Kauno Energija

Quarterly Report • Feb 26, 2024

AB Kauno Energija

Company code 235014830

Raudondvario pl. 84

Kaunas, Lithuania

CONSOLIDATED AND COMPANY'S 12-MONTH CONDENSED SET OF INTERIM FINANCIAL STATEMENTS OF 2023 PREPARED IN ACCORDANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS AS ADOPTED BY THE EUROPEAN UNION (UNAUDITED)

Set of consolidated and company financial statements of 12 months of 2023 (in thousands euro, unless specified otherwise)

CONFIRMATION OF RESPONSIBLE PERSONS TO THE SHAREHOLDERS OF AB Kauno Energija AND THE BANK OF LITHUANIA

In accordance with the provisions of the Republic of Lithuania Law on Securities and the Information Disclosure Rules approved by the Board of the Bank of Lithuania, we, Tomas Garasimavičius, Chief Executive Officer, Virgilijus Motiejūnas, Chief Financial Officer and Acting Chief Accountant of AB Kauno energija, hereby confirm that to the best of our knowledge, the set of condensed interim financial statements of AB Kauno energija for the 12 moths ended 31 December 2023, prepared in accordance with the International Financial Reporting Standards as adopted by the European Union, is true and fair and presents fairly the Company's as adopted by the European
(Joss) and cash flows (loss) and cash flows.

Tomas Garasimavičius

General Manager

Virgilijus Motiejūnas Director of Finance, acting Chief Accountant

Company code 235014830 Raudondvario pl. 84 Kaunas, Lithuania

Set of consolidated and company financial statements of 12 months of 2023 Statemonts of 12 months of 2023
(in thousands euro, unless specified otherwise)

CONDENSED INTERIM FINANCIAL STATEMENTS

		Group		Company
	Notes	2023-12-31	2022-12-31	2023-12-31	2022-12-31
ASSETS
Fixed assets
Intangible fixed assets		249	98	241
Land and buildings		6 201	6 468	6 122	08
Buildings		134 610	127 521	134 610	6 403
Machinery and equipment		13 824	15 020	13 779	127 521
Vehicles		975	397		14 975
Plant and tools		3 263	2 763	975	397
Constructions in progress and prepayments		23 483	13 519	3 217	2 761
Investment property		1 114	1 114	23 483	13 477
Total property, plant and equipment		183 470
Assets managed under the right of use		1 105	166 802	182 186	165 534
Non-current financial assets			1 141	857	884
Investments in subsidiaries
Amounts receivable after one year				2 763	2 763
Other financial assets		128	39
Financial fixed assets, total		75	75	75	75
Non-current assets, total		203	114	2 838	2 838
Current assets		185 027	168 155	186 122	169 354
Stock and prepayments
Inventories
Prepayments	7	1 798	2 694	1 450	1 879
Total inventories and prepayments		1 021	2 162	944	1 851
Amounts receivable		2 819	4 856	2 394	3 730
Short-term time deposits			2 000		2 000
Trade receivables	8	14 257	18 169	13 441
Loans to the companies of the group of companies					17 978
Other amounts receivable		2 743
Amounts receivable within one year, total			5 156	2 745	5 130
Cash and cash equivalents	11	17 000	25 325	16 186	25 108
Current assets, total		8 547	5 550	7 315	4 891
Assets, total:		28 366	35 731	25 895	33 729
		213 393	203 886	212 017	203 083

(continued on the next page)

CONDENSED INTERIM FINANCIAL STATEMENTS (CONTINUED)

		Group		Company
	Notes	2023-12-31	2022-12-31	2023-12-31	2022-12-31
EQUITY AND LIABILITIES
Property
Capital	1	74 476	74 476
Legal reserve	12	7 447	7 447	74 476	74 476
Other reserves	12	50	3 000	7 447	7 447
Profit (loss) available for distribution				50	3 000
Current year profit		4 514
Profit (loss) of the previous years		11 128	6 356	3 899	6 299
Total retained profit (loss)			4 822	10 869	4 620
Total equity		15 642	11 178	14 768	10 919
		97 615	96 101	96 741	95 842
Non-current amounts payable after one year and liabilities
Long-term financial debts	9	54 736
Lease (financial lease)		1 131	43 949	54 736	43 949
Deferred profit tax liabilities		5 819	1 151	869	887
Grants and subsidies			5819	5 819	5819
Employee benefit liabilities		30 850	32 211	30 850	32 211
Accounts payable after one year, and long-term liabilities, total Accounts payable within one year of and other liabilities		383 92 919	374 83 504	363 92 637	363 83 229
Current year's share of long-term financial debt and leasing/financial leases	9	3 318	2 891	3 315	2 889
Short-term financial debts
Trade debtors		14 079	18 548	14 111
Payroll related liabilities		715	695	701	18 487
Received prepayments		840	773		686
Tax payable		909	500	815	660
Derivative financial instruments				717	435
Current year's share of employee benefit obligations		1	90		89
Other provisions	10	2 218	78
Accrued costs and income of future periods		440		2 218	78
Other short-term amounts payable and liabilities		330	337 369	425 337	322
Accounts payable within one year of and other liabilities, total		22 859	24 281	22 639	366 24 012
Total accounts payable and liabilities		115 778	107 785	115 276
Total equity and liabilities		213 393	203 886		107 241
				212 017	203 083

The notes below form an integral part of these financial statements.

(end)

Condensed Interim Statement of Profit (loss) and other Gross Income

Group

	Comments	Q4 2023	2023 from the beginning	Q4 2022	2022 from the beginning
Operating income			of year		of year
Sales revenue	13	37 270	86 044	39 218
Other operational incomes	15	518	1 864	95	87 992
Total operating income		37 788	87 908		1 441
Operating expenses				39 313	89 433
Fuel and purchased energy		(21 852)
Salaries, social insurance		(2 933)	(53 764)	(26 207)	(58 119)
Depreciation and amortisation		(1 727)	(8 804)	(2 060)	(7 931)
Repair and maintenance			(6 695)	(1 479)	(6 447)
Change in impairment of receivables	8	(308)	(891)	(287)	(870)
Taxes, other than income tax		(341)	255	(485)	111
Electricity		(826)	(2 467)	(208)	(2 249)
Raw materials and materials		(179)	(1 628)	(1 088)	(2 537)
Water		(543)	(1 391)	(612)	(1 460)
Change in realisable value of inventories and impairment of fixed assets	7	(1 208) 420	(1 970) 318	(286)	(1 048)
Other costs				58	(44)
Other operational expenses	14	(1 207)	(2 772)	(557)	(2 122)
Operating expenses, total	15	(27)	(486)	(288)	(747)
Operating profit (loss)		(30 731)	(80 295)	(33 899)	(83 463)
Other interest and similar income		7 057	7 613	5 414	5 970
Value impairment of financial assets and short-term investment		532	689	90	247
Interest and other similar costs
Income from financing and investment activities, net value		(1 166) (634)	(1 331) (642)	(134)	(299)
Profit before taxation				(44)	(52)
Income tax		6 423	6 971	5 370	5 918
Deferred income tax income (loss)		(318)	(318)	(75)	(75)
Profit for the reporting period				15	15
		6 105	6 653	5 310	5 858
Termination benefits (accrual), other provisions to be reclassified to profit or loss when certain conditions are met		(2 139)	(2 139)	498	498
Gross income		3 966	4 514
Profit for the period attributable to the Company's shareholders		6 105	6653	5 808 5310	6 356 5858
Gross income attributable to the Company's shareholders		3 966	4514	2808	6356
Earnings per share (EUR)	16	0,14	0,16	0,12	0,14

AB KAUNO ENERGIJA

Company code 235014830 Raudondvario pl. 84 Kaunas, Lithuania

Condensed Interim statement of profit (loss) and other gross income

Company	Comments	Q4 2023	2023 from the beginning of	Q4 2022	2022 from the beginning of
Operating income			year		year
Sales revenue	13	36 168	85 048
Other operational incomes	15	424	1 044	38 133	87 013
Total operating income		36 592		283	903
Operating expenses			86 092	38 416	87 916
Fuel and purchased energy		(21 711)
Salaries, social insurance		(2 543)	(53 764)	(25 794)	(57 847)
Depreciation and amortisation		(1 792)	(8 330)	(2 011)	(7 798)
Repair and maintenance		(288)	(6 632)	(1 453)	(6 293)
Change in impairment of receivables	8		(861)	(286)	(859)
Taxes, other than income tax		(344)	255	(485)	114
Electricity		(804)	(2 407)	(579)	(2 182)
Raw materials and materials		(184)	(1 628)	(1 085)	(2 529)
Water		(371)	(829)	(224)	(682)
		(1 208)	(1 970)	(286)	(1 048)
Change in realisable value of inventories and impairment of fixed assets	7	420	318
Other costs	14			રેક	(44)
Other operational expenses	15	(1 161)	(2 866)	(714)	(2 420)
Operating expenses, total		(26)	(492)	(288)	(154)
Operating profit (loss)		(30 012)	(79 206)	(33 147)	(82 342)
Other interest and similar income		6 580	6 886	5 269	5 574
Value impairment of financial assets and short-term		528	688	90	250
investment		746		1 004	258
Interest and other similar costs		(1 168)	(1 330)	(134)	(296)
Income from financing and investment activities, net value		106	(642)	960
Profit before taxation		6 686			212
Income tax			6 244	6 229	5 786
Deferred income tax income (loss)		(206)	(206)
				15	15
Profit for the reporting period		6 480	6 038	6 244	5 801
Termination benefits (accrual), other provisions to be reclassified to profit or loss when certain conditions are met		(2 139)	(2 139)	498	498
Gross income		4 341	3 899	6 742
Earnings per share (EUR)	16	0,15	0,14		6 299
				0,15	0,14

The notes below form an integral part of these financial statements.

CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY

Group	Notes	Capital	Legal reserve	Other reserves	Profit (loss) available for distribution	Total
Balance on 31 December 2021		74 476	7 447	3 000	4 822	89 745
Profit for the reporting period		-	-
Other gross income		-			5 858	5 858
					498	498
Balance on 31 December 2022		74 476	7 447	3 000	11 178	96 101
Formed reserves				50	(50)
Reversed reserves
Dividends				(3 000)	3 000
					(3 000)	(3 000)
Profit for the reporting period					6 653	6 653
Other gross income
					(2 139)	(2 139)
Balance on 31 December 2023		74 476	7 447	50	15 642	97 615

Company	Notes	Capital	Legal reserve	Other reserves	Profit (loss) available for distribution	Total
Balance on 31 December 2021		74 476	7 447	3 000	5 367
Loss on connection of Petrašiūnai boiler house					(747)	90 290 (747)
Profit for the reporting period					5 801
Other gross income					498	5 801 498
Balance on 31 December 2022		74 476	7 447	3 000	10 919	95 842
Formed reserves			-	50	(50)
Reversed reserves			-	(3 000)	3 000
Dividends
Profit for the reporting period					(3 000)	(3 000)
Other gross income					6 038	6 038
					(2 139)	(2 139)
Balance on 31 December 2023		74 476	7 447	50	14 768	96 741

The notes below form an integral part of these financial statements.

7

AB KAUNO ENERGIJA

Company code 235014830 Raudondvario pl. 84 Kaunas, Lithuania

Set of consolidated and company financial statements of 12 months of 2023 (in thousands euro, unless specified otherwise)

CONDENSED INTERIM CASH FLOW STATEMENTS

		Group		Company
	Notes	2,023 m	2022	2,023 m	2022
Cash flows from (to) operating activities
Gross income		4 514	6 356	3 899	6 299
Adjustments to non-cash items:
Depreciation and amortisation		8 627	8 560
Write-offs and changes in impairment of receivables		(255)		8 597	8 360
Interest costs		1 331	(111)	(255)	(114)
Change in the value of fixed-term deposits			299	1 330	296
Loss (gain) on sale and write-down of fixed assets
and value of shares		26	(17)	16	(17)
Grants and subsidies (amortisation)		(1 361)	(1 778)	(1 361)	(1 291)
Change in realisable value of inventories and impairment of fixed assets		(318)	44	(318)	44
Change in employee benefits liability		(89)	(91)	(89)
Change in lease liability		(6)	71	(18)	(125)
Profit tax expense		318	60	206	(66)
Change in accruals		14	(172)	14	(15)
Change in provision liabilities		2 140	(313)		10
Revere of other results of financing and investing activities		(689)	(247)	2 140 (963)	(499) (502)
Adjustment to total non-cash items		9 738	6 305	9 299
Changes of working capital:					6 081
Decrease (increase) in inventories		1 214	(982)	747	(516)
Decrease (increase) in prepayments		1 141	2 245	907	2 204
Decrease (increase) in trade receivables		3 892	(6 529)	4 517	(6 011)
Decrease (increase) in other amounts receivable		2 413	(3 323)	2 385	(3 336)
Increase (decrease) in long-term trade debts		(89)	72
Increase (decrease) in trade debtors and advances received		(3 196)	7 405	(3 089)	8 276
Decrease (increase) in liabilities related to employment relations		20	46	15	54
Increase (decrease) in taxes payable		409	(109)	282	(153)
Decrease (increase) in received prepayments		67	203	155	196
Increase (decrease) in other current liabilities		(348)	34	(29)	97
Changes in total working capital		5 523	(938)	5 890	811
Net cash flows from operating activities		19 775	11 723	19 088	13 191

(continued on the next page)

AB KAUNO ENERGIJA

Company code 235014830 Raudondvario pl. 84 Kaunas, Lithuania

Set of consolidated and company financial statements of 12 months of 2023 Stationnomis of 12 months of 2023
(in thousands euro, unless specified otherwise)

(end)

CONDENSED INTERIM CASH FLOW STATEMENTS (continued)

		Group		Company
	Notes	2,023 m	2022	2,023 m	2022
Cash flows from (to) investing activities
Acquisition of intangible fixed assets and property, plant and equipment		(25 457)	(20 252)	(25 439)	(20 220)
Sale of property, plant and equipment		63	56	67	61
Interest received on overdue receivables		275	252	275	255
Acquisition of investments, change in value		2 000	(2 000)	2 000	(3 539)
Net (used) cash flows from investing activities		(23 119)	(21 944)	(23 097)	(23 443)
Cash flows from (to) financing activities
Loans received		14 000	14 000	14 000	14 000
Loans repaid		(2 816)	(2 816)	(2 816)
Interest paid		(1 745)	(285)		(2 532)
Rent payments		(98)	(98)	(1 745)	(284)
Dividend paid		(3 000)		(e) (3 000)	(96)
Subsidy received			1 274		1 273
Net cash flows from (used in) financing activities		6 341	12 075	6 433	12 361
Net increase (decrease) in cash flows		2 997	1 854	2 424	2 109
Cash and cash equivalents at the beginning of the period		5 550	3 696	4 891	2 782
Cash and cash equivalents at the end of the period		8 547	5 550	7 315	4 891

The notes below form an integral part of these financial statements.

9

NOTES TO THE CONDENSED SET OF INTERIM 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 n. Sa public imment registered in the Republic
and stored in the Registry of Leoal Fritiies 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 collectortunnels. The Company also provides heating system maintenance services. The Company was registered on 1 July 1971
following the reorganisation of AF Lietuves energiis. The Co following the reorganisation of AB Lietuvos energija. The Company was registered on 1 July 1997
the Baltic Additional Trading List of the Nasday Vilinin Stock Cock Company's the Baltic Additional Trading List of the Nasdaq Vilnius Stock Exchange.

As at 31 December 2023 and 31 December 2022, the Company's shareholders were:

	2023-12-31		2022-12-31
	Number of held shares, units	Ownership (%)	Number of held shares, units	Ownership (%)
Kaunas city municipality	39.736.058	92,84	39.736.058	92,84
Kaunas district municipality	1.606.168	3,75	1.606.168	3.75
Jurbarkas district municipality	746.405	1,74	746.405	1,74
Other small shareholders	713.512	1,67	713.512	1.67
	42.802.143	100.00	42.802.143	100,00

The Company's authorised capital is equal to EUR 74,475,728.82 and is divided into 42,802,143 ordinary shares with a nominal value of EUR 1.74 each. As at 31 December 2023 and 31 December 2022, 143 ordinaly shares with a
at 31 December 2023 and 31 December 2022 all observer 2022, the Compan at 31 December 2023 and 31 December 2022, all shares were fully paid up.

The name of the Company was changed by the decision of the Company's subsidiary UAB Kauno energija NT. From 19 August 2020, the name of UAB Kauno energija NT is UAB GO Energy LT. Other details of the Company remain unchanged, all existing contracts remain volid

On 2 March 2022, AB Petrašiūnų katilinė was reorganised by merging it with AB Kauno energija. AB Petrašiūnų katilinė
was deregistered from the Register of Legal Entijos was deregistered from the Register of Legal Entities

On 31 December 2023 the Company and its subsidiary UAB GO Energy LT form a group (the Group):

Company	Company home address	Group's shareholding	Cost of investment	Profit (loss) for the reporting period	Equity	Main activities
UAB GO Energy LT	Raudondvario pl. 84, Kaunas	100 per cent.	2 764	459	3 081	Energy engineer, lease

The Company and the Group also own a 22% interest in UAB Kauno miesto paslaugų centras. The cost of the investment is EUR 75 thousand (the amount of the investment is included under Other financial assets).

The Group's average number of listed employees during the reporting period was 375 and the Company's average number of listed employees was 338.

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 trefred to as the Council). On 26 February 2004 the Council granted the Company a heat supply licence. The licence is valid for an ulimited period, but may be revoked by an appropriate decision of the Council depending on compliance with certain and the per evolutions. The Council also sets price caps for heat supply. On 13 September 2018, the Council Complanted into Continues Sels price cap for head supply.
On 13 September 2018, the Council by its resolution No. O3E-283 established new co

the Company, which were in force during the reporting period. In accordance with the price-setting methodology, the Council recalculates the price components after the last price and the price and the rate is adjusted prospectively. The recalculated components became applicable on 1 November 2020.

Economic activities

The Company's production capacities consist of the Petrašiūnai power plant, 5 boiler houses in Kaunas integrated network, 7 regional boiler buses in the hist in that has in Kauna in Kaunas in Kaunas integrated
houses in Kaunas city, as well as a bolice has in is is is isolated network a houses in Kaunas city, as well as 8 boiler houses for water heating in Sargenal district.

in March 2022 The Petrašiūnų boiler house under the ownersija became a division of the Company.
In July 2022, the Petrašiūnai nower plant's espacity was salas a la produkte i In July 2022, the Petrašiūnai power plant's capacity was reduced due to environmental requirements.

The total installed thermal capacity of the Company as at 31 December 2022 is approximately 596 MW (of which 53 MW are condensing economizes) electrical, e. al o December 2022 is approximately 596 MV (of which 53 MVV
which 17,8 MW is condensing economized and 8 MW clearing of the Petrasii which 17.8 MW is condensing economize) and BMV electrical capacity, in Jurbarkas 39.4 MW thermal power p
(including 4.4 MV (a condension) and 8 MVV electrical capacity, in Ju (including 4.4 MW – a condensing economizer). The total power generation capacity of the Company as a whole is approximately 605 MW (of which 53 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 sconpentive environment of the Board.

2. Basis of preparation of the financial statements

The condensed interim financial statements of the Company and the Group for the twelve-month period ended 31 December 2023 have been prepared in accordance with his welve-month period ended 31
European Union (hereination the UERS) as and inchinal Reporting Standards as adopted by th European Union (hereinafter the FRS) as applicable to interinational Hilandal Reporting Standards as adopted by the (IAS) 34 "Interim Financial Reporting"). This unacities than information should be read in conjunction with the annual financial statements for the year ended 31 December 2023 which have been prepared in conjunction with the annu
Financial Reporting Standards as adontal by the Europepared in Financial Reporting Standards as adopted by the European Union . These financial statements do not internation
information necessary for the preparation of the full of the fi information necessary for the preparation of the full set of consolidated and separate financial statements. Howeve, selected notes are included to explain and transactions and to provide an understanding of significant changes in the Group's and the Company's financial position and financial performance.

2. Basis of preparation of the financial statements (continued)

All accounting principles applied in the preparation of the condensed interim financial information are the same as those applied in the preparation of the annual financial statements for 2022.

The new standards and amender inditions tatentents for 2022.
Company's financial statements effective from 1 January 2023 have no material impact on the Group's and Company's financial statements.

The currency of the submission is the euro. These statements are presented in thousands of euro, unless otherwise

The Company's financial year coincides with the calendar year.

and the provided bear year of the calendaryear.
The management of the Company has approved the following interim financial statements as at 13 February 2024.

3. Application of assessments in preparation of financial statements

In preparing financial statements in accordance with IFRSs adopted for application in the EU, management shall make calculations and estimates of assumptions that in tos abouting principles and of amounts hall make
assets and liabilities, income and expenses The estimates and of amounts r assets and liabilities, income and relation of elections of elections of announts related to
assets and liabilities, income and related assumptions are based on historical ex and other factors that are consistent with current conditions and the results of which lead to conclusions asperience
values of assets and liabilities that are not proileshe values of assets and libilities that are not available from the results of which ead to conclusions about the residuates. The estimates and related as and archant from other Soulces. The actual results could differ from the estimates are recognised prospectively.

The key assumptions and other significant sources of estimation uncertainty at the interim statements of financial position that have a significal of causing a meanial adjuding anounts of
within the next financial vear as those decribed a meterial adjustment to the climities within the next financial year are in adding a material adjustment to the carrying amounts of assets or libilities
within the next financial year are the same as those descri

4. Definition of lease

Until 1 January 2019 the Group and the Company determined at the time of signing the agreement whether the agreement meets the definition of lease in accordance with in the time of signing the agreement whether the agreement when the agreement Contains a Lease", From 1 January 2019, when an agement is concluded, the deternining whether an arrangement Contains a Lease". From
lease is based on the new definition, Under IEPS 16, A cortransm lease is based on the new definition. Under liFRS 16, A contract, or part of a contract, that conveys the right to use an asset for a period of time in exchange for consideration.

ln evaluating or re-evaluating an agreement that contains a lease component, the Group and the Company allocate the contractual consideration of the ochients a rease component, the sroup and the Company allocate the
lease component of the basis of the agreement to each of the agreement th lease component on the basis of their relative read of the parts of the parts of lease of lease of lease of leases of immovable property where the Group and the Company are lesses, the Group and the Case of leases of immovable propery
components and instead to account for the Company have chosen not to separat components and instead to account for the Couplain the Company nate chosen not to separate the lease
component component.

The Group and the Company, as tenant, have previously classified the lease as an operating or finance lease based on an assessment of whether the lease agreement essentially rouder of the france leased on an
Group and the Company recognise sesentialy provides for the transfer of all risks and Group and the Company recognise in ease and lease lightines in all his sun rewards of overship.
provisions of IFRS 16. These lease are should in help and liabilities in lease provisions of IFRS 16. These leases are shown in the balance sheet.

Assets held under usufruct are presented by the Group and the item of assets held under usufruct.
_

Recognised lease liabilities are presented in the statements of financial position under leasing (finance lease) and longterm financial debts and leasing (finance lease) for the current year.

5. Measurement of fair value

At initial recognition, the transaction price of an acquired asset or a liability assumed in an exchange transaction entered into for a particular asset or liability is the price paid at the time the asset is acquired or the liability is assumed (the acquisition price). In comparison, the fair value of the asset or liability is assumed (the
the asset or naid for the disposal of the lish of the asset or liability is the p the asset or paid for the disposal of the liability (the sale/transfer price).

If the Company initially measures an asset or liability at fair value and the transaction price differs from fair value, the difference is recognised as a gain or loss unless otherwise specified in the IFRS.

The fair value measurement is based on the assumption that a transaction for the sale of an asset or the disposal of a liability will be carried out either:

• in the underlying market for the asset or liability, or
• in absence of a principal market, the most favourable market for the asset or liability in question.

Where observable variables that are directly observable by the Company are not available at the measurement date, i.e. prices quoted (not adjusted) in active markets for identical as ets of lief measurement and, proference to adjusted observable variables that are directly observable. Adjusted variabless are

• prices quoted for similar assets or liabilities in active markets;
• • verieblas other than assets or liabilities in markets that are not active markets that are not active markets;
• variables other than quoted prices observed for a specific asset or lial litty,
• market-confirmed variables.

Where observable variables are not available (directly or indirectly), fair value shall be determined by reference to unobservable variables that the Group and the Company produce using valuation techniques.

The fair value measurement of a non-financial asset shall take into account the ability of the market participant to generate economic benefits by using the specific asset to its maximum and best value or by selling it to general that will use it to its maximum and best value.

The fair value of liability reflects the impact of inactivity risk. Includes, but is not limited to, the entity's own credit risk. When determining the fair value of a liculity, an entity shall assess the effects of its credit risk (financial position) and other factors that may affect the likelihood that the liability will or will not be met.

The Group and the Company must increase the use of relevant observable variables and reduce the use of unobservable variables in order to achieve of fair value measurement by calculating the price at which a liability or equity instrument would be transferred under a legally orderly transaction between market participants at the valuation date in accordance with prevailing market conditions.

Assets and liabilities that are measured at fair value in the statement of financial position, or for which fair value is not determinable but for which disclosures are made, are classified by the Group and the Company in accordance with the fair value hierarchy, which categorises variables into three levels depending on their ave bolithy.

• Level 1 variables are quoted (unadjusted) prices for identical assets or liabilities in an active market that are available to the Company at the date of valuation;
• Level 2 variables are variables, other than quoted prices which are classified as Level 1, that are observable directly or indirectly for a specific asset or liability;
• Level 3 variables are unobserved variables applied to a specific asset or liability.

When the variables used to measure the fair value of an asset or liability may be classified in different levels of the fair value hierarchy, the entire fair value measurement result is classified in the same level of the fair value hierarchy as the lowest level variable that is significant to the entire measurement.

6. Property, plant and equipment

During the first 12 months of 2023, the Group's and the Company's acquisitions of fixed assets amounted to EUR 25,457 thousand and EUR 25,439 thousand, respectively,

Depreciation expense for property, plant and equipment of the Group and the Company as at 31 December 2023 amounts to EUR 8,627 thousand and EUR 8,597 thou said, respectively (31 December 2023 amounts)
thousand The amounts of the Crouple and the Orespectively (31 December 2022: EUR 8,560 thousand). 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).

The management of the Group and the Company has assessed internal indicators and has not identified any additional impairment of property, plant and equipment in 2023.

Part of the Group's property, plant and equipment with an acquisition value of EUR 34,694 thousand as at 31 December 2023 (on 31 December 2022: EUR 35,085 thousand), EUR 34,694 thousand for the Company, was fully depreciated (on 31 December 2022: EUR 35,085 thousand), but still used in business operations.

On 31 December 2023 and 31 December 2022 the Group's and the Company's construction in progress consists mainly of the reconstruction and overhaul of boiler plants and heat supply networks.

As at 31 December 2023, property, plant and equipment with a residual value equal to the Group's EUR 8,548 thousand (on 31 December 2022: EUR 8,548 thousand), and the Company's EUR 8,548 thousand (on 31 December 2022: EUR 8,548 thousand), was pledged to banks as collateral for the loans.

7. Inventories

	Group		Company
	2023-12-31	2022-12-31	2023-12-31	2022-12-31
Technological fuels	1 162	1 602	1 162	1 602
Spare parts	747	1 515	399	700
Materials	338	346	338	346
	2 247	3 463	1 899	2 648
To be deducted: write-down to net realisable value at the end of the period	(449)	(769)	(449)	(769)
Carrying amount of inventories	1 798	2 694	1 450	1 879

The write-down of the Group's and the Company's inventories to net realisable value as at 31 December 2023 amounted to EUR 449 thousand (on 31 December 2022: EUR 769 thousand). The change in the write-down of inventories to net realisable value in 2022 and 2023 is included in the Group's and the Company's Statements of Profit and Loss and Other Gross income under the item of costs of changes in the realisable value of inventories and fixed asses.

8. Amounts receivable within one year

	Group		Company
	2023-12-31	2022-12-31	2023-12-31	2022-12-31
Trade receivables	18 799	22 995	17 943	22 764
To be deducted: expected credit losses	(4 542)	(4 826)	(4 502)	(4 786)
	14 257	18 169	13 441	17 978

Change in impairment of doubtful receivables as at 31 December 2022 in the Group's and the Company's Statements of Profit and Other Gross included in the item of impairment of and the Group's and the
Company's Statements of Profit and Loss and Other Gross included Impairment of doubtful receivables is measured at 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

On 31 December 2023 and 31 December 2022 the Group's and the Company's other receivables consisted of taxes receivable from the State, the Sroups and the Company's offer receivables consisted of taxes
sold (scrap metal, heating system equipment) and services receivables for invento sold (scrap metal, heating system by municipanties for compensation to low-income families, receivables, etc.).

The Group's and the Company's other receivables are interest-free and generally mature in

30 - 45 days.

Credit risk

The Group and the Company are not exposed to significant concentrations of credit risk as they deal with a large number

9. Financial debts

All loans of the Group and the Company are accounted for and repaid in euro. The weighted average (percentage) of the interest rate on outstanding loans at 31 December 2023 and 31 December 2022 was as follows:

	Group		Company
	2023-12-31	2022-12-31	2023-12-31	2022-12-31
Short-term Long-term	4,41	2.39	4.41	2.39

On 7 August 2020, the Company signed a EUR 55 million investment with the European Investment Bank. The signing of the agreement was approved by the Extractions of the European Investment with the European Investment energija on 4 August 2020. On 19 September 2023, a loan tranche of Shareho
energija on 4 August 2020. On 19 September 2023, a loan tranche of EUR 14 million was taken out.

Repayment terms of long-term loans:

	Group		Company
	2023-12-31	2022-12-31	2023-12-31	2022-12-31
Long-term financial debts (loans): Payable between 2 and 5 years Payable after 5 years Current portion of long-term loans	54 736	43 949	54 736	43 949
	22 506 32 230 3 231	17 414 26 535 2 769	22 506 32 230 3 231	17 414 26 535 2 769
	57 967	46 718	57 967	46 718

On 31 December 2023 in the statement of financial standing, the Group and the Company have recorded interest payable to financial institutions under long-term financial during the Group and the Company nave recorded interest respectively.

Details of the Group's and Company's loans as at 31 December 2023:

Set of consolidated and company financial statements of 12 months of 2023 (in thousands euro, unless specified otherwise)

	Credit institution	Date of contract	Amount. thousands EUR	Maturity	Balance as at 2023.12.31, In thousands EUR	To be repaid in 2024, thousand EUR
	Ministry of Finance of th Republic of Lithuania * Ministry of Finance of	2010-04-09	2 410	2034-03-15	1 030	95
2	the Republic of Lithuania *	2010-10-26	807	2034-03-15	423	38
3	ElB*** Ministry of Finance of	2020-08-07	12 000	2036-08-18	11 547	906
4	the Republic of Lithuania * Ministry of Finance of	2014-01-15	793	2034-12-01	458	41
5	the Republic of Lithuania *	2014-03-31	7 881	2034-12-01	4 549	414
6	ElB ***	2020-08-07	15 000	2035-08-24	11 750	1 000
7	AB SEB bank	2016-12-22	4 127	2024-11-30	210	210
8	ElB***	2020-08-07	14 000	2037-08-24	14 000	528
9	EIB***	2020-08-07	14 000	2038-09-29	14 000
	Ministry of Finance: ** I uminor hank AS. *** European Inves				57 967	3 232

European Investment Bank.

AB SEB bankas has determined that the Company must comply with the net financial debt to EBITDA ratio set for the quarter, which must not exceed 4.5. Under the ban areements, the Circle (tot be real of the real of the courty total assets) must be at least 35%. The European Investments also stipulativs sequity ratit (total equity(rola assess) music (company must comply with both of these indicators. As at 31 December 2023, 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.

10. Other provisions

The cost of the heat production service is included in the basic heat price as one of the components in accordance with the methodology established by the Board. As a result of the installation of new generation facilities and the modernisation of existing of acilities by the Company in recent years, the thermal capacity reservation service has not been purchased from 2020 onwards, and consequently no themal capacity reserve costs are incurred. At the end of 2019, the Company applied to the Board to exclude the costs of the market in the heat price, but the Board only approved the recalculation of the heat price from November 2020. The Company made a provision from the beginning of the year to reimburse the unrecovered, but over-niced, costs of the power reserve, and from the the autumn 2020 heating season started to reimburse the provision for this polyment through a reduction in the price to consumers. The Company has made a power reserve tax provision of EUR 959 thousand in 10 months of 2020 to cover future price reductions. In October to December 2020, EUR 312,000 was returned to consumers as a result of price cuts. During the months of January and August 2020, Lons returned to consimily returned to consumers. The Company formed a provision of EUR 577 thousand as of 30 June 2021 to ensure reserve capacity, part of which has been returned to customers as of 2017 in total of EUR 498 thousand returned during 2022. The outstanding part was returned within 2023. As at 31 December 2023, the Company has made an additional provision of EUR 2,139 thousand to cover the differences in the actual cost of electricity, purchased heat, fuel and production included in the price of heat sold and actually incurred, i.e. to cover future ricer reduction indities, no

Set of consolidated and company financial statements of 12 months of 2023 (in thousands euro, unless specified otherwise)

11. Cash and cash equivalents

	Group		Company
	2023-12-31	2022-12-31	2023-12-31	2022-12-31
Cash on the road	700 619 Cash in the bank 7 847 4 931		700	619
			6615	4 272
	8 547	5 550	7 315	4 891

The Group's bank accounts with a balance of EUR 1,073 thousand as at 31 December 2023 (31 December 2022: EUR

1,480 thousand) and the min a bance of EUR 1,073 thousand as at 31 December 2022: EUR
1,480 thousand) and the Company's bank accounts with a balance of EUR 1,073 thousand (31 1,480 thousand) are pledged to the banks as security for loans granted.

12. Changes in equity

Statutory reserve and other reserves

The statutory reserve is required under the legislation of the Republic of Lithuania. At least 5% of net profits, calculated in accordance with International Reporting Standards, must be transferred to the reserve annually until it reache ntilli it was a manali Reporting Stardards, must be transfered to the reserve annually unili it reaches
10% of the authorised capital. The statutory reserve may not be dist

Other reserves

By the resolution of shareholders of 27 April 2023, the Company cancelled the other reserves (EUR 3,000 thousand), allocated EUR 3,000 thousand of EP April 2023, the Company Cancelled the other reserves (EUR 3,000 thousand),
support. support.

Dividends

In 2023, a dividend of EUR 3,000 thousand was paid by the resolution of shareholders.

13. Sales income

The Group and the Company are engaged in the supply of thermal energy, maintenance of building heating and hot water supply systems, electricity and other activities. In 2010, some residents che in and hot water
supplier. These activities are closely internatives. In 2010, some residents ch supplier. These activities are closely interlinked and, for management purposes, their his many as their
considered to be organised in a single seement , the ourposes, the Gr 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 Anril which starts in October and ends in April.

Sales revenues by the Group and the Company activities are presented below:

	Group		Company
Heat supply	2,023 m	2022	2,023 m	2022
Hot water supply	78 647	81 338	78 660	81 458
Maintenance of hot water metering devices	6 476	5 742	5 467	4 643
Maintenance of collectors	551	487	551	487
Maintenance of heating and hot water systems in buildings	348	348	348	348
Cooling supply	17	17	17	17
Sale of tradable emission allowances	5	10	5	10
		50		50
	86 044	87 992	85 048	87 013

Set of consolidated and company financial statements of 12 months of 2023 Stationnomts of 12 months of 2025
(in thousands euro, unless specified otherwise)

Sales revenues by consumer groups of the Group and the Company are presented below:

	Group		Company
	2,023 m	2022	2,023 m	2022
Residents	63 047	65 124	63 047	65 236
Other users	9 561	8 846	9 561	8 846
Budgetary organisations financed from the state budget	5 705	6 044	5 705	6 044
Budgetary organisations financed from municipal budgets	3 856	4 203	3 856	4 203
Institutions financed by territorial sickness funds	2 313	2 182	2 313	2 182
Industrial users	1 562	1 593	568	502
	86 044	87 992	85 048	87 013

14. Other costs

Other costs include:

	Group		Company
	2,023 m	2022	2,023 m	2022
Equipment inspection and testing	205	234	205	234
Maintenance of collectors	362	362	362	362
Money collection costs	122	126	122	126
Ash recovery costs	173	173	173
Information Technologies costs	123	80	123	173
Consulting Services	252	181	252	80
Employee-related costs	118	118	118	181
Invoicing costs	111	88		118
Membership fee	111	97	111	98
Maintenance of fixed assets and related services	102	86	111	97
Transport costs	91	104	102	86
Debt collection costs	141		91	104
Insurance	107	91	141	91
Communication costs	54	49	107	49
Costs for advertising		32	54	32
Audit costs	વેરે	35	ਰੇਤੇ	35
Rental of equipment and machinery	33	23	33	23
Sponsorship	58	56	58	56
Other costs	143	53	143	53
	373	124	468	422
	2 772	2 122	2 867	2 420

18

15. Other operating income and expense

Other operating income includes:

	Group		Company
	2,023 m	2022	2,023 m	2022
Other operational incomes
Inventories sold	238	213	238	213
Miscellaneous services rendered	1 088	987	284	449
Compensation received
Revenue from previous periods
Profit from the sale of fixed assets Other	14	11	14	11
	524	230	508	230
	1 864	1 441	1 044	903

Other operating expenses include:

	Group		Company
Other operational expenses	2,023 m	2022	2,023 m	2022
Cost of miscellaneous services rendered Inventories sold	(173) (111)	(306) (214)	(173) (111)	(306) (214)
Cost of previous periods Sale of fixed assets, write-off	(73) (23)	(30) (119)	(73) (23)	(30) (119)
Other	106)	(78)	(112)	(85)
	(486)	(747)	(492)	(754)

The Group and the Company lease real estate, supply technical water, perform maintenance of heating equipment and provide transport services.

16. Basic and diluted earnings per share

The Group's basic and diluted earnings per share calculations are presented below:

Company
2,023 m 2022
5 801
42 802
42 802 42 802
42 802
0,14
42 802 42 802

17. Commitments and contingencies not included in the balance sheet

DNSB Rotušes 10 has filed a claim against the Company for the removal of the heat supply network from the building at Rotušės a. 10, Kaunas, and for compensation for damages in the rentoval of the fleal supply.

In 2023 June 29 The Court of Appeal of Lithuania left unchanged the 2023 February 7 The decision of the Kaunas District Court: to reject the claim of the DNSB "Rotušes 10".

18. 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.

On 4 December 2020, the Company and other companies controlled by Kaunas City Municipality signed an agreement on the establishment of UAB Kauno miesto paslaugų centras.

Set of consolidated and company financial statements of 12 months of 2023 (in thousands euro, unless specified otherwise)

In 2022 and 2023, the Group and the Company did not have any significant transactions with other companies controlled by Kaunas City Municipality, except for the purchase or significan transactions with other companies controlled by
and companies controlled by Kaunas City Municipality unre esti and companies controlled by Kaunas City Municipality were carried out at market prices.

In 2022 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, Kaunas City Municipality, Kaunas City Municipality periods were as follows:

31 December 2023	Purchases	Sales	Amounts
Kaunas City Municipality, companies financed and fully managed by it	1 930	9 028	receivable 1 141	Amounts payable 467
Jurbarkas district municipality	19	282	1	4
31 December 2022	Purchases	Sales	Amounts receivable	Amounts payable
Kaunas City Municipality, companies financed and fully managed by it	1 234	8 345	3 105	253
Jurbarkas district municipality	15	292	14	3

Sales include the amounts of reimbursements for housing heating costs, cold water and sewage costs, and hot water
costs for financially challenged residents costs for financially challenged residents.

On 31 December 2023 and 31 December 2022 the Company's transactions with subsidiaries and the balance sheet
balances at the end of the period were as falleyes balances at the end of the period were as follows:

UAB GO Energy LT	Purchases	Sales	Amounts receivable	Amounts payable
31 December 2023	1963	138	19	225
31 December 2022	77	12	43

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.

Management's salary and other benefits

On 31 December 2023 the Group's and the Company's management consists of 2 and 1 persons (2 and 1 at 31 December 2022) respectively.

	Group		Company
	2023-12-31	2022-12-31	2023-12-31	2022-12-31
Wages and salaries charged to the management	136	103	130	97
Reimbursements of employee benefits calculated for the management

During 2022 and 2023, there were no loans, guarantees, other disbursements or accruals to the management of the Group and the Company, or transfers of assets.

19. 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.