintain or change the
capital structure, the Group and the Company may issue new shares, repay the capital to the shareholders. There were
no changes to the capital management objectives, policy or process as of 31 December 2025 and 31 December 2024.
The Law on Joint-Stock Companies of the Republic of Lithuania requires that the Group's and the Company's
shareholders' equity shall not be less than 50% of its share capital. The Group and the Company meet the requirements
of the Law on Companies of the Republic of Lithuania with respect to equity capital. There are no other externally imposed
capital requirements for the Group and the Company.
The Group and the Company measure capital using the ratio of liabilities to equity. Equity consists of ordinary shares,
reserves and retained earnings attributable to equity holders of the parent company. The Group's and the Company's
management have not set a specific target ratio for the ratio of liability to equity, however, the following current indicators
are considered to be sufficiently good performance indicators:
Group
Company
2025
2024*
2025
2024*
Non-current liabilities (including deferred taxes and
grants and subsidies)
94,689
100,853
94,330
100,498
Current liabilities
23,365
20,631
23,170
20,594
Liabilities, total:
118,054
121,484
117,500
121,092
Equity
124,992
107,706
123,621
106,663
Ratio of liabilities* to equity (%))
94.45
112.79
95.05
113.53
*Details of the adjustment can be found in note 17 of the comments.
Liabilities include all non-current (including deferred income tax liability and grants (deferred income)) and current
liabilities.
Market risk
External risk factors affecting the Group's and the Company's core business: the economic crisis, rising fuel prices,
unfavourable legislation and regulations from the government and other authorities, local government decisions, pricing
policies for products sold, inflation and the general economic downturn reducing the income of heat consumers, cyclical
nature of operations, environmental requirements.
To mitigate risks, the Company applies a risk management model that includes risk identification, assessment,
management and monitoring. An additional debt administration plan on the management of potential consumer
insolvency risks has been prepared and implemented. The planned plan of additional measures is consistently
implemented on a monthly basis, with good results and above projections.
26. Off-balance sheet commitments and contingencies
On 26 February 2024, AB Kauno energija filed a complaint with the Regional Administrative Court regarding the decisions
of the National Energy Regulatory Council (NERC), Decision No. O3E-141 "On the determination of the revenue level
for heat production and/or supply for the first year of validity of the base revenue level for heat production and/or supply
for AB Kauno energija":
Case subject matter: AB Kauno energija (the Claimant) is challenging the decisions of the National Energy Regulatory
Council (NERC) (the Respondent) in court: decision No. O3E-84 dated 26 January 2024, decision No. O3E-141 dated
9 February 2024, and decision No. O3E-213 dated 23 February 2024.
Claim amount: 2,587.50 thousand Eur.
Case stage: 26/02/2024 The Applicant filed a complaint with the Regional Administrative Court regarding the NERC
rulings. In the first instance, the court did not satisfy the complaint of AB "Kauno energija". On 05.01.2025, AB "Kauno
energija" filed an appeal with the court. The case in the appellate instance has not yet been examined.
The dispute does not affect the financial statements, as the disputed rates that are actually applied by the Company.
As of 31 December 2024, in accordance with the provisions of the heat price setting methodology established by the
National Energy Regulatory Council (in Lithuanian - Valstybinės energetikos reguliavimo taryba), a liability to consumers
of EUR 2,347 thousand was calculated, which arose due to the difference between the costs included in the heat price
and the actual costs incurred for the purchase of fuel, heat and electricity for technological needs. This liability was
returned to consumers in 2025 through an additional heat price component. The regulatory liability to consumers
calculated as of 31 December 2025 amounted to EUR 2,874 thousand which will be returned to consumers in future
42
AB KAUNO ENERGIJA
Company code 235014830
Raudondvario pl. 84
Kaunas, Lithuania
2025 Consolidated and Company‘s Financial
Statements
(in thousands euro, unless specified otherwise)
periods in accordance with the procedure established by NERC, thus it being accounted for as an off-balance sheet
liability.
27. Related party transactions
The parties are considered to be related if one party can control the other party or has significant influence over the other
party in making financial or operational decisions.
In 2025 and 2024, the Group and the Company did not have any significant transactions with other companies controlled
by Kaunas City Municipality, except for the purchase or provision of utility services. Transactions with Kaunas City
Municipality and companies controlled by Kaunas City Municipality were carried out at market prices.
In 2024 and 2023, the Group's and the Company's transactions with Jurbarkas City Municipality, Kaunas City Municipality
and companies financed and controlled by Kaunas City Municipality, and their debts and liabilities as at the end of the
periods were as follows:
2025
Purchases
Sales
Amounts
Amounts
Kaunas City Municipality, companies
receivable
payable
3,328
4,817
871
722
financed and fully managed by it
2024
Purchases
Sales
Amounts
Amounts
Kaunas City Municipality, companies
receivable
payable
2,402
3,892
1,177
534
financed and fully managed by it
Sales include the amounts of reimbursements for housing heating costs, cold water and sewage costs, and hot water
costs for financially challenged residents.
On 31 December 2025 and 31 December 2024 the Company's transactions with subsidiaries and the balance sheet
balances at the end of the period were as follows:
Amounts
Amounts
UAB GO Energy LT
Purchases
Sales
receivable
payable
2025
1,865
335
37
132
2024
2,935
225
27
377
UAB GO Energy LT provides real estate management services to AB Kauno energija and participates in unregulated
energy development projects together with its parent company.
28. Management's salary and other benefits
On 31 December 2025 the Group's and the Company's management consists of 2 and 1 persons (2 and 1 as at 31
December 2024), respectively. As of 31 December 2025, the Company's Board consists of 3 members, and the
Supervisory Council consists of 3 members (as of 31 December 2024 – 3 and 3, respectively).
.
Group
Company
2025
2024
2024
2023
Wages and salaries charged to the
management
222
176
159
133
The Board
104
78
104
78
The Supervisory Board
95
44
95
44
Reimbursements of employee
benefits calculated for the
management
-
-
-
-
During 2025 and 2024, no loans, guarantees, other payments, accrued amounts, or asset transfers were granted to the
Group’s and the Company’s management.
29. Events after the date of the balance sheet
There have been no other events after the reporting date that could have a material effect on the financial statements
or that should be disclosed in the financial statements.
AB Kauno energija
Code of legal entity 235014830
Raudondvario av. 84
Kaunas, Lithuania
AB KAUNO ENERGIJA CONSOLIDATED
MANAGEMENT REPORT OF THE YEAR 2025
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2025
44
CONTENTS
1. Reporting period of the Consolidated Management Report .................................................................... 45
2. Companies consisting the Group of companies and their contact details ............................................... 45
3. Nature of core activities of the companies composing the group of companies ..................................... 46
4. Issuer’s agreements with credit institutions ............................................................................................. 46
5. Trade in securities of companies composing the Group of companies in regulated markets ................. 46
6. Overview of the condition, performance, and development of the Group of companies ........................ 47
6.1. Overview of the Group’s condition, performance, and development ...................................................... 47
6.2. Main risks and uncertainties of the Company and their impact on operating results .............................. 50
7. Analysis of financial and non-financial performance results, information related to environmental issues
53
8. References and additional explanations .................................................................................................. 57
9. Significant events after the end of the reporting period ........................................................................... 57
10. Group Activity Plans and Forecasts ........................................................................................................ 57
11. Information on research and development activities ............................................................................... 58
12. Information on own shares acquired and held by the Issuer ................................................................... 58
13. Information on the aims of financial risk management, hedging instruments in use ............................... 59
14. Information on the Issuer’s subsidiary undertakings ............................................................................... 59
15. Share Capital Structure ........................................................................................................................... 59
16. Information on the Issued Shares of the Issuer ....................................................................................... 60
17. Information on the Issuer’s shareholders ................................................................................................ 62
18. Employees ............................................................................................................................................... 64
19. Procedure for amending the Issuer’s Articles of Association .................................................................. 66
20. Issuer’s governing bodies ........................................................................................................................ 66
20.1. Data on the committees in the Company ................................................................................................ 67
20.2. Information on the members of the Company’s Supervisory Board: ....................................................... 67
20.3. Information on the members of the Company’s Management Board ...................................................... 68
20.4. Information on the General Manager and Chief accountant of the Company: ........................................ 69
21. Information on significant agreements ..................................................................................................... 69
22. Information on Agreements Between the Issuer and Members of its Bodies or employees ................... 69
23. Information on major transactions with related parties ............................................................................ 69
24. Information on harmful transactions concluded on behalf of the Issuer during the reporting period ...... 69
25. Information on compliance with the Governance Code of Companies and the Company’s corporate
social initiatives and policies ............................................................................................................................ 70
26. Information on Publicly Disclosed Information ........................................................................................ 70
Annex 1 – AB Kauno Energija Remuneration Report for 2025
Annex 2 – Information on Corporate Governance
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2025
45
1. Reporting period of the Consolidated Management Report
Reporting period for which the AB Kauno Energija Consolidated Management Report has been prepared is
January 1, 2025 – December 31, 2025.
2. Companies consisting the Group of companies and their contact details
AB Kauno Energija (hereinafter – the Company or the Issuer) prepares both the Company’s and the
Consolidated Financial Statements. The group of companies (hereinafter referred to as the Group) consists
of AB Kauno Energija and its subsidiary – UAB GO Energy LT in which the Issuer directly controls 100 per
cent of the shares. The company has no branches.
Main details of the Company:
Name of the Company: AB Kauno Energija
Legal-organizational form: Public Limited Liability Company
Headquarters’ address Raudondvario av. 84, 47179 Kaunas
Code of legal entity: 235014830
Telephone (+370 37) 305 650
Fax (+370 37) 305 622
E-mail: info@kaunoenergija.lt
Webpage www.kaunoenergija.lt
Registration date and place August 22, 1997, Kaunas, Order No 513
Register manager State Enterprise Centre of Registers Kaunas Branch
VAT payer code LT350148314
Main information about the subsidiaries:
Company name UAB Go Energy LT
Legal-organizational form Limited Liability Company
Headquarters’ address Raudondvario av. 84, 47179 Kaunas
Code of legal entity 303042623
E-mail info@goenergy.lt
Registration date and place April 16, 2013, Kaunas
Register manager State Enterprise Centre of Registers Kaunas Branch
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2025
46
3. Nature of core activities of the companies composing the group of companies
The nature of core activities of the Group is manufacture and rendering of services. The Company is the parent
company of the Group. The Company generates and supplies heat to consumers (for the purposes of heating
and hot water production) in the cities of Kaunas and Jurbarkas and in Kaunas district Akademija town, Ežerėlis
town, Domeikava village, Garliava town, Girionys village, Neveronys village, Raudondvaris village, (hereinafter
referred to as Kaunas district).
Also, following provisions of the Law on Heat Sector, the Company supplies hot water (is engaged in hot
domestic water supplier activities) from May 1, 2010 for consumers in the cities of Kaunas and Jurbarkas and
Kaunas district, who chose the Company as a hot water supplier. As of December 31, 2025, the Company
supplied hot water to 1,476 residential buildings in Kaunas, Kaunas district and Jurbarkas city.
In addition, the Company maintains engineering structures (collectors – manifolds) and operates heat and
electricity production facilities. The Group and the Company carries out a supervision of indoor heat and hot
water supply systems, maintenance of heat unit equipment, repairs of heat units and other heating equipment,
provides premises rental services under agreements. The Group and the Company are engaged in licensed
activity in accordance with the licenses held. On February 26, 2004 the National Commission for Energy
Control and Prices (hereinafter – the Commission) issued a heat supplier licence to the Company. The licence
is valid indefinitely. Maintenance of indoor heat and hot water supply systems is pursued following the
provisions of Article 20 of The Law on Heat Sector of the Republic of Lithuania.
The vision of the Group and the Company is to be an innovative, competitive, and added value for shareholders
creating Company engaged in heat and cooling generation and their centralized supply, maintenance of indoor
heating and hot water systems.
Values of the Group and the Company:
• Responsibility towards consumers for reliable heat and hot water supply.
• High qualification of employees allowing to reach the highest efficiency indicators.
• Ability to apply innovative solutions in everyday activities.
Strategic goals of the Group and the Company:
AB Kauno Energija is the most advanced and innovative district heating (hereinafter – DH) company in
Lithuania.
Principled guidelines of Company’s heat economy strategy are as follows:
• Increase of safety and reliability of heat supply – the Company intends to formulate an expert
assessment of safety / vulnerability of heat supply system, to implement update and modernization
of system of parameters data transfer, collection and evaluation, to implement optimization of the
network hydraulic mode and increase of speed of parameters reaction / change, to reconstruct and
optimize sections of termofication pipelines and elements, to implement update and development of
the system of DH network water reserve – emergency replenishment, to implement technical
solutions and / or use a good practice increasing reliability and safety, ensuring stability of
thermofication mode;
• to actively participate in formation of policy of Kaunas city supply with heat and in increase of
Company’s desirability and in expansion of district heating market.
• formation of good practice and its publicizing.
4. Issuer’s agreements with credit institutions
On September 13, 2018 the Issuer Service Agreement was signed with AB SEB Bankas (company code
112021238, Gedimino pr. 12, Vilnius).
5. Trade in securities of companies composing the Group of companies in regulated
markets
As at 31 December 2025, 20,031,977 (twenty million thirty-one thousand nine hundred seventy-seven)
ordinary registered shares of the Issuer (ISIN code LT0000123010), with a total nominal value of EUR
34,855,639.98 (thirty-four million eight hundred fifty-five thousand six hundred thirty-nine euros 98 cents), are
admitted to trading on the Baltic Secondary List of the Nasdaq Vilnius stock exchange. The Company’s
shares were first listed on 28 December 1998.
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2025
47
6. Overview of the condition, performance, and development of the Group of companies
6.1. Overview of the Group’s condition, performance, and development
In 2025, the company's focus was on achieving its strategic objectives by providing innovative, efficient, safe,
economical, and sustainable heating solutions.
The company's financial and non-financial objectives are to ensure the safety and reliability of its core
activities; improve production efficiency; enhance the efficiency of the heat transmission system; improve
access to district heating; and utilize modern, innovative tools and methods for organizing and managing
heat supply and operations.
The "Development Strategy of AB Kauno energija for the period of 5 years, covering the years 2022–2026,
by implementing the directions of development of the energy sector" was approved by the Company's
Supervisory Board on 11 July 2022. A summary of the strategy is available on the Company's website at a
specific address: https://www.kaunoenergija.lt/apie-bendrove.
The Company covers a major part of heat production and supply market in the cities of Kaunas and
Jurbarkas and Kaunas district. Company’s generation capacities consist of Petrašiūnai power plant, 5 boiler-
houses in Kaunas integrated network, 7 district boiler-houses in Kaunas district, 1 boiler-house in Jurbarkas
city, 14 boiler-houses of isolated networks and 26 local gas burning boiler-houses in Kaunas city (25 of them
are gas burned and 1 of them – burned with pellets), also 8 local water heating boiler-houses in Sargėnai
catchment. Total Company’s power generation capacity is 534,7 MW (including 52.9 MW of condensational
economizers’ capacities; 3.1 MW of absorption heat pump).
In 2025, 31% of all heat supplied to the network was produced in the Company’s owned production sources.
The rest of required quantity of heat was purchased from independent heat producers (hereinafter – IHP) in
monthly auctions, according to legal acts. Starting from May 2018 an electronic heat purchasing auctions are
arranged by the Energy Stock Exchange operator UAB Baltpool. Electronic auctions are carried out in
accordance with the Regulations of the Heat Auctions approved by the National Energy Regulatory Council.
The Schedule of the Procedure and Conditions for the Purchase of Heat from Independent Heat Producers,
the Methodology for Determining Heat Prices, the Rules for the Provision of Information on Energy, Drinking
Water Supply and Wastewater Treatment, Sewage and Surface Water Treatment Companies, a Summary of
Conditions of Usage of Heat Transfer Networks, and a schedule of the Procedure for Publicly Disclosed
Information were changed respectively.
Fuel used by the Company for heat production in the year 2025 is presented in Chart 1.
Chart 1
The Company purchased heat during the year 2025 from 10 IHP in Kaunas and Kaunas district as follows:
from UAB Kauno Termofikacijos Elektrinė, UAB Idex Taika, UAB Idex Taika Elektrinė, UAB Lorizon Energy,
UAB Ekoresursai, UAB Aldec General, UAB Idex Biruliškių, UAB “Ekopartneris”, UAB Foksita and UAB
Kauno Kogeneracinė Jėgainė. Total purchases consisted of 977 thousand MWh of heat, i.e., 69 per cent of
heat supplied to the network.
33.4
12.75
14.14
15.35
7.65
64.4
84.33
84.81
81.29
91.34
2.20
2.92
1.05
3.36
1.01
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2021 y. 2022 y. 2023 y. 2024 y. 2025 y.
Fuel structure, per cent
Natural gas Solid biofuel Biogas and other fuels
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2025
48
During 2021–2025, the amounts of heat produced by the Company’s facilities and purchased from IHP,
thousand MWh:
Chart 2
This produced and purchased heat was supplied by the Company through integrated and local heat supply
networks, as at 31 December 2025, to 4,554 companies and organisations and 121,140 residential
consumers, in total – 125,694 consumers.
Chart 3
Investments
Investments are made in accordance with Company’s investment plan for the year 2025, which has been
approved by decision No T-50 of Kaunas City Municipality Council of February 18, 2025 “Regarding
investment plan of AB Kauno Energija for the year 2025 and its financing” (hereinafter – Investment plan).
The Company makes investments based on an assessment of the economic situation, the competitive
environment and the availability of financing. Investment plans are approved by the Board of Directors and
coordinated by the Kaunas City Municipal Council.
The Company implements trunk pipeline replacement projects, optimizes pipeline diameters, connects new
objects to the DH network and modernises heat production facilities according to Investment plan.
483.8
396.8
417.3
468.3
437.4
1104.7
1017.1
961.3
938.9
976.8
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2021 y. 2022 y. 2023 y. 2024 y. 2025 y.
Heat purchase and production, thous.MWh
Heat productions in own facilities Heat purchsased from IHP
96.38%
3.62%
Repartition of Company's heat consumers by groups
Units of residential households (inhabitants)
Other consumers
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2025
49
In 2025, an absorption heat pump (smoke-water) with a second-stage economizer will be installed in the
Šilko boiler room. From 2030, stricter environmental requirements will apply to the boiler room, with
particulate emissions not exceeding 50 mg/m3. Once the smoke purification filters are installed, sludge
treatment equipment will no longer be needed, chemicals will not need to be dosed, and boiler room
operation will be easier. The project is worth EUR 2.9 million.
In accordance with the Description of the Procedure and Conditions for the Purchase of Heat from
Independent Heat Producers, the heat supplier is responsible for ensuring reserve heat production capacity
in a specific centralized heat supply system. The current reserve capacity boiler at the Petrašiūnai power
plant, a PTVM-100 water heating boiler manufactured in 1963, is morally, physically, and technologically
obsolete. In order to maintain the current power reserves in the network, this boiler must be replaced. The
project involves the installation of two new and modern water heating boilers that will be able to use gas and
liquid fuel. Fuel diversity will be increased, and modern and fully automated systems will enable a quick and
effective response to network needs. The project is worth EUR 6 million.
In 2024-2025, the Company is reconstructing the heat supply networks on Karaliaus Mindaugo Avenue in
Kaunas. Worn-out pipelines are being replaced in order to increase reliability and reduce heat losses. The
project value is EUR 4.2 million.
The expansion of heat supply networks is underway in the Aleksotas microdistrict, with heat supply networks
being laid on Europos pr. and Veiverių pl., connecting new consumers and enabling prospective consumers
and existing buildings to connect. The project is worth EUR 1.3 million.
In 2025, a section of the heat supply network on J. Basanavičiaus Avenue in Kaunas was reconstructed. The
project value was EUR 1.1 million.
In 2025, the digitization of the company's archives was completed. Value: EUR 0.57 million.
Installation of a smart centralized heat supply network monitoring and control system has begun. The project
is value EUR 0.8 million.
The dynamics of consumers’ heating capacities connections to Company’s DH network and disconnections
from them in 2021–2025 is shown in Chart 4.
Chart 4
Dynamics of consumer’s connections and disconnections
A total capacity of objects disconnected from DH network in 2026 was approx. 2.26 MW. Disconnection of
heat equipment from centralized heat supply networks and the change of heating method is pursued
following the order determined by the Civil Code of the Republic of Lithuania, the Law on Heat Sector of the
Republic of Lithuania, the Law on Construction of the Republic of Lithuania and sub statutory legal acts
implementing these Laws.
0.35
0.26
1.28
1.17
2.26
7.12
25.21
29.60
12.64
16.62
0
5
10
15
20
25
30
35
2021 y. 2022 y. 2023 y. 2024 y. 2025 y.
Capacities disconnected, MW Capacities connected, MW
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2025
50
Company’s investments of the years 2021–2025 are presented in Chart 5.
Chart 5
6.2. Main risks and uncertainties of the Company and their impact on operating results
External risk factors affecting the Company’s core business:
• Competition among heat producers in Kaunas.
• Increase in final (i.e., including all expenditures) price of natural gas and biofuel.
• Ever-changing legal environment.
• Heat production pricing policies.
Competition environment risk factors.
In order to operate effectively and reliably in creation the added value for shareholders, the Company is
facing threats specific to the sphere of its activity, but also takes advantage of opportunities to work efficiently
and effectively by exploiting the available potential. One of the biggest threats that the Company may face is
a relatively high price for heat purchased from IHP, who are ranked as private business units committed to
profit generation. Purchase of heat is pursued following valid law and the Description of procedure for
purchase of heat from independent suppliers of heat approved by NERC. In turn, the Company invests
extensively in modernization and construction of its own manufacturing facilities, to reduce the comparative
costs of heat production. Thus, it takes advantage of the regulatory environment and reduces the energy
purchase price.
With the emergence of new IHP the Company faced additional technical, economical, legal and other issues
that need to be solved: management of heat supply network and balancing of power of these producers in
case of emergency stop of them, retaining of optimum working parameters of the network, regulation,
change and applying of heat purchase from IHP order.
Commercial risk factors
The Company is the main supplier of centrally produced heat to the cities of Kaunas and Jurbarkas and part
of Kaunas district. To retain this market, it is necessary to implement modern and efficient heat production
technologies in own production facilities and to focus on production at the lowest cost, benefiting from private
differences of different types of fuel.
Company’s heat sales are directly dependent on heat demand, i.e., heat consumption, which is mostly
affected by the average outdoor air temperature, the amount of investment of consumers in energy-saving
and rational use of heat and the pace of development of the heat sales.
14.02
20.32
25.50
22.23
24.58
0.00
5.00
10.00
15.00
20.00
25.00
30.00
2021 y. 2022 y. 2023 y. 2024 y. 2025 y.
Implentation of investments, milion euro
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2025
51
Changes in fuel prices and the price of heat, produced by IHP have an impact on cost of Company’s heat
and electricity production.
Company’s performance is affected by the decrease in sales due to reduced and further decreasing heat
demand (in pursuance of residential buildings renovation and by installing a heat saving equipment), due to
consumer’s disconnections from DH network (due to the various reasons). Risks can be mitigated by
Company’s current and further investments in heat and electricity production facilities, using renewable
energy sources, reducing heat production expenditures as well as the price of heat supplied for consumers,
and continually reasonably informing customers on the benefits of DH network systems (safety, reliability,
correlation with one sort of fuel, fuel conversion, local pollution sources in residential areas, total
environmental pollution, etc.) in comparison with autonomous heating.
Operational risk
As of 31 December 2025, overdue payments from heat consumers exceeding 90 days amounted to EUR 5.1
million (as of 31 December 2024 – EUR 4.7 million). To recover these debts as soon as possible, the
Company actively uses a variety of legal debt management measures, such as pre-trial actions, judicial
recovery, and cooperation with law Companies. In addition, when a debt becomes big, a restriction of heat
supplies is applied as a prevention measure (if there are technical possibilities and according to the law).
Since 2 January 2018, a unified Kaunas resident service centre “Mano Kaunas” has been operating at
Statybininkų St. 3, Kaunas, in the premises of UAB Kauno Švara. Residents can obtain prompt
information/consultation regarding services provided by Kaunas City Municipality-managed companies – AB
Kauno Energija, UAB Kauno Švara, UAB Kauno Autobusai, UAB Kauno Butų Ūkis, UAB
Kauno Gatvių Apšvietimas, and UAB Kauno Vandenys – as well as conclude contracts, pay bills, submit
requests, obtain certificates, etc.
Activities of the Company are cyclical. During the heating season (October – April) a major operating income
is earned. During the non-heating season, the Company’s revenues are at their lowest since only heat for hot
water is used. In addition, during the non-heating season, the Company incurs more costs because it must
prepare for the upcoming heating season, i.e., to carry out the repairs and reconstruction of heat supply
networks and heat production facilities.
Legal compliance risk
Energy activities are governed by the Law on Heat Sector, the Law on Energy, the Law on Electricity, the
Law on Natural Gas, the Law on Drinking Water Supply and Wastewater Management, Government
resolutions, Heat supply and consumption rules, Methodology of heat prices and payments for heat of NCC
and other legislation. Their amendments affect the heating industry.
With new amendments of articles 2, 3, 20, 22, 28, 31, and 32 of the Law on Heat Sector No XI-1608 of the
Republic of Lithuania that came in affect from November 1, 2011 in accordance with Article 7, the heat and
hot water prices may not include any costs related with the indoor building heating (including heat units), and
hot water systems. In implementing the legislation, from November 1, 2011 all these costs directly reduce the
profit of the Company.
Legal compliance risk is a risk of increase in losses and (or) loss of prestige, and (or) decrease in
confidence, which can be determined by the external environment factors (for example, violation of external
legal acts, non-compliance of requirements of supervising institutions, etc.) or internal factors (for example,
violation of internal legal acts and ethical standards, cases of employee’s abuse, etc.).
Technical and process factors
The biggest process risks are related to the condition of heating systems. Modernization rate of them is
determined by lack of funds – it is necessary to reconstruct more than 15 km of pipelines per year to
condition of age of heat supply system and the minimum investments should consist of approximately 11
million euros. Hydraulic testing identifies their weakest points. Every year, about 200 points where cracks
occur are identified during the tests. Upon discovery of defects, pipes are exposed and promptly repaired.
DH network is reconstructed in the most worn-out sections of district heating. New industrially (polyurethane
foam insulation in polyethylene shell) insulated pipes not requiring concrete channels are mounted in the
reconstructed sections of the heat supply network. Heat loss is very low in reconstructed sections (process
level), while the pipelines no longer pose a threat of rupture and ensure reliable heat supply to consumers.
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2025
52
One of the technical risk factors for heat generation facilities is their age. Some of heat generation facilities
are already renewed now. Every year boiler repairs, and preventive work is carried out during the non-
heating season. They are necessary to ensure secure heat supplies and reliability, i.e., securing of heat
production facilities and fuel reserves.
More detailed information on Company’s production facilities modernization is provided in chapters on
operations and development.
Environmental factors
These can be classified as factors affecting the Company and those influenced by the Company’s activities.
In order not to adversely impact the environment and comply with the pollution limits, vibration and noise
values, the Company is guided by the requirements of the Kyoto Protocol, the Helsinki Commission
(HELCOM) and environmental constraints of Helsinki Convention, as well as the European Parliament and
Council Directive 2001/80/EB of regulating energy emissions and Lithuanian environmental normative
document LAND 43-2013 for the use of natural resources, and releases and emissions of air pollutants to the
environment in its activities. Main sources of pollution of the Company: burning fossil fuel in the Company's
heat sources, production of heat and wastewater used in the industrial processes.
The Company pays taxes for atmospheric and water pollution. If allowable emission rate limits or annual
limits are exceeded, the Company would pay the fines under the applicable laws of the Republic of
Lithuania. The Company was not imposed any penalties in the year 2025.
Main Company’s emission reduction measures: modernization of heat generation facilities, heat transfer loss
reduction by replacing the existing pipes with the pipes with polyurethane foam insulation, installation of new
technology and improvement of existing technological equipment, use of less polluting fuels, and continuous
emission monitoring.
Additional efforts by the company to reduce CO2 emissions:
• Green” procurement: suppliers are selected not only based on price and quality but also based on lower
environmental impact.
• Implementation of an environmental management system (ISO 14001:2015) to systematically manage
direct and long-term operational environmental impacts and address relevant environmental issues. This
system also facilitates wider implementation of green procurement.
• Renewal of the vehicle fleet: preference for electric and hybrid vehicles.
• Waste sorting from production and administrative activities, handing over sorted waste to licensed waste
managers, and removing trash bins from administrative offices to encourage employee participation in waste
sorting and reduce plastic bag usage.
• Initiatives to inform the public about energy-saving measures, including articles on renewable energy, its
benefits for nature and people, modern technologies used by the Company, and contributions to climate
change mitigation.
• Encouraging employees to use less polluting transport for commuting and to share vehicles when
possible.
Intangible resources factors
The expertise of the Company's employees and the technological innovations undertaken are key intangible
resources that directly affect the Company's performance. They allow for a more efficient heat production and
supply process, reduced costs and increased customer satisfaction. Strategic management of these resources
makes the Company more competitive, sustainable and cost efficient.
Staff competences:
- Highly skilled engineers and operators ensure efficient management of boiler plants and networks, reducing
energy losses and operating costs.
- Professional project managers are able to implement advanced solutions such as remote control systems or
heat storage technologies.
- Well-trained network management staff reduce the number of incidents and their impact on customers, thus
increasing service reliability.
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2025
53
Technological innovation:
- Automated control systems allow real-time optimisation of heat production according to consumption
demand, reducing fuel consumption.
- Data analytics solutions help to forecast heat demand, avoiding overproduction.
- The deployment of smart meters provides customers with transparent information on heat and hot water
consumption, reducing disputes and increasing service satisfaction.
7. Analysis of financial and non-financial performance results, information related to
environmental issues
The Company’s sales revenue for the year 2025 was EUR 99,364 thousand and compared to year 2024
decreased by 17 per cent (in the year 2024 it consisted of EUR 84,817 thousand). Sales revenue of the
Group of the year 2025 was EUR 100,488 thousand (in the year 2024 it consisted of EUR 85,447 thousand).
The average price of heat sold increased by 16 percent (in the year 2025 it was 7.89 ct/kWh, and in the year
2024 – 6.79 ct/kWh).
Comparison of financial indicators of the Group of the year 2025 with the indicators of the years 2021–2024
is presented in Table 1.
Table 1
No
Indicator of the Group
2021
2022
2023
2024*
2025
1
Revenue from sales, thousand euros
50,963
87,992
85,048
85,447
100,488
1.1
Including: Heat energy
47,125
81,338
78,660
76,989
88,114
1.2
Other income
2
10
5
0
154
1.3
Maintenance of indoor heating and hot
water supply systems, heating
substation facilities
12
17
17
9
9
1.4
Income from the maintenance of
collectors
348
348
348
379
366
1.5
Hot water supply including cold water
price
3,014
5,742
5,467
6,759
9,931
1.6
Income from maintenance of hot water
meters
456
487
551
1,311
1,914
1.7
Revenue from the sale of trading
emission allowances
6
50
0
0
0
2
Profit, thousand euros
72
6,356
4,505
8,449
18,328
3
EBITDA (earnings before interest,
taxes, depreciation and amortization
and other non-cash expense items),
thousand euros
6,488
12,350
13,553
17,746
28,803
4
Profitability of core business, per cent
(operating profit / operating sales) *
100
-0.6
6.6
8.7
9.4
17.8
5
Net profitability, per cent (net profit /
operating sales) *100
0.1
7.11
5.1
9.9
18.2
6
Assets, thousand euros
179,934
203,886
213,540
229,190
243,046
7
Equity, thousand euros
89,745
96,101
97,606
107,706
124,992
8
Return on equity (ROE), per cent
(net profit / average equity) *100
0.1
6.9
4.7
8.2
15.8
9
Return on assets (ROA), per cent
(net profit / average assets) *100
0.0
3.6
2.2
3.7
7.8
10
Debt ratio (liabilities /assets)
0.50
0.37
0.40
0.40
0.37
11
Debt-to-equity ratio (liabilities / equity)
1.0
0.8
0.9
0.9
0.7
12
General liquidity ratio (short-term
assets / short-term liabilities)
1.33
1.47
1.28
1.52
1.38
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2025
54
No
Indicator of the Group
2021
2022
2023
2024*
2025
13
Quick ratio ((short-term assets-
inventory) / short-term liabilities)
1.23
1.36
1.20
1.44
1.32
14
Net earnings per share (net profit /
average weighted number of shares in
issue)
0.00
0.14
0.14
0.20
0.43
15
Last share market price of the year
/net profit /number of shares at year-
end (P / E ratio)
656.89
7.44
6.5
4,71
4.44
16
Share capital, thousand euros
74,476
74,476
74,476
74,476
74,476
17
Share capital-to-assets ratio
0.41
0.37
0.35
0.32
0.31
18
Dividend pay-out ratio (dividend per
share / earnings per share)
0.0
0.5
0.0
0.14
A comparison of the Company’s financial indicators for 2025 with 2021–2024 is presented in Table 2.
Table 2
No
Indicator of the Company
2021
2022
2023
2024*
2025
1
Revenue from sales, thousand euros
50,981
87,013
85,048
84,817
99,364
1.1
Including: Heat energy
47,133
81,458
78,660
76,989
88,135
1.2
Other income
2
10
5
0
0
1.3
Maintenance of indoor heating and hot
water supply systems, heating
substation facilities
12
17
17
9
9
1.4
Income from the maintenance of
collectors
348
348
348
348
366
1.5
Hot water supply including cold water
price
3,024
4,643
5,467
6,759
9,931
1.6
Income from maintenance of hot water
meters
456
487
551
712
923
1.7
Revenue from the sale of trading
emission allowances
6
50
0
0
0
2
Profit, thousand euros
457
6,299
3,881
8,288
18,000
3
EBITDA (earnings before interest,
taxes, depreciation and amortization
and other non-cash expense items),
thousand euros
6,322
11,797
12,762
17,409
28,446
4
Profitability of core business, per cent
(operating profit / operating sales) *
100
0.2
6.2
8.0
10,0
17.8
5
Net profitability, per cent (net profit /
operating sales) *100
0.8
7.2
4.5
9.8
18.1
6
Assets, thousand euros
178,654
203,083
212,245
227,755
241,121
7
Equity, thousand euros
90,290
95,842
96,723
106,663
123,621
8
Return on equity (ROE), per cent
(net profit / average equity) *100
0.43
6.61
4.0
8.15
15.6
9
Return on assets (ROA), per cent
(net profit / average assets) *100
0.2
3.0
1.9
3.6
7.7
10
Debt ratio (liabilities /assets)
0.49
0.37
0.40
0.40
0.37
11
Debt-to-equity ratio (liabilities / equity)
1.0
0.8
0.9
0.9
0.7
12
General liquidity ratio (short-term
assets / short-term liabilities)
1.36
1.40
1.18
1.41
1.27
13
Quick ratio ((short-term assets-
inventory) / short-term liabilities)
1.27
1.33
1.11
1.33
1.22
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2025
55
No
Indicator of the Company
2021
2022
2023
2024*
2025
14
Net earnings per share (net profit /
average weighted number of shares in
issue)
0.01
0.14
0.13
0.19
0.42
15
Last share market price of the year /
net profit / number of shares at year-
end (P / E ratio)
103.49
7.51
7.0
4.8
4.52
16
Share capital, thousand euros
74,476
74,476
74,476
74,476
74,476
17
Share capital-to-assets ratio
0.42
0.37
0.35
0.33
0.31
18
Dividend pay-out ratio (dividend per
share / earnings per share)
0.0
0.5
0.0
0.14
* The audited 2024 indicators have been restated based on the 2024 data adjusted in the 2025 financial
statements to maintain comparability. The figures for prior periods have not been adjusted.
Corruption Prevention
The purpose of the Company's Corruption Prevention Policy is to set out the key principles and requirements
for the prevention of corruption in the Company and its subsidiaries and guidelines for ensuring compliance
with them.
The Company is committed to the highest standards of business ethics and advocates free and fair trade,
open competition and ethical conditions, in accordance with the legislation of the Republic of Lithuania. The
Company adheres to and follows the Kaunas City Municipality Corruption Prevention Action Plan 2023-2025.
Anti-corruption obligations cover the following areas: compliance with legal provisions and standards of
conduct; disclosure of information, transparent accounting; prohibition of influence peddling and bribery;
conflicts of interest; nepotism and cronyism; gifts and hospitality; donations; donations; purchases and sales;
abuse of office/office; selection/evaluation of staff; confidentiality.
The Company does not engage in international business transactions and therefore the Corruption
Prevention Policy does not address the bribery of foreign officials in international business transactions.
Environmental impact on activities
The Company’s performance can be affected by changes in sales turnovers caused by changed heat
demand, which can be caused by consumer investments in the renovation of buildings, heat saving and
rational consumption, average higher of lower outdoor temperature during the heating season, changes in
fuel prices, heat purchase price from IHP.
Company’s reconstructed heat production facilities changing fossil fuel to biofuel will make a serious
competition with their costs of production to IHP, operating in Kaunas.
The dynamics of the Company’s average heat prices for 2021–2025 are presented in Chart 6.
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2025
56
Chart 6
Heat and hot water prices are calculated and approved in accordance with the Methodology for Setting Heat
Prices, approved by the National Energy Regulatory Council (NERC) Resolution No. O3-96 of 8 July 2009.
The annual level of heat production and/or supply revenue is set for a 3–5 year period. For regulated
services (products), a long-term pricing mechanism is applied in the heat tariff, i.e., an annual level of heat
production and/or supply revenue is established for the base period, which is adjusted in the second and
subsequent years by determining the recalculated level of heat production and/or supply revenue.
On 23 February 2024, the National Energy Regulatory Council, by resolution No. O3E-213, unilaterally set
the annual revenue level for heat production and/or supply for AB Kauno Energija for the first year of the
base heat price validity period.
On 26 February, 2025, the Company's Board of Directors set the annual level of AB Kauno energija's heat
production and/or supply revenues for the second year of the base heat price validity period.
Information related to environmental issues
The Group and the Company strive to use natural resources sparingly, to adopt less polluting technologies, to
comply with the requirements of environmental legislation, and to apply preventive measures to reduce the
negative impact on the environment.
Waste management
Within the Group and the Company, waste generated during operations is collected, sorted, and transferred
to licensed waste management companies. In 2025, the Group and the Company transferred 2,556.325 tons
of various waste for recycling, including absorbents, filter materials, packaging containing or contaminated
with hazardous chemical residues, paper and cardboard, insulating materials containing asbestos, used
tires, bituminous mixtures, batteries and accumulators, daylight lamps, concrete, and iron and steel waste. In
2025, the Company will transfer the production waste it generates – ash (2,504.62 tons generated at the
Company's production units: Šilko, Nemuno, Inkaro, Jurbarko, Garliavos, Ežerėlis, Girionys, Noreikiškiai,
Domeikava, Raudondvaris boiler houses and the Petrašiūnai power plant, where biofuel is burned) as a by-
product, in accordance with the by-product plans agreed with the Environmental Protection Agency, for the
construction of the site foundation.
Wastewater management
In accordance with the schedule agreed with the Environmental Protection Agency (EPA), the Group and the
Company constantly monitor that the effluent discharges from stationary sources are within the permissible
limits set out in the integrated pollution prevention and control permits.
Air pollution
The Group’s and the Company’s laboratory for measuring emissions from stationary air pollution sources,
authorized by the Environmental Protection Agency, continuously monitors that pollutants emitted into
3.63
7.13
6.99
6.79
7.89
0
1
2
3
4
5
6
7
8
9
2021 y. 2022 y. 2023 y. 2024 y. 2025 y.
Average price of heat, supplied by AB Kauno
energija, ct/kWh
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2025
57
the atmosphere from stationary sources do not exceed the limits set in integrated pollution prevention and
control permits and other pollution permits. Biofuel is burned at the Company’s “Šilko”, “Nemuno”, “Inkaro”,
Jurbarko, Garliavos, Ežerėlio, Girionių, Noreikiškių, Domeikavos, Raudondvario boiler houses, and
Petrašiūnai Power Plant, thus reducing atmospheric pollution.
The comparison of the amount of pollutants emitted into the atmosphere in 2025 from the Company’s
stationary facilities with the amount of the years 2021–2024 is presented in table 3 below.
Table 3
Emissio
ns per
year, t
Particulates,
t
Nitrogen
oxides, t
Carbon
monoxide, t
Sulphur
dioxide, t
Hydrocarbons, t
Other
pollutants, t
2025
24.2063
203.9261
584.1596
13.8761
0.0354
0.2030
2024
30.8070
191.7773
629.7397
14.63
0.4936
0.1765
2023
56.7076
171.0513
839,7873
22.1036
0.5971
1.5198
2022
51.5130
159.8142
796.3571
60.3571
2.0144
0.3117
2021
72.9579
196.5479
781.2462
158.4375
1.2315
0.2966
Cyclones for smoke cleaning from particulates are installed in Šilkas, Ežerėlis, Girionys, Noreikiškės, Inkaras
boiler-houses and Petrašiūnai power-plant. Their working efficiency is checked every year. The Company is
involved in the greenhouse gas emissions trading system.
8. References and additional explanations
Main financial data of the Group and the Company are provided in the Consolidated and Company’s
Financial Statements of AB Kauno Energija of the year 2025.
The financial statements are prepared in accordance with the International Financial Reporting Standards as
adopted by the European Union and their interpretations. Standards have been issued by the International
Accounting Standards Board and interpretations have been issued by the International Financial Reporting
Interpretations Committee.
Internal control over consolidated statements
When preparing its consolidated financial statements, the Company combines the itemised financial
statements of the Company and its subsidiaries, by summing up the items of assets, liabilities, equity,
revenue, and expenses. Afterwards, it eliminates the book value of the Company’s investment in the
subsidiary and Company’s share of equity in the subsidiary; amounts on balance sheets, transactions,
income and expenses inside the Group (for this purpose, it prepares a reconciled report of all transactions,
income and expenses for the period); difference in depreciation of contribution in kind measured at market
value as compared to its book value.
For the purpose of preparing the consolidated financial statements of the Group, the financial statements of
the Company and subsidiaries are prepared for the same date.
It’s verified whether the accounting policy of the Company and its subsidiaries for accounting of similar
transactions is the same. The subsidiaries’ income and expenses are included into the Consolidated
Financial Statements as of the date of acquisition.
9. Significant events after the end of the reporting period
After the end of the reporting period, there were no significant events other than those disclosed in the financial
statements.
10. Group Activity Plans and Forecasts
As investments allow continual business development and profitability, the aims of the Group’s and the
Company’s investment program for the year 2025 is further increase in volumes of heat production and
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2025
58
effectiveness, expansion of heat selling market, through increase of use of biofuel for heat production,
development of heat transmission and distribution increasing safety and reliability, developing services of
maintenance of engineering systems and further improvement of consumers services quality.
In compliance with the provisions of the plan for the facilities on the implementation of the National
Renewable Energy Development Strategy, in order to implement the Company’s key business objectives
and the provisions of the National Energy Independence Strategy related to the assurance of technical
requirements for reliability of heat facilities and heat supply networks, to guarantee the quality keeps apply to
consumers, Kaunas city municipality decided to approve Company’s investment plans with the decision No.
T-50 “Regarding Investment Plans of AB Kauno Energija for the Year 2025 and Their Financing” on February
18, 2025.
During 2025, under the Company’s investment program, the modernization of Company-owned boiler
houses continued, automating production processes, installing condensing economizers, reconstructing heat
supply networks, as well as replacing heat metering devices. The implementation of these measures will
reduce heat transmission losses, optimize heat supply to consumers, and ensure the reliability of heat
supply.
On September 9, 2025, Kaunas City Council, by its Decision No. T-699 "On the Approval of AB Kauno
energija 2025-2034 , approved the Company's 10-year development investment plan (hereinafter referred to
as the Plan), which aims to form an investment portfolio that optimally meets the Company's strategic
objectives for the period 2025-2034. The Plan takes into account current and projected trends in the energy
sector and assesses possible technological changes and their impact on the operation of the heat supply
system. The Plan was prepared based on detailed Company data on heat consumption, heat production
capacity, existing and potential energy resources, and includes financial forecasts and scenarios to identify
optimal investment directions.
11. Information on research and development activities
Company’s representatives are constantly invited to work in committees of preparation of Energy
Engineering studies programs of Kaunas University of Technology and in groups of external and self-
evaluation. Working in these groups and committees Company’s representatives analyse aims of programs
and goals of studies, composition of training plans, appropriateness of staff, material basis, process, and
evaluation of studies, as well as program management. Performing external and self-evaluation, committees
apply recommendations for improvement of program structures and implementation process, to satisfy the
needs of employers and to meet the requirements of national and European legal acts in the field of higher
education.
The company has set a goal to completely eliminate the use of natural gas in heat production with gas
consumption to be halved in the next three years to only 5% of total energy consumption for heat production.
This will increase the use of green heat from biofuels and reduce CO2 emissions, helping to achieve the
Company's long-term goals of supplying more consumers with cheaper biofuel-based heat, reducing CO2
emissions and enabling new customers to connect to the city's heat network.
Minimising gas consumption will help achieve the Company's long-term goals: to supply more consumers
with cheaper biofuel-based heat through more optimal utilisation of Kaunas Energy's heat production
capacity; reducing emissions of CO2, which contribute to the greenhouse effect; enabling new customers to
connect to the city's heat network.
By reducing annual electricity costs, which are significant in heat production and supply, the Company
consistently invests in its own solar power plants and Organic Rankine Cycle (ORC) power plants. ORC
turbines installed in biofuel boiler houses generate electricity using organic fluid vapor.
12. Information on own shares acquired and held by the Issuer
The Company does not own its own shares. The Company’s subsidiaries have not purchased any of the
Company’s shares. Neither the Company nor its subsidiaries purchased or sold own shares during the
reporting period.
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2025
59
13. Information on the aims of financial risk management, hedging instruments in use
All information on this issue is provided in the notes to the 2025 set of consolidated and Company financial
statements of AB Kauno energija. The Company did not use any financial hedging instruments in 2024–2025.
14. Information on the Issuer’s subsidiary undertakings
The authorised capital of Company’s subsidiary UAB GO Energy LT registered in the Register of Legal
Entities on December 31, 2025 is 2,762,958 euros and it is divided into 95,406 ordinary registered shares
with par value of 28.96 euros each.
UAB GO Energy LT has no holdings directly or indirectly managed in other companies.
Activities of UAB GO Energy LT include the real estate development, management, leases, purchase, and
sale.
As of December 31, 2025, company UAB GO Energy LT had 48 employees.
Comparison of financial indicators of UAB GO Energy LT for the year 2025 with the indicators of the years
2021–2024 is provided in Chart 7.
Chart 7
15. Share Capital Structure
The authorised capital of the Company registered in the Register of Legal Entities of the Republic of
Lithuania as of December 31, 2025 is EUR 74,475,728.82 (seventy-four million four hundred seventy-five
thousand seven hundred twenty-eight euros and 82 cents).
Structure of authorized share capital of the Issuer by types of shares is specified in Table 4.
Table 4
Type of shares
Number of
shares, units
Nominal
value,
euros
Total nominal
value, euros
Municipal share
in the authorised
capital, per cent
Share of private
shareholders in
the authorised
capital, per cent
Ordinary nominal
shares
42,802,143
1.74
74,475,728.82
98.33
1.67
738
607
111
1646
983
411
3932
3201
620
4225
4116
84
4068
3734
302
0
500
1000
1500
2000
2500
3000
3500
4000
4500
Turnover from sales Sales costs Comprehensive income
Activity results of GO Energy LT, thous. euros
2021 y. 2022 y. 2023 y. 2024 y. 2025 y.
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2025
60
16. Information on the Issued Shares of the Issuer
The authorised capital of AB Kauno Energija was registered on May 18, 2015 by the decision of General
Meeting of Shareholders held on April 28, 2015 and amounts to EUR 74,475,728.82 (seventy-four million
four hundred seventy-five thousand seven hundred twenty-eight euros and 82 cents) and it is divided to
42,802,143 (forty-two million eight hundred and two thousand one hundred forty-three) ordinary shares of
par value of 1.74 euros each.
There are no limitations on the transfer of securities.
Main characteristics of shares released into free circulation of securities (as of December 31, 2025).
Securities registration No A01031430
ISON code of securities LT0000123010
Number of shares 20 031 977 ordinary nominal shares
Nominal value EUR 1.74
Total nominal value of shares EUR 34,855,639.98
Main characteristics of shares issued and registered for non-public trading (as of December 31, 2025).
ISON code of securities LT0000128407
Number of shares 22,770,166 ordinary nominal shares
Nominal value EUR 1.74
Total nominal value of shares EUR 39,620,088.84
The Company’s securities trading history for 2021–2025 is presented in Table 5.
Table 5
Indicator
2021
2022
2023
2024
2025
Opening price, euro
0.82
1.11
0.89
0.92
0.93
Highest price, euro
1.19
1.12
1.14
1.1
1.95
Lowest price, euro
0.80
0.76
0.87
0.895
0.91
Last price, euro
1.11
0.89
0.91
0.93
1.9
Circulation, units
147,659
64,193
97,113
83,527
263,253
Circulation, million euro
0.15
0.06
0.09
0.08
0.41
The share price (in euros) and turnover history for 2021–2025 as of December 31 are shown in Chart 8.
Chart 8
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2025
61
The company’s share price comparison with its sector (utilities) and the OMX Vilnius Index is presented in
Chart 9.
Chart 9
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2025
62
17. Information on the Issuer’s shareholders
The number of Company’s shareholders as of December 31, 2025 was 816.
Information on Shareholders of the Issuer who owned more than 5 per cent of the authorised capital of the
Company registered on May 18, 2015 (42,802,143 ordinary nominal shares) as of December 31, 2025 is
provided in Table 6 and Chart 10.
Table 6
Shareholder Name,
Surname (Company Name,
Type, Registered Address,
Code)
Number of ordinary
nominal shares
owned by the
shareholder, units
Share of
the Share
Capital
Owned
Share of votes
carried by
owned shares.
per cent
Share of votes
owned by the
shareholder
together with
acting entities,
per cent
Kaunas City Municipality
Laisvės al. 96, 44251 Kaunas
Code 111106319
39,736,058
92.84
92.84
-
Other shareholders
3,066,085
7.16
7.16
-
Total:
42,802,143
100
100
-
Chart 10
Shareholder Groups Distribution at the End of the Reporting Period is Presented in Table 7.
Table 7
Group Name
Number of Shares
Belonging to the
Group
Share of the Share
Capital, % of Total
Shares
Local authorities
42 088 631
98.33
Natural persons
458 705
1.07
92.84%
3.75%
1.74%
1.67%
Structure of shareholders as of December 31, 2025
Kaunas city municipality Kaunas district municipality
Jurbarkas district municipality Other shareholders
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2025
63
Group Name
Number of Shares
Belonging to the
Group
Share of the Share
Capital, % of Total
Shares
Legal entities
254 807
0.60
Total
42 802 143
100
17.1. The shareholders, who owned more than 5 per cent of the shares (20,031,977 ORS) issued for public
trading (reg. No. A01031430, VP ISIN code – LT0000123010) as of December 31, 2025 are listed in Table 8.
Table 8
Name
Type of shares
Number of
shares,
units
Total
nominal
value of
shares, EUR
Share of
publicly
issued shares
(%)
Share of
share ca
pital (%)
Kaunas City Municipality
Laisvės al. 96, 44251
Kaunas
Code 111106319
Ordinary
registered
shares
16,965,892
29,520,652
84.69
39.64
Kaunas District Municipality
Savanorių pr. 371, 49500
Kaunas,
Code 111100622
Ordinary
registered
shares
1,606,168
2,794,732
8.02
3.75
Other shareholders
Ordinary
registered
shares
1,459,917
2,540,256
7.29
3.41
Total:
20,031,977
34,855,640
100
46.80
17.2. The shareholders, who owned more than 5 per cent of the shares (22,770,166 ORS) issued for non-
public trading (VP ISIN code – LT0000128407) as of December 31, 2025 are listed in Table 9.
Table 9
Name
Type of
shares
Number of
shares,
units
Total
nominal
value of
shares,
Euro
Percentage of
shares from
those released
into the public
circulation
Share of
the
authorise
d capital
(%)
Kaunas City Municipality
Laisvės al. 96, 44251
Kaunas
Code 111106319
Ordinary
registered
shares
22,770,166
39,620,089
100
53.20
None of the shareholders of the Issuer holds any special rights of control. The rights of all shareholders are
the same; they are specified in article 4 of the Law on Companies of the Republic of Lithuania. The number
of shares carrying votes at the General Meeting of Shareholders of the Company is 42,802,143 units.
The Company has not been notified on the limitations of voting rights or any other mutual agreements of
shareholders which may limit the transfer of securities and / or voting rights.
In 2021, no dividends from the profit of 2020 were allocated and paid to the Issuer’s shareholders.
In 2022, no dividends from the profit of 2021 were allocated and paid to the Issuer’s shareholders.
In 2023, the dividends from the profit of the year 2022 were allocated and paid to the shareholders of the
Issuer. Dividend per share was 0.07009 euro, in total – 3.0 million euro. A total of 0.05 million euros was
allocated for sponsorship.
In 2024, no dividends from the profit of 2023 were allocated and paid to the Issuer’s shareholders.
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2025
64
In 2025, the dividends from the profit of the year 2024 were allocated and paid to the shareholders of the
Issuer. Dividend per share was 0.02435 euro, in total – 1.04 million euro. A total of 0.05 million euros was
allocated for sponsorship.
18. Employees
As of December 31, 2025 the group had 396 employees. Changes in the number of employees of the Group
in year 2021–2025 are provided in Table 10.
Table 10
Actual number of
employees
Group
31/12/2021
Group
31/12/2022
Group
31/12/2023
Group
31/12/2024
Group
31/12/2025
Total:
379
383
372
401
396
management
3
2
2
2
2
specialists
212
203
189
205
204
workers
164
178
181
194
190
Changes in number of employees of the Company in year 2020–2024 are provided in Table 11.
Table 11
Actual number of
employees
Company
31/12/2021
Company
31/12/2022
Company
31/12/2023
Company
31/12/2024
Company
31/12/2025
Total:
350
353
344
370
348
management
1
1
1
1
1
specialists
197
189
178
192
189
workers
152
163
165
177
158
Education of employees of the Group as at the end of the reporting period.
Table 12
No
Education
Group
31/12/2021
Group
31/12/2022
Group
31/12/2023
Group
31/12/2024
Group
31/12/2025
1
Secondary incomplete
1
1
1
1
1
2
Secondary
176
150
140
147
143
3
College
38
34
38
39
39
4
Higher
164
198
193
214
213
Total:
379
383
372
401
396
Education of employees of the Company as at the end of the reporting period.
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2025
65
Table 13
No
Education
Company
31/12/2021
Company
31/12/2022
Company
31/12/2023
Company
31/12/2024
Company
31/12/2025
1
Secondary incomplete
1
1
1
1
1
2
Secondary
156
135
125
137
117
3
College
38
34
37
28
30
4
Higher
155
183
181
204
200
Total:
350
353
344
370
348
Company’s management pays a lot of attention on increase in work efficiency, working conditions
improvement, supply with latest working tools, professional development, planning of internal activities and
control implementation, also for improvement of consumer service quality. Executive and professional
qualification levels suit their positions, and work experience and practical knowledge of subject of other
employees makes them possible to work in their positions.
To increase work efficiency, the Company conducts an annual work performance evaluation of structural
units’ managers, the main goal of which is to evaluate the employee’s qualifications and abilities of functions
performance assigned in job regulations, to properly evaluate employees' activities, provide feedback on the
goals execution in order to increase employee loyalty, satisfaction with conducted work, encouraging them to
improve. The result of this process is information allowing better coordination of the Company's activities and
for encouraging employees to improve their working activities.
The Company actively cooperates with educational institutions and enables high school students to apply
theoretical knowledge and gain practical skills. When there is a need for new employees, the most active and
best students are given the opportunity to get a job in the Company.
The remuneration of the Issuer’s employees consists of a fixed salary component, bonuses and allowances
paid in accordance with the Labour Code of the Republic of Lithuania and other legislation, and the
Company’s order on additional employee benefits.
According to the Company’s additional employee benefits order:
1. For continuous employment within the Company employees are granted additional paid leave.
2. The record of service of employees who worked in Lithuanian energy system companies and who
were redeployed to the Company according to the corporate employer agreement, i.e., when the transfer
was carried out according to the Labour Code or the Law on Employment Contract, is considered
uninterrupted and those employees are granted an additional paid leave for an uninterrupted record of
service within the Company.
3. At the agreement of the employer and employee, the employee may be granted unpaid leave for
family related issues and other important reasons.
4. Company’s employees are entitled to additional paid leave.
The employer Obligates to:
1. Provide conditions for preventive employee health check-ups;
2. In the event of an employee’s death, provide a payment equal to 4 minimum monthly wages
(hereinafter – MMV), free transportation or reimbursement of transport costs (the payment is granted to the
person handling the funeral arrangements);
3. In the event of the death of the employee's close relative (parent (adoptive parent), child (adoptive
child) or spouse), the Company grants the employee an MMS benefit, free transport or covers transport
costs;
4. In the event of the birth of one or more children, the Company grants the employee a gift in the
amount of 50 per cent MMS for each child;
5. Upon registration of the marriage, the employee is granted a gift in the amount of 50 per cent MMS;
6. When an employee reaches a milestone birthday ending in "5" (e.g., 25, 35, etc.), a cash gift of €50 is
awarded, and upon reaching an anniversary ending in "0" (e.g., 20, 30, etc.), a cash gift of €100 is awarded;
7. In other cases, when the employee needs financial support (in case of losses due to natural disasters
and other reasons beyond the control of the employee), the Company grants a benefit of up to 3 MMS;
8. If an employee becomes seriously ill (based on the list of serious illnesses approved by the Ministry
of Health of the Republic of Lithuania) or suffers a serious accident, a benefit equal to 3 MMA is paid. In the
case of a serious illness, a benefit equal to 1 MMA is paid once a year (over 12 months).
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2025
66
19. Procedure for amending the Issuer’s Articles of Association
The Issuer’s Articles of Association stipulate that the General Meeting of Shareholders of the Company has
the exceptional right to amend the Statutes other than the exceptions provided in the Law on Companies of
the Republic of Lithuania. The resolution on the amendment of the Company’s Statutes 2/3 qualified majority
of votes of the members participating in the meeting of shareholders is needed.
The Statutes of the Company were amended on August 10, 2023 by the decision of the General Meeting of
Shareholders. The new wording of the Statutes was registered on August 28, 2023 in the Register of Legal
Entities of the Republic of Lithuania. It can be found on Company’s website at www.kaunoenergija.lt.
20. Issuer’s governing bodies
According to the Company’s Articles of Association, the Company’s governing bodies are the General
Meeting of Shareholders, a collegial supervisory body – the Supervisory Board, a collegial management
body – the Management Board, and a sole management body – the Chief Executive Officer.
Decisions of the General Meeting of Shareholders made on the issues within the competence of the General
Meeting of Shareholders provided for in the Statutes of the Company are binding to its shareholders, the
Supervisory Board, the Management Board, and the General Director, and to other employees of the
Company.
All persons who are the shareholders of the Company on the date of the General Meeting of Shareholders
have the right to attend the Company’s General Meeting of Shareholders personally or by proxy or be
represented by persons with whom they had entered into the agreement on the transfer of the voting right.
The record date of the meeting of the Company is the fifth working day before the General Meeting of
Shareholders or the fifth working day before the repeat General Meeting of Shareholders. A person attending
the General Meeting and entitled to vote shall provide a document which is a proof of his personal identity
and sign the registration list of the Meeting of Shareholders. A person who is not a shareholder shall
additionally provide a document attesting to his right to vote at the General Meeting of Shareholders.
1 (one) General Meeting of Shareholders was convened in the year 2025. Company’s General Manager and
the Chief Finance Officer attended them. Issuers’ shareholders can ask questions and can get answers or
explanations from Company’s managers and speakers.
The collegial management body – Supervisory Board is elected by the General Meeting of Shareholders
according to the procedure specified in the Law on Companies of the Republic of Lithuania. The Supervisory
Board consists of 3 (three) members. The Supervisory Board is elected for a term of 4 (four) years. The
Supervisory Board elects the chairman of the Supervisory Board from among its members. The General
Meeting of shareholders may remove from office the entire Supervisory Board or its individual members
before the expiry of the term of office of the Supervisory Board. Where individual members of the
Supervisory Board are elected, they shall be elected only until the expiry of the term of office of the current
Supervisory Board.
The Supervisory Board elects and dismisses the Management Board members and supervises the activities
of the Board and the General manager of the Company; submits its comments and proposals to the General
Meeting of Shareholders on the Company’s operating strategy, set of annual financial statements, draft of
profit / loss allocation and the annual report of the Company as well as the activities of the Board and the
General Manager of the Company; submits proposals to the Board and the General Manager of the
Company to revoke their decisions which are in conflict with laws and other legal acts, the statutes of the
Company or decisions of the General Meeting of Shareholders; addresses other issues assigned to the
scope of powers of the Supervisory Board by decisions of the General Meeting of Shareholders regarding
the supervision of the activities of the Company and its management bodies. The Supervisory Board shall
not be entitled to assign or delegate the functions assigned to the scope of its powers by the Law on
Companies of the Republic of Lithuania and the statutes of the Company to other bodies of the Company.
General
Meeting of
Shareholders
Supervisory
Board
Management
Board
General
Director
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2025
67
The Supervisory Board, following the resolution No. 1K-18 of August 21, 2008 of the Securities Commission
of the Republic of Lithuania “Regarding The Requirements For Audit Committees”, as well as “Guidelines For
The Application Of Requirements For Audit Committees” which were approved by the decision of the
Securities Commission of November 28, 2008 approves the internal rules of procedure for forming the Audit
Committee and elects the Audit Committee members.
The Supervisory Board of the Company approved on May 21, 2019 a new wording of the internal rules of
procedure of the Audit Committee of the Company.
The Management Board is a collegial management body of the Company. The Management Board is
comprised of 3 (three) members. The Management Board is elected for the period of 4 (four) years by the
Supervisory Board. The Supervisory Board can remove from office the entire Management Board or its
individual members before the expiry of their term. If individual members of the Management Board are
elected, they shall serve only until the expiry of the term of office of the current Management Board. The
Management Board elects the chairman of the management Board from among its members.
The General Manager is the manager of the Company. The manager of the Company is a sole person
management body of the Company organising its activities. Authority and responsibilities of the
administration members of the Company are established by the order of the General Manager.
20.1. Data on the committees in the Company
The members of Audit Committee appointed by the decision No. 2023-4 of the Supervisory Board of October
13, 2023:
Full name
Position
Beginning of term
End of term*
Mr. Mindaugas Šimkus
Independent member of Audit
Committee
October 13, 2023
April 26, 2027
Ms. Violeta
Kavaliauskienė
Independent member of Audit
Committee
October 13, 2023
April 26, 2027
Ms. Edita Girdvilienė
Member of Audit Committee
October 13, 2023
April 26, 2027
* The term of office of the Audit Committee coincides with the term of office of the Supervisory Board of the
Company.
In carrying out its activities, the Audit Committee follows the internal rules of procedure of the Company’s
Audit Committee approved by decision No 2019-4 of May 21, 2019 of the meeting of the Supervisory Board
of the Company. The Audit Committee performs its functions provided for in article 52 of the Law on Audit of
the Republic of Lithuania.
20.2. Information on the members of the Company’s Supervisory Board:
Members of the Supervisory Board of the Company:
Full name
Position
Beginning of term
End of term
Mr. Antanas Etneris
Chairman of the Supervisory
Board
June 29, 2023
April 26, 2027
Mr. Mindaugas Bičkauskas
Member of the Supervisory Board
June 29, 2023
April 26, 2027
Ms. Jolanta Brazaitienė
Member of the Supervisory Board
April 1, 2024
April 26, 2027
Company’s Supervisory Board comprised of two independent members and of one member of Kaunas City
Municipality administration, as he partially represents the controlling shareholder, i.e., Kaunas City
Municipality, holding 92.84 per cent of the Company’s voting shares.
1 session of the Supervisory Board was held during of the year 2025. More than ½ of the members of the
Supervisory Board attended all sessions.
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2025
68
Mr. Antanas Etneris
Mr Antanas Etneris, main occupation - director of UAB Wisewood (code 302527538, Ringuvos str. 74, LT-
45245 Kaunas), director of UAB Mana Grupė (code 303991865, Kruonio str. 16, Kaunas), director of UAB
Airhotel (code 302598948, Oro Uosto str. 2, Karmėlava, LT-54460 Kaunas distr.), member of the Board of
UAB Stoties Turgus, member of the Board of UAB Kauno Vandenys.
Holds no shares of the company. Holds the shares of the companies UAB Wisewood, UAB Mana Ranga,
UAB Mana Grupė, UAB Airhotel, UAB Dramart, UAB Ukraineičių 4, UAB Vėjo Dukra, UAB Plėtros Fondas,
UAB Aguonų Projektai, LLC My Group.
During the reporting period, the member of the Supervisory Board was remunerated EUR 42.4 thousand.
Mr. Mindaugas Bičkauskas
Main occupation - Director of UAB Urbo bankas Vilnius branch (code 112027077, Pamėnkalnio str. 40, LT-
01114 Vilnius).
Holds no shares of the company. Holds the shares of the companies AB Šiaulių bankas, AB Apranga, AB
Linas Agro, AB Vilkyškių pieninė, AB Litgrid.
During the reporting period, the member of the Supervisory Board was remunerated EUR 31.8 thousand.
Jolanta Brazaitienė
Main occupation Kaunas city municipality administration - Leader (Central Accounting Unit) (company code
111106319, Laisvės av. 96, LT-44251 Kaunas).
Holds no shares of the company. During the reporting period, the member of the Supervisory Board was
remunerated EUR 20.7 thousand.
20.3. Information on the members of the Company’s Management Board
Members of Company’s Management Board:
Full name
Position
Beginning of term
End of term
Nerijus Mordas
Chairman of the Management Board
July 13, 2023
April 26, 2027
Algimantas Stasys Anužis
Member of the Management Board
July 13, 2023
April 26, 2027
Giedrius Kazlauskas
Member of the Management Board
July 13, 2023
April 26, 2027
17 sessions of Company’s Management Board were held in the year 2025. More than 2/3 members of the
Management Board attended all the sessions.
Mr. Nerijus Mordas
Main occupation Chief finance officer of UAB Vičiūnų Grupė (code 303211678, V. Krėvės av. 97, LT-50369
Kaunas). Member of Company’s Management Board since June 1, 2015 until April 27, 2023 and since July
13, 2023.
Holds no shares of the Company. No interest in the capital of other Lithuanian companies.
Mr. Nerijus Mordas charged EUR 41.7 thousand of remuneration under agreement of activity of member of
the Management Board. No bonuses estimated, nor any assets were transferred or guarantees issued
during the reporting period.
Giedrius Kazlauskas
Main occupation UAB „Laustiga“ director (code 135456025, Ukrainiečių str. 4, LT-45234 Kaunas).
Member of Company’s Management Board since July 13, 2023.
Holds no shares of the Company. No interest in the capital of other Lithuanian companies.
Mr. Giedrius Kazlauskas charged EUR 31.3 thousand of remuneration under agreement of activity of
member of the Management Board. No bonuses estimated, nor any assets were transferred or guarantees
issued during the reporting period.
Mr. Algimantas Stasys Anužis
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2025
69
Member of the Council of Kaunas Chamber of Commerce, Industry and Crafts, president of Lithuanian
Veterans Basketball League. No main place of work.
Member of Company’s Management Board since June 1, 2015 until April 27, 2023 and since July 13, 2023.
Holds no shares of the Company. No interest in the capital of other Lithuanian companies.
Mr. Algimantas Stasys Anužis charged EUR 31.3 thousand of remuneration under agreement of activity of
member of the Management Board. No bonuses estimated, nor any assets were transferred or guarantees
issued during the reporting period.
20.4. Information on the General Manager and Chief accountant of the Company:
Mr. Tomas Garasimavičius
General Director of the Company from March 30, 2020. Education - higher university, Vilnius University in
2003, Bachelor of Political Science, Vilnius University in 2005, Master of Political Science, Creighton
University, USA 2005, Master of Political Science. Workplaces during the last 10 years and positions:
Adviser to the Prime Minister of the Republic of Lithuania on Energy (December 2012 – December 2016),
Member of the Supervisory Board of UAB Lietuvos Energija (July 2013 – July 2017), Member of the
Nomination and Remuneration Committee of the Supervisory Board of UAB Lietuvos Energija (July 2013 –
July 2017), Member of the Risk Management Supervisory Committee of the Supervisory Board of UAB
Lietuvos Energija (September 2013 – July 2017), Member of the Support Fund Council of UAB Lietuvos
Energija (September 2014 – September 2017), Adviser to the Prime Minister of the Republic of Lithuania on
Energy and the Environment (January 2017 – March 2018), Adviser to the Mayor of Kaunas city on Energy
(June 2018 – March 2020).
Holds no shares of the Company. No interest in the capital of other companies.
Ramunė Petkevičienė
Chief Accountant of the Company from 2 May 2024. Education – higher university degree, Vilnius University,
Master's degree in Accounting, finance and banking. Workplaces in the last 10 years, and job positions:
Hoptrans Holding, UAB Chief Accountant 2013–2024 y.
Company’s General Manager and the Chief Accountant charged 247.2 thousand euros of remuneration in
the year 2025, and the average amount per member is 123.6 thousand euros. No other assets had been
transferred; no guarantees granted.
21. Information on significant agreements
There are no significant agreements that would come into force, change or termination in case of change in
controls of Issuer (their impact as well, except cases when due to the character of agreements the disclosure
of them would make a significant harm).
22. Information on Agreements Between the Issuer and Members of its Bodies or
employees
There are no agreements of the Issuer or its managerial body members or employees (which provide for
compensation in case of their resignation or termination of employment on no grounds or in case their
employment is terminated due to changes in controls of the Issuer).
23. Information on major transactions with related parties
There were no larger individual transactions. More detailed information is provided in the Note 25 of the
Explanatory Notes to the Financial Statements.
24. Information on harmful transactions concluded on behalf of the Issuer during the
reporting period
There are no harmful transactions concluded on behalf of the Issuer during the reporting period (not
complying with the Company's objectives, normal market conditions, detrimental to the interests of
AB KAUNO ENERGIJA CONSOLIDATED MANAGEMENT REPORT OF THE YEAR 2025
70
shareholders and other interest groups etc.) which were or are likely to have an adverse effect on the
Issuer's activities and (or) performance in the future, as well as information on transactions entered into in a
conflict of interest between the Issuer’s management, controlling shareholders or other related parties'
obligations to the Issuer and their private interests and (or) other duties.
25. Information on compliance with the Governance Code of Companies and the
Company’s corporate social initiatives and policies
Information on compliance with the corporate governance code is provided in Annex 2 to this Management
Report. Management reports on the Company’s corporate social initiatives and policies are announced on
the Company’s website.
26. Information on Publicly Disclosed Information
In performing its obligations under the applicable legislation regulating the securities market, the Issuer has
announced the following information starting from January 1, 2025 over the GlobeNewswire news distribution
service, in which notices are disseminated within the European Union. This information was also posted on
the website of the Issuer. All the information is available on website of Nasdaq Vilnius
(http://www.nasdaqbaltic.com/market/?lang=lt) and Issuer’s website (http://www.kaunoenergija.lt).
Title
Announcement
category
Language
Time
AB Kauno energija business activity results of the 9 months
of the year 2025
Interim
information
EN, LT
26/11/2025
16:00
Correction: Interim consolidated financial statement of
Kauno energija AB covering 6 months of 2025
Half-Yearly
information
EN, LT
29/08/2025
11:09
Interim consolidated financial statement of Kauno energija
AB covering 6 months of 2025
Half-Yearly
information
EN, LT
25/08/2025
16:15
Public joint stock company AB Kauno energija established
public institution "Transformacijos”
Notification on
material event
EN, LT
02/06/2025
12:15
Activity results of AB Kauno energija of the 1 quarter of the
year 2025
Interim
information
EN, LT
26/05/2025
16:00
Procedure for the Payment of AB Kauno Energija
Dividends for 2024
Notification on
material event
EN, LT
07/05/2025
15:00
Audited annual information of AB Kauno Energija for the
year 2024
Annual
information
EN, LT
29/04/2025
07:29
Dividend payment ex-date of AB Kauno Energija
Notification on
material event
EN, LT
29/04/2025
07:23
Resolutions of the General Meeting of Shareholders of AB
Kauno Energija
General
meeting of
shareholders
EN, LT
29/04/2025
07:19
Correction: Convocation of General Meeting of
Shareholders of AB Kauno Energija
General
meeting of
shareholders
EN, LT
23/04/2025
19:53
Correction: Convocation of General Meeting of
Shareholders of AB Kauno Energija
General
meeting of
shareholders
EN, LT
07/04/2025
09:34
Convocation of General Meeting of Shareholders of AB
Kauno Energija
General
meeting of
shareholders
EN, LT
03/04/2025
16:00
Information on The Election of The General Manager of
The AB Kauno Energija
Notification on
material event
EN, LT
31/03/2025
16:00
AB Kauno energija business activity results of the 12
months of the year 2024
Interim
information
EN, LT
26/02/2025
17:00
71
Annex 1
AB KAUNO ENERGIJA
REMUNERATION REPORT FOR 2025
GENERAL INFORMATION ON THE REMUNERATION REPORT
The Remuneration Report of AB Kauno Energija (hereinafter – the Company) has been prepared for the
reporting financial period of 2025, which coincides with the calendar year. The Remuneration Report
(hereinafter - the Report) was prepared in accordance with the Law on Financial Statements of Entities of the
Republic of Lithuania, the Remuneration Policy of AB Kauno Energija (hereinafter - the Remuneration Policy)
and other legal acts.
On April 29, 2024, the General Meeting of Shareholders approved the Remuneration Policy of AB Kauno
Energija and approval of the remuneration report. This Remuneration Policy applies to the Company’s
General Manager, members of the Management Board and members of the Supervisory Board insofar as it
relates to the payment of monetary remuneration for their activities in the Company’s management and / or
supervisory bodies. The Remuneration Report provides information on the remuneration of each member of
the management and supervisory bodies, information on other (un) received benefits, other data.
INFORMATION ON THE REMUNERATION RECEIVED BY MEMBERS OF THE MANAGEMENT AND
SUPERVISORY BODIES
According to the Remuneration Policy approved by the Company’s General Meeting of Shareholders, the
specific remuneration is paid only to the Company’s General Director, Supervisory Board and members of
the Management Board.
Report on the remuneration of the Company’s General Director in 2025
The remuneration accrued and paid to the Company’s General Director during 2024, determined by the
Management Board, complied with the remuneration forms provided for in the Remuneration Policy (Item
3.1). The amount of remuneration for the General Director of the Company was determined by the decision
of the Management Board No. 2024-5-4 of February 26, 2024. For the 2024 operating results, by the
decision No 2025-8-1 as of 7 May 2025, the Management Board of the Company granted a bonus equal to
his 30% fixed part of salary. The General Director of the Company was paid with EUR 159.2 thousand
remuneration during 2025 (a fixed part of the remuneration 110.2 thus. Eur, salary supplement 31.5 thous.
Eur, bonus 17.5 thous. Eur), an increase of 19.3% compared to 2024 (the General Director started working
for the Company on March 30, 2020).
The Head of the Company – the General Manager - did not receive any remuneration from the companies
referred to the group of companies, as defined in the Law on Consolidated Financial Statements of
Companies of the Republic of Lithuania. The salary of the Head of the Company was paid in accordance
with the procedure, scope and terms provided for in the Employment Contract, the General Director did not
receive other property benefits during 2025, including the award of shares or other transactions in favour of
and in the interests of the Head.
Report on the remuneration of the members of the Supervisory Board of the Company in 2025
The Company has 3 (three) independent members of the Supervisory Board. During 2025 the Company
accrued EUR 94.9 thousand to independent members of the Supervisory Board under activity agreements,
an increase of 5.6% compared to 2024. The average EUR 31.6 thousand per one independent member of
the Supervisory Board per year. The members of the Supervisory Board did not receive payments from the
subsidiaries. Information on the remuneration of each individual member of the Supervisory Board is
provided in the Annual Report.
Report on the remuneration of the members of the Management Board of the Company in 2025
The Company has 3 (three) independent members of the Management Board. During 2025 the Company
accrued EUR 104.2 thousand to independent members of the Management Board under activity
agreements, remained unchanged compared to 2024. The average EUR 34.7 thousand per one
72
independent member of the Management Board per year. The members of the Management Board did not
receive payments from the subsidiaries. Information on the remuneration of each individual member of the
Management Board is provided in the Annual Report.
No bonuses (tantèmes) were paid to the members of the Supervisory Board or the Management Board.
During the reporting period, no guarantees or sureties were given to the members of the Supervisory Board,
Management Board and the Head of the Company, no assets or other property rights were transferred, no
other benefits were received from the Company.
Members of the Supervisory Board and Management Board, the General Director of the Company and
members of the Audit Committee have no significant material obligations to the Company (Issuer), just as the
Company (Issuer) has no obligations to these persons.
Guarantees and sureties and / or other measures to secure the fulfilment of the obligations of the Head of
the Company, members of the management bodies and Supervisory Board were not granted on behalf of
the Issuer during 2025, the Issuer did not grant loans and Company shares to these persons.
The remuneration paid to the Head of AB Kauno Energija, members of the Management Board and the
Supervisory Board in 2025 complied with the principles, grounds and conditions approved in the
Remuneration Policy.
INFORMATION ON THE COMPANY'S EMPLOYEE REMUNERATION SYSTEM
The description of the Company's Remuneration Scheme (the "Remuneration Scheme") was adopted on 16
November 2023 and supplemented in 2024 by a supplementary incentive scheme.
The purpose of the Company's Remuneration System is to establish clear principles of remuneration for
work, to reward work and results fairly and transparently, to motivate, encourage and empower employees to
improve the efficiency and quality of their work, to achieve the Company's objectives, and to retain and
attract competent employees.
The principles of the remuneration system are designed to be consistent with the long-term interests of the
Company's business, business strategy, objectives, values and to promote sound and effective risk
management, to avoid conflicts of interest, and to ensure the principles of investor and client protection in the
provision of services to the Company.
The Company's Remuneration Framework is designed according to the following principles:
*Fairness - the reward and performance evaluation system applies to all employees of the Company. Under
the job level matrix, the salary ranges for positions of equal value are the same.
*Competitiveness - the remuneration of the Company's employees is determined by considering the situation
on the labour market, by comparing the remuneration of certain posts with the remuneration of similar posts
or posts of similar value on the labour market.
* clarity/transparency - the reward and performance evaluation system is aligned with the Company's
strategy. The remuneration of the Company's employees depends on the Company's financial capacity, the
results of the performance evaluation, the economic situation in the country and the Company's budget. It is
possible to set the remuneration of individual employees according to the Company's reasonable need at a
given time for a particular competency held by an employee. Every employee of the Company knows at
which level of the job matrix his/her position is located, what career paths are possible and how his/her
performance is related to his/her remuneration;
*neutrality with regard to gender, age, origin, nationality, religious, political opinions, social status, sexual
orientation - employees are paid equally for equal work or work of equal value, regardless of their gender,
age, origin, nationality, religious, political opinions, social status, sexual orientation.
The average salary of the Company's employees (excluding members of the Supervisory Board and the
Management Board) and the Company's gross revenue:
2021 y.
2022 y.
2023 y.
2024 y.
2025 y.
Gross revenue,
thousand EUR
457
6,299
3,881
8,288
18,000
Average salary,
thousand EUR
1.6
1.8
1.9
2.2
2.5
73
FINAL PROVISIONS OF THE REMUNERATION REPORT
The Report approved by the Management Board of the Company is submitted to the General Meeting of
Shareholders, which decides whether to approve the Remuneration Report or not. Such (non) approval does
not release the Management Board from the responsibility for the decision taken.
The Remuneration Report for 2025 is an integral part of the Consolidated Annual Report and is published on
the website of the Company http://www.kaunoenergija.lt and www.nasdaqomxbaltic.com in accordance with
the procedure established by legal acts.
74
Annex 2
AB KAUNO ENERGIJA, PURSUE THE GOVERNANCE REPORT
AB Kauno Energija (hereinafter – the Company), following Article 12 paragraph 3 of the Law on Securities
of the Republic of Lithuania and item 24.5 of the Listing Rules of AB NASDAQ Vilnius, discloses its
compliance with the NASDAQ Vilnius Corporate Governance Code for the Companies, whose securities are
traded on the regulated market, and its specific provisions and recommendations. If any of the provisions or
recommendations of the Code are not respected due to any reasons, the explicable information is provided
herein.
Summary of the Corporate Governance Report:
Specifics of the Company’s activities:
The Company is listed on the secondary list of the Nasdaq Vilnius Stock Exchange starting from December
28, 1998.
The main activities of the Company are production, rendering of services. The Company is the parent company
of the Group consisting of LLC GO Energy LT. The Company produces and supplies heat to consumers (for
heating and hot water preparation purposes) in the cities of Kaunas and Jurbarkas and in the Kaunas district
(Akademija, Ežerėlis, Domeikava, Garliavos, Girioniai, Neveronys, Raudondvaris).
Company’s governance structure:
- The Company has a Management Board elected for a four‑year term, as well as a General Manager appointed
by the Management Board (for more information on the Issuer’s governing bodies and the composition of the
committees, please refer to Section 20 ‘Issuer’s bodies’ of this Consolidated Annual Report). The activities of
the Company’s Management Board and the General Manager are focused on implementing the Company’s
strategic objectives, taking into account the aim of increasing shareholder equity value.
- The company has a supervisory body – the supervisory board.
The Management Board and the general Manager acts in close cooperation seeking to obtain the maximum
benefit for the Company and its shareholders. The Management Board periodically reviews and assesses
Company’s activity results.
- The chairman of the company’s board is not and has not been the company’s CEO. His current or past
positions do not create any obstacles to performing independent and impartial supervision.
- The members of the Management Board elected by the General Meeting of Shareholders are independent
and act for the benefit of the Company and its shareholders.
- The company has an Audit Committee, which includes 2 independent members. The company has not
established nomination or remuneration committees.
Accountability to the Company's shareholders:
- The Company discloses and continuously updates all information necessary to assess the Company’s
management bodies: information about the Company’s CEO, the composition of the supervisory board and
the management board, the members’ education, work experience, competence, and participation in the
activities of other companies is disclosed in the Company’s periodic reports as well as on its website.
- The Company discloses all regulated information through PLLC Nasdaq Vilnius news distribution system.
This ensures access to the broadest public in the Republic of Lithuania and other EU countries.
The information shall be provided simultaneously in Lithuanian and English. The company publishes the
information before or after the trading session of PLLC Nasdaq Vilnius. The Company shall not disclose
information that may affect the price of the issued securities in the form of comments, interviews or in any
75
other manner until such information is made public through the news distribution system of PLLC Nasdaq
Vilnius.
- All shareholders of the Company have equal access to and participate in the decision-making process
important for the Company.
The procedures for convening and conducting general meetings of shareholders shall comply with the
provisions of the legal acts and shall provide equal opportunities for shareholders to participate in the meeting,
to acquaint themselves in advance with draft resolutions and decision-making materials, as well as to ask.
INFORMATION ON CORPORATE GOVERNANCE
(prepared in accordance with the version of the Law on Reporting of Corporate and Group of Companies
Reporting of the Republic of Lithuania (XIV-2811), effective from 1 December 2024)
1. Reference to the applicable corporate governance code and where it is publicly available and/or reference
to any relevant publicly available information on corporate governance practices.
The Company provides information on its compliance with the applicable Corporate Governance Code in
Annex 2 of the consolidated annual management report for 2025. The Company publishes its annual
management report on its website (on the Company's website under "Investors" → "Financial information and
reports". Link: https://kaunoenergija/investuotojams/finansine-informacija/).
2. If the provisions of the applicable Corporate Governance Code are departed from and/or not complied with,
the provisions from which such departures occur and/or are not complied with, and the reasons.
The Company publishes this information in Annex 2 "Corporate Governance Report" of the 2025
Consolidated Annual Management Report under the columns "Yes / No / Not Relevant" and "Comment".
3. Information on the scope of risk and risk management – describing the management of risks related to
financial reporting, risk‑mitigation measures, and the internal control system implemented within the
company.
The Company discloses information on the extent of risk and risk management in paragraphs 6.2 and 7 of the
2025 consolidated annual management report.
4. Information on significant direct or indirect holdings in the company
The Company discloses information on significant direct or indirect holdings in the 2025 consolidated annual
management report in item 17.
5. Information on the Company's transactions with related parties as set out in Article 37.2 of the Companies
Act (specifying the parties to the transaction (legal form of the legal person, name, code, register where data
on this person are collected and kept, registered office (address); name, surname, mailing address of natural
person) and the value of the transaction)
Pursuant to Article 37.2(10)(3) of the Law on Joint Stock Companies, the provisions of Article 37.2 shall not
apply to transactions concluded with a subsidiary company of which the joint stock company is the owner of
all the shares, or where the aggregate amount of such transactions in the course of a financial year does not
exceed 1/10th of the value of the assets of the latest balance sheet of the joint stock company whose shares are
admitted to trading on a regulated market. As the Company's transactions are all loans with subsidiaries or do
not exceed 1/10th of its assets, the details of such transactions are not detailed.
6. Information on shareholders with special control rights and description of these rights
Information on the Company's shareholders is set out in section 17 of the consolidated annual management
report for 2025.
76
7. Information on any existing restrictions on voting rights (such as restrictions on the voting rights of persons
holding a certain percentage or number of votes, time limits for the exercise of voting rights, or systems
whereby the rights attached to the securities are separated from the security holder)
The Company is not subject to any restrictions on voting rights.
8. Information on the rules governing the election and replacement of members of the Board of Directors and
amendments to the company's articles of association
Information on amendments to the Company's Articles of Association is set out in item 19 of the consolidated
annual management report for 2025.
Information on the election and replacement of the Company’s board members is provided in Section 20 of
the consolidated annual management report for 2025.
9. Information on the powers of the Board members
The members of the Company's board operate in accordance with the Companies Act, the Company's Articles
of Association, the Rules of Procedure of the Board of Directors and other legal acts and have no special
powers. The members of the Board shall act at all times for the benefit of the Company and its shareholders.
10. Information on the competence of the General Meeting of Shareholders, the rights of shareholders and
their exercise, if this information is not provided for by law
The Company discloses information on the competence of the General Meeting of Shareholders, the rights of
shareholders and the exercise of those rights, as well as the procedure for organising shareholders' meetings,
in point 20 of the 2025 consolidated annual management report.
11. Information on the composition of the management and supervisory bodies and their committees, and their
and the CEO's areas of responsibility Board functions.
The Company provides information on the members of the Supervisory Board, the Management Board and
the Company's Chief Executive Officer in items 20.1, 20.2, 20.3 and 20.4 of the 2025 Consolidated Annual
Management Report. The members of the Supervisory Board, the members of the Management Board, the
Chief Executive Officer of the Company shall be guided in their activities by the Rules of Procedure of the
Management Board and the Regulations of the Chief Executive Officer. Nevertheless, the members of the
Supervisory Board, the members of the Management Board and the Chief Executive Officer of the Company
shall act at all times for the benefit of the Company and its shareholders.
12. Information on all shareholders’ agreements (their substance and conditions)
The Company has no information on any shareholders’ agreements.
PRINCIPLES/ RECOMMENDATIONS
YES/NO /NOT
APPLICABLE
COMMENTARY
Principle 1: General Meeting of Shareholders, equitable treatment of shareholders, and shareholders’
rights
The corporate governance framework should ensure the equitable treatment of all shareholders. The
corporate governance framework should protect the rights of shareholders.
1.1. All shareholders should be provided with
equal opportunities to access the information
and/or documents required by law and to
participate in the adoption of decisions
important to the Company.
Yes
All shareholders have equal access to the
information and / or documents provided
for in legal acts and participate in making
important decisions for the Company.
The Company provides information
through the Nasdaq Vilnius Stock
Exchange Central Regulated Information
Base in Lithuanian and English
77
simultaneously. The information is
published immediately at once, thus
ensuring the simultaneous provision of
information to all.
1.2. It is recommended that the Company’s
capital should consist only of the shares that
grant their holders equal voting, ownership,
dividend, and other rights.
Yes
The authorized capital of the Company
consists of ordinary registered shares,
which grant equal voting, ownership,
dividend, and other rights to all
shareholders of the Company.
1.3. It is recommended that investors should
have access to the information concerning the
rights attached to the shares of the new issue
or those issued earlier in advance, i.e. before
they purchase shares.
Yes
The Company enables investors to
familiarize themselves with the rights
granted by the new or already issued
shares well in advance.
1.4. Exclusive transactions that are
particularly important to the Company, such
as transfer of all or almost all assets of the
Company which in principle would mean the
transfer of the Company, should be subject to
approval of the General Meeting of
shareholders.
Yes
According to the Company’s Articles of
Association, important transactions—
i.e., decisions concerning non‑current
assets with a carrying amount exceeding
EUR 3 million—require the approval of
the General Meeting of Shareholders or
the Supervisory Board.
For particularly significant and
exceptional transactions, such as the
transfer of all or nearly all of the
Company’s assets, the Company would
act in accordance with the Lithuanian
Law on Companies and other applicable
legal acts establishing the requirements
for approving such transactions.
1.5. Procedures for convening and
conducting a General Meeting of
Shareholders should provide shareholders
with equal opportunities to participate in the
General Meeting of Shareholders and should
not prejudice the rights and interests of
shareholders. The chosen venue, date and
time of the General Meeting of Shareholders
should not prevent active participation of
shareholders at the General Meeting. In the
notice of the General Meeting of
Shareholders being convened, the Company
should specify the last day on which the
proposed draft decisions should be submitted
at the latest.
Yes
All shareholders of the Company are
informed about the date, place and time
of the General Meeting of Shareholders
in accordance with the established
procedure in advance, in accordance with
the terms established by legal acts,
announcing the General Meeting of
Shareholders, agenda, and draft
resolutions in the Central Regulated
Information Base of PLLC Nasdaq
Vilnius Stock Exchange. The Company
specifies the date of the General Meeting
of Shareholders and may propose draft
resolutions in the Notice of the General
Meeting of Shareholders to be convened
on the Company's website
www.kaunoenergija.lt In the notice of
the convention of the General Meeting of
Shareholders, the Company shall indicate
when the shareholders may supplement
the agenda of the General Meeting of
Shareholders and propose draft
resolutions.
1.6. In order ensure the right of shareholders
living abroad to access the information, it is
recommended, where possible, that
documents prepared for the General Meeting
of Shareholders in advance should be
Yes
The documents prepared for General
Meeting of Shareholders including draft
resolutions of the meeting are available
not later than 21 day prior the date of
General Meeting of shareholders as
78
announced publicly not only in Lithuanian
language but also in English and/or other
foreign languages in advance. It is
recommended that the minutes of the General
Meeting of Shareholders after the signing
thereof and/or adopted decisions should be
made available publicly not only in
Lithuanian language but also in English
and/or other foreign languages. It is
recommended that this information should be
placed on the website of the Company. Such
documents may be published to the extent
that their public disclosure is not detrimental
to the Company or the Company’s
commercial secrets are not revealed.
required by the Law on Joint stock
companies. The documents placed on the
website of NASDAQ Vilnius security
exchange and the Company website are
available in Lithuanian and English
languages. Resolutions accepted by the
General Meeting of Shareholders
including financial reports, the audit
report, annual report, amendments of the
Statutes etc. are announce in Lithuanian
and English languages are announced via
the central base of regulated information
of NASDAQ Vilnius security exchange
and the Company website
www.kaunoenergija.lt
1.7. Shareholders entitled to vote should be
provided with the possibility to vote at the
General Meeting of Shareholders either by
participating in person or in absentia.
Shareholders should not be hindered from
voting in advance in writing by completing
the general voting ballot.
Yes
The shareholders of the Company have
the right to participate in the General
Meeting of Shareholders both personally
and through a representative, if the
person has the appropriate authorization
or the contract of transfer of voting rights
concluded with him/her in accordance
with the procedure established by legal
acts, as well as the conditions for the
shareholders to vote by filling in the
General voting bulletin as provided by
the Law on Companies of the Republic of
Lithuania.
1.8. In order increasing the shareholders’
opportunities to participate effectively at
General Meetings of Shareholders, it is
recommended that companies should apply
modern technologies on a wider scale and
thus provide shareholders with the conditions
to participate and vote in General Meetings
of Shareholders via electronic means of
communication. In such cases the security of
transmitted information must be ensured, and
it must be possible to identify the
participating and voting person.
No
The Company does not comply with the
provisions of this recommendation as
there is no possibility to ensure the
security of the information transmitted
and it is not possible to identify the
person who participated and voted.
1.9. It is recommended that the notice on the
draft decisions of the General Meeting of
Shareholders being convened should specify
new candidatures of members of the collegial
body, their proposed remuneration and the
proposed audit Company if these issues are
included into the agenda of the General
Meeting of Shareholders. Where it is
proposed to elect a new member of the
collegial body, it is recommended that the
information about his/her educational
background, work experience and other
managerial positions held (or proposed)
should be provided.
Yes
When announcing the General Meeting
of Shareholders, and if the agenda of the
General Meeting of Shareholders
includes the issue of electing new
members of the collegial body or electing
the audit firm, it shall disclose in the draft
resolutions the nominations of the
proposed new members of the collegial
body and the proposed election
Company.
Information about the candidates to the
members of the collegial body shall be
provided in advance by publishing this
information on the Nasdaq Vilnius Stock
Exchange website, on the website of
PLLC Kauno Energija,
www.kaunoenergija.lt, or by publishing
79
it to the shareholders participating in the
General Meeting during the meeting if
the shareholders, whose shares give at
least 1/20 of all votes, propose an
additional candidate during the meeting.
In its annual and six-month interim
report, the Company publicly informs
about the positions held by the collegial
body, work experience and education.
1.10. Members of the company’s collegial
management body, heads of the
administration
1
or other competent persons
related to the company who can provide
information related to the agenda of the
general meeting of shareholders should take
part in the general meeting of shareholders.
Proposed candidates to member of the
collegial body should also participate in the
general meeting of shareholders in case the
election of new members is included into the
agenda of the general meeting of
shareholders.
Yes
Members of the Company's collegial
body and heads of administration
participate in the General Meetings of
Shareholders. Proposed nominees for
members of the collegial body are also
present if possible, if the election of new
members is included on the agenda of the
General Meeting.
Principle 2: Supervisory Board
2.1. Functions and liability of the Supervisory Board
The Supervisory Board of the Company should ensure representation of the interests of the
Company and its shareholders, accountability of this body to the shareholders and objective
monitoring of the Company’s operations and its management bodies as well as constantly provide
recommendations to the management bodies of the Company.
The Supervisory Board should ensure the integrity and transparency of the Company’s financial
accounting and control system.
2.1.1. Members of the Supervisory Board
should act in good faith, with care and
responsibility for the benefit and in the
interests of the Company and its shareholders
and represent their interests, having regard to
the interests of employees and public
welfare.
Yes
According to the Information available to
the Company all the members of the
Supervisory Board are acting in good
faith in the interests of the Company
following the Company’s but not the own
interests or interests of the third persons.
2.1.2. Where decisions of the Supervisory
Board may have a different effect on the
interests of the Company’s shareholders, the
Supervisory Board should treat all
shareholders impartially and fairly. It should
ensure that shareholders are properly
informed about the Company’s strategy, risk
management and control, and resolution of
conflicts of interest.
Yes
The Company's Supervisory Board in its
work aim to behave honestly and
impartially with all the Company's
shareholders and by the knowledge of the
Company, there was no such kind of the
contrary case. The Chairman of the
Company's Supervisory Board and the
Chairman of the Management Board
harmonizes and coordinates interaction
with Company’s General Manager and in
the name of Supervisory and
Management Boards communicates with
shareholders, informs the shareholders
1
For the purposes of this Code, heads of the administration are the employees of the company who hold top level management
positions.
80
about the Company’s strategy, activity
and other essential questions.
2.1.3. The Supervisory Board should be
impartial in passing decisions that are
significant for the Company’s operations and
strategy. Members of the Supervisory Board
should act and pass decisions without an
external influence from the persons who
elected them.
Yes
The Supervisory Board of the Company
acts impartially when taking decisions
that are significant for the Company's
activities and strategy.
2.1.4. Members of the supervisory board
should clearly voice their objections in case
they believe that a decision of the supervisory
board is against the interests of the company.
Independent
2
members of the supervisory
board should: a) maintain independence of
their analysis and decision-making; b) not
seek or accept any unjustified privileges that
might compromise their independence.
Yes
According to the information available to
the Company, all members of the
Supervisory Board act in the best
interests of the Company and
shareholders, are guided by the interests
of the Company and not by themselves or
by third parties, trying to maintain their
independence in decision making.
2.1.5. The Supervisory Board should oversee
that the Company’s tax planning strategies
are designed and implemented in accordance
with the legal acts in order to avoid faulty
practice that is not related to the longterm
interests of the Company and its
shareholders, which may give rise to
reputational, legal or other risks.
Yes
In exercising its competence to supervise
the activities of the Company's
management bodies, the Supervisory
Council performs the duties specified in
the recommendation and submits its
opinion on tax planning issues.
2.1.6. The Company should ensure that the
Supervisory Board is provided with
sufficient resources (including financial
ones) to discharge their duties, including the
right to obtain all the necessary information
or to seek independent professional advice
from external legal, accounting or other
experts on matters pertaining to the
competence of the Supervisory Board and its
committees.
Yes
In the Company’s view, the Supervisory
Board is equipped with sufficient
resources, including the right to obtain all
necessary information—particularly
from the Company’s employees.
2.2. Formation of the Supervisory Board
The procedure of the formation of the Supervisory Board should ensure proper resolution of
conflicts of interest and effective and fair corporate governance.
2.2.1. The members of the Supervisory Board
elected by the General Meeting of
Shareholders should collectively ensure the
diversity of qualifications, professional
experience and competences and seek for
gender equality. With a view to maintain a
proper balance between the qualifications of
the members of the Supervisory Board, it
should be ensured that members of the
Supervisory Board, as a whole, should have
diverse knowledge, opinions and experience
to duly perform their tasks.
Yes
Pursuant to the Law on Companies of the
Republic of Lithuania, the Supervisory
Board is elected, and the qualification of
its members is assessed at the General
Meeting of Shareholders.
2
For the purposes of this Code, the criteria of independence of members of the supervisory board are interpreted as the criteria of
unrelated parties defined in Article 31(7) and (8) of the Law on Companies of the Republic of Lithuania.
81
2.2.2. Members of the Supervisory Board
should be appointed for a specific term,
subject to individual re-election for a new
term in office in order to ensure necessary
development of professional experience.
Yes
The Supervisory Board is elected for the
term of 4 (four) years. The term of office
of members on the Supervisory Board is
the maximum term of office prescribed
by the Lithuanian Law on Companies.
A General Meeting of Shareholders may
remove from office both the entire
Supervisory Board and individual
members thereof before the end of their
term of office.
2.2.3. Chair of the Supervisory Board should
be a person whose current or past positions
constituted no obstacle to carry out impartial
activities. A former manager or Management
Board member of the Company should not be
immediately appointed as chair of the
Supervisory Board either. Where the
Company
decides to depart from these
recommendations, it should provide
information on the measures taken to ensure
impartiality of the supervision.
Yes
The Chairman of the Company's
Supervisory Board and the CEO of the
Company is not the same person.
The members of the Supervisory Board
and the Chairman have not been
members of the Management Board of
the Company or the CEO of the
Company.
2.2.4. Each member should devote enough
time and attention to perform his duties as a
member of the Supervisory Board. Each
member of the Supervisory Board should
undertake to limit his other professional
obligations (particularly the managing
positions in other companies) so that they
would not interfere with the proper
performance of the duties of a member of the
Supervisory Board. Should a member of the
Supervisory Board attend less than a half of
the meetings of the Supervisory Board
throughout the financial year of the
Company, the shareholders of the Company
should be notified thereof.
Yes
Members of the Supervisory Board are
active participants of the meetings of the
collegial body and devote enough time to
perform their duties as members of the
collegial body. In 2025 there were 1 (one)
Supervisory Board’s meetings, and all of
them were attended by more than 2/3 of
all the members of the Supervisory
Board. All members of the Supervisory
Board attended more than ½ of the
meetings.
2.2.5. When it is proposed to appoint a
member of the Supervisory Board, it should
be announced which members of the
Supervisory Board are deemed to be
independent. The Supervisory Board may
decide that, even though a particular member
meets all the criteria of independence, he/she
cannot be considered independent due to
special personal or Company related
circumstances.
Yes
Information on the candidates to the
Company's Supervisory Board members
(as well as information on the candidate's
compliance with the independence
requirements) is provided to the General
Meeting of Shareholders in accordance
with the Law on Companies of the
Republic of Lithuania (see commentary
on recommendation 1.9).
2.2.6. The amount of remuneration to
members of the Supervisory Board for their
activity and participation in meetings of the
Supervisory Board should be approved by the
General Meeting of Shareholders.
Yes
Remuneration is paid for the work on the
Supervisory Board to its members, by
decision of the General Meeting of
Shareholders in accordance with the Law
on Companies of the Republic of
Lithuania. The members of the
Supervisory Board are not remunerated
for their performance and participation in
the meetings.
82
2.2.7. Every year the Supervisory Board
should carry out an assessment of its
activities. It should include evaluation of the
structure of the Supervisory Board, its work
organization and ability to act as a group,
evaluation of the competence and work
efficiency of each member of the Supervisory
Board, and evaluation whether the
Supervisory Board has achieved its
objectives. The Supervisory Board should, at
least once a year, make public respective
information about its internal structure and
working procedures.
No
There was no practice of assessment of
the activity of Supervisory Board at the
Company and of informing shareholders
about that up to now because the
controlling shareholder who proposes
candidates to the Supervisory Board
exhaustively knows the experiences and
competences of each candidate.
Principle 3: Management Board
3.1. Functions and liability of the Management Board
The Management Board should ensure the implementation of the Company’s strategy and good
corporate governance with due regard to the interests of its shareholders, employees and other interest
groups.
3.1.1. The Management Board should ensure
the implementation of the Company’s
strategy as approved by the Supervisory
Board, where such a board is established. In
cases where a Supervisory Board is not
formed, the Management Board is also
responsible for approving the Company’s
strategy.
Yes
The Company's Management Board
carries out the duty of implementation of
the Company's strategy approved by the
Company's Supervisory Board.
3.1.2. As a collegial management body of the
Company, the Management Board performs
the functions assigned to it by the Law and in
the Statutes of the Company, and in such
cases where the Supervisory Board is not
formed in the Company, it performs inter alia
the Supervisory functions
established in the Law. By performing the
functions assigned to it, the Management
Board should consider the needs of the
Company’s shareholders, employees and
other interest groups by respectively striving
to achieve sustainable business development
Yes
As the Supervisory Board is formed in
the Company, the Management Board
performs the functions of the Company's
collegial management body. The
obligation to consider the Company, the
shareholders, the employees and other
interest groups is established in the
agreement on performance of the
Management Board signed by each
member of the Management Board.
3.1.3. The Management Board should ensure
compliance with the laws and the internal
policy of the Company applicable to the
Company or a group of companies to which
this Company belongs. It should also
establish the respective risk management and
control measures aimed at ensuring regular
and direct liability of managers.
Yes
The Management Board ensures that the
laws and Company internal policies
applicable to the Company and its entire
group are respected. The Company also
operates a risk management and control
program. Risk management is carried out
by the management of the Company.
83
3.1.4. Moreover, the management board
should ensure that the measures included into
the OECD Good Practice Guidance
3
on
Internal Controls, Ethics and Compliance are
applied at the company in order to ensure
adherence to the applicable laws, rules and
standards.
Yes
The Company has a policy of internal
control and business ethics. The
Company has adopted a Business Ethics
Policy that clearly and publicly declares
a negative attitude towards bribery and
corruption. The provisions of this policy
apply to all employees, agents,
intermediaries, suppliers and
subcontractors of the Company.
3.1.5. When appointing the manager of the
Company, the Management Board should
consider the appropriate balance between the
candidate’s qualifications, experience and
competence.
Yes
When appointing the CEO of the
Company the Management Board
considers the balance of his/her
qualifications, experience and
competence as well as the opinion of the
Company's Supervisory Board.
3.2. Formation of the Management Board
3.2.1. The members of the Management
Board, elected by the Supervisory Board or,
if the Supervisory Board is not formed, by the
General Meeting of Shareholders should
collectively ensure the required diversity of
qualifications, professional experience and
competences and seek for gender equality.
With a view to maintain a proper balance in
terms of the current qualifications possessed
by the members of the Management Board, it
should be ensured that the members of the
Management Board would have, as a whole,
diverse knowledge, opinions and experience
to duly perform their tasks.
Yes
The members of the Management Board
are elected by the Supervisory Board of
the Company. The members of the
Management Board of the Company are
qualified and competent to perform their
functions, having a long experience in
management.
3.2.2. Names and surnames of the candidates
to become members of the Management
Board, information on their educational
background, qualifications, professional
experience, current positions, other
important professional obligations and
potential conflicts of interest should be
disclosed without violating the requirements
of the legal acts regulating the handling of
personal data at the meeting of the
Supervisory Board in which the Management
Board or individual members of the
Management Board are elected. If the
Supervisory Board is not formed, the
information specified in this paragraph
should be submitted to the General Meeting
of Shareholders. The Management Board
should, on yearly basis, collect data provided
in this paragraph on its members and disclose
it in the Company’s annual report.
Yes
Information about candidates to the
Company’s Management Board is
provided to the shareholders together
with the documents of the shareholders’
meeting following the requirements of
the Law on Public Limited Liability
Companies of the Republic of Lithuania.
Shareholders may see the documents
prior the meeting. Information about the
members of the Management Board
(names, education, qualifications,
professional experience, participation in
the activities of other companies, other
important professional obligations) is
provided in the periodical reports.
3.2.3. All new members of the Management
Board should be familiarized with their
Yes
All new members of the Management
Board are familiarized with their duties,
Company structure and activities.
3
Link to the OECD Good Practice Guidance on Internal Controls, Ethics and Compliance: https://www.oecd.org/daf/anti-
bribery/44884389.pdf
84
duties and the structure and operations of the
Company.
3.2.4. Members of the Management Board
should be appointed for a specific term,
subject to individual re-election for a new
term in office in order to ensure necessary
development of professional experience and
sufficiently frequent reconfirmation of their
status.
Yes
The members of the Management Board
are elected for a 4-year term. The number
of terms is unlimited. Members of the
Management Board are elected by the
General Meeting of Shareholders.
Shareholders who nominate and vote for
the Management Board follow their own
approach, which candidates are best to
represent the interests of the
shareholders.
3.2.5. Chair of the Management Board
should be a person whose current or past
positions constitute no obstacle to carry out
impartial activity. Where the Supervisory
Board is not formed, the former manager of
the Company should not be immediately
appointed as chair of the Management Board.
When a Company decides to depart from
these recommendations, it should furnish
information on the measures it has taken to
ensure the impartiality of supervision.
Yes
The Chairman of the Company’s
Management Board hasn’t been the
General Manager of the Company. His
current or past position is not an obstacle
for independent and impartial
supervision.
3.2.6. Each member should devote enough
time and attention to perform his duties as a
member of the Management Board. Should a
member of the Management Board attend
less than a half of the meetings of the
Management Board throughout the financial
year of the Company, the Supervisory Board
of the Company or, if the Supervisory Board
is not formed at the Company, the General
Meeting of Shareholders should be notified
thereof.
Yes
Each member of the collegial body fulfils
his/her functions properly: actively
participates at the meetings of collegial
body and devotes enough time to perform
his / her duties as a member of the
collegial body. The quorum of each
meeting was regulated so the
Management Board would be enabled to
accept decisions constructively.
In 2025, 17 meeting of the Management
Board had been held. All the meetings
were attended by more, than 2/3
members of the Management Board. All
Board members attended more than ½ of
the meetings.
3.2.7. If the management board is elected in
the cases established by the Law where the
supervisory board is not formed at the
company, and some of its members will be
independent
4
, it should be announced which
members of the management board are
deemed as independent. The management
board may decide that, even though a
particular member meets all the criteria of
independence established by the Law, he/she
cannot be considered independent due to
special personal or company-related
circumstances.
Yes
Al the members of the Management
Board are independent.
3.2.8. The General Meeting of Shareholders
of the Company should approve the amount
of remuneration to the members of the
Yes
Remuneration is paid for the work on the
Management Board to its members, by
decision of the General Meeting of
4
For the purposes of this Code, the criteria of independence of the members of the board are interpreted as the criteria of unrelated
persons defined in Article 33(7) of the Law on Companies of the Republic of Lithuania.
85
Management Board for their activity and
participation in the meetings of the
Management Board.
Shareholders in accordance with the Law
on Companies of the Republic of
Lithuania. The members of the
Management Board are not remunerated
for their performance and participation in
the meetings.
3.2.9. The members of the Management
Board should act in good faith, with care and
responsibility for the benefit and the interests
of the Company and its shareholders with due
regard to other stakeholders. When adopting
decisions, they should not act in their
personal interest; they should be subject to
noncompete agreements and they should not
use the business information or opportunities
related to the Company’s operations in
violation of the Company’s interests.
Yes
By the Company’s information, all
Management Board members should act
in good faith, with care and responsibility
for the benefit and in the interests of the
Company and its shareholders. They are
guided by the Company’s interests but
not their own or any third parties seeking
to maintain their independence in
decision-making, and they do not accept
any unjustified privileges that would
compromise their independence.
3.2.10. Every year the Management Board
should assess its activities. It should include
evaluation of the structure of the
Management Board, its work organization
and ability to function as a group, evaluation
of the competence and work efficiency of
each member of the Management Board, and
evaluation whether the Management Board
has achieved its objectives. The Management
Board should, at least once a year, make
public respective information about its
internal structure and working procedures in
observance of the legal acts regulating the
processing of personal data.
No
To date, the Company has not established
the practice of performing a separate
Management Board performance
evaluation or reporting such results to
shareholders, as the controlling
shareholder proposing candidates is well
informed about the experience and
competence of each nominee.
Principle 4: Rules of procedure of the Supervisory Board and the Management Board of the
Company
The rules of procedure of the Supervisory Board, if it is formed at the Company, and of the
Management Board should ensure efficient operation and decision-making of these bodies and
promote active cooperation between the Company’s management bodies.
4.1. The Management Board and the
Supervisory Board, if the latter is formed at
the Company, should act in close cooperation
in order to attain benefit for the Company and
its shareholders. Good corporate governance
requires an open discussion between the
Management Board and the Supervisory
Board. The Management Board should
regularly and, where necessary, immediately
inform the Supervisory Board about any
matters significant for the Company that are
related to planning, business development,
risk management and control, and
compliance with the obligations at the
Company. The Management Board should
inform he Supervisory Board about any
derogations in its business development from
the previously formulated plans and
objectives by specifying the reasons for this.
Yes
Legal acts, Statutes and rules of
procedure governing activities of the
Company’s Supervisory and
management bodies lay down the
principles and procedure of cooperation
between Supervisory and management
bodies of the Company and ensure that
management and Supervisory bodies
cooperate to attain the greatest possible
benefit to the Company and its
shareholders.
86
4.2. It is recommended that meetings of the
Company’s collegial bodies should be held at
the respective intervals, according to the pre-
approved schedule. Each Company is free to
decide how often meetings of the collegial
bodies should be convened but it is
recommended that these meetings should be
convened at such intervals that
uninterruptable resolution of essential
corporate governance issues would be
ensured. Meetings of the Company’s
collegial bodies should be convened at least
once per quarter.
Yes
The Company follows the order foreseen
in the work regulations of the
Supervisory Board and the Management
Board and the information about the
convened meeting is presented in
advance together with an agenda and all
the necessary information and documents
related to the meeting agenda.
The Supervisory Board and the
Management Board meeting agenda may
be changed or added during the meeting,
in the presence of all members of the
collegial body, or when there is an urgent
need to deal with Company’s certain key
issues.
4.3. Members of a collegial body should be
notified of the meeting being convened in
advance so that they would have enough time
for proper preparation for the issues to be
considered at the meeting and a fruitful
discussion could be held and appropriate
decisions could be adopted. Along with the
notice of the meeting being convened all
materials relevant to the issues on the agenda
of the meeting should be submitted to the
members of the collegial body. The agenda
of the meeting should not be changed or
supplemented during the meeting, unless all
members of the collegial body present at the
meeting agree with such change or
supplement to the agenda, or certain issues
that are important to the Company require
immediate resolution.
Yes
According to the Company’s Statutes and
the working procedure regulations of the
Supervisory Board and the Management
Board, the members of the collegial body
and persons that are invited to such
meetings, are informed of them in
advance. They are also provided with all
the information and materials, needed to
examine the questions, presented in the
agenda.
4.4. In order to coordinate the activities of the
Company’s collegial bodies and ensure
effective decision-making process, the chairs
of the Company’s collegial supervision and
management bodies should mutually agree
on the dates and agendas of the meetings and
close cooperate in resolving other matters
related to corporate governance. Meetings of
the Company’s Supervisory Board should be
open to members of the Management Board,
particularly in such cases where issues
concerning the removal of the Management
Board members, their responsibility or
remuneration are discussed.
Yes
The chairmen of Company's Supervisory
and management bodies coordinate dates
of the meetings, their agendas and
cooperate in solving other issues of
corporate governance. The Chairman of
the Management Board and members of
the Management Board are invited to the
meetings of the Supervisory Board of the
Company.
Principle 5: Nomination, remuneration and audit committees
5.1. Purpose and formation of committees
The committees formed at the Company should increase the work efficiency of the Supervisory Board
or, where the Supervisory Board is not formed, of the Management Board which performs the
Supervisory functions by ensuring that decisions are based on due consideration and help organise
its work in such a way that the decisions it takes would be free of material conflicts of interest.
87
Committees should exercise independent judgment and integrity when performing their functions
and provide the collegial body with recommendations concerning the decisions of the collegial body.
However, the final decision should be adopted by the collegial body.
5.1.1. Taking due account of the company-
related circumstances and the chosen
corporate governance structure, the
supervisory board of the company or, in cases
where the supervisory board is not formed,
the management board which performs the
supervisory functions, establishes
committees. It is recommended that the
collegial body should form the nomination,
remuneration and audit committees
5
.
Yes/No
The Audit Committee is formed by the
Supervisory Board from March 31, 2009
and the term of office of this committee
coincides with the term of office of the
Company's Supervisory Board.
5.1.2. Companies may decide to set up less
than three committees. In such case
companies should explain in detail why they
have chosen the alternative approach, and
how the chosen approach corresponds with
the objectives set for the three different
committees.
Yes/No
The Audit Committee is an independent,
and objective committee carrying out the
functions of supervision, analysing,
evaluation and consultation in order to
improve General organization and create
value added. The main function of the
Committee is systematic and versatile
evaluation, as well as encouragement of
better risk management, and enough
control and maintenance procedures
resulting in submission of
recommendations to the Management
Board and management regarding
implementation of the objectives and
tasks, risk management procedure and
internal control functioning.
The nomination and remuneration
committees are not formed at the
Company. As the Management Board of
the Company is composed of competent
members and they perform their
activities efficiently, the Company does
not currently see the need for other
committees.
5.1.3. In the cases established by the legal
acts the functions assigned to the committees
formed at companies may be performed by
the collegial body itself. In such case the
provisions of this Code pertaining to the
committees (particularly those related to their
role, operation and transparency) should
apply, where relevant, to the collegial body
as a whole.
Not applicable
The Management Board of the Company
does not perform the functions assigned
to the Audit Committee.
5.1.4. Committees established by the
collegial body should normally be composed
of at least three members. Subject to the
requirements of the legal acts, committees
Yes
The Audit Committee consists of 3
members, two of whom are independent,
with at least 5 years of experience in
accounting, with relevant experience in
5
The legal acts may provide for the obligation to form a respective committee. For example, the Law on the Audit of
Financial Statements of the Republic of Lithuania provides that public-interest entities (including but not limited to public
limited liability companies whose securities are traded on a regulated market of the Republic of Lithuania and/or of any
other Member State) are under the obligation to set up an audit committee (the legal acts provide for the exemptions
where the functions of the audit committee may be carried out by the collegial body performing the supervisory functions).
88
could be comprised only of two members as
well. Members of each committee should be
selected on the basis of their competences by
giving priority to independent members of
the collegial body. The chair of the
Management Board should not serve as the
chair of committees.
finance and accounting in listed
companies.
The Chairman of the Management Board
is not a member of the Committee.
5.1.5. The authority of each committee
formed should be determined by the collegial
body itself. Committees should perform their
duties according to the authority delegated to
them and regularly inform the collegial body
about their activities and performance on a
regular basis. The authority of each
committee defining its role and specifying its
rights and duties should be made public at
least once a year (as part of the information
disclosed by the Company on its governance
structure and practice on an annual basis). In
compliance with the legal acts regulating the
processing of personal data, companies
should also include in their annual reports the
statements of the existing committees on
their composition, the number of meetings
and attendance over the year as well as the
main directions of their activities and
performance.
Yes
The Audit Committee follows the
regulations of the Committee approved
by the Supervisory Board. These
Regulations establish the rules defining
the rights and duties of the Audit
Committee, the size of the Audit
Committee, the period of membership of
the Audit Committee, the requirements
for the education, professional
experience and independence principles
of the members of the Audit Committee.
The Audit Committee annually submits
an annual activity report to the General
Meeting of Shareholders, announcing the
composition of the Committee, the
number of meetings and the attendance of
the members, describing the work
performed and presenting the results.
5.1.6. With a view to ensure the
independence and impartiality of the
committees, the members of the collegial
body who are not members of the committees
should normally have a right to participate in
the meetings of the committee only if invited
by the committee. A committee may invite or
request that certain employees of the
Company or experts would participate in the
meeting. Chair of each committee should
have the possibility to maintain direct
communication with the shareholders. Cases
where such practice is to be applied should be
specified in the rules regulating the activities
of the committee.
Yes
The members of the collegial body take
decisions at the meetings of their
members, but in certain cases the
committee invites the head of the
Company and the responsible employees
of the Company to attend its meetings,
who are responsible for the areas of
activity of the issues under discussion.
The Chairman of the Audit Committee is
also provided with the opportunity to
communicate with the shareholders.
5.2. Nomination committee
5.2.1. The key functions of the nomination
committee should be the following:
1) to select candidates to fill vacancies in the
membership of Supervisory and management
bodies and the administration and
recommend the collegial body to approve
them. The nomination committee should
evaluate the balance of skills, knowledge and
experience in the management body, prepare
a description of the functions and capabilities
required to assume a particular position and
assess the time commitment expected;
No
The Nomination Committee is not
formed in the Company.
89
2) assess, on a regular basis, the structure,
size and composition of the Supervisory and
management bodies as well as the skills,
knowledge and activity of its members, and
provide the collegial body with
recommendations on how the required
changes should be sought;
3) devote the attention necessary to ensure
succession planning.
5.2.2. When dealing with issues related to
members of the collegial body who have
employment relationships with the Company
and the heads of the administration, the
manager of the Company should be consulted
by granting him/her the right to submit
proposals to the Nomination Committee.
No
See article 5.2.1
5.3. Remuneration committee
The main functions of the remuneration
committee should be as follows:
1) submit to the collegial body proposals on
the remuneration policy applied to members
of the Supervisory and management bodies
and the heads of the administration for
approval. Such policy should include all
forms of remuneration, including the fixed
rate remuneration, performance-based
remuneration, financial incentive schemes,
pension arrangements and termination
payments as well as conditions which would
allow the Company to recover the amounts or
suspend the payments by specifying the
circumstances under which it would be
expedient to do so;
2) submit to the collegial body proposals
regarding individual remuneration for
members of the collegial bodies and the
heads of the administration in order to ensure
that they would be consistent with the
Company’s remuneration policy and the
evaluation of the performance of the persons
concerned;
3) review, on a regular basis, the
remuneration policy and its implementation.
No
There is no Remuneration Committee in
the Company.
The Company has implemented a
remuneration policy that includes all
forms of remuneration, including fixed
salary, performance-based benefits and
severance payments. The Company is
approved by the Company's management
in coordination with the Trade Union
Committee operating in the Company.
5.4. Audit committee
90
5.4.1. The key functions of the audit
committee are defined in the legal acts
regulating the activities of the audit
committee
6
.
Yes
The Audit Committee follows the
regulations of the Audit Committee
approved by the Supervisory Board of the
Company.
The Audit Committee carries out
independent, objective monitoring,
investigation, evaluation and advisory
activities to improve the Company's
performance and create added value.
5.4.2. All members of the committee should
be provided with detailed information on
specific issues of the Company’s accounting
system, finances and operations. The heads
of the Company’s administration should
inform the audit committee about the
methods of accounting for significant and
unusual transactions where the accounting
may be subject to different approaches.
Yes
All members of the Committee are
provided with detailed information on the
specific accounting, financial and
operational characteristics of the
Company and, upon request, information
on the execution of important
transactions.
5.4.3. The audit committee should decide
whether the participation of the chair of the
Management Board, the manager of the
Company, the chief finance officer (or senior
employees responsible for finance and
accounting), the internal and external
auditors in its meetings is required (and, if
required, when). The committee should be
entitled, when needed, to meet the relevant
persons without members of the management
bodies present.
Yes
The Audit Committee decides on the
participation of other persons in its
meetings and, if necessary, the Audit
Committee invites the head of the
Company and the responsible employees
of the Company to its meetings, who are
responsible for the areas of activity of the
issues under consideration. The
Chairman of the Audit Committee is also
provided with the opportunity to
communicate with the shareholders.
5.4.4. The audit committee should be
informed about the internal auditor’s work
program and should be furnished with
internal audit reports or periodic summaries.
The audit committee should also be informed
about the work program of external auditors
and should receive from the audit firm a
report describing all relationships between
the independent audit firm and the Company
and its group.
Yes
The Audit Committee is informed about
the work performed by the Internal
Auditor and receives conclusions about
the research performed. Each year, the
Audit Committee receives reports from
external auditors describing all
relationships between the independent
auditor and the Company and its group.
5.4.5. The audit committee should examine
whether the Company complies with the
applicable provisions regulating the
possibility of lodging a complaint or
reporting anonymously his/her suspicions of
potential violations committed at the
Company and should also ensure that there is
a procedure in place for proportionate and
independent investigation of such issues and
appropriate follow-up actions.
Yes
The Company has provided employees
with the opportunity to submit
complaints or anonymous reports about
violations committed in the Company,
however the Company has not received
such complaints or reports during the
reporting period.
5.4.6. The audit committee should submit to
the Supervisory Board or, where the
Supervisory Board is not formed, to the
Yes
The Audit Committee analyses and
evaluates the Company's annual and
semi-annual financial statements, makes
6
Issues related to the activities of audit committees are regulated by Regulation No. 537/2014 of the European Parliament and the
Council of 16 April 2014 on specific requirements regarding statutory audit of public-interest entities, the Law on the Audit of
Financial Statements of the Republic of Lithuania, and the Rules Regulating the Activities of Audit Committees approved by the
Bank of Lithuania.
91
Management Board its activity report at least
once in every six months, at the time that
annual and half-yearly reports are approved.
recommendations to the Management
Board for their approval, together with its
activity reports for that period.
Principle 6: Prevention and disclosure of conflicts of interest
The corporate governance framework should encourage members of the Company’s supervisory and
management bodies to avoid conflicts of interest and ensure a transparent and effective mechanism
of disclosure of conflicts of interest related to members of the supervisory and management bodies.
Any member of the Company’s Supervisory
and management body should avoid a
situation where his/her personal interests are
or may be in conflict with the Company’s
interests. In case such a situation did occur, a
member of the Company’s Supervisory or
management body should, within a
reasonable period of time, notify other
members of the same body or the body of the
Company which elected him/her or the
Company’s shareholders of such situation of
a conflict of interest, indicate the nature of
interests and, where possible, their value.
Yes
Members of the Company's management
bodies behave in such a way that there is
no conflict of interest with the Company.
During the reporting period, there is no
known conflict of interest between the
Company and the member of its
management body.
Principle 7: Remuneration policy of the Company
The remuneration policy and the procedure for review and disclosure of such policy established at
the Company should prevent potential conflicts of interest and abuse in determining remuneration of
members of the collegial bodies and heads of the administration, in addition it should ensure the
publicity and transparency of the Company’s remuneration policy and its long-term strategy.
7.1. The Company should approve and
publish the remuneration policy on the
website of the Company, such policy should
be reviewed on a regular basis and be
consistent with the Company’s long-term
strategy.
Yes/No
The Company has implemented and
operates a remuneration policy approved
by the Company's management, but it is
not published on the Company's website.
The Company will follow the
recommendations of Principle 7 when the
respective laws and other legal acts of the
Republic of Lithuania are adopted.
7.2. The remuneration policy should include
all forms of remuneration, including the
fixed-rate remuneration, performance-based
remuneration, financial incentive schemes,
pension arrangements, and termination
payments as well as the conditions specifying
the cases where the Company can recover the
disbursed amounts or suspend the payments.
Yes
The Company has implemented a
remuneration policy that includes all
forms of remuneration, including fixed
salary, performance-based benefits and
severance payments. This procedure is
approved by the management of the
Company in agreement with the Trade
Union Committee.
7.3. In order to avoid potential conflicts of
interest, the remuneration policy should
provide that members of the collegial bodies
which perform the Supervisory functions
should not receive remuneration based on the
Company’s performance.
Yes
See article 3.2.8
7.4. The remuneration policy should provide
enough information on the policy regarding
termination payments. Termination
payments should not exceed a fixed amount
or a fixed number of annual wages and in
General should not be higher than the non-
Yes
Termination benefits shall be granted in
accordance with the provisions of
Chapter 5 of the Labour Code of the
Republic of Lithuania and the provisions
of the Collective Agreement in the
Company.
92
variable component of remuneration for two
years or the equivalent thereof. Termination
payments should not be paid if the contract is
terminated due to inadequate performance.
7.5. If the financial incentive scheme is
applied at the Company, the remuneration
policy should contain enough information
about the retention of shares after the award
thereof. Where remuneration is based on the
award of shares, shares should not be vested
at least for three years after the award thereof.
After vesting, members of the collegial
bodies and heads of the administration should
retain a certain number of shares until the end
of their term in office, subject to the need to
compensate for any costs related to the
acquisition of shares.
No
The Company does not apply a system of
financial incentives.
7.6. The Company should publish
information about the implementation of the
remuneration policy on its website, with a
key focus on the remuneration policy in
respect of the collegial bodies and managers
in the next and, where relevant, subsequent
financial years. It should also contain a
review of how the remuneration policy was
implemented during the previous financial
year. The information of such nature should
not include any details having a commercial
value. Particular attention should be paid on
the major changes in the Company’s
remuneration policy, compared to the
previous financial year.
No
See article 7.1.
7.7. It is recommended that the remuneration
policy or any major change of the policy
should be included on the agenda of the
General Meeting of Shareholders. The
schemes under which members and
employees of a collegial body receive
remuneration in shares or share options
should be approved by the General Meeting
of Shareholders.
No
See article 7.1.
Principle 8: Role of stakeholders in corporate governance
The corporate governance framework should recognize the rights of stakeholders entrenched in the
laws or mutual agreements and encourage active cooperation between companies and stakeholders in
creating the Company value, jobs and financial sustainability. In the context of this principle the
concept “stakeholders” includes investors, employees, creditors, suppliers, clients, local community
and other persons having certain interests in the Company concerned.
8.1. The corporate governance system should
ensure that the rights and legitimate interests
of stakeholders are respected.
Yes
The corporate governance framework
assures the rights of stakeholders that are
protected by law are respected. The
Company applies a Corporate Contract
with employees, and the contract is
signed by the CEO and Trade Union.
The Company pursues the maximum
possible transparency in its relations with
8.2. The corporate governance framework
should create conditions for stakeholders to
participate in corporate governance in the
manner prescribed by law. Examples of
participation by stakeholders in corporate
93
governance include the participation of
employees or their representatives in the
adoption of decisions that are important for
the Company, consultations with employees
or their representatives on corporate
governance and other important matters,
participation of employees in the Company’s
authorized capital, involvement of creditors
in corporate governance in the cases of the
Company’s insolvency, etc.
all stakeholders and the compliance with
the highest ethical requirements and
principles – in its activities, because
honest and open business activities are
one of the key elements of impeccable
business reputation.
The Company takes into account the
changing customer needs, constantly
improving its operational processes,
empowering employees, taking care of
the safety and health of its employees,
seeking to maintain a close relationship
with investors and ensure information
accessible to all, continuously updating
the information and posting it in the
“Investors” section of its website.
8.3. When stakeholders participate in the
corporate governance process, they should
have access to relevant information.
8.4. Stakeholders should be provided with the
possibility of reporting confidentially any
illegal or unethical practices to the collegial
body performing the Supervisory function.
Principle 9: Disclosure of information
The corporate governance framework should ensure the timely and accurate disclosure of all
material corporate issues, including the financial situation, operations and governance of the
Company.
9.1. In accordance with the Company’s
procedure on confidential information and
commercial secrets and the legal acts
regulating the processing of personal data,
the information publicly disclosed by the
Company should include but not be limited
to the following:
Yes
The information contained in this
recommendation shall be disclosed in the
annual and semi-annual reports of the
Company in accordance with the
requirements of legal acts regulating data
processing and confidential information
procedures. This information is
published on the website of PLLC
Nasdaq Vilnius. Stock Exchange and on
the Company's website.
9.1.1. operating and financial results of the
Company;
9.1.2. objectives and non-financial
information of the Company;
9.1.3. persons holding a stake in the
Company or controlling it directly and/or
indirectly and/or together with related
persons as well as the structure of the group
of companies and their relationships by
specifying the final beneficiary;
9.1.4. members of the Company’s
Supervisory and management bodies who are
deemed independent, the manager of the
Company, the shares or votes held by them at
the Company, participation in corporate
governance of other companies, their
competence and remuneration;
9.1.5. reports of the existing committees on
their composition, number of meetings and
attendance of members during the last year as
well as the main directions and results of their
activities;
9.1.6. potential key risk factors, the
Company’s risk management and
supervision policy;
94
9.1.7. the Company’s transactions with
related parties;
9.1.8. main issues related to employees and
other stakeholders (for instance, human
resource policy, participation of employees
in corporate governance, award of the
Company’s shares or share options as
incentives, relationships with creditors,
suppliers, local community, etc.);
9.1.9. structure and strategy of corporate
governance;
9.1.10. initiatives and measures of social
responsibility policy and anti-corruption
fight, significant current or planned
investment projects.
This list is deemed minimum and companies
are encouraged not to restrict themselves to
the disclosure of information included into
this list. This principle of the Code does not
exempt companies from their obligation to
disclose information as provided for in the
applicable legal acts.
9.2. When disclosing the information
specified in paragraph 9.1.1 of
recommendation 9.1, it is recommended that
the Company which is a parent Company in
respect of other companies should disclose
information about the consolidated results of
the whole group of companies.
Yes
The Company discloses information on
the Company’s and the Group’s
consolidated results. The information is
disclosed in the management report and
consolidated financial statements.
9.3. When disclosing the information
specified in paragraph 9.1.4 of
recommendation 9.1, it is recommended that
the information on the professional
experience and qualifications of members of
the Company’s Supervisory and
management bodies and the manager of the
Company as well as potential conflicts of
interest which could affect their decisions
should be provided. It is further
recommended that the remuneration or other
income of members of the Company’s
Supervisory and management bodies and the
manager of the Company should be
disclosed, as provided for in greater detail in
Principle 7.
Yes
The information specified in the
recommendation is presented in the
Company's annual and semi-annual
reports. The Company will implement
the recommendations of Principle 7 once
the legislation governing is adopted.
9.4. Information should be disclosed in
such manner that no shareholders or investors
are discriminated in terms of the method of
receipt and scope of information. Information
should be disclosed to all parties concerned
at the same time.
Yes
The Company discloses all regulated
information through the news
distribution system of PLLC Nasdaq
Vilnius. This ensures that it is accessible
to the widest possible public. The
information is simultaneously available
in Lithuanian and English. In addition,
the Company publishes information
before or after the Nasdaq Vilnius trading
session so that all shareholders and
investors of the Company have equal
access to information and make
95
appropriate investment decisions. The
Company shall not disclose information
that may affect the price of the securities
issued by it in the comments, interviews
or other ways until such information is
made public through the Central
Regulatory Information base.
Principle 10: Selection of the Company’s audit firm
The Company’s audit firm selection mechanism should ensure the independence of the report and
opinion of the audit firm.
10.1. In order obtain an objective opinion on
the Company’s financial condition and
financial results, the Company’s annual
financial statements and the financial
information provided in its annual report
should be audited by an independent audit
firm.
Yes
An independent audit Company performs
auditing of the Company’s and its
subsidiaries individual and consolidated
(the group) annual financial reports in
accordance with International
Accounting Standards applicable in the
EU. An independent auditing Company
also evaluates conformity of
management report to the audited
financial statements.
10.2. It is recommended that the candidate
audit firm be proposed to the General
Meeting of Shareholders by the Company’s
Supervisory Board or, where the Supervisory
Board is not formed, by the Company’s
Management Board.
Yes
The Management Board proposes an
audit Company to the General Meeting of
Shareholders.
10.3. If the audit firm has received
remuneration from the Company for the non-
audit services provided, the Company should
disclose this publicly. This information
should also be available to the Supervisory
Board or, if the Supervisory Board is not
formed at the Company, by the Management
Board of the Company when considering
which audit firm should be proposed to the
General Meeting of Shareholders.
Yes
Information on remuneration to the audit
Company is made public in the decisions
of the General Meeting of Shareholders.
The audit firm provides non-audit
services only with the approval of the
Audit Committee. In 2025, the audit firm
did not receive any remuneration for the
non-audit services provided.